SASKATOON – Prairie farmers can expect to sell at least 500,000 tonnes of feed barley to Japan this year.
The Canadian Wheat Board announced last week that it has signed a memorandum of agreement with the Japanese Food Agency to ship that amount in calendar year 1996.
That’s well below the traditional 800,000-tonne agreement signed with the Japanese and reflects the board’s new cautious approach to its feed barley export program.
“It reflects the need to ensure that we can provide what we say we’re going to provide, to what is probably our best customer in the world for barley,” said Jim Pietryk, the board’s co-ordinator of producer relations.
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More sales possible
He added the 500,000 tonne agreement represents a minimum. The board could make more sales if supplies are available and prices stay at current levels.
Last year the board had problems meeting its sales commitments to Japan when high domestic prices led many barley growers to sell into local markets rather than to the board. Final year-end figures are not yet available, but it’s expected 1995 barley sales to Japan will total about 700,000 tonnes, 100,000 tonnes below the target.
Because the board had to pass up anticipated sales to the lucrative Japanese market, pool returns were lower than expected, which got the board into hot water with many producers. This year the board has said it will not accept feed barley deliveries later in the crop year if those deliveries would diminish returns from the 1995-96 pool account.
The board failed in its first attempt to negotiate a 1996 supply agreement with Japan back in November because of supply uncertainty. But officials said strong farmer deliveries and good contract sign-up allowed the board to reach last week’s deal.
“This important agreement for a continuing presence in this major market was only possible through the early commitment of feed barley to the CWB by farmers,” said Adrian Measner, the agency’s executive director of marketing.
Deliveries to the board have picked up since the pool return outlook was raised to $196 a tonne in late November. That translates into an Alberta farmgate price of about $156 a tonne ($3.40 a bushel.) Local prices in southern Alberta are around $3.60 a bushel. The net initial payment is around $2.75.
