For longtime Saskatchewan Wheat Pool members like David Miner, the earth moved this year when his company announced a partnership with Cargill Ltd.
A partnership with Cargill, the traditional enemy?
Even more amazing to him was that his Speers, Sask. neighbors did not seem to care.
“It would have been very unpopular 15 or 20 years ago,” said the 59-year-old lifetime pool member. “It’s surprising to me that there hasn’t been much comment on it.”
Miner answers his own riddle. He thinks most pool members have been conditioned to believe there is no place for politics or ideology in the company’s commercial decisions.
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And while he is no fan of Cargill, Miner said he has no strong feelings about the Roberts Bank partnership.
“I came to the conclusion about five years ago that Saskatchewan Wheat Pool had become a very large grain handling organization and not much more, and that’s the way they’re behaving,” he said.
For some, the deal is intriguing for what it says about grain politics and how they have changed in 20 years.
“It wouldn’t have run when I was involved,” said Don Lockwood of Davidson, Sask., vice-president of Sask Pool from 1969-82. “At that time, it just wouldn’t have been very acceptable.”
Considered an enemy
Then, Cargill was seen by many pool members as the enemy, a giant multinational corporation exploiting grain farmers for profits that would leave the country.
The pool, by contrast, was seen as an organization created to provide service to members. Making money was secondary.
Now, many see the differences between the companies blurring.
Aubrey Wood, a former pool director from Kelfield, Sask., said pool members recognize the grain industry is a big business requiring plenty of money for facilities and services needed to keep the company competitive. Partners with money are needed and if that means Cargill, so be it.
Officials of the two companies say the project makes economic sense, whatever the traditional politics.
Cargill’s lack of terminal space at Vancouver has always left the company at a competitive disadvantage, said Barbara Isman, Cargill’s assistant vice-president for corporate affairs.
To justify the Roberts Bank investment, Cargill needed a partner that could provide large grain volumes. Sask Pool, the Prairies’ largest grain handler, fit the bill perfectly.
For Sask Pool, the need was for more west coast terminal capacity, said company officials.
Internal studies suggested changes in rail rates and freight pooling, along with growth in Pacific rim markets, would boost the company’s westbound export shipments by about one million tonnes over the next few years.
“Sask Wheat Pool needed more capacity and Cargill needed a terminal,” said pool president Leroy Larsen. “It’s a good fit.”
Between them, the two firms own about two-thirds of the prairie grain cleaning capacity, so both can benefit from a terminal that can handle unit trains of clean grain.
Larsen said some pool members have complained about the Cargill alliance, “but once it is explained to them and they have some understanding of the competition that will take place back in the country, they accept it.”
Isman said the two companies simply recognized they could put together a more viable project by working together.
“I think we buried all that old political stuff a while ago,” she said. “We can’t afford to fight each other.”
Dick Dawson, a retired vice-president of Cargill Ltd. and now a Winnipeg consultant, said the Roberts Bank partnership symbolizes a new grain industry era of co-operation and strategic alliances.
“It’s a constructive and positive evolution of maturity when the hatchets of the past get buried and the major originator of grain on the Prairies marries with one of the biggest exporters in the world,” he said. “It just makes good common sense.”
