CWB Enters into Handling Agreements with Cargill

[charliep]

See the CWB website. On Road so not
able to link.

[wilagro]

http://www.cwb.ca/public/en/newsroom/releases/2012/news_release.jsp?news=030112.jsp

[gustgd]

UPDATE 2-CWB signs deal with Cargill to
handle 2012/13 grain
Thu Mar 1, 2012 8:34pm GMT
* Allows access to 30 elevators, 3 port
facilities
* CWB looks to start buying grain in a few
weeks
* CWB seeking deals with other grain handlers
By Rod Nickel
March 1 (Reuters) - The Canadian Wheat Board
said on Thursday that it has agreed with
Cargill Ltd to move the CWB's 2012/13 grains
through its grain elevators and port
facilities, the first such deal as the board
moves to compete in the open market.
The Wheat Board will lose its wheat and
barley marketing monopoly in August for the
next harvest, leaving it to compete to buy
farmers' grain against companies like
Cargill, Viterra and Richardson
International.
The CWB lacks country elevators and port
storage space, while grain handlers are eager
to secure as much volume as possible.
Canada is the biggest exporter of spring
wheat and durum.
"We can now move ahead to provide farmers
with an exciting package of programs they can
use with confidence in this new era," said
Wheat Board CEO Ian White.
The board will begin buying farmers' 2012/13
grain through cash and pool contracts for
autumn delivery within a few weeks, he said.
The CWB is also seeking similar deals with
other grain handlers.
"Farmers will be pleased to hear this because
they're wanting to start making some
(planting) decisions and lock in some prices
for 2012," said Manitoba farmer Doug Chorney,
president of Keystone Agricultural Producers.
Farmers in Western Canada begin sowing crops
as early as mid-April.
The CWB's expertise in pooling - a marketing
method that captures prices over a defined
period of time - is also attractive to
farmers, Chorney said.
"(It's) really tough to time your sales at
the peak (price) all the time."
The president of Cargill's Canadian
subsidiary, Len Penner, said its deal with
the Wheat Board allows growers to use more
marketing options through Cargill.
U.S.-based Cargill, the third-largest
Canadian grain handler, has 30 grain
elevators across Western Canada, along with
port facilities at Vancouver, Thunder Bay,
Ontario, and Baie Comeau, Quebec.
The Canadian government is backstopping the
CWB for up to five years with financial
guarantees, after passing a law in December
to scrap the 69-year-old monopoly.
"The CWB's first grain handling agreement is
further proof that the CWB can be a viable
and competitive marketing option for
farmers," said Agriculture Minister Gerry
Ritz in a statement.

[dave4441]

Makes alot of people look pretty stupid. Pro CWB guys have said none of this would ever ever happen. Turns out they wanted it to never happen.

[bucket]

The cwb partnered with the "evil" family run Cargill????

The devil must be enjoying ice cream today.

[ColevilleH2S]

I wonder what [URL="http://en.wikipedia.org/wiki/Burbot"]Burbot[/URL] would have to say about this? (much rolling of eyes)

[malleefarmer]

was gonna break this yesterday but chose not to.

would be sinful of me but its been the hot rumour here since monday cwb cargill wheat board.

they intergrated alot of new selling options into the awb here.

[wilagro]

bucket: With the Harper government running the CWB expect these unholy alliances. Not to say that this particular arrangement is "bad" but the possible SALE of the CWB in the future MAY figure in this cozy little agreement. The Devil is in the details as they say.

Watch for agreements with the other grain companies in the weeks ahead and see if they compare. I am suspicious of this particular agreement after what transpired in Australia.

[Burbert]

It's Burbert, NOT Berbot, dork! This is
the beginning, marriage made in
marketeering/chiseling heaven. Way ta
go Cargill, Comedia is essentially yors
now. The other sleeping old multis, had
better wake up or r risking losing out.
Viagra better wake up and get stiff, for
at least 4 hours taday and attempt ta
dooo somethin, other than yappin aboot
how great theys is. Pioneer, well they
kin just go their own way, cousin theys
suck good friends wit all. Little
indies, are hooped, fd, screwed,
history,done, fini, over, the end,
kaput,dats it blah, blah, blah. Maybe
theys could attempt ta specialize in the
feed markets and suck up ta feeders and
the Albertie gobermont fer some lip
service!!!!!!!

[bucket]

Wilagro

I think Viterra is the bad one in
Australia.

I don't deal with cargill so shouldn't
make much difference to me. Unless they
gave them the railcars.

[nicolaas]

Has any one heard of the producer cars? I have really been using them the past few years(saving 900/car in elevation charges as opposed to my friendly neighborhood terminal). I'm assuming the cars can now be unloaded at the coast with Cargills terminal?

[malleefarmer]

bucket is correct no one has problems with cargill

[charliep]

When you look at capacity at port (Vancouver, Prince Rupert, Thunder Bay, Baie Comeau, versus potential grain handle at primary elevators in and Cargills connections/own flour mills in the US, there is likely a solid business reason why they were the first to sign a handling agreement. If I remember back to the days of the Daily Price Contract, Cargill was one of the main companies that booked supplies for this program prior to its getting overbooked. Not a comment on good or bad. Just an observation.

[charliep]

Will get beat on by both sides of this debate but I highlight the benefits of the CWB in the new.

1) Farmer support based on history and fit in their risk management programs. Lots of farmers still like pooling. May be the CWB will off better ways to manage grade and protein spread risk than grain company contracts. Ability to separate price (CWB) and delivery (grain company).

2) The CWB will offer services to grain such as reduced/no hedging costs/price risk (handle for elevation), inventory financing, ability to use deliveries to other grain companies to source crop for end use sales, ability to use CWB contacts in the export market, etc. Put another way, the grain companies may have solid business reasons to use the services of the CWB.

3) The potential development of price and volume information systems at primary elevator and port position. As an example, there will likely be an active cash market for wheat on the west coast (not every ship is going to arrive on time or every grain company have exactly the right wheat in store when a vessel arrives). There will mean cash trade. The question is how available this information will be and from there how it will be reported.

Not all will be bad in the new world.

[bucket]

charliep

Does that mean you see a day when they use basis and premiums to get the grain they need at the right time and place?

If so doesn't that mean a more efficient sytem that doesn't tie up elevator space with off grade grain for months?

I remember seeing a pioneer elevator with snowstar wheat tying up a couple of bins for 9 months.They were pissed but the hutterites that delivered there were happy.