CWB Press Release on Initial Payments

[charliep]

Interesting press release on the forcoming 2010/11 adjustment payments. I like the wording. I have to put in context adjustment payments have been done this ways since the beginning of time.

More disturbing though is even with the initial adjustment payments, you still have significant amounts owing to you in final payments. As an example, the $28/tonne initial now turns into $98/tonne (assuming the full $70 adjustment) or 2/3 of the forecast elevator total payments of $160/tonne (deductions of $55). It is a year I would use one of the multiple of CWB producer payment options to get my money up front.

[charliep]

The quote for the release.

Producers who have delivered wheat, durum and barley to the CWB so far in the 2010-11 crop year are likely to receive increases to their initial payments in mid- to late-November. Given the significant rise in the markets reflected in recent CWB Pool Return Outlooks, the CWB has recommended adjustment payments that -- if approved by the federal government as submitted -- would increase payments to the base grades of wheat, durum, feed barley and malting barley in the range of $50 to $70 per tonne. It is important to note that payment amounts are recommendations only and, until officially approved, may be subject to change. Similarly, the expected payment timeframe noted above represents an estimate only and cannot be confirmed until government approval is received, according to a process set out by the CWB Act.
 

[charliep]

A weird question but in a world of no government guarantees, how will things change both with regards to how initial and adjustment payments are announced. How will the CWB handle risk? Can it be done without some form of contingency fund?

[charliep]

The initial payment quote was for feed wheat by the way.

[charliep]

Actually my $28 elevator is too high. Initial today on feed wheat is $78 port. Add the full $70 adjustment on and the initial becomes $148. The PRO is $215. Could be wrong but I suspect feed wheat should be tradeable at $250/tonne plus in store Vancouver (based on $6/bu corn futures).

Back home in the country ($55 CWB deductions), your payment today is $23/tonne. An adjusted payment would be $93. Your forecast total payments are $160. Your price if you had direct access to the market would be $195 ish.

[charliep]

May as well put the CWB PPO payments in for feed wheat (October 15).

EPO feed wheat - $144.25/tonne local payment (after deducting $16.75 premium) with the ability to enjoy higher feed wheat payments than $215/tonne port.

FPC feed wheat (today) - $23 initial plus an additional $153.77/tonne after 10 business days top up (includes feed wheat discount of $14.61). Total local fpc payment - $176.77/tonne.

[charliep]

Only me but I hope provides value. Would really watch initial payment spreads and the impact of the adjustment payment on your actual fpc value. With almost 100 % certainty, the CWB will widen spreads when the adjustments payments are acted on. You want to deliver lower grades/proteins ahead of this announcement if you plan on applying against an fpc contract. Why TOM4CWB and Steve_Winkler made the comments they did in a previous thread.

[SASKFARMER3]

I think what it means is the CWB is pleading with its farmers (the ones that believe their Bs )to please deliver your feed and #3. We will pay you real soon please please deliver.