Ontario wheat producers offered advance

Friday, June 29, 2012

by BETTER FARMING STAFF

 
Farmers willing to commit wheat to the Grain Farmers of Ontario (GFO) pooling program prior to July 31 are entitled to $20 per tonne in addition to the initial payment upon delivery at harvest. For example, the initial payment for soft white winter wheat (Pool A) has been set $140 per tonne. Farmers who commit their grain to the pool before July 31 will be entitled to an initial payment of $160.

Todd Austin, marketing manager for GFO, said the $20 amounts to “an advance of $20 a tonne.” All pools, except Pool G (feed wheat), are eligible for the advance. Once a farmer commits to supplying the pool, the commitment amounts to a forward contract that must be fulfilled.

Austin notes participation in the pool program is better when prices are depressed. “The last few years, with high forward-contract prices, participation has been lower,” Austin says. “It really depends on where the market is. In days when prices were low, we certainly had more participation.”

The advantage to producers for participating early in the pool is they get an advance of $20 a tonne. The GFO marketing team “gets a better idea of what wheat will come into the pool and hopefully that gives us an opportunity to make more informed decisions,” Austin says.

This is the third year for the GFO wheat pooling program, which was carried over from the days of the Ontario Wheat Producers’ Marketing Board. BF