The Alberta Barley Commission says the success of the Canadian Wheat Board’s feed barley program for farmers has yet to be decided.
“The support for the program will be based on the tonnage. And we have no idea how many tonnes were signed up under the program,” said Kevin Muxlow, policy co-ordinator for the commission.
The board’s program ended after more than three weeks on Sept. 30. About 1,650 farmers signed about 1,800 contracts.
The number of tonnes will be announced once all the grain has been sold.
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The program was designed to meet world demand for export barley. Drought in North Africa and quality problems in Europe have increased the opportunity for the board to sell.
“We wanted to take advantage of those increasing prices but, of course, we didn’t have supplies to do that with and this program allowed us to access supplies we normally wouldn’t have,” said Justin Kohlman, wheat board spokesperson.
The program offered an incentive to farmers who committed their barley to the board.
“With the regular payment system what happens is they deliver to the elevator and they get a percentage of expected return that’s guaranteed by the government, roughly 70 to 80 percent. Now what this did is it allowed them, when they delivered, to get more money up front, so instead of getting 70 to 80 percent, they got 90 percent,” said Kohlman.
“They (farmers) were able to get more money up front with no risk to them because if prices go up higher than we anticipated, they still get to take part in the pool.
“More than three-quarters took the early price, but the only disadvantage is you get a deduction on average of about five cents a bushel,” said Kohlman.
The grain will be moved out by the end of December, he said.
Muxlow said the barley commission wants the wheat board to look at the whole picture before declaring victory.
“It’s good to see that there’s some response but at the same time, it’s my understanding there’s about 100,000 permit book holders out there, and (about) 1,600 farmers signed up. We’re talking less than two percent. That puts it into perspective,” said Muxlow.
He credited the board for making the export feed barley price more attractive compared to the domestic market.
“Since the board stepped in with this program, some producers have signed up and in return the domestic market has increased its price in Lethbridge between $2 to $5 a tonne. This shows how marketing competition improved returns for farmers.”
The rivalry between the export and domestic markets is positive, said Muxlow. “It’s showing that competition for farmers’ barley is providing benefits to them.”
Kohlman said although tonnage figures haven’t been released, the board has a goal of one million tonnes of barley for this year and it’s well on the way to reaching that.
“We went into it (the program) with two goals in mind. First to give farmers more pricing options, more flexibility and it certainly met that requirement based on farmer sign-up.
“Secondly to meet sales demand because there was good marketing opportunities, which allowed us to take advantage of those. I mean we were able to make sales that we probably couldn’t have without this program,” said Kohlman.
He said the board will have to decide whether to offer the program again next year.
