MUNDARE, Alta. – The popularity of the Canadian Wheat Board’s daily price contract has spurred it to develop a new contract designed to give farmers more pricing flexibility.
CWB director Allen Oberg told farmers at a wheat board farmer forum that it is looking at a new tonnage contract that would allow producers to declare the amount of wheat they want to sell outside the pool.
Farmers could then price the grain throughout the year with the board still acting as marketer of the grain.
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“There is a fair amount of interest in these flexible options,” said Oberg, pointing to last year’s 650,000-tonne daily price contract that sold out in two hours.
Oberg said the board is looking at either expanding the existing daily price contract with a greater tonnage of grain allowed, but with a smaller limit per farm.
Each farm is now able to contract 5,000 tonnes. The price is based on a basket of U.S. elevator prices.
The second option would be to create a new tonnage contract with no limit. The price would be based on a basket of world prices and would reflect a more made-in-Canada basis level, he said.
A decision on the new board contract will be made at the March meeting of the CWB board, Oberg told about 65 farmers at the meeting.
Vegreville, Alta., farmer Dennis Fried wasn’t able to get in on last year’s daily price contract, but said he will take a close look at the upcoming tonnage contract.
“I have to think about it,” said Fried, who was pleased with the new variety of pricing options offered by the board.
“The wheat board got a lot of criticism because only a select few farmers were able to capitalize on it,” he said.
Oberg said if the tonnage contract is approved, farmers would have until mid-July to commit the amount of grain they want to sell outside the pool.
Fried liked the idea of a July deadline. By July, much of the American winter wheat crop has been harvested and Canadian farmers have a better idea of world wheat supply.
Oberg said the new tonnage contract will make a smaller pool of wheat, but the key to a successful pool is knowing the amount of tonnes within it.
