Naber Seeds downfall surprised some, not all

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Published: June 20, 2002

The demise of one of the best known companies in the special crops

industry has left farmers confused, bankers nervous and many industry

insiders shocked.

Naber Seed and Grain Co. Ltd. of Melfort, Sask., was placed into

receivership June 10.

Saskatchewan Pulse Growers executive director Garth Patterson said news

of its collapse floored many people.

“We were all saddened and shocked to hear that a company such as

Naber’s, that was a real leader in the industry, was experiencing these

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kinds of problems.”

Saskatchewan Agriculture special crops specialist Ray McVicar said the

company’s failure came as a “real shock” to him as well.

“Naber Seeds to me is a real terrible loss. (It was) a fine company

with very knowledgeable and experienced people and I really hope that

they can come through it and rebuild.”

But others in the business of trading special crops were not surprised

by Naber’s demise.

Industry analyst Brian Clancey warned people about the “terrible

margins” in the special crops industry as far back as January 2001,

when he spoke at Pulse Days in Saskatoon.

Others also saw the writing on the wall as the ramifications of last

year’s drought-reduced crop started to unfold.

“In a highly volatile year like this one has been, it’s very easy to be

caught on the wrong side of the market,” said Kevin Dick, president of

the Canadian Special Crops Association, a group that represents

exporters, brokers and processors.

“Naber Seed was well known to be taking big positions in the market and

they were also well known for essentially working for very little to no

margin on a sale.”

Dick said special crops cannot be hedged and “highly speculative”

companies that take big positions in the market to keep the processing

side of their operations busy are playing with fire. Companies like

Naber are being knocked out by big price swings and low crop volumes,

he said.

Naber Seeds general manager Todd Naber declined to comment.

His company isn’t the first special crops firm to falter this year.

Agritrans Logistics, a Winnipeg broker, went bankrupt in March. One

month later Cancom Grain Co. was placed into receivership by its banker.

People are reacting differently to the business failures.

Growers are uncertain with whom they should be doing business, said

John Trawin, a seed grower who farms east of Melfort.

“People are beginning to wonder, ‘now what am I going to do? Am I safe

selling it over there?’ “

Buyers of Canadian pulses don’t seem to share those concerns. Arun

Shah, managing director of the Indian firm Agrimpex India Private Ltd.,

said the recent failures won’t deter him from doing business here in

the future.

“There are many good, reputable medium- and large-scale companies still

operating, so I do not think that Canadian exports shall be affected

adversely.”

Saskatoon pulse crop broker Larry Weber of Weber Commodities Ltd. said

he expects the Naber Seeds failure to be “uglier” than Cancom’s because

the company was handling a lot of canaryseed the month before it was

placed into receivership.

Canadian Grain Commission spokesperson Paul Graham said Naber had about

$1 million in security posted with it, but it is not yet known whether

that will be enough to cover claims against the company.

Canaryseed is not covered by the Canada Grain Act.

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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