(Resource News International) — U.S. brewer Anheuser-Busch is the first company to offer the Canadian Wheat Board’s
new CashPlus malting barley program to Western Canadian
producers, an official with the CWB confirmed.
“The rather significant tonnage is filling up fast, so that
would seem to indicate that farmers are interested in signing up
for this program,” said CWB spokesperson Maureen Fitzhenry.
She was unable to discuss specifics as the information was
considered commercially sensitive.
However, Fitzhenry said, the range for the CashPlus price
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would be between $335 and $355 per tonne, basis in store
Vancouver.
The CWB was also in the process of talking
with other companies about offering the program, she said.
Under CashPlus, a three-way transaction occurs between the
farmer, the selecting company and the CWB.
The CWB negotiates sales price and volume with the selecting
company and establishes a guaranteed price for producers. The
selecting company and the producer then directly negotiate a
contract.
The CashPlus price is meant to be responsive to prevailing market
conditions. The guaranteed price will not change on a set
schedule, but in response to sales and market conditions.
The CWB will pay a potential additional premium to
producers, derived from any spreads between the guaranteed cash
price and actual CWB sales returns for malting barley.
Officials from St. Louis-based Anheuser-Busch, makers of the Budweiser and Michelob brands of beer, were not available for
comment.
Canadian maltsters and grain companies, meanwhile, have
refused to participate in the program, saying it does not provide
strong enough price signals to entice farmers to grow barley
instead of other crops. The groups also claim that the program is
costly and cumbersome to use.
CashPlus also limits the price going
back directly to farmers, thereby continuing the inability to
send proper price signals to growers, the Malting Industry
The four members of MIAC represent Canada’s four major maltsters, who have said that between them they buy about 1.1 million tonnes of matling barley, roughly 60 per cent of the CWB’s pool, each year.
