Western Canadian grain farmers earned a near-record $7.1 billion from sales made through the Canadian Wheat Board (CWB) in the 2008-09 crop year that ended last July 31.
Although per-tonne wheat and durum returns are down substantially from 2007-08, the year when the CWB returned a record $7.2 billion to farmers, higher grain sales and good grain quality last crop year kept total returns up.
Total wheat receipts in the pool in 2008-09 were up 19 per cent, while the total volume of grain pooled was up 10 per cent.
The CWB exported 18.4 million tonnes of wheat, durum and barley in 2008-09 up a million tonnes from the year before and the highest in nine years, the CWB said in a news release.
Details of the CWB’s earnings are summarized in its 2008-09 Report to Producers mailed to farmers last week.
The full annual report is expected out this month after it’s tabled in Parliament.
CWB administrative costs of $79.1 million are up $3.4 million or four per cent. Most of the increase is due to a new Supply Chain Transformation (SCT) system.
The CWB keeps a close watch over expenses, Brita Chell, the CWB’s chief financial officer said in an interview March 5.
“We recognize there is a lot of sensitivity around them with some farmers out there,” she said.
“As we go forward we recognize it’s something we have to keep our eye on… to manage them to a reasonable… cost per tonne.”
The wheat pool’s administration costs totalled $52 million, up from $46.1 in 2007-08. Still, the cost per bushel of 8.9 cents was down slightly from 9.3 cents due to a larger pool.
Malt barley record
Although wheat and durum per-tonne returns are down from 2007-08, it was a record-breaking year for malting barley. The CWB earned a record per-tonne return for malting barley, with Special Select Canada Western Two-Row barley returning $314.05 a tonne ($6.84) in-store.
The CWB marketed a record 2.8 million tonnes of malting barley – 2.4 million tonnes through the pool and the rest through its CashPlus program.
The CWB says the CashPlus program proved itself. The designated barley pool was closed early in 2009 to protect the record returns it earned until then. World malting barley prices were falling and accepting additional deliveries to the pool would erode its value.
CashPlus gave farmers the option to sell their malting barley at higher prices than they would’ve received in the domestic feed market.
The CWB also repaid the $25.5 million it borrowed from the pool accounts in 2007-08 to cover the deficit in the contingency fund used to backstop various price options for farmers outside the pools.
The CWB changed its risk management process, and that combined with market changes that were favourable to the programs, allowed the CWB to erase the deficit caused by the extraordinary market conditions of 2007-08.
Fewer farmers, representing fewer tonnes of grain participated in the CWB’s producer payment and early payment options in 2008-09.
Around 11,000 farmers delivered 1.8 million tonnes under the Fixed Price and Basis Price Contracts compared to 18,000 farmers and 4.5 million tonnes in 2007-08.
Just under 1,400 farmers took the CWB’s Early Payment Option on 308,000 tonnes versus 9,534 farmers who took it on almost 1.8 million tonnes the crop year before. [email protected]