Open market attracts new grain brokers from outside Canada

Canada has seen an increase in the number of licensed grain brokers that are buying and selling Canadian grain following the elimination of single desk grain marketing.

Figures provided by the Canadian Grain Commission show that 14 companies have been granted new grain dealer licences in Canada since Aug. 1, 2012.

As of last week, 83 companies held grain dealers licences in Canada, up from 73 a year earlier.

Four existing licensees did not seek licence renewals during the past 12 months.

Documents posted on the CGC website suggest that most of the new licences were granted to companies based in the United States or to Canadian-based subsidiaries of foreign companies.

New grain dealers operating in Canada include The Andersons Inc. of Ohio, Dakota Midland Grain of North Dakota, Lansing Trade Group of Kansas, Walsh Grain of Wisconsin, Markit Grain Group of Minnesota, GrainCorp Operations, a subsidiary of Australian grain handler GrainCorp, and CHS Canada, a subsidiary of the U.S.-based farmer co-operative CHS.

The Andersons Inc. and Lansing Trade Group recently finalized a deal to acquire Thompsons Ltd., a grain and food grade bean handling company in Blenheim, Ont.

The deal, which closed July 31, gives The Andersons and Lansing equal ownership in Thompsons, which has 12 locations in Ontario and Minnesota.

According to the Canada Grain Act, grain dealers as well as operators of primary, terminal, process and transfer elevators must be licensed by the grain commission or be granted an exemption.

A grain dealer’s licence is generally issued to any company that buys, sells or handles western grain but does not operate grain handling facilities such as primary elevators or terminals.

The number of grain brokers operating in Australia also rose noticeably after the elimination of single desk wheat marketing.

In some cases, it led to concerns over payment security, particularly when farmers were selling grain to new companies that had a limited track record in the industry.

As part of a comprehensive review of its services and fee structures, the grain commission has proposed changing its existing bond-based producer payment protection program.

Work aimed at introducing a new security program, most likely an insurance based model, is continuing.

According to the commission, producers will continue to be covered under the current security program until the new program takes effect.   

A complete list of companies licensed by the grain commission can be viewed on its website at www.grainscanada.gc.ca.

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