Agricore may be just a temporary resting place along the road for the Manitoba and Alberta pools, say grain industry officials both inside and outside the new organization.
Agricore won’t actually go into business until this fall, but already people inside and outside the company are advising farmers to be ready for more changes in the years ahead.
“This is just a stronger platform for future growth, whether that means joint ventures or affiliations or some kind of merger with other organizations,” said Manitoba Pool Elevators chief executive officer Greg Arason. “I think that’s something that will obviously be on the table in the not-too-distant future.”
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Some expect the new company, spawned by the merger of MPE and Alberta Wheat Pool, may search outside of Canada for potential partners.
“I think there will be a look south of the border,” said Murray Fulton, an agricultural economist at the University of Saskatchewan.
Some of the large agricultural co-ops in the U.S. have recently been going through their own flurry of mergers and joint ventures, involving huge companies like Cenex, Harvest States and Land O’Lakes Inc.
“There’s an almost wholesale change in the structure down there,” said Fulton, and there could be a lot of interest in some cross-border partnerships, joint ventures, or even mergers.
At the July 31 press conference announcing the creation of Agricore, MPE president Charlie Swanson raised the possibility of expanding the new company’s business outside Canada.
“We’re coming together to position ourselves to provide service to farmers not only in Manitoba and Alberta, but in Saskatchewan as well, and also to position us to go outside Canadian borders at some point in the future as well.”
Peter Galloway, an Alberta Pool delegate from Fort Saskatchewan, Alta., is one member who thinks the creation of Agricore is an interim step.
“You look south at some of the big American co-ops and wonder if ultimately that’s not going to be the final answer,” he said in a recent interview.
The other idea that just won’t go away is the three provincial pools getting together to form one prairie-wide Canadian owned grain company.
“We are certainly not ruling out the possibility of the three pools getting together some day,” said Swanson. “We’ve got to get this done and done right before we start thinking about the next steps, but certainly we would not rule out any future steps.”
Previous attempts to merge the three pools have been unsuccessful, with the most recent round of discussions taking place last winter. But officials at all three companies say the creation of Agricore could pave the way for it to happen.
“Maybe it’s easier to start with two and work from there,” said Alberta Pool vice-president John Pearson, especially if the two are relatively equal in size.
By combining the assets and facilities of the two provincial pools, Agricore is now much closer to Sask Pool in terms of grain handling capacity and market share. It hopes to exceed Sask Pool’s grain handling volumes within five years, mainly by expanding into Saskatchewan.
The two pools say that by combining into one much larger firm, they will become more efficient and be able to offer better service to farmers.
Pearson said farmer members will get the benefits of any savings the new company can realize, both through cash payments under the company’s patronage dividend system and through lower operating costs and better service related to economies of scale.
