Business

The agency is closing six southwestern Ontario grain elevators, angering farmers

A Montreal-based firm is closing six grain elevators in southwestern Ontario, a transfer that can have an effect on farmers within the area and lift considerations about elevated focus available in the market, business leaders mentioned.

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A Montreal-based firm is closing six grain elevators in southwestern Ontario, a transfer that can have an effect on farmers within the area and lift considerations about elevated focus available in the market, business leaders mentioned.

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Solio Agriculture says it made the “tough however essential determination” to shut its Ontario grain operations, closing its elevators in Chatham-Kent and Lambton, Essex, Elgin, Oxford and Wellington counties.

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“The choice was basically made as a result of we had been unable to generate returns or earnings on these enterprise actions,” Solio Chief Government Casper Castra mentioned Thursday.

The corporate’s monetary challenges had been exacerbated by “elevated volatility in commodity costs” over the previous few years, brought on by the pandemic and Russia’s assault on Ukraine, a serious grain producer, he mentioned.

“Not having the ability to join that deeply into the worth chain places us ready the place we’re not in a position to compete or make a revenue,” mentioned Castro, who famous that Solio doesn’t have Ontario terminals to export grain instantly.

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Solio, the agri-business arm of Solio Cooperative Group, grew to become the most important shareholder in Ontario Grain Partnership in 2018. The corporate plans to proceed serving clients at diminished capability throughout this yr’s harvest season and can “doubtlessly start the sale technique of its belongings to patrons,” it mentioned in a press release.

The closing elevators are inside Florence in Lambton County to the west of Bothwell, Staples in Essex County to the north of Leamington, Wallaceburg in Chatham-Kent, Talbotville in Elgin County to the north of St. Thomas, Palmerston in Wellington County to the north of Listowel and Princeton in Oxford County to the east of Woodstock.

Ontario Grain’s sudden departure has raised considerations about one much less participant in an already concentrated enterprise, some business observers mentioned.

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“It is unlucky that Solio is shifting out. We do not know who’s coming so it is a huge concern proper now,” mentioned Gus Ternoi, Chatham-Kent director of Ontario’s Grain Farmers, the producers’ umbrella group.

Whereas he is optimistic will probably be enterprise as standard for farmers contracted with Solio, closing the corporate’s Ontario operations raises questions concerning the penalties, Ternoi mentioned.

“Actually, going ahead, there’s a whole lot of concern about what that basically means,” he mentioned. “One much less participant. Does this imply will probably be tough to ship grain? We do not know now. “

Philip Shaw, a farmer and agricultural economist, sees the transfer as “an enormous blow to farmers” in southwestern Ontario.

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“At any time you might be more likely to lose retailers for grain and patrons of grain, which makes the business extra concentrated,” he mentioned, including that it might create extra issues for suppliers to farmers.

As a serious participant in grain advertising, Ontario Grain’s exit shall be felt most in Chatham-Kent, Essex and Lambton counties, Shaw mentioned.

Different giant operators embody firms equivalent to Andersen, Cargill, Nice Lakes Grain and Parris & Heimbecker.

Usually, when grain firms shut they downsize their amenities to keep away from promoting to opponents, Shaw mentioned. He is unsure if Solio will take the identical route.

If Solio can promote its grain elevators, the hope is that the client will present related providers to farmers, Castro mentioned. The amenities present grain drying, cleansing and storage providers to farmers.

Castra emphasised Solio’s dedication to farmers because it begins to say no, saying that the corporate is now leaving the market to assist farmers plan for the harvest season.

“We’re doing our greatest to offer minimal disruption to farmers right now,” he mentioned.

cleon@postmedia.com

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The Native Journalism Initiative is funded by the Authorities of Canadaa

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