SASKATOON – A good quality wheat crop in the U.S. means high protein won’t provide as big a bonus to Canadian wheat growers this year.
The initial payments released for the new crop year that began Aug. 1 show a significant reduction in the price spreads between low and high protein levels for hard red spring wheat and durum.
The initial payment for No. 1 CW red spring wheat with 14 percent protein is $204 a tonne, which represents a premium of $14 a tonne over the base grade payment of $190.
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By contrast, during the crop year just ended, the spread between those two grades was 50 percent greater, at $21 a tonne.
Jim Pietryk, an information officer with the Canadian Wheat Board, said the change reflects the fact that the hard red winter wheat crop in the U.S. is coming off with high protein content.
“That’s working to eliminate any protein premium that was there,” he said.
The protein spreads can be adjusted throughout the crop year. Unknown at this point is the quality and protein content of the spring wheat crops in Canada and the U.S.
“If the Canadian and U.S. spring wheat comes in with good quality, (the spreads) will probably stay where they are,” said Glenn Lennox, wheat market analyst with Agriculture Canada in Winnipeg. “If we get a frost somewhere at the end of August that could all change.”
The market assumes there will be more protein relative to total wheat supplies than last year, he said.
“Right now it is logical to assume there will be less of a premium in 1996-97 for good quality wheat,” said Lennox.
Here are some other protein premiums effective Aug. 1, with July 31 levels in brackets:
- No. 1 CWRS 15 percent $24 a tonne ($38), 1 CWRS 13 percent $6 ($9).
- No. 2 CWRS 15 percent $24 ($30), 2 CWRS 13 percent $6 ($9).
- No. 3 CWRS 13 percent $4 ($7).
- No. 1 CW amber durum 14 percent $19 ($73), 1 CWAD 13 percent $7 ($57).
