Post-monopoly grain sales going smoothly, Cargill says

Thursday Mar 21 2013

Importers able to fill wheat needs

Grain sales and movement across Western Canada have gone smoothly in the first year after the region's grain-marketing monopoly ended, Cargill Ltd. president Len Penner said Wednesday.

The Canadian Wheat Board's monopoly expired on Aug. 1, allowing farmers 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, has seen few glitches in the newly opened market, 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., headquartered in Winnipeg, is the Canadian arm of U.S.-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.

Last year, Swiss-based Glencore acquired Viterra and sold off some parts to Richardson and, pending regulatory approval, to Agrium. 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 per cent.

"The gap may have moved, but the No. 3 spot we're in hasn't gone up or down," Penner said. "At this point, we're quite comfortable in the spot we're at."

Cargill, which plans to build a canola-crushing plant in Camrose, Alta., is not planning any additional major projects or acquisitions in Canada this year, Penner said.

"The plate's full."

In Penner's presentation to hog farmers at the Manitoba Swine Seminar, he said grain and meat production globally have struggled to keep up with consumption.

"We are one (grain) production shock away from another volatile price move."

-- Rod Nickel is a Reuters correspondent in Winnipeg.


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