New CWB program uses U.S. spot prices to give farmers full range of choices (February 15, 2005)

Saskatoon – The CWB today launched its most innovative producer payment option to date -- one that lets farmers choose a price for their wheat based on a daily cash price derived from U.S. elevator prices. The Daily Price Contract (DPC) will provide farmers with choices to allow them earlier cash flow and increased pricing flexibility.


Ken Ritter, chairman of the farmer-controlled board of directors, told reporters attending a Saskatoon news conference that the DPC represents a historic shift for the CWB, a former Crown Corporation that was reorganized as a farmer-controlled marketing agency in 1998. "I sit at the board table with nine other farmers from across Western Canada. Together, we are committed to providing farmers with a full range of pricing choices, while protecting the marketing clout of the single-desk," Ritter said.


"When combined with the full portfolio of producer payment options, the DPC can provide most of the functions of a so-called dual market to Prairie farmers without destroying the single sales desk and pooling," noted CWB President and CEO Adrian Measner. "The program gives Prairie farmers the ability to track markets daily and receive prices that are derived from daily cash prices at U.S. elevators."


The DPC will be available as a limited pilot program in the 2005-06 crop year (August 1, 2005 to July 31, 2006), with farmers able to sign-up tonnage from June 1 to July 22, 2005. There will be a 500 000-tonne-limit on sign-up for the first year. The CWB will begin posting a daily cash price on June 1 to help farmers become familiar with the program and farmers can begin pricing their wheat under the program on August 2, 2005.


Recognizing the strong support pooling continues to receive from producers across the Prairies, the DPC has been designed to be revenue neutral to the pool accounts, as is the case with all the other pricing options, Ritter noted. The DPC will also be accessible to all Prairie grain producers, not just those living within easy driving distance of the U.S. border.


"The daily price will be derived from a basket of elevator points south of the border and will be posted daily by the CWB as a cash price per tonne or bushel," said Measner. "As with the Fixed Price and Basis Payments contracts, this grain will continue to be marketed through the CWB."


The DPC will also make it easier for individual farmers to market niche and high-value products such as organic grain, Measner said, as U.S. prices are currently used by the CWB to determine the price of Producer Direct Sales contracts.


A backgrounder answering questions about how the DPC will work and providing examples of how a farmer can use the program is attached to this release.


Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based company sells grain to more than 70 countries and returns all sales revenue, less marketing costs, to Prairie farmers.


For more information, please contact:


Louise Waldman
Manager, Media Relations
Cell: (204) 479-2451