Farmer-owned terminal group fears voice lost

Losing membership | The terminal association is considering reducing its farmer-owned minimum requirement

The Inland Terminal Association of Canada is discussing ways to expand its membership.

The recently announced sale of the Prairie West Terminal at Plenty, Sask., to CWB marks the third sale of a farmer-owned ITAC terminal in the past four months.

In January, Viterra acquired the Lethbridge Inland Terminal for an undisclosed amount.

And in early March, shareholders at the Weyburn Inland Terminal at Weyburn, Sask., voted to sell WIT to Parrish & Heimbecker for $95 million.

CWB announced in April that it had reached an agreement to buy Prairie West Terminal for $43 million pending shareholder endorsement and necessary court approvals.

CWB said it expects the PWT transaction to be completed in June.

ITAC, which represents farmer-owned and directed terminals, will have six members, down from 11 a few years ago, if all pending sales are approved.

ITAC chair Eric Ponath said the potential loss of three members in a few months is concerning.

“We’re always sorry to see when a farmer-owned terminal goes to a main line … company,” said Ponath.

“I believe we have a unique voice that we bring forward as farmer-owned terminals and obviously, the fewer members you have, the smaller a voice you have.”

The western Canadian grain industry has seen a flurry of investments and takeovers since single desk grain marketing was eliminated.

Viterra, P&H, Cargill and Richardson have all announced significant investments in export terminals and country facilities.

CWB, which is scheduled for privatization within the next three years, has acquired export terminals and inland elevators.

It has also announced new terminal construction at Colonsay, Sask., and Bloom, Man., in the past two months

Some observers say farmer-owned assets are significantly undervalued based on current share valuations.

In addition, CWB’s privatization strategy hinges on the acquisition of its own network of prairie grain collection facilities. Right now, CWB depends primarily on grain handling agreements with competitors. 

Ponath said the investment climate in Western Canada’s grain handling industry is different now than it was a couple of years ago.

“Obviously something has changed in the last while,” he said. “It could be the loss of the wheat board monopoly or it could be the opportunity that the line companies see and the appetite for risk that they have. But with three (ITAC terminals) going in such a short amount of time, there‘s clearly some change in the industry.”

Ponath said ITAC members will look at strategies aimed at maintaining the organization’s operations and ensuring that it still serves as a voice for independent facilities.

“We may have to change our mandate somewhat because right now … (our members must be) 50 percent farmer-owned, minimum,” he said.

“We are always in discussions and looking for way to grow and to ex-pand our base.”

Excluding PWT, ITAC’s current membership includes the CMI Terminal at Naicam, Sask., Gardiner Dam Terminal at Strongfield, Sask., Great Sandhills Terminal at Leader, Sask., Northwest Terminal at Unity, Sask., Providence Grain Solutions at Fort Saskatchewan, Alta., and South West Terminal at Gull Lake, Sask.

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