Cargill may run 2012 wheat pool in W. Canada

Thu Nov 24, 2011 3:46pm EST
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Cargill CARG.UL may run a pool for Western Canadian farmers' spring wheat in 2012 and will also be ready to offer farmers forward price contracts for their grains in an open market, the president of the company's Canadian division said on Thursday.

If a government bill to strip the Canadian Wheat Board of its monopoly as of August 2012 becomes law next month, grain handlers will be able to immediately offer farmers contracts to buy next year's harvest.

Farmers in Western Canada currently must sell wheat and barley for milling or export through the CWB, but Ottawa's bill would set up a free-for-all among grain handlers to buy the region's prized grain, well before farmers even plant next year's crop.

Canada is the world's biggest exporter of spring wheat, durum and malting barley.

"We have considered all of those particular (pricing) approaches," President Len Penner told reporters after speaking to the Winnipeg Chamber of Commerce. "Part of what we need to assess is what role will (the CWB) play on the pooling side versus what other competitors will choose to do."

Penner said he thinks farmers will want to pool wheat, as they have in Australia after it ended its own wheat marketing monopoly in 2008.

The Wheat Board will continue operating in the open market, albeit on a smaller scale without its monopoly.

The number of pooling options Cargill may offer depends on how much demand there is for them, Penner said.   Continued...