Looking for Logic in the Durum FPC Versus EPO

[charliep]

New crop years are always fun for economists (a sad comment on our personalities) because they generate a whole new set of numbers.

1CWAD 12.5 PRO - $275/tonne port paid at delivery (minus CWB deductions).

1 CWAD 12.5 100 % EPO cost $23.50/tonne or $247.50 port paid to them at time of delivery (minus CWB deductions). Can particate in total payments above $275/tonne.

1CWAD FPC payment port $253.06 (minus CWB deductions).

Assuming the $275/tonne is a reflection of US prices adjusted to port position and a fictious program like the daily price contract for wheat, the farmer is offered $275/tonne cash price (minus deductions)?

Which of these options should a farmer use - particularly if cash flow is important to them? A trick question.

[charliep]

Mistake on my first one. Should have commented you only $144/tonne and have to wait the rest which make result in a total payment value that may be more than or less than the PRO forecast.

[charliep]

More embarassment.

The $23.50 EPO should have been deducted from the $275/tonne. Payment would have been $251.50/tonne minus CWB deductions. The FPC with no ability to participate in better CWB total payments down the road only provides $1.56/tonne better cash flow.

Apologize for the math mistake.