WINNIPEG – While Manitoba Pool Elevators had “satisfactory” earnings last year, president Charlie Swanson said the country elevator division of the company could be improved.
Manitoba Pool had net earnings before income taxes of $7.7 million for the year ending July 31, 1995. While grain purchases increased by 22 percent to 2.87 million tonnes, chief executive officer Greg Arason said the country elevator department lost $4.9 million, which is $600,000 less than it lost last year.
Arason said market share increased by one percent, and dividends went directly into producers’ pockets in the form of competitive prices.
Read Also
August rain welcome, but offered limited relief
Increased precipitation in August aids farmers prior to harvest in southern prairies of Canada.
“This has been our core business, but lately the country elevator portion … has not provided an adequate return,” Arason told 79 delegates to the company’s annual meeting, which started Nov. 6.
Arason said the company faces fundamental questions in how much grain will be delivered to its elevators in the future. Because of grain transportation changes and higher freight rates, Arason said more grain will likely be used in local markets.
Learn from the past
“We cannot afford too many $5 million mistakes,” Arason said, referring to the department’s loss. “We need to take a long, hard look at our future network requirements. We need to be objective, not emotional, if we are to have a viable business 10, 20 or 30 years from now.”
Gordon Miles, general manager of services and development, told delegates many people have the “not our elevator” syndrome. Miles said a team of employees have looked at the system and have proposals for cutting the number of elevators by one-half or one-third.
But Miles said it’s up to delegates to decide how quickly to move on proposals and how much market share the company can afford to lose.
“This decision is always a balance between the needs of the members in terms of service and the business needs of the organization,” Arason added.
He told reporters the company may not be able to afford to have competitive prices for some grain. Board grains accounted for more than 75 percent of business at elevators several years ago. Today, those grains account for 60 percent.
