Sask. Farmers could face profit loss with Bunge-Viterra merger

Farmers may see less profits from their grain as Bunge Ltd. moves towards a merger with Viterra Ltd.

Saskatchewan Wheat Development Commission Chair Jake Leguee said they figure there will be $ 770 million in lost income for producers every year if Missouri-based Bunge acquires Viterra. “We’ve long been concerned about consolidation in the grain industry. As a farmer, I need a competitive marketplace to be able to sell into to ensure I get the best price for the product that I can.”

However, if the merger goes ahead, Leguee suggested it would potentially eliminate competition as in some areas there are only one or two buyers. “The way capitalism works best is to have effective competition. We need multiple companies across Western Canada,” Leguee said.

Viterra is one of North America’s largest grain handlers, while Bunge is the world’s largest oilseed crushing company.

This is the second attempt at a merger. In 2017, Glencore — the parent company of Viterra — tried to purchase Bunge.

Meanwhile, he said they are also concerned about a potential worsening at the Port of Vancouver, which handles 75 per cent of Western Canada exports.

“When you have one company controlling potentially even more of that port, it could really have an impact on the ability for us to get grain out,” Leguee said. Meaning the actual price farmers get for the grain.

Lastly, he said with the proposed sale, there are also concerns about the canola crushed industry, as a combined Bunge-Viterra entity would own about 40 per cent of the crushing capacity in Western Canada.

“It’s quite significant. I would also say there is a real concern about the viability in the case of this proposed crush plant that Viterra is looking at building in Regina; will it still make sense if this entity is allowed to merge.”

The Bunge-Viterra merger has the provincial government’s attention after the Agricultural Producers Association of Saskatchewan, Alberta Grains, SaskBarley and Sask Wheat are calling on the federal government to consider the deal’s potential impacts “on the profitability and sustainability of farmers.”

The premier said he’s also keeping an eye on the canola crush plant Viterra plans to build just outside Regina. Moe said his government has worked very hard to create a good investment environment in the province.