Farmers’ enthusiasm for a new feed barley export program offered by the Canadian Wheat Board has been as damp as the harvest weather in the eastern Prairies.
But analysts say the program is one of only a few bright spots in a market forecast darkened by huge world and domestic supplies of feed grains.
As of Sept. 18, 340 farmers had signed up for the program, which guarantees delivery by Dec. 31. Most requested an early payment option, said Justin Kohlman, board spokesperson.
“As harvest is progressing, interest is really picking up,” said Kohlman.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The program ends Sept. 29, or earlier if farmers sign up enough barley to meet wheat board sales orders.
The low participation rate surprised Paul Cassidy of Mitcon Inc. in Calgary, who thinks the program is “fairly progressive.
“That’s too bad,” he said, adding farmers are likely too preoccupied with getting the crop off to spend time looking at the new program.
The lack of interest also surprised John DePutter, a London, Ont., analyst who writes about feed markets for the Wild Oats newsletter.
“Farmers need as many marketing alternatives to choose from as possible,” said DePutter, who said the new program shows some innovation.
The program effectively lets farmers lock in a minimum price of $117 per tonne (before transportation and handling costs to port) at a cost of $2.50 per tonne.
Cassidy called that cost “phenomenally cheap” compared to the cost of a call or put option expiring at the end of the crop year.
The farther farmers are away from southern Alberta feed markets, the more attractive the option, said Cassidy.
It might not be the best option for farmers who need feed barley for cash flow in the fall, he said.
