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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 August 16, 2017

Wednesday, August 16, 2017

Commodity Period Price Weekly Movement
Corn CBOT September 3.52  20 cents
Soybeans CBOT November 9.25  53 cents
Wheat CBOT September 4.20  44 cents
Wheat Minn. September 6.73  60 cents
Wheat Kansas September 4.20  24 cents
Chicago Oats September 2.60  10 cents
Canadian $ September 0.7898  0.15 points

Harvest 2017 prices as of the close, August 16 are as follows:
SWW @ $182.43/MT ($4.96/bu), HRW @ $189.46/MT ($5.16/bu),
HRS @ $254.49/MT ($6.93/bu), SRW @ $187.11/MT ($5.09/bu).

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Market Trends Report for August-September 2017

Monday, August 14, 2017

US and World

It has been an uneven growing season in much of the American corn belt. The Western corn belt has been dry especially in the Dakotas, while the mid south and Eastern corn belt were inundated with heavy rains earlier in the spring. The forecast in late July turned cooler and wetter for all of the American corn belt. This new forecast essentially changed much of the outlook for the American crop, but still many analysts were expecting lower August USDA numbers reflecting some of the earlier tough conditions for US corn and soybeans. Anticipation of the August 10th USDA report was filled with expectations of lower yield projections.

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On August 10th, the USDA lowered their projected corn yield estimate to 169.5 bushels per acre down from their earlier projection of 170.7 bushels per acre and less than last year's 174.6 bushels per acre. At the same time the USDA raised soybean yield expectations to 49.4 bushels per acre up from their 48 bushels per acre earlier estimate. This pegged 2017/18-soybean production at 4.4 billion bushels. Both of these USDA estimates rocked the grain market August 10th, as it was a big surprise. With so much uneven weather affecting this crop in the field a US corn yield of 165-166 bushels per acre was a general trade estimate. Futures prices plummeted on this very bearish report.

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