The Canadian company that is building a high-throughput grain terminal and loop track at Northgate, Sask., says it will lose nearly $12 million because of falling durum prices.
Ceres Global Ag Corp. said in a Jan. 6 news release that declining prices will erode the value of the company’s durum inventories, resulting in a loss of $11.7 million during the company’s third fiscal quarter, which ended Dec. 31.
Ceres is not scheduled to report its full third quarter financial results until Feb. 10.
“While we make every effort to monitor grain prices and mitigate our risks through active hedging against futures prices, the amount and speed at which durum wheat prices have declined is unprecedented, given the amount of new supply coming to market,” said Ceres president Patrick Bracken.
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“The loss is a material development and its disclosure is consistent with our objective of transparency. It’s important to understand that the loss has no reflection on the quality of inventory being stored.”
Ceres provides grain origination, storage, handling and trading services and is storing more than 42.1million bushels of assorted grains, including oats, rye, and durum, at its eight storage and handling facilities in Minnesota, New York and Ontario.
The company has been receiving grain deliveries at a temporary facility in Northgate since last year and is continuing with a plan to build a terminal there. It’s expected to be completed late this year.
Toronto-based Ceres is focused on two primary businesses: a grain storage, handling and merchandising unit and a commodity logistics unit.
The company’s grain storage unit includes Riverland Ag Corp., a wholly owned subsidiary that operates grain storage and handling assets in Minnesota, New York, and Ontario and has aggregate storage capacity of 42.1 million bushels.
Ceres’ commodity logistics unit includes the Commodity Logistics Centre at Northgate, which provides grain handling, agriculture services and oilfield transloading services.
Ceres also owns a 25 percent interest in Stewart Southern Railway Inc., a short-line railway that operates 130 kilometres of track in southeastern Saskatchewan.
Contact brian.cross@producer.com
