by JIM ALGIE
A two-year $50 million-plus grain-handling project in Hamilton by the company that took over former Canadian Wheat Board operations should speed exports of Ontario grain and oilseeds while strengthening regional markets, Grain Farmers of Ontario Chair Mark Brock said in an interview, Wednesday.
Construction began recently on a new, 50,000 tonne-capacity Lake Ontario terminal for grains and oilseeds at Pier 26 in Hamilton, Winnipeg-based G3 Canada Limited announced, Tuesday. The project is to be completed by harvest in 2017.
When they begin receiving crops, the new facilities should strengthen the basis for Ontario grains, GFO’s Brock said.
photo: Mark Brock
“I think the big thing for us, if you look at it strictly from the producer level, any new opportunities like this one help to move our product at a hopefully quicker pace which helps to keep our basis level strengthened,” Brock said. “This is great news for the Ontario grain industry because it just increases competition within the province, and that translates usually into higher prices for producers.”
For the port of Hamilton, G3’s announcement represents yet another expansion of agricultural business in shipping facilities once dominated by steel. A background report posted on the Port of Hamilton website claims major agricultural investments over the past five years make it “an essential link in the region’s agricultural economy.” A port directory lists five agriculture-related firms, including three major commodity traders: Parrish & Heimbecker, Limited, Richardson International Limited and Bunge North America.
Bunge and the Saudi-based SALIC Canada Ltd. acquired assets of the former Canadian Wheat Board to create G3 (Global Grain Group) in a controversial deal that closed finally, July 31. At the time the deal closed, G3 Chief Executive Officer Karl Gerrand described the company’s intention to build a “coast to coast grain-handling enterprise.” In a statement announcing the Hamilton project, Gerrand said it responds to recent export growth in Ontario’s grain industry.
“We look forward to expanding our relationship with farmers in the province,” Gerrand said. He said the company seeks to become the grain marketing “partner of choice” for Ontario growers.
Gerrand claimed the company has designed a new terminal that will meet the truck handling speed of “any competing terminal in Ontario.” Located just off the Queen Elizabeth Way, the new terminal will load lake vessels for transport to existing G3 export facilities in the St. Lawrence River.
A G3 spokesman declined to provide exact capital costs for the Hamilton project although he did say “the amount is north of $50 million.” Asked in emailed questions if the Hamilton project represents eastward expansion of former wheat board activity, G3 communications manager Richard Martin declined to make the wheat board link.
“G3 Canada is a new business,” Martin said. “This project is an important part of establishing our coast to coast Canadian presence,” he added.
Port of Hamilton agricultural business has grown dramatically in recent years both in total volume and as a proportion of total cargo. A January, Hamilton Spectator report showed 2.01 million tonnes of agricultural commodities moved through the port in 2014, about 19 per cent of the port’s total volume of 10.5 million tonnes that year.
Parrish & Heimbecker completed new grain handling facilities in Hamilton recently and acquired additional facilities as recently as 2012. Richardson completed a 15,000 million tonne expansion of existing grain storage in 2008.
The growth of agricultural trade through Hamilton also represents a plus for Ontario grain and oilseeds growers, GFO’s Brock said.
“In lieu of struggling steel commodities they’ve seized the opportunity for agricultural commodities,” Brock said of recent developments in Hamilton. “They’re not only exporting the raw product, but also importing some of the fertilizer inputs we needs,” he said.
“You create new opportunities and it just takes the pressure off everybody else,” Brock said. BF
Comments
Exports have always been the skinny cow for the grain farmers. => grain has to be cheaper to be exported. and exports can appear/disappear overnight.
and NO quicker pace doesn't imply better basis.
so yes more competition is always welcomed, but in the niagara +10c not more...
Simon Jacques
Agreed, when we export at a loss we subsidize foreign consumers.
(A) Ethanol mandates were foisted on us because of the fear-mongering tactics of those who warned of energy insecurity (a hard sell in Canada because we have long-been a net energy exporter), imminent oil shortages and crude oil prices in the $140 per-barrel range.
Ten years later, with:
(1) oil prices about $90 - $100 per barrel less than that, and no price increase on anyone's horizon.
(2) North American energy insecurity a bad dream thanks to, among other things, shale-oil technology.
(3 the dubious effects of ethanol on the environment better known
(4 the marginal energy replacement ratios of ethanol better known
(5) ethanol's adverse effect on the price of food and livestock producers too-well known
government has little reason to retain ethanol mandates and every reason to get rid of them.
Therefore, with corn-ethanol ever-increasingly looking like a sick dog looking for a place to die, building an export facility to export grains lest ethanol mandates end, would appear, on the surface, to be somewhat less risky than what it might otherwise be.
(B) Mr. Jacques is entirely correct - what will get exported through Hamilton by boat will tend to get re-imported through Sarnia by truck. So, what leaks out the bottom of the Ontario corn "bath-tub" in the form of increased exports originating in the Hamilton area, is usually replaced by increased imports of corn into western Ontario from Michigan and Ohio and poured into the top of the corn "bath-tub".
Stephen Thompson, Clinton ON
Just last night the news showed gas stations in the GTA that were closed because of a gas shortage . Only one company though . Seems fishy to me . Ethanol is one way to help keep the pipelines full along with reducing emissions .
You just don't get it and perhaps never will,the Governments in this Country and the US are slowly being influenced by an ever increasing population with a environment well-being agenda.With huge supplies of oil the ethanol mandate makes little sense but then so does spending huge amounts of money subsidizing Wind Turbines and for such little returns.
The only reason these two continue to eat up taxpayers dollars is the public opinion that they are "green" and good for the environment.Your economic principals mean little compared to the perceptions and emotions of the largely ruling urban population and Governments know it.
(A) "Shorting" ethanol?
It was smart by ag-leaders to linke Energy to Agriculture, oil went to the roof at 100$/bbl and corn was at 8$/BU :P
Flip side of it : oil 50$/bbl, oil 40/bbl, lower CAD ( temporary Basis Booster) but inputs costs for farming will rise faster (fert, chemicals, machinery eveything imported in USD).
IP Soybeans still offer decent premiums ( BUT the other leg of grain farming revenues has been amputated).
Costs are Rising and knowing that grain farming is ALREADY very low margin business, I am optimist in life and Agriculture but not in the Markets.
-I think southwestern-ont farmers farming for a living are in a risky vulnerable position (partly because of the policies of the past but mostly because the Market has reversed).
The ultimate hedge might be to take advantage of the following discrepancy: sell some cropland as 95% or more of the value is farming capital, not the operations.
In 2015, Land in "south-west part of the Bath-Tub" is priced at Corn 8 USD/BUSHEL and even with exceptional Yield in Essex/Chatham, even when you amortize land costs on 50 yrs can you payback the land and make a return ?
Fasten your seatbelt, Difficult Times Ahead.
Simon Jacques,
I read an article in the Tri State News Publication that was about another Ethanol Plant proposed for the State, that would be the 6th one I believe. The article went on to say their biggest market was in Canada, anyone know if this is true??
I believe so, Canada is somewhat important for U.S Ethanol Merchants.
Essentially when Ethanol is blended with Canadian refined products or Ethanol, they can cheat EU.
Canada Country of origin is used to re-export to Europe/other countries to circumvent the 91$/MT EU tariff on U.S Ethanol exports.
Simon Jacques
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