Terminal West deal adds competition – WP editorial

SET ANOTHER place at the Port of Vancouver table because a new terminal owner has joined participants at the previously limited buffet.

And with a large percentage of farmer ownership, Terminal West Ltd. looks set to ensure prairie grain growers will be served well.

The farmer owned inland terminals – Weyburn Inland Terminal, North West Terminal , Prairie West Terminal and Great Sandhills Terminal Marketing Centre make up the farmer-owned portions of the terminal purchase announced last week. The other two partners, Paterson Globalfoods and Parrish & Heimbecker, ensure the terminal will have enough grain volume to keep the 102,070 tonne facility operating at reasonable capacity.

Federal Competition Bureau stipulations require the terminal to handle at least 2.2 million tonnes of grain annually. The combined licensed capacity of the players involved in Terminal West could provide up to five million tonnes.

Competition is the main entrée on the new menu.

The Competition Bureau dictated the sale of the former United Grain Growers-owned port facility in October 2002 when UGG merged with Agricore to become Agricore United. The bureau ruled that AU would have too big a share of Vancouver’s grain handling business.

It took five years, rumours of potential foreign purchase and several failed attempts by interested parties, but it appears increased competition will now be achieved through the Terminal West purchase. The transaction is expected to be finalized June 30. The price was not disclosed.

A full meal deal, which includes generous helpings of farmer involvement, is particularly welcome during these volatile times in the prairie grain industry.

Agricore United is destined to meld with either Saskatchewan Wheat Pool or James Richardson International in the near future. That move will create a grain-handling powerhouse and will further consolidate ownership of port grain handling facilities.

As well, changes to the Canadian Wheat Board seem likely to result in a reduced board role in grain shipping and handling, putting more power into the hands of larger grain companies with full prairie-to-port networks.

Farmers worried about this consolidating trend’s effect on handling charges will be partly offset by the competition offered by the new Terminal West.

They can also expect some of the realized profits to be returned to the inland terminals’ farmer shareholders.

The other page in the menu of changing competition for grain is the burgeoning domestic biofuel industry.

As more plants come into production, they will provide another market for farmers’ grain and oilseeds, generating more competition and likely higher prices for prairie product. It will make prairie farmers less dependent on the often volatile export markets.

With commodity prices at a multi-year high and competition in the grain industry improving as it has rarely done before, prairie producers will at last be in a position to take a larger bite out of the grain industry profit pie.

Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.

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