Close to the beginning of a crop year and I start to get the information for CWB deductions. One of these is the Freight adjustment factor (FAF). Irrelevant to most of you (just another number on your cash ticket) but a brain teaser for a summer afternoon.
The new FAF for wheat ex durum is $12.35/tonne ($12.65 last year). The FAF for durum is $0 (same as last year) with small adjustments for Manitoba (closer to Minneapolis cash market). Feed barley - $0. Malt barley is $6.68/tonne versus $6.93 last year.
My questions to test farmer understanding about the black box of price pooling.
What is a FAF?
What is it meant to adjust for?
Why would the FAF decrease by 30 cents/tonne in the case of wheat ex durum and 25 cents/tonne in the case of malt barley (assuming the CWB stays in the game)? Should the number be bigger or smaller?
Is the FAF even needed any more or are there better ways to adjust for delivery location relative to markets/capacity? Damn it. I gave away one of the answers.
The new FAF for wheat ex durum is $12.35/tonne ($12.65 last year). The FAF for durum is $0 (same as last year) with small adjustments for Manitoba (closer to Minneapolis cash market). Feed barley - $0. Malt barley is $6.68/tonne versus $6.93 last year.
My questions to test farmer understanding about the black box of price pooling.
What is a FAF?
What is it meant to adjust for?
Why would the FAF decrease by 30 cents/tonne in the case of wheat ex durum and 25 cents/tonne in the case of malt barley (assuming the CWB stays in the game)? Should the number be bigger or smaller?
Is the FAF even needed any more or are there better ways to adjust for delivery location relative to markets/capacity? Damn it. I gave away one of the answers.