February 20, 2008

Canada increases initial payments for wheat and barley

The 2007/08 (Aug/Jly) initial payments for Western Canadian wheat, durum, and designated barley will increase effective Feb. 21, 2008, the Canadian Wheat Board announced.

The increase in initial payments for wheat will range from CAN$41.60 to CAN$51.60 (US$40.9-US$50.8 ) per tonne, with the value dependent on grade, class and protein level.

For milling durum, the increase will range from CAN$80.50 to CAN$96.50 (US$79.2-US$95.0) per tonne. For designated barley the increase will range from CAN$10.00 to CAN$13.00 (US$9.8-12.8).

Initial payments are a portion of the returns farmers can expect from the sale of their grain over the entire crop year. The payments are guaranteed by the federal government and are revised upward as market conditions allow.

The CWB cautioned that as initial payments are set in relation to world prices, levels from year to year will vary according to market conditions. Initial payments should not be confused with monthly Pool Return Outlooks (PROs) which are the CWB's estimates of total crop year returns.