Farmers can look forward to grain handling efficiencies in a post single desk environment, says a grain market analyst.
“You’ll see some dropping handling charges like we did for canola,” Marlene Boersch, managing partner of Mercantile Consulting Venture, told delegates attending Agri-Trend’s 2011 Farm Forum.
She is convinced the costs of moving grain to port will fall because there will be more players vying for farmers’ grain.
Boersch believes there will be transportation efficiencies because within a few years Canada will change to a wheat grading system similar to that used in the United States.
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That will eliminate bottlenecks at export terminals where grain companies are segregating and storing the various grades of wheat.
“It will simplify the system and put us more in line with the world markets. I see very little downside for the farmers,” said Boersch.
She also expects to see grain companies steer more grain to the Prince Rupert Grain Terminal, which is jointly owned by Viterra, Richardson International and Cargill.
She anticipates new investment in processing plants, which is a good thing because many of the existing facilities are old and expensive.
Some grain companies are already talking about offering pooling contracts for wheat in 2012. Boersch used to run a pooling contract for pulses and had some cautionary words for those considering such contracts.
“I would urge the farmers to read them very, very carefully. They tend to be in favour of the companies in that they put all their administration and trading expenses and so on, on top of them,” she said.
