Saskatchewan Wheat Pool








Saskatchewan Wheat Pool

1996 to 2003
Bulls, bears and losses

The 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.

At 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.

Company 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.

Analysts 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.

John 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.

Agricore 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.

Class 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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