February 1, 2013
Cargill's western Canada's grain sales going smoothly after CWB's monopoly ends
Since the end of Canadian Wheat Board's grain-marketing monopoly, grain sales and movement across western Canada have gone smoothly for Cargill in the first year.
Since the end of Canadian Wheat Board's monopoly on August 1, 2012, Canadian farmers are allowed to sell their grain to any buyer for the first time in 69 years.
Cargill, the third-largest western Canadian grain handler after Viterra and Richardson International Ltd, has seen few glitches in the newly opened market, Cargill Ltd. president Len Penner said on the sidelines of a hog conference in Winnipeg.
"Everyone has stepped up and it's largely been business as usual. Customers that are looking for Canadian wheat are getting Canadian wheat."
Grain movement from the vast western Prairies to ports has also been smooth, he said. Canada is the sixth-largest wheat grower in the world. Cargill Ltd is the Canadian arm of US-based agribusiness giant, Cargill Inc.
The former Wheat Board, now operating as the much-smaller CWB grain-marketing company, has said it is in talks with investors who could buy or strike a partnership with it. Penner declined to comment on whether Cargill is interested. The gap in grain-handling capacity between Richardson and Cargill has grown since Richardson bought some of Viterra's country elevators from Glencore International PLC.
Last year, Swiss-based Glencore acquired Viterra and sold off some parts to Richardson and Agrium Inc. As a result, Glencore and Richardson now own roughly one-third each of western Canada's grain-handling capacity, while Cargill's share remains at an estimated 15%.
"The gap may have moved, but the No. three spot we are in has not gone up or down," Penner said. "At this point, we are quite comfortable in the spot we are at."
Cargill, which plans to build a rapeseed-crushing plant in Camrose, Alberta, is not planning any additional major projects or acquisitions in Canada this year, Penner said.
In Penner's presentation to hog farmers at the Manitoba Swine Seminar, he said grain and meat production globally has struggled to keep up with consumption.
