CWB Modifies Early Payment Option

WINNIPEG - Mar 7/05 - SNS -- The Canadian Wheat Board (CWB) will allow growers to obtain Early Payment Option (EPO) contracts for wheat, durum and selected barley which has already been delivered to the board during the 2004-05 marketing year.

With the change, growers can receive up to 100% early payment for deliveries of wheat, and 90% for durum and selected barley. The policy change applies all eligible grades of wheat, durum and selected barley.

Previous deliveries of CW Feed, No. 4 CARS, No. 3 CWSWS, No 4 CWAD and No. 5 CWAD can be applied to a feed grade EPO contract. Farmers must deliver tonnage committed under the EPO program through regular CWB delivery contract call opportunities.

Farmers who apply previously reported deliveries to an EPO will receive an additional payment within ten business days, which will include the difference between the locked Early Payment Value (EPV) and the initial payment for the reference grade, less a discount.

Participating farmers will also be eligible for CWB adjustment, interim and final payments when those payments exceed their EPV. This ensures that these farmers will receive a return equal to the pool account, less the EPO discount, should CWB sales returns exceed their early payment value.

Farmers with EPO commitments made before this policy change can also apply previously reported deliveries that occurred before the date of their EPO contract. Requests to apply a portion, or all previously reported deliveries will be on a first in, first applied basis.

The CWB provided the following examples of how the scheme works:

A farmer who had already delivered No. 1 CARS 13.5 can apply for an EPO today. If the farmer wants a 100% EPO, with a discount of $2.00 per metric ton (MT) this farmer is eligible to receive a payment of $32.95 MT over and above the CWB payment of $171.05 MT. For a 90% EPO, with a discount of .50 cents MT, the farmer will receive $12.05 MT over and above to the CWB initial payment

A farmer who had already delivered No. 1 CWAD can apply today for a 90% EPO. With a discount of .50 cents MT, the farmer is eligible to receive a payment of $29.15 MT, in addition to the CWB initial payment of $160.75.