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.
