Farmer Owned Grain Elevators?

[TOM4CWB]

I understand AGPRO SWP is in the process of finalising a takeover by Topher, which ADM is the majority shareholder indirectly in.

Publically "in the very near future" (January) is the time frame of this announcment.

I hear ADM is increasing its share to 25%, soon to be 45% in Agricore United.

Does this mean a merger of SWP and Agricore United in the not too distant future?

What impact will this have on oilseed crushing in western Canada?

Does this mean that destruction is being completed of the Co-operative grain marketing structure in western Canada?

[roadrunner]

Who is Topher?

[TOM4CWB]

roadrunner;

Alfred C. Toepfer International is I believe a German based trading company who is, according to my sources 50% owned by ADM and 50% Intrade. Further I am told Intrade is owned 60% by ADM.

I understand SWP has a marketing alliance with Toepfer now.

[roadrunner]

Hello Tom,

If ADM is involved would the Canadian Gov't allow that type of takeover as it would create somewhat of a monopoly in the grain industry?

[Steve]

ADM is a worldwide company and does some grain trading but is basically in food processing. So they are partners in grain handling systems to insure a good supply of grain to their mills and plants and this is not really a bad thing for producers of grain and oil seeds. They don’t have the controlling share in a lot of these companies.

[TOM4CWB]

Roadrunner,

We could hope that ADM would not have controling interest, but, if ADM invests hundreds of millions in western Canada, and bail our failing co-operatives, is it fair to expect any less?

Steve, I really hope you are right, because fear alone is one of our worst enemies, and fear of failure many times creates failure itself.

I believe it is good for grain producers to know what is happening, even if we can only do a little by maintaining our own share in these co's ourselves to help prevent monopolies from taking over...

I am sure Agpro and UGG would rather have farmer share holders, but hard times and fear from poor past performance makes these scary investments...???

[charliep]

Interesting. ADM does not seem like a good marriage to me with other suitors like Conagra more likely candidates based on needs/philosophy. How would one of the companies get around the fact that SWP "B" (the only ones that I know that trade) are non voting/have no management say?

Any rumors in the ag community about Cargill/their involvement in the western Canadian ag. industry.

[TOM4CWB]

Charlie,

Agpro/SWP deny any takeover is close, and suggest the announcment is "only good news" and not an anouncment of any takeover.

It must be tuff being a worker at Agpro/SWP to sell Ag inputs or buy grain, however in Sask maybe it is different than AB on its stability???

I see they announced the sale the Western Producer last week, this will change the "politics" of the Western Producer very likely!!!

[cowman]

Well TOM I hope it dosn't change the way the Western Producer airs its "politics"! I remember, as a boy, my fatheer opening the WP and saying "AH, lets see what the commies have to say?!! But seriously, it is an excellent paper and gives you all kinds of information and I hope they keep right on publishing the way they do now! Theres nothing wrong with getting another "slant" on what is happening in Agriculture.

[wedino]

Tom4, ..It must be tuff being a worker at Agpro/SWP to sell Ag inputs or buy grain, however in Sask maybe it is different than AB on its stability???


From the sask side - it seems to me that SWP is finally trying to compete - I find myself delivering to them, I must say its been a long time since I could. I don't think I ever said never, at least not that I can remenber.

Cheers........wedino

[Steve]

I remember not so long ago when we just had Alberta Wheat Pool and United Grain Growers, both co-operatives and very poor service. They were open 8:00 AM to 12:00 and 1:00 to 5:00PM five days a week and there was no real competition, because they only had to look after their members. To be fair to the elevator managers, they didn’t get the labor support to be open more hours.

The best thing that happen was when Cargill came to town, this started a little competition and all the elevators stayed open 12 hour seven days a week and some 24 hours a day. This sure made it nice for farmers delivering grain and not trying to beat the clock because the elevator was closing at 5:00 PM.

Farmers started to expand to try and lower the cost of production, also bought bigger trucks to be more efficient in transporting grain.

The co-operative farmer owned elevators didn’t keep up at the same rate to improve the grain handling facilities. Board directors were not keeping up with farmer needs and farmers were reluctant to invest more money to expand services. The co-ops started to borrow money so they could upgrade the grain handling facilities and we all know the rest of the story.

You have to work with large volumes to be efficient; also need good managers that look for ways to cut operating cost and still proved good service.

Canada’s small population and good grain and livestock production, we need foreign investment to help us process and export our products.

I welcome corporations like ADM to come in and work as partners.

I believe we still have fairly good Government competition legislation to stop large corporation monopolies.