Well it look like Sask Pool is convinced change is coming

[agstar77]

AS ,CWB directors are no different from SWP, remeber Bruce Johnson?

[jensend]

just talked to somebody who watches as things develop and this is either conagra or chinese money and may be coming out of china as they anticipate the end of the cwb. reminds me of when nilsson's bought heartland livestock out here and everybody thought it would be good for the cattle industry but turned out they just came to **** and pillage like the other auction and packer guys.

[wedino]

Would it be so bad if they had to divest of port terminals? Chance for inland terminals to pick up a port terminal or maybe cwb2. Market likes SWP announcement, up $.28 so far today.

[AdamSmith]

Agricore shares rise 21 per cent after Pool makes takeover bid
November 8, 2006 - 11:51 a.m.
REGINA (CP) - Shares in grain handler Agricore United (TSX:AU) shot up 21 per cent Wednesday morning, a day after rival Saskatchewan Wheat Pool Inc. (TSX:SWP) made a hostile takeover bid that would create a combined business worth more than $1.2 billion.

Agricore stock advanced $1.73 to $9.97 with 926,603 shares changing hands in early trading. Pool stock edged down two cents to $6.89.

THE WAY I READ IT THE MARKET ISN'T TO IMPRESSED WITH THE OFFER BY POOL, IT HAS ALREADY VALUED AGRICORE SHARES ABOVE THE POOLS OFFER AND DROPED POOL SHARES.

I KEEP ASKING MYSELF WHY? WHY NOW? WHY AT ALL? IS THE POOL AFRAID TO COMPETE?
DO THEY KNOW THAT HANDLING REVENUE PER TONNE IS GOING TO DROP BIG TIME SO THEY WANT TO MAKE IT UP ON VOLUME? IT JUST SEEM LIKE THEY FELT THEIR GOING TO LOSE ANYWAY SO LETS THROW A HAIL MARY AND HOPE ITS CAUGHT!

ND ELEVATORS BUY GRAIN FOR 7 CENTS/BUSHEL IN THE DOOR AND 7 CENTS/BUSHEL OUT THE DOOR! THATS 1/3 WHAT OUR SYSTEM CHARGES

[jensend]

so is au buying back shares in self defence?

[wd9]

ADM might be.

[wedino]

Or is SWP buying AU shares?

[jensend]

i'm sure swp is buying au shares. adm and au might be buying as well to push price up or in self-defence. two million shares traded today. how this all unfolds will depend on who is bankrolling swp. i think adm holds just under 25%. either way it's another bad thing for producers as ownership of that sector gets more concentrated. if swp gets control of au, whoever is controlling swp on this will have a lot of influence over canadian grain industry especially as cwb becomes less of a factor.

[Jman]

Now the lefties are worried about the potential elevator closures that will result from the SWP-AU merger.

In my opinion, the HT elevator system is overbuilt in W. Canada. These facilities, approx. 350 of them, were built to 15-25 KT capacity, and were expected to turn over 10-12X per year with a total throughput of 200-225 KT/yr. Very few facilities ever achieve these volumes. How many towns throughout the "Designated Area" are inundated with two or more of these monoliths within a 50 mile radius? The sooner they close 1/2 of these things HT's down and pass the savings on to us in terms of trucking incentives, the sooner we will have more money in our pockets. How hard is it to truck your grain 75-80 miles, rather than 40-50 miles...and extra 20 minutes. Just think of all the overhead costs saved by SWP by shutting downs these (duplicate) facilities. Most have 8-12 staff, a crop input facility, obscene municipal taxes, depreciation costs, maintenance, etc.

Also the railways will be able to better plan long term car requirements at the 100 and 112 car loading stations, thereby increasing railcar turn around time.

[rainman]

J'man, do you honestly think the railway would speed up delivery of cars to the country? I highly doubt it. They seem to run the show in terms of what an elevator can turn and I know that 56 or 112 spot, the CN and CP are not efficient. Most of the time these terminals are waiting on the rail. I also disagree with your thoughts on eliminating terminals. If you want to haul your grain a hundred miles, go for it. I like having a terminal that is 2 miles from my front door and furthermore these terminals are at least something in an already depleted rural landscape. They create jobs and bring a lot of money to the community including very high municipal Taxes.

[rbrunel]

I think that we still may be short of terminals on the landscape. I have a feeling we may all want to move grain at similar times and increased capacity is what it will take. If you take the american situation, a large portion is delivered off the combine. does this not make sense or am i out in right field

[AdamSmith]

rbrunel I agree with you. I believe we will see a new demand for much greater inland terminal storage capacity once the open market gets rolling. A high throughput with limited storage capacity sound great in theory but this is the prairies. I know one of the things that I want to see change within our system is the ability to deliver at least a quarter to a third of production off the combine. For that to happen, we need more commercial storage.

The cheapest way for any company to gain market share would to either triple their storage capacity at their big elevators or to invest in processing (milling, crushing, malting, whatever) or both. I think industry consolidation is just too short sighted. Nobody gains anything by it. We want to see new investment, not existing investments changing hand. I really don’t care who owns what, as long as it adds to the industries health and dynamic, this takeover, if it ever happens, adds nothing.

I’ve spoke about my belief that the open market will bring into our system higher yielding wheat varieties, I’ve grown 100 bu/ac winter wheat before, just imagine the number of acres and bushels of winter wheat being grown when we can get the same price for winter wheat as spring wheat. Imagine adding 10 or 15 bushels to our trend line yeils over the next ten years. Either farmers build expensive storage that are only turned once each year or we have the grain companies build cheaper storage that can be turned 4 or 5 times.

[Incognito]

You will lose your @ss turning a facility 4-5 X a year. At 10X it would be difficult to turn a profit.

Cargill are turning some of their corn facilities 60 times.

[AdamSmith]

Incognito, do we have the ability to turn a facility that many times a year (60)? And can we compare a barge loading facility in Illinois to a rail loading facility in Souris MB, with crappy roads into them, road bans for 2 months a year, -30 and snow drifting for 3 month of the year, soft rail beds until mid june and some type of labor action bringing the whole thing to a crashing halt at least once a year?

And if a company is going to lose it's ass with 5 turnarounds, what do farmers lose, spending $2/bu on storage and only using it once?

Your taking into account all the other costs associated with operating a facility, I'm only talking about the costs to build storage. What makes more sense, on farm storage at $2-3/bushel and using it once, or something less per bushel, at a commercial facility and using it more than once per year.

Your saying improve efficency, I'm saying build more storage but we're both saying the system will need to be able to handle the harvest rush in an open market a whole lot better.

It's either that or farmers are going to be left with humongous basis levels from Sep to Dec for years to come, leaving many of us with zero deliveries until the new year when basis levels improve.

[Incognito]

_______________________________________
"crappy roads into them, road bans for 2 months a year, -30 and snow drifting for 3 month of the year, soft rail beds until mid june and some type of labor action bringing the whole thing to a crashing halt at least once a year?
_______________________________________

Spend your money on something that provides an alternative to exporting raw product and provides someone else the opportunity to steal your equity.

Then you may get your required turns and the CWB becomes useful to whom?