Former AU head assesses health of grain industry

Brian Hayward served as the chief executive officer of United Grain Growers and Agricore United in the 1990s and most of the 2000s. Hayward left the grain industry in 2007, after Saskatchewan Wheat Pool, soon to become Viterra, took over Agricore.

Hayward no longer works in the executive office, but he still spends a great deal of time in corporate boardrooms.

In 2007, he founded Aldare Resources, a consultancy that advises Canadian and global companies on governance, strategy, and mergers and acquisitions.

Hayward also chairs the boards of Princess Auto and Farmers Edge and is a director with the Business Development Bank of Canada.

He lives in Winnipeg and works out of an office owned by Princess Auto.

Western Producer reporter Robert Arnason spoke with Hayward in late January about the state of Canada’s grain industry.

WP: Why didn’t you pursue another job as a corporate executive after Agricore United?

BH: I had a lot of people saying to me, ‘are you going to run a company, are you going to move to Toronto?’ I said no. I’ve just been the CEO of a publicly traded company from start to finish, for 17 years. Why would I want to do that again? I decided to (do) something to leverage my skills and people started asking me … to be involved with boards and helping with strategic transformations and sale processes.

WP: Do you miss the grain industry?

BH: What I miss the most (is) some tremendous people I had the privilege of working with…. I’m still involved in agriculture. Farmers Edge is clearly an ag company … and I’m on a board in South Africa for (AFGRI), a grain handling, feed, soybean crushing, wheat milling (company)…. What I don’t miss is the politics, at all. I found a lot of the debates, the righteous indignation of one party or another, tiring after a while.

WP: What do you think about the state of Canada’s grain industry, in the post Canadian Wheat Board era?

BH: I think it’s extremely healthy. I think there was a time when the wheat board was useful, probably back in the ’70s when a lot of the buying community was central desk. It was a way for us to interface with that kind of marketplace…. (But) the farm business community learned a great deal from canola, marketing it and being successful. It didn’t seem to me that all of a sudden there was a crisis (without the CWB), with people not knowing how to market…. It’s still early days, it’s been (just) a little while, but I think 10 years from now there’s going to be a much more dynamic marketplace in wheat and barley than what there was.

WP: The winter of 2013-14 was a challenging year for Western Canada’s grain handling system. What are the lessons from that experience?

BH: It was a huge, huge crop. It wasn’t a failure of the system. It was that we had an enormous crop at a time when prices, by historical standards, were extremely attractive. So everybody was wanting to move everything, right away…. But I think it’s a healthy thing. I think that individuals and firms in the industry (now) understand that you need to have that capability to handle that (volume) in the future. There were probably a lot of lessons learned by the railways and grain companies…. (But) the railways put out plans and say, ‘here is what our car supply is going to be. This is our service plan.’ When they don’t meet it, there is something called a shortfall … but there are no financial consequences to the railways…. I think that’s a piece that’s an irritant to a lot of people, the grain companies and ultimately farmers.

WP: In places like Minnesota and North Dakota, co-operatives are major players in the grain trade. Is there a need or role for a co-operative in Canada’s grain industry?

BH: Not really…. I don’t think you can look at the grain co-operatives in the United States and say, ‘oh, they’re like the pools of the 1950s.’ They’re not…. The reality in the ag business, the food business, is you have to have scale. You have to be big to spread your overheads over a volume of business, to be able to innovate and invest in technology and infrastructure…. So there are co-ops (in ag) but they operate using business principles. I think a lot of farmers in Western Canada, the ones that are going to be there in 10 to 15 years, they’re businesspeople. I don’t think they’re looking at needing to be politically engaged in transportation issues or all sorts of farm politics (through a co-op).

WP: Some analysts have said that Canada’s agriculture industry has a “commodity mindset.” Instead of producing ag commodities, maybe we should brand Canadian products to achieve a competitive advantage. What do you think of that?

BH: I never subscribed to the idea that branding Canada was going to be a way to prosperity…. We just need to focus on having solid health and regulatory systems that are world class. But it’s just a little arrogant to think … that somebody, in whatever country, and they go to purchase bread or oil and it says Product of Canada, and that leaps above all the other branding…. The (commercial) brands are going to drive the consumer product marketplace. The “Product of” is not going to sell the product… I’m in Quebec now and you can buy lobster here, and there’s actually a tag on it. You can go on your computer and see a picture of the guy who caught (it)…. That kind of traceability is going to be (important) for the major brands. Budweiser will probably say, ‘we can tell you what fields it (barley) was grown at and how it was grown.’ That’s the future, not putting a flag on something. The process is going to be more important.

Contact robert.arnason@producer.com

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