A producer pasta co-operative that was reeling one year ago over lost opportunities is now well positioned to realize new ones, says the new chair of Prairie Pasta Producers.
Wally Meili replaces Perry MacKenzie, who had led the co-op through tumultuous times since 2000 and will continue to sit on the board.
Prairie Pasta was originally formed to try building a durum mill and pasta plant in Canada but scrapped the plan after failing to obtain concessions from the Canadian Wheat Board.
It then attempted to buy shares in Dakota Growers Pasta Co. of Carrington, North Dakota, North America’s third largest pasta manufacturer, which would have allowed Prairie Pasta members to sell three million bushels of durum a year to the U.S. mill.
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In its first attempt, Prairie Pasta was unable to sell the one million shares needed to close the deal. While the second attempt came closer, it also failed, this time when the wheat board informed the co-op the deal would not qualify under the CWB’s new generation co-op policy.
Despite several years of disappointment, Meili is optimistic about his group’s future.
“We still have our relationship with Dakota Growers. It’s not dead. Policy is fluid. The wheat board seems to be changing some of their marketing options they’ve been giving people in the last little while so we’re hopeful that eventually we’ll be able to do that (invest in Dakota Growers).”
The co-op has also been investigating possible joint ventures with other pasta producers in Canada that could lead to minor processing in the West, but Meili said the process is happening much slower than his organization would like.
He admitted there is little hope of reviving the co-op’s original plan to build a plant.
“The only way we’d look at building something would be in conjunction with someone who has the marketing capabilities already set up,” he said, adding that a “build it and they will come” attitude may work in baseball movies, but is a recipe for disaster in the pasta industry.
Wheat board director Larry Hill, who has been a liaison between the board and the durum growers, said the new generation co-op policy was developed to encourage pasta plants to be built in Canada rather than to invest in foreign plants, and that the CWB has not revisited that policy.
“I think Canadian producers would want this policy to cover plants built in Canada. I’m confident that a good policy that supported value-added (durum production) in Canada would be supported by all producers.”
However, Hill said he has no problem with producers selling their identity preserved product to an American mill that is prepared to pay a premium for it, provided it happens through the producer direct sale system. Under that system, Prairie Pasta members would sell durum to the wheat board and then buy it back before trucking it to the Dakota Growers plant. Producers would keep any premium they received from the mill over and above the wheat board’s price, but wouldn’t compromise the board’s ability to continue selling grain to the United States as a single desk.
Though negotiations in recent years with the CWB have been difficult, Meili said discussions are ongoing. While the relationship between the co-op and the wheat board hasn’t soured, the two sides are still of differing opinions. “We’re just optimistic that eventually these things that do make sense for producers will be allowed to happen,” Meili said, adding that a solution won’t happen overnight.
Hill agreed.
“We need to try to work out some kind of an arrangement that suits everybody’s needs, but it isn’t going to be easy, I don’t think,” he said.
