Some farmers in the southern Prairies have been getting 2002-03 prices throughout the month of August, even though it’s officially 2003-04.
A variety of logistical problems in some locations prevented producers from delivering all of the grain they contracted with the Canadian Wheat Board before the official end of the crop year July 31.
When the board calls for 100 percent of a delivery contract, farmers are guaranteed the right to deliver all of the contracted grain into that year’s pool account.
So in order to fulfil that commitment, the board gave farmers in that situation a few extra weeks to deliver into the 2002-03 pool.
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Board officials wouldn’t say exactly how much grain was expected to be delivered after Aug. 1, other than to say it wasn’t much and the program should be wrapped up by the end of August.
Spokesperson Rheal Cenerini said it’s not an unusual occurrence.
“Every year there are a few spots that for whatever reason need a few more rail cars to clean everything up,” he said. “This year isn’t particularly problematic.”
Most of the extended delivery has been taking place in the heavier durum producing areas of southern Alberta and southern Saskatchewan.
Durum movement fell behind in 2002-03 because some overseas customers had trouble getting access to ocean vessels earlier in the crop year.
A labour dispute at Canadian Pacific Railway late in the crop year also affected grain movement to the West Coast, creating a backlog at some elevators in southern Alberta. As well, some smaller elevators were unable to get cars earlier in the year as a result of the tendering system.
“So they’re getting some of that movement now,” said Cenerini.
A farmer who fails to deliver at least 85 percent of the grain contracted to the board is liable for liquidated damages ranging from $6 to $15 a tonne on wheat and durum and $6 to $25 for feed and malting barley, depending on the size of the losses incurred by the board as a result of the unfulfilled contracts.
There has been an average of about 1,000 liquidated damage claims per year over the past five years.
In a year in which the price outlook for the following year’s pool account is significantly higher, there could be a financial incentive for a farmer to hold back contracted grain and pay the penalty. However, that clearly isn’t the case this year.
Farmers delivering No. 1 CWAD 14.5 percent protein durum into the 2002-03 pool can expect to receive a total payment of $281 a tonne, less freight and handling charges, according to the CWB’s pool return outlook.
The PRO for that same durum delivered into the 2003-04 pool is just $208 a tonne, although that can move up or down as market conditions change throughout the year.
Year-end statistics released by the Canadian Grain Commission indicate that as of July 31 farmers had delivered 19.1 million tonnes of the major grains and oilseeds to elevators across Western Canada, down from 24.8 million tonnes the previous year.
