The Canadian subsidiary of Anheuser-Busch has become the first malting company to offer the Canadian Wheat Board’s CashPlus barley contract to prairie farmers.
The move is a crack in the wall of opposition to the CashPlus program by prairie maltsters and grain companies.
Officials with BARI, based in Winnipeg, did not return phone calls asking for comment.
However, Greg Kostal of Kostal Ag Consulting said BARI was offering contracts for six-row Legacy and Tradition and two-row Metcalfe, with certain specifications.
The contracts were initially priced at $6 a bushel for six-row and $6.30 for two row, but were later bumped up to $6.50 and $6.75 respectively, he said, based on a loaded rail car.
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He didn’t know the tonnage being sought by BARI but said his understanding was the contracts were sold out.
The wheat board confirmed that a malting company was signing up farmers to CashPlus contracts to farmers last week, but declined to name the company.
CWB spokesperson Maureen Fitzhenry said the contracts reflected an in-store value in the range of $335 to $355 a tonne ($7.30 to $7.73 a bu.).
She said the contracts involved a “substantial tonnage” and were almost sold out within a few days.
“It’s proving very popular,” she said.
“It seems to indicate that farmers are eager to sign up and are able to identify the benefits of selling their barley this way.”
The board is continuing to talk with other maltsters, she added, and expects CashPlus contracts to become available from other companies “very soon.”
CashPlus provides a guaranteed minimum cash price reflecting the price at which the CWB is selling to domestic and overseas buyers. Farmers and selectors are free to negotiate premiums and discounts to the CWB’s contract price.
Any revenue in excess of the contracted price will be distributed among contract holders at the end of the marketing year.
Critics of the program, including maltsters, grain companies, open market farm groups and the federal government, say the program lacks price transparency and injects a new and unnecessary layer of bureaucracy in the barley marketing system.
The board and other farm groups say it does provide transparency and accurate market signals and gives barley growers a viable business option.
Kostal said the prices offered last week pencil out pretty well for producers, noting that with a year-end premium and storage payments the contracts will price out around $7 a bu. for six-row.
“That’s as good as $12 spring wheat or 35 cent canaryseed,” he said.
“It generates profit and is a viable option.”
