OTTAWA – Alberta Wheat Pool’s joint venture in a Montana grain transfer plant will enable it to better ship to the American market if the Canadian Wheat Board loses its North American export monopoly, says a pool official.
“It positions the pool well both ways,” said Doug Brunton of the pool’s grain marketing division.
“We can continue to operate efficiently as a board agent if it retains its monopoly and if the board loses part or all of its marketing monopoly into the U.S., we would be well placed to get into that market.”
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In February, Alberta Pool will become the first Canadian-owned grain company to set up a jointly owned facility on U.S. soil when its transfer operation opens at Sweetgrass, Mont.
It is co-owned with General Mills Inc.
It includes six 1,500 tonne bins, a loading leg capable of processing 400 tonnes per hour, a 52-car rail spot and a track scale.
The pool will truck durum, milling wheat and feed to the site for transfer onto Burlington Northern Railroad for shipment to U.S. destinations.
Alberta Pool officials say part of the attraction is lower freight and elevation costs. But being prepared to take advantage of market changes as the Canadian Wheat Board mandate is being reviewed also is important.
“An example of our desire to position ourselves to respond to future market opportunities lies in our decision to enter a joint partnership with General Mills to build and operate a transfer house at Sweetgrass,” pool chief executive officer Gordon Cummings wrote in the last company annual report.
Brunton said in an interview the move has been welcomed in Alberta farm circles.
“We were surprised by the breadth of approval this has received in Alberta. This is a province with a strong basis for continental trade.”
He said the negative side is the possibility that the Canadian Wheat Board, if it retains its monopoly, will short the U.S. market for overseas sales or the Canadian presence in Montana will raise local political ire in a U.S. election year when protectionist winds blow strong.
“That concern was a consideration,” said Brunton. “But we considered the opportunity just too great. We think in the future, economics will rule. There will be regulation but less intrusive than it has been in the past.”
