Merger

[agstar77]

Can ADM make a better offer to AU? What does this mean to SWP? Consolidation was bound to happen, but will farmers benefit or will this mean one less choice to market grain after the CWB is killed? This will put an end to any farmer reps on AU board. Can Patterson-SWP be far behind?

[parsley]

Didn't SWP have ALL farmer reps? Are you atisfied with how that turned out? If you were one of those SWP farmers, would you would want more of that same scenario? What would you change?

Parsley

[charliep]

Will change the landscape alright. Picking a my home country east of Calgary, the new entity will have 3 facilities - Indus (former Agricore - 42,000 tonnes), Carseland (former UGG - 42,000 tonnes) and a Pioneer (Carseland - 18,000 tonnes I think). I assume there will have to some divesting of assets to meet anti combines needs but that has yet to be seen.

[hoppsing]

Fed govt doesn't seem to mind privately owned monopolies/oligopolies. Only the CWB !

[agstar77]

If farmer reps on boards of grain companies is a bad idea how can farmer run value added be a good idea? Do you see the conflict in these propositions? Perhaps it is just who is selected to be on the B.O.D. It may be the scale of the operation. A farmer run small business may succeed but when it comes to something as large as pasta plant specialized management is needed outside the expertise of the people who grow the grain. MPE suffered from a weak BOD, which allowed management to run it into the ground. SWP suffered the same fate and almost dissappeared.

[kamichel]

I am happier to see JRI merger with Agricore than SWP merger with Agricore.
Now if someone could convince JRI to build an ethanol plant within 20 miles of my farm I will be the most happy.

[Vader]

This is bad news for farmers and will likely have an impact on the barley plebiscite.

I predict a hostile takeover by Pioneer Agricore of SWP.............................soon!

[agstar77]

Isn't it ironic the CWB barley vote has not taken place yet and the future is already clear. There will be more mergers creating nice neat efficient packages for someone to take over. Choice will be the last thing you will have in marketing your grain and yet the Cons say this vote is all about choice.

[sask]

vader, you really are the most negative, waste of time
on this site.

[chaffmeister]

To me, this is good news. I'm sure there will be some required divestiture of assets and if smaller players can get bigger by buying some assets from Richardson Agricore, that's all good. And/or, if a new player jumps in, even better.

I've read quite a bit here on Agriville about the increased concentration of the grain handling system but its not as bad as some make out:

1995-96
19 primary elevator firms
top 6 controlled 94% of licenced space
top 8 controlled 98%

today
35 primary elevator firms
top 6 control 81%
top 8 control 89%

Richardson Agricore - as it stands right now - would control 36.2%.

What will be important is the selling of specific elevators to ensure no undue concentration in "small markets".

Also, the terminal question will be a huge stumbling block.

[Vader]

sask,

You're pretty touchy. I am not driving this environment, just observing and making a personal prediction. I could be dead wrong. Perhaps it will in fact be a SWP Paterson merger or a Cargill takeover of SWP. One thing is for sure. This is not the end of corporate mergers and takeovers.

[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.

[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