CWB Initial Payments Increased Today (Nov 16)

[charliep]

Just a note the CWB/federal government increased initial payments today.

http://www.cwb.ca/public/en/newsroom/releases/2007/111607.jsp

I like to look at the percentage of the PRO as a measure of risk.

Initial payment for 1CWRS 13.5 now $230.50/tonne port or close to 80 % of the October PRO.

Initial payment for 1CWAD 12.5 $314.50/tonne or close to 67 % of the October PRO.

Initial payment for malt (2 row) and feed barley is $260 and $231/tonne respectively, about 90 % of the October PRO.

Shouldn't be political but the conservative government is being far more aggressive on increasing initial payments early in the crop year than any of the former liberal governments.

It also raises issues around how the CWB calculates the premiums. I note new initial payments should reflect substantially less risk for the CWB and yet the premiums for EPO contracts (90 and 100 % in the case of wheat and 100 % in the case of barley) have not changed. Anyone who signed an 80 % EPO over the past couple of weeks (as highlighted by TOM4CWB) should be thanked for their generousity in topping up the contingency fund.

FINALLY, I WOULD TAKE VERY SERIOUSLY THE NOTE THE CWB IS NOT OBLIGED TO TAKE WHEAT ON THE "C" SERIES. You may be right or wrong on the decision to carry wheat into the summer uncontracted but you will be the one who takes the risk (not the CWB or the taxpayer). A part of this risk is the inability to deliver till the new crop. Suspect that is part of the agreement between the federal government to get initial payments this high this quickly.

[Fransisco]

Watch now as the anti-choice crowd goes after the Conservatives for being too aggressive with the initials. I think the word of choice will be <b>'RECKLESS'.</b>

[charliep]

Will note the following article from e-malt. Canadian farmers should take note.

Australia: Graincorp closed its new-season barley pool to protect it from failing international markets
Graincorp's sudden closure of its new-season barley pool has sparked anger among growers who have not even had a chance to harvest yet, The Land reported November 21.

The decision to close the pool to protect it from falling international markets, is being held up by the pro-single desk lobby as a sign of things to come if the wheat market is deregulated.

The estimated returns from the 2007-08 No2 barley pool now being offered by GrainCorp is roughly $40/t below that of the No1 pool price, which closed last Friday before harvest had started in many areas of Victoria and South Australia.

In a special report to be published in The Land, NSW, on November 22, GrainCorp national barley pool manager, Adam Robinson, says it was decided to protect the equity of growers who had delivered, after the barley market fell by more than $50/tonne in three weeks.