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Transitions in the Canadian Market

Transitions in the Canadian Market. James Rea AVP Bulk Product Sales American Fats & Oils Association Annual Meeting 2012. Agenda. Major Transitions Deregulation of the Canadian Wheat Board Rationalization of Origination Assets/Players

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Transitions in the Canadian Market

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  1. Transitions in the Canadian Market James Rea AVP Bulk Product Sales American Fats & Oils Association Annual Meeting 2012

  2. Agenda • Major Transitions • Deregulation of the Canadian Wheat Board • Rationalization of Origination Assets/Players • Canola and the Expansion of the Canola Processing Industry • Acreage – Crops and Returns

  3. Deregulation • Deregulation of the Market • Canadian Wheat Board monopoly ends after 77 years (1935-2012) • Open Market as of August 1, 2012 • Canadian Wheat Board’s Participation Going Forward? • Wheat/Barley account for 37 MMT or ~50% of Cdn Grain/Oilseed production

  4. Rationalization - Grain Handling Capacity Western Canada Dramatic increase in handling and loading efficiency over 2 decades

  5. Rationalization of Major Asset Owners 1998 2001 2007 2012 Today Manitoba Pool Elevators 1926-1998 Agricore Cooperative Limited 1998-2001 Alberta Wheat Pool 1923-1998 United Grain Growers Limited 1917-2001 United Grain Growers Limited 1917-2001 Agricore United 2001-2007 Saskatchewan Wheat Pool 1923-2007 Saskatchewan Wheat Pool 1923-2007 Saskatchewan Wheat Pool 1923-2007 Viterra 2007-2012 Glencore 1974- Richardson International 1857- Richardson International 1857- Richardson International 1857- Richardson International 1857- Richardson International 1857- Cargill 1865- Cargill 1865- Cargill 1865- Cargill 1865- Cargill 1865-

  6. Rationalization - Country Elevators Pre-Glencore Capacity Distribution

  7. Rationalization - Country Elevators Post-Glencore Capacity Distribution

  8. Crush and the Canola S&D Final production not yet known

  9. Canola Crush Capacity (MMT) Canada/U.S. North - Approx

  10. Canadian Crush and Oil Production

  11. CANOLA OIL EXPORTS

  12. Growth in Canadian Canola Acres • Expecting canola acres to remain in the • 19-21 million range for the next 3-5 yrs

  13. Acreage Shift 2004 - 2012 000’s Acres

  14. Return Per Acre

  15. Summary • 2012/13 – Canadian Open Market Volumes Increase Dramatically • Grain and Oilseed handling in Canada has been extensively rationalized over the past 20 years • Strong Oil Demand Driving Investments in Canola Processing • Canadian Canola acres have doubled in the past 10 years as Farm-gate returns advance Canola seed production

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