SASKATOON – Wheat growers have finally found out exactly how they’ll be paid for protein next crop year.
The number of protein breaks for milling wheat and durum have been increased substantially. And for the first time, farmers who grow 3 CWRS wheat will be eligible for a protein premium.
Since last fall, the Canadian Wheat Board and prairie grain handling companies have been negotiating a new protein segregation system that would tie farmers’ payments for wheat more closely to protein levels.
While that goal was shared by everyone from farmers to marketers to handlers, agreement on the details, especially issues surrounding costs and efficiencies, proved elusive. In the end, say those involved in the discussions, no side got exactly what it wanted.
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“There was a lot of compromising,” said Ed Guest, manager of the Western Grain Elevators Association. “We’ve reached the best collective conclusion we can, certainly not the best conclusion that anyone individually would have wanted.”
A wheat official described the new system as an “interim measure” and said the board will continue to work with the elevator companies to bring in even more protein breaks in 1996-97.
Continuous increase
The board, supported by some farm groups, eventually wants to bring in separate payments for every one-tenth of a percent change in protein.
Here are the new rules going into effect Aug. 1:
- For 1 and 2 CWRS separate payments will be made for every additional half a percentage point of protein between 12 and 15 percent. Currently, protein premiums are paid on 1 CWRS between 13 and 14.5 percent and on 2 CWRS with 13.5 per cent.
- For 3 CWRS, a protein premium will be paid at 13 percent. There has never been a protein payment for 3 CWRS.
- For durum, premiums will be paid on 1 and 2 CWAD for every half percent of protein between 12.5 and 14 percent. Currently the only protein break on durum is at 13 percent.
- There is no change in protein payments for other grades, including 1 and 2 CW winter wheat with 11.5 percent and 1 CW soft white spring testing less than 10 percent.
Satisfy foreign customers
Adrian Measner, the board’s executive director of marketing, said overseas customers have been requesting specific levels of protein.
The new segregations will enable the selling agency to meet that demand and to reflect the appropriate value back to farmers, he said. Millers in Canada and the U.S. have also been requesting more clearly defined protein increments on durum.
The agency’s export sales will still be based on 13.5 and 14.5 percent protein but the new segregations in the country will allow it to keep closer tabs on protein content and do more blending to meet customer specifications.
Measner said the introduction of a protein premium on 3 CW will be especially significant in the coming crop year. The lateness of the crop could result in a larger than normal proportion of 3 CW. With world wheat supplies expected to be tight, high protein 3 CW could fetch a premium price.
“The CWB may need to be able to market high protein 3 CWRS in the international market and reflect the appropriate value back to our farmers,” said Measner.
The question of whether to have a protein break on 3 CW was a major sticking point in discussions between the board and grain handlers.
Since 3 CW can be produced anywhere on the Prairies, the companies will have to be able to test protein at virtually every elevator.
