Bulls, bears and losses
situation that the Pool now finds itself in has a tragic irony.
Before going public in March of 1996, the company had gone deeply
into debt to acquire several subsidiaries. Farmer-members, who know
all too well how dangerous that can be, were unnerved by the Pool's
activities. They had joined the pool to avoid debt and to unify
against corporate interests who, they felt, were out to swindle
them out of a season of hard work. Now the organization was becoming
the very thing they united to fight.
the same time Wheat Pool members were getting older, and one of
the benefits of being a member is that at retirement you can cash
out your investment. In 1995 the Pool expected 46 per cent of its
members to do just that within 10 years. Going public seemed the
best way to generate revenue for a looming cash crunch.
The Pool was also slimming down its grain handing operations in
1995. Only 564 grain elevators were operating when the company went
public and it was planning to close more at a rate of 20 a year
in conjunction with planned rail closures.
chief executive officer Don Loewen and president Leroy Larsen fought
picketing farmers and court cases to take Saskatchewan Wheat Pool
public. Even though it turned a decent profit for two years, the
company started to report millions in losses by 1999.
Loewen resigned and Bruce Johnson was fired as head of the grains
group in June of 1999 and, as its grain handling division started
to slip, the Pool began a slow slide. For the fiscal year 1999,
the Pool recorded a loss of $12.9 million. Then in 2000 the losses
ballooned to $89.9 million. In 2001, losses were reported at $44.1
million, while 2002 losses increased again to $92.1 million.
blamed poor commodity prices for the decline, but some farmers said
it was because the company lost its soul when it went to the stock
market. These critics think the Pool is getting what it deserves
for pursuing an agenda of free trade, deregulation and privatization.
Burton, a farmer from Fort Qu'Appelle who was a member of the Co-operating
Friends of the Pool, said in 1999 that the Pool severed its historic
ties with the agricultural community through decisions that led
to closing dozens of older grain elevators and the building of massive,
so-called, high-efficiency elevators.
was formed in 1998 with the merger of Manitoba Wheat Pool and Alberta
Wheat Pool. Both were involved in merger talks with Saskatchewan
Wheat Pool in the late 1980s. When Agricore merged with United Grain
Growers in 2002 Saskatchewan Wheat Pool lost its historic position
at the top of the grain handling market.
B shares opened on the Toronto Stock Exchange in 1996 at $12 each;
they traded as high as $24 in late 1997. Now, as the Pool tries
to pull itself from the jaws of bankruptcy, its shares are hovering
around 70 cents each.
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