How does the CWB determine the relative market value of each grade of grain?
The CWB tracks the price spreads that existed in the market for the different grades sold during the crop year. These price spreads are used to determine the relative value contributed by each grade to the pool accounts. Price spreads are calculated by analyzing the estimated selling prices for similar grains sold by competitors. The estimated selling prices are, for the most part, based on the U.S. futures prices, which are readily available and very transparent. The estimated selling prices also reflect the different quality (market) premiums and discounts that are available at each of the U.S. port positions, but do not reflect the additional premiums that the CWB is able to extract from some of its customers. Instead, the additional premiums which are attributed to the CWB’s status as a single-desk seller are shared equally among all farmers within a pool account. However, it isn’t always possible to determine the price spreads based solely on an analysis of the competitors’ sellin
