The CGC on Tuesday announced the results of its review of producer claims in the wake of last July’s bankruptcy filing by Pipeline Foods, whose footprint in Canada included two small southern Saskatchewan grain elevators and a Winnipeg office.

The commission’s review found 49 eligible claims for unpaid deliveries, for which the CGC said Tuesday it will pay out compensation of over $2.2 million from the security posted by Pipeline’s Canadian subsidiary.

Pipeline filed for bankruptcy in Delaware last July 8 and suspended its purchases of grain from Canadian growers effective July 9. It sought another petition July 12 to extend creditor protection to cover its subsidiaries, including the Canadian business.

The company said in a release in July that it decided a Chapter 11 bankruptcy reorganization “provides the best means to support its operations and to continue the process of selling the company in order to preserve company value and jobs.”

Pipeline said it “regret(s) the hardship this may present to our creditors, including farmers, producers and vendors and we hope we can work through issues together, in due time, with the least amount of disruption.”

Pipeline had bought its two Saskatchewan elevators in 2017: the former Mainline Terminal facility at Wapella, about 130 km south of Yorkton, and the Gull Lake Grain Corp. site at Gull Lake, about 50 km southwest of Swift Current. The elevators have capacity to handle 3,500 and 4,000 tonnes of grain respectively.

The company had just got rolling earlier in 2017 with backing from players including New York agribusiness investment firm Amerra Capital Management. The new company had planned to store, screen and blend organic and non-GMO grains including barley, corn, rye, flax, lentils, oats, peas, soybeans and wheat at the two elevators.

Pipeline, which had also set up a South American regional office in Buenos Aires, said in 2017 it was “pursuing opportunities” to invest $300 million to $500 million over the next three to five years “to build a better, more sustainable supply chain in agriculture.”

As a condition of licensing, CGC-licensed grain companies in Canada must tender security for outstanding grain liabilities to producers, in the form of a bond, letter of credit, letter of guarantee or payables insurance.

If a CGC-licensed company doesn’t meet its payment obligations, the commission then uses that posted security to compensate eligible producers. — Glacier FarmMedia Network

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“They [Cargill] have worked through most of the issues,” Canadian Grain Commission spokesman Remi Gosselin said in an interview Tuesday. “Our understanding at the grain commission is that there should be no issues on a go-forward basis for future deliveries and they are working through previous deliveries to resolve all of the complaints, but it’s going to take sometime to get through each one of them.”

Some farmers who delivered grain starting in August complained Cargill was slow to pay them. Under the Canada Grain Act, licensed primary grain elevators are obliged to pay farmers for their grain immediately if the farmer requests it.

Payment delays followed “the implementation of a new technology system,” Cargill official April Nelson wrote in an email Friday.

“We apologize for the impact this has had on our Canadian grain customers and our teams are dedicated to fulfilling all contracts as soon as possible. We know that this experience is not what customers expect from Cargill.

“We are committed to a high level of service and are in frequent communication with the Canadian Grain Commission (CGC) as we navigate this issue, with focused priority on quick resolution for our farmer customers. We ask anyone currently experiencing payment delays to reach out to their local Cargill representative if they haven’t already done so.”

The Western Producer reported on Cargill’s problems Sept. 30.

The CGC was aware of the issue and working with Cargill, Gosselin said in an interview with the Manitoba Co-operator Nov. 1.

“The point we want to make is farmers don’t need to worry about the financial wellbeing of Cargill,” he said. “It’s not that they are going out of business, or having trouble paying producers, it’s more about their internal computer systems having a glitch and they are working on resolving that problem.

“Believe me, if we had any indication of any problem the CGC would be taking action. We have no indication of financial difficulties at Cargill.”

A number of farmers have complained about Cargill’s slow payments on social media.

In a letter Friday to Cargill customers president Jeff Vassart apologized and asked for continued patience.

“Your local [Cargill] team has been working extremely hard throughout this difficult situation and is dedicated to delivering excellent customer support,” Vassart wrote. “They continue to actively communicate the customer impact of these issues to Cargill leadership. Please know we continue to work hard to return to the level of service you deserve.

“If you require an immediate payment, please reach out to your Cargill representative or your Cargill location. We will ensure your payment is addressed as quickly as possible. We will continue to post updates on CargillAg.ca as we continue to work through these issues.”

Unpaid farmers can also call the CGC, Gosselin said.

“Our [CGC] experience has been when we escalate things with them [Cargill] that they resolve the individual complaints in relatively short order,” he said.

“Cargill will be presenting us with a plan on how they will work through all of the outstanding payments. There is open and direct communications with Cargill and we are in direct contact with them.”

Ensuring farmers get paid for ‘regulated‘ grain delivered to licensed grain companies is part of the CGC’s role under the Grains Act.

The CGC regularly audits grain companies to ensure they have enough security posted to cover farmer liabilities. However, the CGC’s payment protection program is time-limited.

After delivering grain, farmers have 90 days to exchange a primary elevator receipt or grain receipt for a cash purchase ticket or cheque. But once a farmer receives a cash purchase ticket or cheque, he or she is eligible for compensation paid from the licensed company’s security for only 30 days, so long as it’s still within the 90 days post-delivery. If not, farmers are ineligible for payments from the company’s posted security.

There’s also a chance the security doesn’t cover all what’s owed to farmers. In that case payments are pro-rated. That’s why the CGC recommends farmers get paid as soon as they deliver grain to an elevator.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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The Winnipeg-based company announced Monday it will build new facilities at Rycroft, Alta. and Melfort, Sask., with construction starting later this year on both toward completion in early 2023.

The two elevators will each be built with 150-car loop track systems connecting to Canadian National Railway (CN) track, and will each include storage capacity for 42,000 tonnes of grain.

Other “high-efficiency features” will allow producers the ability to unload a Super-B truck in less than five minutes as well as “excellent” road access, the company said.

“G3 is keeping grain moving to market, and that means more delivery opportunities for our farmer customers, and faster service which saves farmers time and money,” G3 CEO Don Chapman said in the company’s release.

Other grain handlers with elevators at Melfort include Viterra, Richardson Pioneer and The Andersons, while Richardson, Parrish and Heimbecker, Cargill and Grain Millers Canada have facilities at Rycroft.

G3 has been on a relatively steady expansion track on the Prairies since its formation in 2015, today operating 17 Prairie grain elevators and five port terminals.

Those include elevators opened earlier this year at Vermilion, Alta. and Swift Current, Sask. In 2020 G3 opened five Alberta elevators, along with its West Coast port terminal at Vancouver. — Glacier FarmMedia Network

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Crystal Valley, which sells supplies like fertilizer to farmers and buys their crops, said it became aware of the attack on Sunday, prompting it to take operating systems offline and to stop accepting major credit cards.

“This attack has infected the computer systems at Crystal Valley and severely interrupted the daily operations of the company,” Crystal Valley said in a statement on its website. It asked customers for understanding while the company resolves the issue.

The attack left Crystal Valley unable to mix fertilizer or fulfil orders for livestock feed, said Kevin Paap, a corn and soybean farmer in Garden City, Minnesota, on Thursday.

“With the help of some other local co-ops, they’re helping grind some feed and sharing the burden,” he said.

NEW Cooperative Inc. in Iowa said on Monday its systems were offline to contain a cybersecurity incident. A Russian-speaking cybercriminal group named BlackMatter said on its website that it stole data from the farm services provider.

The disruptions are hitting the Farm Belt as growers gear up for the autumn harvest.

Crystal Valley operates eight grain elevators with the capacity to store a total of 25 million bushels in the south of Minnesota, the third biggest U.S. soybean-producing state and fourth biggest corn producer, according to its website. Two locations load huge 110-car trains for delivery to big buyers or exporters.

Paap, president of the Minnesota Farm Bureau, said he has been able to deliver grain to Crystal Valley’s elevator in Vernon Center with minor delays as the normally automated process is offline.

“It’s old school, with hand-written tickets instead of the computer reading the card on the side of your truck as you drive in,” he said.

Cybersecurity has risen to the top of the Biden administration’s agenda after high-profile attacks that affected U.S. fuel and food supplies.

— Reporting for Reuters by Tom Polansek and Karl Plume.

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Privately-held P+H said Thursday it plans to expand to a 100-car spot, up from 50, at its elevator at Quill Lake, Sask., about 60 km east of Humboldt.

Work on that expansion, connecting to Canadian National Railway’s (CN) Margo subdivision at its site east of town, is expected to start this month for completion in November, the company said.

“The upgrade allows us to clear twice as much grain out of the facility,” P+H said in a release. “Increased shipping will provide more consistent and higher-volume marketing plans to our customers.”

Also, work will begin in August on a new rail car unloading system at the elevator, “which will allow us to unload a rail car off either track at 272 tonnes per hour,” P+H said.

That new system, due for completion in September, would also allow the elevator to unload an “improperly loaded” car or to receive cars loaded elsewhere, the company added.

P+H’s grain handling capacity at Quill Lake was expanded in 2000 from 3,500 tonnes to 9,000, and again to 21,000 tonnes in 2011 with the addition of seven new steel bins.

Separately, the company said Thursday, work is already underway on a fertilizer rail unload tunnel, able to empty a rail car at 20 tonnes per hour — along with what it described as the “first phase of increasing the speed of the facilities’ rail loadout capacity.”

The company has expanded the Quill Lake site’s fertilizer retail business in recent years, having installed a new shed there in 2016. — Glacier FarmMedia Network

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The Winnipeg company said Thursday it will buy 100 per cent of the shares in Italgrani USA Inc., whose assets include a mill, elevator and Mississippi River barge-loading facility at St. Louis; three grain elevators in northwestern North Dakota; and a commodity trading desk in Minneapolis.

Privately-held Richardson didn’t release a dollar figure for the deal, but said it expects its purchase agreement to close “immediately” after regulatory approvals are received. Richardson said it would also “retain the current workforce” for the St. Louis-based company.

“This acquisition is fully aligned with our long-term strategic goals of diversification, geographic expansion, and an increased presence in food processing — having gone from canola to oats and now to durum processing,” Richardson CEO Curt Vossen said in a release.

“The significant scale of processing capability of the Italgrani plant, combined with origination opportunities and crop inputs retail facilities… will further enhance the services we will be able to offer to our producer customers, both in Canada and the U.S.”

Italgrani in 2018 completed a major expansion at the St. Louis facility, adding an 8,000-hundredweight capacity milling unit that brought its daily processing output to 28,000 cwt of semolina and/or durum flour — which before grinding translates to about 1,800 tonnes of durum wheat.

Italgrani’s North Dakota elevators — which along with durum handle spring wheat, flax, sunflowers, peas and other crops for domestic and export sales — are within relatively short reach for growers in southeastern Saskatchewan and southwestern Manitoba.

Those three elevators, which also include retail crop input facilities, are at Powers Lake, about 90 km south of Estevan, Sask.; Tolley, about 75 km south of Carnduff, Sask.; and Benedict, about 150 km south of Lyleton, Man.

Italgrani, which bills itself as “Italian family-founded and -owned,” is today majority-held by Progetto Grano, a Milan-based holding company that bought its controlling stake in 2006.

Italgrani started out of a Minneapolis office in 1979 and expanded to include the St. Louis mill and elevator by 1987. It bought its Mayco Export grain trading and brokerage subsidiary in 1988 and started investing in North Dakota grain handling space in 1989.

“We are confident that Richardson will understand and nurture the unique culture and business qualities that made Italgrani so successful over the years and will contribute to the further growth of the business,” Progetto Grano CEO Ruggero Benedini said Thursday in Richardson’s release. — Glacier FarmMedia Network

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The privately-held Winnipeg grain firm said Wednesday it has already started work on the new build, which it expects to have ready to receive grain in June next year.

The existing elevator, put up in 1980, was expanded from 12,000 tonnes capacity in 2008-09 to its current maximum handle of 35,000 tonnes.

The new facility, however, will have 25,000 tonnes of grain storage capacity along with a new 150-car loop track served by Canadian National Railway (CN), for “continuous” grain loading and movement.

The company said the new facility “further extends” its national grain asset network, “bringing area producers the chance to leverage global grain marketing opportunities provided by the P+H grain merchandising team.”

The Yorkton site will also continue to have “a team of experts who will leverage a full suite of seed, crop protection, and crop nutrition products and provide area producers with crop input solutions that fit their farm.”

The new elevator will “complement” the existing site’s recently-built 6,000-tonne capacity fertilizer shed and 7,800-square foot heated chemical shed, the company said.

P+H, which also operates in flour and feed milling, in 2019 significantly boosted its grain handling space in the West, buying Louis Dreyfus’ 10 grain elevators to bring its total count of primary grain facilities to 29.

“This build confirms our commitment to investing in facilities and capabilities that support Canadian producers as they strive to grow and market the best crop and further solidifies our commitment to the growers in the Yorkton area,” P+H CEO John Heimbecker said in Wednesday’s release. — Glacier FarmMedia Network

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The company said Monday it began construction work earlier this month at Carmichael, about 65 km southwest of Swift Current, about three km south of the Trans-Canada Highway on the Canadian Pacific Railway mainline.

Expected to be ready by fall next year, the Carmichael elevator will have 46,000 tonnes of storage capacity with a loop track for handling 175 high cube-style rail cars, “high speed” receiving and loadout, and a “high capacity” grain cleaning system.

Once the new elevator is built, Richardson said, it will start construction on “crop inputs assets” at the site including a high-speed fertilizer blender and a 10,000-square foot warehouse, both to be up and running by fall 2023.

“Richardson has maintained a significant presence and loyal customer base in the southwestern part of the province and will continue to seek opportunities for improving operational efficiencies,” Tom Hamilton, Richardson’s senior vice-president for agribusiness operations, said in a release.

In the same area, Richardson already has a 29,920-tonne capacity elevator at Swift Current; a 19,000-tonne capacity elevator it bought from Viterra in 2013 at Maple Creek, about 70 km west of Carmichael; and a 31,900-tonne capacity elevator it bought from Agricore United in 2007 at Reed Lake, about 50 km east of Swift Current.

“With the addition of the new facility at Carmichael, we look to bridge our historical presence in the area with the realities of meeting our grower customers’ evolving business needs,” Hamilton said. — Glacier FarmMedia Network

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The suspensions took effect at 12:01 p.m. Tuesday, a CGC official said in an interview.

“This means for a limited period of time (until April 30) activities (by W.A. Grain) that would require a licence are suspended, which include in principle purchasing grain from western Canadian producers and trading in grain in reference to CGC grades,” Remi Gosselin, the CGC’s head of communications said.

Gosselin declined to comment specifically on what prompted the CGC to suspend the Innisfail, Alta.-based company’s licences.

“I can’t get into that, only to say at this point we want to give them a chance to manage their finances and they have nine days to do so,” Gosselin said. “April 30 we will decide if their licences are reinstated or revoked.”

The CGC could also opt to extend the suspensions or reinstate the licences with conditions, he said.

“There is justifiable cause for us to take the actions we did,” he said. “We need to have assurance that they will be able to meet their assurances of licensing beyond April 30. I’ll just leave it at that.”

To be licensed, companies must demonstrate they can pay farmers for the grain they are taking delivery of, and must post security to cover those liabilities.

If the CGC revokes W.A. Grain’s licences, farmers owed money by the company will be asked to submit their claims to the CGC to access security posted by the company. It’s also possible they might get some or all their grain back in-kind.

If it comes to that, affected farmers must document their claims with proper receipts.

Claims are also time-limited. CGC payment protection expires 90 days after grain has been delivered, or 30 days after a cheque for the grain has been issued.

The suspensions include W.A. Grain’s grain dealer’s licence, as well as the licences for its primary elevators at Pambrun, Ponteix and Vanguard in southwestern Saskatchewan and at Bashaw and Bowden in central Alberta.

“The (CGC) order prohibits any movement of grain and that means selling stocks in store, accepting producer deliveries as well as contracting new grain sales unless the grain commission is satisfied there is sufficient inventory to cover outstanding elevator receipts,” Gosselin said.

The CGC won’t know how much grain W.A. Grain has in-store until it conducts an audit, he said.

Several pulse crop buyers have recently experienced financial difficulties, prompting the CGC to revoke their licences and pay farmers using companies’ posted security.

The CGC suspended the licences of Canpulse Foods and Global Grain Canada and their parent company Globeways Canada last Oct. 31, when they were unable to provide security to cover farm liabilities.

All the farmers eligible for compensation were covered, the CGC announced March 2.

The CGC received 40 eligible claims involving Canpulse, totalling more than $3 million. There were 13 eligible claims for farmers dealing with Global Grain, worth nearly $700,000.

Global Grain’s liability was reduced because a number affected farmers were able to get their grain back, Gosselin said.

Two hundred and twenty-two farmers deemed eligible were paid a record $11.1 million through the CGC’s producer protection program in 2020 after ILTA Grain, which specialized in pulse crops, went out of business in 2019.

Another 49 farmers, however, didn’t qualify because of the time limits and collectively lost $1.5 million.

That’s why the CGC urges farmers to get paid as soon as they deliver.

While the CGC monitors licensed grain companies monthly, sometimes buyers can get quickly overextended.

Industry observers say pulse crop buyers are generally more at risk of financial problems for a combination of reasons.

Most are small companies with limited resources.

There are no pulse futures markets, so purchases and sales can’t be hedged, and pulse crop prices can often be more volatile.

Right now it’s also harder to access the shipping containers used to export pulse crops.

— Allan Dawson reports for the Manitoba Co-operator from Miami, Man.

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The Winnipeg company’s current site, on Canadian National Railway (CN) track about six kilometres north of the town of Swan River, is anchored by a wooden crib workhouse and up until 2001 had about 4,850 tonnes of storage capacity.

Richardson in 2002 began to add steel bin storage at the site, which according to the Canadian Grain Commission has capacity today for about 28,310 tonnes of grain.

“While the current original wood structure has served an important role in supporting our customers within the Swan River Valley, it is nearing the end of its useful life span,” Richardson Pioneer’s chief operations officer Darwin Sobkow said Monday in a release.

The new high-throughput, which Richardson expects to complete by August next year, is to have 36,600 tonnes of storage capacity and a loop track system to load 150 rail cars.

The new site will also have high-speed receiving and loadout, a “modern and efficient” grain cleaning system and a new 4,600-square foot office, the company said.

The site will remain “fully operational during the entire construction period through the existing grain and crop inputs facilities,” Richardson said.

The company, Sobkow said, has had a “significant presence” in the Swan River Valley for over 40 years and redevelopment there is “the next logical course of action.”

Privately-held Richardson is the only major Prairie grain handler with capacity at Swan River. In 2007 it also picked up an older elevator in town from Agricore United, as the latter company prepared to merge into Viterra.

However, under order from the federal Competition Bureau that year, Richardson dealt that site away to Cargill, which already owned another small older elevator nearby.

Cargill in 2015 shut down and demolished both its Swan River elevators, saying they would need “significant and costly” upgrades to remain in operation. — Glacier FarmMedia Network

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