Agricore United posted poorer first quarter results than last year, with improved grain shipments and feed sales more than offset by lower sales of crop nutrients.
The company reported last week that it lost $20.6 million in the quarter that ended Jan. 31, $2.2 million more than the restated $18.4 million loss for the same period a year ago.
Sales of crop inputs were $51 million, down $19 million from the same period last year.
The company said rising fertilizer prices and low commodity prices prompted farmers to delay buying decisions until closer to seeding.
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Crop input sales in the first quarter typically represent less than 10 percent of AU’s annual sales of crop inputs and chief executive officer Brian Hayward was optimistic that input sales would improve.
“Good moisture conditions across Western Canada will encourage maximum use of the productive capacity and the impact of significant crop growth last year indicates a need for fertilizer products this year,” he said in a News release
news.
He added that the company’s customers are mostly up to date in repaying last year’s credit programs, which suggests “purchasing decisions are operational rather than financial as farmers weigh final planting decisions against demand signals from the world commodity markets.”
The company handled more grain at its country elevators, but its market share dropped slightly.
It handled 2.7 million tonnes in the country, or about 34 percent of the total industry handle of 7.9 million tonnes in the quarter.
Last year it handled 2.5 million tonnes, or 35 percent of the total handle of 7.2 million.
Hayward said the company was optimistic about grain shipments for the rest of the year.
Commodity margins declined about four percent compared to 2005, reflecting a change in the mix of grains and oilseeds that the company ships, combined with lower oilseed margins on flax and linola and lower margins on peas because of the poor quality of the 2005 crop.
Feed sales increased by 16,000 tonnes or 6.2 percent for the quarter, while the average margin increased to $44.28 per tonne compared to $44.10 per tonne for the same quarter last year.
