SASKATOON – High protein durum is worth $30 a tonne more in Japan than at an elevator in North Dakota, says the Canadian Wheat Board.
Wheat board chief commissioner Lorne Hehn told delegates attending the annual meeting of Manitoba Pool Elevators that a sale of durum to Japan in early November would have provided a farmer at Estevan, Sask., with a net farmgate return of $330.41 a tonne, or $8.99 a bushel.
The same quality durum sold to an elevator in Fortuna, N.D., on Nov. 3 would have provided a net return of $299.64, or about $8.15 a bushel.
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Even a sale to a Canadian miller would have fetched a higher price than the U.S. market, with a domestic sale out of Thunder Bay working out to $320.46 a tonne, or $8.72 a bushel.
Those prices are all well above the board’s most recent Pool Return Outlook, which forecasts a final price for 13 percent CW amber durum of $298 in-store Vancouver (a Saskatchewan farmgate price of about $258 a tonne or about $7.02 a bushel).
But Hehn said that will soon change. “You’ll see a sizable increase in the next CWAD pool return outlook.”
A document prepared by the board’s market analysis department says farmers must keep in mind that the posted U.S. spot price is for the very best quality and very little durum is actually bought at that price. In addition, U.S. elevators often discount Canadian grain by 15-25 cents a bushel for increased handling and administration costs.
Board market analyst Ward Weisensel said the PRO represents the board’s best estimate at a given point in time of what it expects to pay out for durum no matter when a farmer delivers it during the crop year. And he emphasized it reflects returns expected from sales made throughout the year.
“Prices are going to be up and down through that period,” he said, and the PRO simply can’t be above the U.S. spot price prices on every single day of the crop year.
Earlier in the MPE meeting, delegates voted almost unanimously in favor of a resolution urging the federal government to take immediate action to “shut down the illegal export of Canadian grains.”
Delegate Ray Bernier of Fisher Branch complained that farmers crossing the border without proper authority are being treated with kid gloves: “I just ask that when a law’s being broken, the law be enforced.”
Glen Franklin, who farms at Deloraine, said every bushel of grain that crosses the border is one less bushel that could be handled at an MPE elevator. “This is business lost and money out of your pocket,” Franklin told the delegates.
