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Successful risk management program needs vote of confidence from provincial and federal governments

GUELPH – Ontario Grains & Oilseeds appreciates the leadership shown by Ontario’s McGuinty government in 2007 when the pilot Risk Management Program (RMP) was launched. But with the three-year pilot period about to expire this year, it is time for the provincial government to continue its leadership role in protecting the viability of the family farm and make RMP permanent. It is also time for the federal government to come to the table in support of provincial business risk management programs.

RMP is a price support program for grain and oilseed producers to offset losses caused by low commodity prices created by global subsidies, and volatility in world markets and currency rates. Payments are triggered when prices for grains and oilseeds fall below a specific support level based on a cost-of-production formula.

RMP is currently a partnership between the province and producers and similar to an insurance program, with both partners contributing to the program.  “After eight years of depressed world prices prior to 2007, RMP has fulfilled its mandate of providing an element of long-term stability and the ability to plan for the future,” says Leo Guilbeault, Chair of Ontario Grains & Oilseeds.

The RMP pre-harvest payments are scheduled to be mailed beginning November 23 for the 2009 forward-contract period.  Producers will receive a payment on corn this year of $0.144 per bushel at the 100 per cent coverage level (adjusted for the 40 per cent provincial contribution from $0.36).  Producers are currently working to bring the federal government on board as partners in RMP at the federal rate of 60 per cent.

RMP is a critical pillar in supporting a multi-billion dollar industry that feeds Ontario cities and keeps our rural communities thriving. 

Ontario’s grains and oilseeds producers strongly encourage the province to make the program permanent and for the federal government to come to the table as partners, as we do not want to go back to a system where we stumble from crisis to crisis with emergency aid announcements that cost the government more in the end,” Mr. Guilbeault said.

Ontario Grains & Oilseeds represents over 25,000 farm families growing soybeans, wheat, corn, canola and edible beans from Ottawa to Windsor.  Our labour and innovation brings in nearly $3 Billion a year in food and biofuel products, the backbone of rural communities throughout Ontario.  The spin-off industries bring in over $10 Billion per year.  There has even been some speculation that Agriculture could once again become the number one industry in Ontario with the downsizing of the auto sector.

For more information on the RMP, please visit Agricorp’s webpage: http://www.agricorp.com/en-ca/programs/rmp/#market_prices

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Grain Market Commentary for July 19, 2017

Wednesday, July 19, 2017

Commodity Period Price Weekly Movement
Corn CBOT September 3.82  03 cents
Soybeans CBOT November 10.12  25 cents
Wheat CBOT September 5.03  32 cents
Wheat Minn. September 7.75  06 cents
Wheat Kansas September 5.00  44 cents
Chicago Oats September 2.93  11 cents
Canadian $ September 0.7950  1.00 points

Harvest 2017 prices as of the close, July 19 are as follows:
SWW @ $218.72/MT ($5.95/bu), HRW @ $218.72/MT ($5.95/bu),
HRS @ $289.01/MT ($7.87/bu), SRW @ $217.90/MT ($5.93/bu).

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Special Post June 30 USDA Market Trends Report

Tuesday, July 04, 2017

US and the World

It can be an explosive time in the grain markets. Across the greater US corn belt corn, soybeans and wheat are showing great variability as we head into July. Historically, the July 4th weekend has always served as a market flashpoint as crops start to develop quickly and summer weather makes its impact. The June 30th USDA planted acreage estimates and quarterly stocks report also impact the market at this critical time. In 2017, we are here again and once again the USDA did provide some surprises for market action.

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In their June 30th USDA report many market observers were musing that US soybean acres may overtake US corn acres planted. However, that was not the case as USDA predicted US corn planting at 90.89 million acres and US soybean planting coming in at 89.51 million acres. US corn acreage is down 3.11 million acres from last year. The US soybean acreage was approximately 440,000 acres below pre report estimates, but still 7% higher than last year. All wheat acreage came in at approximately 45.66 million acres, which was the lowest since the USDA began keeping records in 1919.

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