Maybe this should be a recurring series of posts as well. I'll say it again, the manner in which the CWB pays farmers for grain is about the most muddled signal that farmers receive. The TV signals we got on the farm in the days before satellite were stronger.
If you have your price signal antennae up (the bunny ears, if you will) you may have noticed that the board put out its initial payments for feed barley. This value represents the money farmers would receive up front for feed barley delivered into the board. The price they posted was $110.50 per tonne or $2.41 per bushel. The signal to the farmer: we really don't want your grain. If our lowball PRO price wasn't enough of a signal, the initial payment should be. In this case, we are lucky that we don't have to use the board. In the case of other grains, we are not so lucky.
There is a definite cost to the payment system used by the CWB and it means that the prices quoted in the Pool Return Outlook are higher than the farmer can expect to receive. The reason is that the farmer bears the interest cost, the cost of financing the foregone cash, for grain that he has delivered but not yet paid for. Waiting sixteen months to receive final payments from the CWB is a cost to farmers.
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