This one resonates.
Being 3rd generation myself through more than 60 years of UGG history and as one of the most consistent long term Agriculture Bulls that I know of, the Viterra deal has left a sting. When Viterrra took over Agricore United, that was sour, but it stayed Canadian and it stayed strong. This deal was way undervalued and only 1 player is solidly Canadian – I don’t know what Agrium is anymore, they feel a lot more CPS than Agrium and that’s like saying a lot more Cargill than Agricore United.
Being a pro-farmer player in this industry but unable to claim the title of “farmer” myself, I stand with Larry on this piece as he nails it, and nothing better to hammer the point home than the Vossen quote in the middle.
Not only was a large part of our heritage lost in this transaction, it was given away for pennies. Six years ago when Durum was $3.50 and Canola was $6.50, I said that we would average a dollar a bushel price increase every year for the rest of our lives. Six years haven’t proven me wrong and this deal will look very poor in short order.
Weber Commodities Ltd.
EDITORIAL – Mar 23rd, 2012
This is NOT My Idea of PROGRESS
It is Rain’s 7th birthday today, so I am feeling older again. And cranky. Although I love what I do, I wasn’t born to do this. I was born to be a farmer. It came from both sides of my hereditary equation. I was reminded last week on a blog that I have never suffered like a farmer. It is bullshit, as I endure not being a farmer, everyday. Life’s curves sometimes alter our journey; nevertheless, it was my genetic pool that made my life complex while in Winnipeg. At that time and as it still does to this day, everyone forgets where they came from the minute they walk into a grain company’s boardroom, as an employee or representing their constituents within a Board of Directors.
It drove me near crazy then and it still does to this day. From my first expedition at a boardroom table, when the old boys club were aghast that I should even be allowed to speak until I was 40 years old (I was 26 at the time), the first words out of my mouth were “What about the farm?” Ed Conn, who I still admire as the shrewdest canola trader of my lifetime, looked at me and said, “Who cares!” The rest of the room fell silent. 60% of the people around that table had farm backgrounds.
After thirty years of witnessing changes to the grain industry, sometimes pleading for change and fighting every opportunity I could for change – sooner or later it had to bite me in the ass. And it has. I don’t always know what is best for you, but I can go to my grave knowing that I always held one entity first and foremost above everything else – and that entity would be farmers.
In 1986, at a rail siding in Dutton, Manitoba, to commemorate the grand opening of an elevator, I had the fortune of being alone with George T. Richardson, who was President and CEO of James Richardson and Sons at the time, one on one, for over 15 minutes. It is not the first time that I had been with him, but he was jovial and inquisitive on this day. I answered most of the questions, and heeded the Hon. Otto Lang’s advice that if you are talking – you are not learning. We danced around protein segregation, the inaccuracies of the new protein machines and the anti-quated block shipping system until I had the chance to ask the only question I wanted to. “Mr. Richardson, what is the key to your family’s success?” I remember the answer like it was 2 minutes ago and he delivered it in stately G.T.R fashion with one leg bent and his face slightly tilted. “We surround ourselves with great people. We respect differences of opinion and we plan diligently for the future.” I didn’t miss a beat and replied, “Then why did we build an elevator in the middle of nowhere?” Mr. Richardson didn’t break his stance, but looked me straight in the eye and said: “This area has meaning to our family, and sometimes it is not just about business, Larry, it is about doing the right thing.”
The elevator was a failure. Primarily, it was a poor choice of the first elevator manager, where Walter thought he had to buy everyone’s business and it never recovered. You can only pay for 1CWRS and ship 3CWRS for so long. I did my best to get them extra railcars, including manufacturing grain they didn’t have in store, to burn off shipping penal-ties, but it never worked. I had left Pioneer Grain when the Dutton siding was traded (that should have been a hint for me…) but the “doing the right thing” comment has lived with me to this day.
When I saw Curt Vossen’s quote over the Reuter’s wire this week, I was envious, no, I was pissed off that the rest of the Canadian industry did not subscribe to the same theory that has made the Richardson family so successful. Here is the quote responding to a question revolving around if anyone had courted Richardson’s grain empire: “Sure we’ve been a player in that regard. Do we have any intention of responding to those (inquiries)? No, our shareholders have indicated a strong desire to make this a seven-, eight-, nine-generation play, and they’ve got a few more to go.”
When our farming Grandfather’s and their father’s for some, started breaking sod, and building their own businesses over a hundred years ago, they envisioned a healthy Canadian grain industry; one that was controlled by Canadians and farmers and yes, even cooperatively for some. Those torches were passed to the Mac Runciman’s, the E.K. Turner’s and later to the Ted Allen’s and Milt Fair’s.
I read a commerce quote at some point and I cannot find it this morning, but the heart of it was that the longer change is stymied, the tighter the coil springs until change rapidly takes place. I’m not going to blame change for this occurrence this week. Nor should you. The demise of the CWB didn’t start this – but it most likely ended it. I will question the fighting over change over the past 3 decades that has made the industry ripe for a takeover. The industry was weak and devoid of farm leadership. Politically, we burned so much energy (and great people) on the CROW, the WGTA, and the CWB, the vision aspect of a healthy Cana-dian industry has always been second. It is the dreaded chicken and egg conundrum. What really came first?
AIMCo (Alberta Investment Management Corp) was right in November, 2011 and in the previous eighteen months stating that the current Viterra Board of Directors did not have the required skills to meet the Company’s leadership. It allowed the hunter (Schmidt) to become the hunted. Selling the heart and soul of our forefather’s blood, sweat and tears for a one time lottery is just another excuse for incompetence.
I stated earlier this week that I would be irritated for some time. This is why. Farmers took the biggest haircut when SWP fought back from bankruptcy. Farmers had little to no say into the transformation of Agricore to Agricore United and then AU to Viterra. Farmers had little to no say after Viterra was formed save for an optical illusion called the Farm Leadership Council which has now morphed into a Seinfeld pilot. So when Mayo Schmidt walks away later this year with his 37 million tucked into his money belt, and the Board of Directors walk with their million dollar payouts, who at the table, asked the one question that will keep me up for a very long time: “What about the farm?”
And who at that table put greed and fiduciary duty aside long enough to ponder this: “sometimes it is not just about business, it is about doing the right thing.” Your forefathers are right now, beating the tops of their coffins; however, the silence from the farm is deafening. Just like the Ed Conn example above, that silence says everything….