An “overhaul” of the GrainFlo delivery program, along with storage payments on Series contracts, are among the changes planned to the Canadian Wheat Board’s delivery contracts for the new crop year.
“These are significant changes that ensure fair and flexible delivery opportunities for farmers, while allowing for efficient grain movement to ensure the highest possible returns for farmers,” CWB CEO Ian White said in a release Thursday.
GrainFlo is a CWB delivery contract for wheat and durum that allows farmers to deliver into two delivery periods and also get a storage payment. Starting in the 2010-11 crop year, the tonnage cap for Canada Western Red Spring wheat (CWRS) increases to three million tonnes from the previous limit of 700,000 tonnes.
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For Canada Western Amber Durum (CWAD), meanwhile, the cap rises to 600,000 tonnes, up from 200,000.
“This program expansion is designed to help resolve the ‘first-come, first-served’ dynamic that frustrated some producers last year,” the CWB said.
Also, in place of four GrainFlo delivery periods, there will now be two periods, the board said Thursday. Period 1 will be from Dec. 15, 2010 to March 15, 2011 and Period 2 will be from March 16 to June 30, 2011.
In the GrainFlo program, the CWB will call your grain within the period and you have 30 days to deliver when called.
“This is intended to continue providing you with some choice over when you deliver your grain and, at the same time, ensure that the CWB can call grain when needed to execute grain sales,” the board said in a memo to producers.
Storage payments
The CWB said last week it will also provide storage payments for CWRS wheat Series A, B and C and CWAD wheat Series A and B delivery contracts.
“This enables farmers outside the GrainFlo program to also earn storage payments and helps compensate farmers for delivering throughout the crop year,” the CWB said.
On a related note, also in the 2010-11 crop year, farmers taking part in the Churchill or Wheat Storage programs will get a portion of their storage payment with the premium payment after the contract sign-up deadline — in these cases, the deadline is Oct. 31, 2010.
“This allows for a larger on-time payment for farmers and less administration costs,” the CWB said.
GDCs
The CWB said it also plans increase use of its guaranteed delivery contracts (GDCs) for smaller-volume, specialty wheat classes, as “an efficient way to take advantage of marketing opportunities throughout the year.”
GDCs, for example, will completely replace Series contracts for Canada Prairie Spring White wheat (CPSW) and Canada Western Extra Strong wheat (CWES) for 2010-11, the board said.
For Canada Western Red Winter (CWRW), Canada Western Soft White Spring (CWSWS) and Canada Prairie Spring Red (CPSR) wheats, Series A contracts will be available at the start of the crop year, with storage payments being paid to contract holders.
But if more grain is required after the Series A contract period has expired, GDCs will be used to source the additional grain.
The CWB also said it will move to a “formula-based” calculation on liquidated damages in 2010-11, replacing the former $6 to $25 per tonne range.
