Merger

[AdamSmith]

If I may, I'm going to put on my soothsayer hat and share what I see.

I see a reinvented and reinvigorated Western Canadian grains industry emerging. The combination of increased world demand for grains as fuel and the corresponding rise in price for those grains along with a relaxed regulatory environment will create many new opportunities for farmers.

The mergers of existing grain companies are inevitable and are a logical response in preparation to this new environment of wealth and opportunity.

If mergers are to happen having JRI establishing themselves as Canada's heavyweight is in my opinion the best possible outcome.

There are going to be many new entrants into the grain buying game, and most will be specialized buyers or direct end use buyers. For example we will see the Ethanol companies buying directly from farmers, we will see Malt companies and even Brewers like Anheuser Busch and others contracting with and buying directly from farmers.

For every take over or merger of an existing entity there will be four or five of these smaller but more specialized buyers emerge. And we the growers of grain will be in a better position than before, not a worse position, as the left wing, union loving farm groups are fear mongering about.

The CWB will survive but in a much different position than today. Its role too will be that of a specialized buyer of grain. The CWB will abandon any form of cash pricing and reinvent pooling. It will be pooling in the professional management sense NOT pooling in the collectivist sense.

I view these developments as signs of optimism. I only wish more people shared my level of optimism.

[parsley]

77, SWP had all farmer reps. It didn't work.

Now, the plan is to add a few experts.

I'll bet if I asked you if there should be outside Board members when SWP was formed, the retorts would have been scathing!

Central planners cannot do the job.

What is a "weak board" ?

How do you determine a strong board?

How do you pick a 'strong' director?

ONE person or ONE group or one part of the country is not capable of even asking the right questions that will determine success, let alone answering the queations.

Choice provides diversity, variety, safety. Some will flpo just as SWP did. But out of that combination, there will be some success.

Parsley

[parsley]

77, SWP had all farmer reps. It didn't work.

Now, the plan is to add a few experts.

I'll bet if I asked you if there should be outside Board members when SWP was formed, the retorts would have been scathing!

Central planners cannot do the job.

What is a "weak board" ?

How do you determine a strong board?

How do you pick a 'strong' director?

ONE person or ONE group or one part of the country is not capable of even asking the right questions that will determine success, let alone answering the queations.

Choice provides diversity, variety, safety. Some will flop just as SWP did. But out of that combination, there will be some success.

Parsley

[JohnKenneth]

i'm with kamichael on all counts. better a smart company taking over a dumb company than 2 dumb companies coming together.

[lakenheath]

Sask,

Maybe a constructive post would help. Vader takes a lot of crap from every direction. Agree or disagree with him, he is an asset to this web-site. So please repsect his opinions, as they are merely opinions. I didn't hear him insult your mother.

[charliep]

Apologize for taking off topic but what will be the relationship be between the barley plebescite and the merger. Expressing frustration when people want to bring everything in the kitchen sink on the barley discussion when barley has to be looked at as a separate decision made on its unique market characturistics.

[agstar77]

Chaff the usual way they divest is by dynamiting the weakest links. It might sound okay to have more primary elevators , but if it is not accessible to you , it doesn't matter.

[cropduster]

Aggie...I like your previous comments about farmer run companies......seems it must be more of the same at the CWB table also!!It will be interesting to watch the `Taliban` directors run that into the ground!!

[chaffmeister]

Agstar77:

Who said anything about more primary elevators? Look to Charlie’s post – Richardson Agricore will have three facilities just east of Calgary. I’m gonna stick my neck out and suggest that at least one will have to go to a competitor if the merger goes ahead. And none of these are “weakest links”. (AU had to divest of a few when they merged - a some were world class assets.) If LDC or Bunge or Paterson or a new investor picks one of them up, a small firm just got bigger.

The other thing we should consider when we talk about competition is the competition from processors – ethanol plants, biodiesel, etc. All good.

[bgmb]

I this at best case scenario from this merger is that we as farmers gain nothing and lose nothing.

Reasons why this merger will not benefit farmers:
1) Yes there will be synergies from this merger bit they will not be passed on to farmers remember this will be a publicly traded company.

2) Less competition amongst buyers(grain companies) is always bad for sellers(farmers). How anyone can dispute this FACT is beyond belief.

My guess is most of the people who are supporting this are agricore stock holders. As am I by the way.

[agstar77]

Charlie, since the government is pushing barley and wheat marketing choice it is only fair to comment on what the choices will be if the CWB no longer markets barley and wheat.

[agstar77]

Cropduster, you are referring to the Strahl Taliban appointed directors are'nt you?