REGINA -Roman Wojcichowsky still isn’t ready to sell his feed barley to the Canadian Wheat Board.
The Carstairs, Alta., farmer says last week’s increase in the pool return outlook and initial payments is a step in the right direction and will likely prompt some farmers to deliver barley to the board. But he won’t be one of them.
“I would think twice about it, but I still would be selling to the local market because as of right now it’s still paying a premium,” he said in an interview from his farm.
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Wheat board officials have been telling farmers in recent weeks that by not selling feed barley to the board, they’re missing out on an extremely lucrative export market in Japan, where prices are consistently some $40 a tonne (about 90 cents a bushel) above the Canadian domestic price.
Until last week, that hadn’t been reflected in initial payments and the board’s PRO and barley was dribbling into the board’s pool accounts at a rate of about 5,000 tonnes a week.
The marketing agency is hoping that last week’s increase in both will shake some barley out of the system and some market watchers say that will likely be the case.
Temptation rising
“It’s getting tempting and certainly as you get further away from the Lethbridge market (a region densely populated with cattle feedlots) the more tempting it becomes,” said Al Dooley of Alberta Agriculture. The new outlook is at an unprecedented level, with No. 1 CW feed barley projected to sell for $191-$201 a tonne.
For a Red Deer, Alta., farmer that works out to a net return of $3.43 a bushel.
The new initial payment of $165 a tonne works out to a Red Deer price of $2.75 a bushel.
A sale to the off-board market will fetch around $3.30 a bushel in Red Deer, although in some parts of southern Alberta, local prices are even higher.
“I would have no problem around here getting $3.70 right now,” said Wojcichowsky.
But board officials say farmers should look at the pool return outlook, not the initial prices, when deciding whether to sell feed barley to the pool account.
For many farmers concerned about getting more cash in their pockets right away, the spread between initial payments and local prices will determine where their barley goes.
“I sure would like to sell my barley to the board,” said Ernie Vitek, a Viking, Alta., farmer who describes himself as a supporter of the wheat board. “But $3.75 is the price a guy sees around here and the board is paying quite a bit less.”
Even at last week’s annual meeting of Saskatchewan Wheat Pool, one of the friendliest audiences a CWB commissioner can find, there were some pointed questions about barley markets.
Delegate Clifford Allen of Lemberg said there must be more flexibility in the board’s policies so that price signals can be sent out to farmers more quickly.
Wheat board commissioner Gordon Machej said the board is always prodding the government to move more quickly on initial payment increases and has discussed offering a spot price for barley to compete with local cash markets, which would require a change to the CWB Act.
Delegate Donald Dean of Langbank said the board should have been telling farmers sooner that it needed barley to meet demand in Japan.
Machej said the board has been publicly saying that since June but for some reason the message never sank in with farmers.
