WINNIPEG – Grain marketing, pricing and transportation will be a different game after Aug. 1 when the Crow Benefit ends. And the three prairie pools have decided a different game requires a different strategy.
They will be taking over domestic and North American marketing of non-board grains from XCAN Grain Pool Ltd. by the end of August.
Kenneth Matchett, chief executive officer of XCAN, said the marketing arm of the pools will handle mainly offshore sales.
“We feel that with variable freight rates from one point to another, depending on different markets, that there will be an increasing need to be on top of the management of that transportation function,” Matchett said.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The Crow Benefit paid subsidies to railways to fund part of the expense of shipping prairie grain to export ports.
Greg Arason, chief executive officer of Manitoba Pool Elevators, said the change means his company will now deal directly with North American buyers, provide prices to country elevators, finance inventories, arrange transportation and handle other logistics that go along with sales.
Arason said the change will give his company more flexibility. “At any one time, we could be shipping by truck to a mill in the area, we could be shipping by rail on an XCAN sale, we could be shipping by rail on a sale that we’ve organized.”
Arason said farmers probably won’t notice the change, except there will likely be more variable pricing because of the transportation changes.
“I think we’ll be more responsive to market signals with street prices, and farmers will have to be more aware that street prices are going to be more variable than they have been in the past,” Arason said, adding that prices may vary throughout a day or between elevators.
Richard Wansbutter, director of marketing and transportation for Saskatchewan Wheat Pool, said a major change will occur in pricing for canola in Saskatchewan. “We’ll have differential prices in various areas to reflect local markets, for example the crushing plants,” he said.
“You just can’t simply back off freight from Vancouver and say that’s the price, because that doesn’t reflect local markets.”
Dale Riddell, who works in country operations for Alberta Wheat Pool, agreed. “If the farmers notice any difference, I think that what we’re trying to do is be more responsive to the variations that will exist in freight.
“Hopefully we’ll be able to be as responsive to their individual needs in terms of getting the best price and securing as many markets as we possibly can,” Riddell said, adding that Alberta will likely be targeting the western United States for North American sales.
Matchett declined to comment on whether XCAN would have to lay off staff.
