Pooled approach helped Canadian farmers net 57 percent more profits
Western Canadian farmers will receive about CAN$7 billion (US$6.8 billion) from grain marketed through the Canadian Wheat Board (CWB) in 2007-08, up 57 percent from 2006-07, Ian White, CWB president and chief executive officer announced July 31.
White said a pooled approach to selling in this year's high-price international grain markets helped Canadian farmers earn US$560 million more, included in total revenue for spring wheat and durum.
US farmers however, failed to catch the windfall as they sold too early, he added.
"The CWB took a strategic approach to marketing during a time of unprecedented prices," White said at a news conference. "Combined with the disciplined selling pace of the pools, this meant we could take advantage of market rallies for higher overall returns."
Producer pooled earnings for high-quality spring wheat, after freight and handling, are expected to be CAN$8.44 per bushel in Saskatchewan, Canada, C$8.56 in Manitoba, Canada, and CAN$8.69 in Alberta, Canada almost double that of 2006-07.
For high-quality durum, returns are up 120 percent from the previous year,. White noted that some farmers used CWB pricing options to get prices as high as C$20 for wheat.
CWB malting barley sales were the highest in eight years at 2.4 million tonnes, a 33-percent increase over last year. This included record sales of 114,000 tonnes to Mexico and a half-million-tonne increase in exports to the United States. Producer returns for designated barley will be about CAN$5 per bushel at farmgate, up 65 percent over 2006-07.
Things are unlikely to remain rosy for 2008-09, however, spring wheat pool return projections have declined about 6 percent from 2007-08 levels, but remain well above historical averages.
Improved winter wheat production in the US and a expected record world wheat harvest would keep prices down.
Preliminary export numbers for 2007-08 are 11.3 million tonnes wheat, 3.1 million tonnes durum, 1.6 million tonnes feed barley and 1.3 million tonnes malting barley. Domestic sales were 2.1 million tonnes for wheat, 285 000 tonnes durum and 1.1 million tonnes malting barley.
End-of-year grain stocks are now very low at 3.9 million tonnes.