As it stands, the Canadian Wheat Board will not be offering Producer Payment Options for the 2012-13 crop year.

"There is a great deal of uncertainty over what form, if any, the Canadian Wheat Board will take on August 1st, 2012, so it's really impossible to offer any programs for forward pricing into that crop year at this time," says CWB spokesperson Maureen Fitzhenry. "We had previously announced that the 12-13 Churchill Storage program and the 12-13 Wheat Storage program will not be offered due to operational uncertainty, and now we're announcing that the futures portion of the Basis Price Contract cannot be offered at this time either."

Under normal circumstances this would be the time when the futures portion of a BPC would be offered for the 2012-13 crop year.

Fitzhenry says PPOs have been increasingly popular.

"In the 2010-11 year that just ended we had more than 28 thousand contracts signed up, which is a record number. What we find is that particularly when markets are rising farmers really like the opportunity to assume their own price risk, choose to lock in the prices when they think markets are highest, and to effectively manage their cash flow," she says.

Oberg's latest

CWB chair Allen Oberg issued a letter to producers yesterday:


Dear fellow producer:

Voting is now over. The voice of Prairie farmers will be heard Sept. 9, when the results of the producer plebiscite on the future of the CWB are released by MNP.

The CWB's board of directors will respect the results of this plebiscite. If the majority of farmers want to end the single desk marketing system and move to an open market for barley and/or wheat, we will start working on the transition to an open market. I would expect Minister Ritz and the Government of Canada to also respect the wishes of Prairie farmers.

Throughout the plebiscite period, I have heard a lot of concerns from farmers. One of the most frequent questions I have been asked is what will the CWB look like if the single desk is dismantled.

The short answer is there won't be a CWB once the single desk is dismantled.

The longer answer is: there may be some new organization created, but it will look nothing like the CWB does today. Over the last five years, the board has looked at a number of different business models as part of ongoing contingency planning, including open-market models. Not one of these models comes anywhere close to offering farmers the value the CWB does. A new entity can be created, but if its mandate is to continue to provide farmers with some additional value, it will be hard pressed to do so.

Recognizing that the federal government may go ahead and remove the single desk without consulting farmers, the CWB has been in close contact with federal officials throughout the summer. We have made them aware of the relative lack of value the CWB can offer without a single desk. We have made them aware of the estimated costs of winding up the current CWB the government recently announced its intention to hire an external consultant to review these costs.

We have been very clear with the federal government that the CWB cannot transition from its current marketing structure to any other type of company without an infusion of significant operating and financing capital, regulated access to terminals, assistance in an ownership structure, and other measures to safeguard a fledgling company in its formative years.

This is where we hit the roadblock we simply cannot proceed any further until government shares its plan and vision for a new organization. Minister Ritz has said he wants a strong and viable organization. But with no money to pay farmers for grain, no ability to finance operations, no place to accept deliveries and no way to move grain to customers, any new entity cannot be "strong and viable". It's a recipe for failure, not success.

Sincerely,

Allen Oberg
CWB chair
Forestburg, Alberta