SWP SOME ONE HELP ME UNDERSTAND!

[SASKFARMER3]

The SWP making a bid to take over AU, is this a bad April fools Joke.
The SWP lost money the last time I checked again last quarter. Shouldn't it be the other way around Agricor Buying SWP.

[jensend]

maybe there's somebody in this world that wants them both and they are bankrolling this venture. pretty nifty way to get a lot of influence in the grain handling sector in a real hurry. the pool either had to buy or sell; they weren't viable as it was. china is buying into the canadian oil and gas industry, might be doing the same in grains to keep control of more of their food supply in light of the ethanol and biodiesel hype right now.

[agstar77]

Rumour is that is Conagra, major competitor of ADM.

[chaffmeister]

Conagra - interesting. Remember that this is a company that came up to Canada (by Mayo Schmidt) with the idea that they would control their origination of Canadian wheat (ConAgra is the single largest buyer of Canadian wheat). They also looked at tariff elevations etc and figured owning elevators in Canada would be like owning a cash cow.

The CWB had different ideas; ConAgra could not control their origination. And they didn't figure on elevations getting eaten up by trucking premiums (because of competition.) So now they're gone - sold out to JRI.

Fast forward to today. The CWB could be gone which takes away the first problem of controlling originations. Controlling half the country elevation takes care of the other problem - competition. So, on the surface, this kinda makes sense. But I have my doubts....

A cheaper way would be to enter an LTA with potential suppliers of elevation services.

The first thing that came to mind when I read about SWP's interest in AU was - where's the money coming from. Hey - maybe the CWB is behind this merger / takeover, partnering with someone plus putting the $50 million contingency fund to good use!!!

[AdamSmith]

chaff, I really doubt the cwb is behind this.

My guess is, this is a Sask Pool brain wave, but they were not in any position to pull it off alone, so they need a partner. The big question is who.

But we do know that if a merger is going to take place, it is going to cost much more than this low ball offer.

The market spoke yesterday, (not sure what the stocks are trading at today), and investors said merge if you want, but you're going to have to pay alot more.

[agstar77]

AU is trading at 10.50, up on volume. Still below what it traded for when the AG UGG deal went through.

[TOM4CWB]

Chaffmeister;

This is all about the new world in 10 years AFTER biofuels are integrated in western Canada.

Think about what happens with 3-5mmt more Canola being crushed for specialty oils and biofuel in 10 years. What does this do to the export oriented grain handlers?

Then process another 3mmt or more of wheat/bly for ethanol... what is left for the traditional grain handlers for export?

There is going to be a massive restructuring, there has to be... at some point. Agricore is in the weakest position because of debt. SWP already dealt with that problem and transfered it to a share structure.

The CWB could be out of the export game by default... because there will simply not be enough critical mass to sustain a large union and institutional player who markets using a price discount commodity based selling system.

Curt explained to us how a 150 year young Company survives in 2010.

It is all about managing personal relationships... matching up STABLE patient capital... with STABLE end user comsumptive demand... relationships that carefully manage risk and retain capital through volatility and high risk periods.

We ARE in a transistion... this trial ballon is a signal... that we should start serious consideration for each one of our entities.

What will the new future of Agriculture as both a food...and an energy producers... look like? What will control our RISK... in the most effective manner?

THIS IS ALL ABOUT managing RISK... THROUGH PERSONAL RELATIONSHIPS...

The 20,000 CWB growers who have transitioned to PPO's put the writing on the wall... as did the 1.1mmt with a $35mil transfer to the pools and Contingency fund.

We are more effective marketers outside the pool accounts of the CWB through personal relationships with the market... to effectively manage RISK.

Does anyone think the gov. will approve the CWB request to raise the COntingency Fund cap to $100mil?

[agstar77]

T4, there has been talk that Bruce Johnson might be shoved into the CWB CEO job by Strahl. What is your opinion on his qualifications re SWP and Don Loewen as well as Farm Gro. How might this relate to the current merger situation with SWP and AU? Perhaps some of the SWP delegates would have some insight into Mr. Johnson and whether he is competent to serve on the CWB board.

[TOM4CWB]

Agstarr77:

I want to relate a true report from the military to you;

I think it was about 10 years ago... or so... and a Military Herc went down on Baffin Island I believe it was.

The whole operation after the crash & clean up, cost millions of dollars...

The media asked if the surviving pilot shouldn't be FIRED who had some personal error and decisions in the crash.

The Airforce Official put it this way.

We need to treat this as a training exercise... because looking at it any other way is foolish.

We just spent many Millions of dollars... of pain, suffering, and time learning valuble information and lessons.

It would be foolish to fire the pilot... after we just spent over $10 million training him!

The CWB Directors... the "single desk" supporters...

MUST get their collective heads out of the sand.

The world has changed. SWP has changed... and hopefully all of us... if we are wise... will learn from our mistakes and create a prosperous future!

[Braveheart]

Agstar77, more than anyone else currently on the CWB board, Bruce Johnson understands the grain handling, transportation and marketing systems (CWB and non board) very, very well. Having been one of the most respected executives in one of the largest grain companies makes him very qualified.

Furthermore, having lived through SWP's foray into value added, Mr. Johnson will have learned what does and doesn't work. Good judgement comes from experience. Experience comes from bad judgement. I think Bruce Johnson's experience will be a huge asset to the CWB board now, and of immeasurable value to CWB ll.

[Braveheart]

Agstar77, I thought the CWB already had a CEO. Is Adrian leaving? I hope so. He really isn't qualified to run CWB ll in an open market environment.

[chaffmeister]

Braveheart - would you keep a guy around that clearly does not share your vision for the organization, has publicly and acrimoniously debated against your vision all the while being confrontational and difficult to work with your main suppliers (grain companies)? And, on top of that, had failed to PROVE that his vision is the right one and that he is capable of out-performing any other business model through exercising the formidable market power available to him - the single desk?

What do you figure - will he earnestly and diligently implement the proposed change with dedication and commitment? Naw, me neither.

In any other situation, under these circumstances, the CEO would gracefully resign due to irreconcilable differences.