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Bill Parrish Credits Diversi?cation for Company Longevity

DATE: September 21, 2006
PUBLICATION: Farmers' Independent Weekly
BY: Allan Dawson, FIW Staff

P & H patriarch has seen a lot of changes in the grain biz



VOICE OF EXPERIENCE: Parrish & Heimbecker chariman Bill Parrish has seen a lot of changes in the grain trade the last 61 years. He spoke about some of those changes September 14, fittingly, in the ornate Millenium Centre on Winnipeg's Main St. It was originally a bank drawn to the city in the early part of the last century by the West's booming grain economy.

Bill Parrish has seen a lot of changes in Western Canada’s grain trade the last 61 years.

Around 1948, there were 50 elevator companies with shares in the North-West Line Elevators Association, which didn’t include the Prairie Pools or United Grain Growers, Parrish, the grandson of one of the founders of Parrish & Heimbecker (P & H), told elegates attending the Canadian Farm Wr i ter s’ Federat ion annual meeting in Winnipeg September 14.

Today only three of those companies — P & H, Paterson GlobalFoods Inc. (N. M. Paterson & Sons) and Pioneer Grain ( James Richardson International) are still in business.

In 1945, when Parrish started working for the family business that his grandfather William Linton Parrish and Norma Heimbecker started in Brandon in 1909, there were 5,000 country elevators blanketing the West; today there are 352 and most of them are large capacity, high throughput facilities.

The wooden crib elevator, once emblematic of the West, has almost disappeared. In 1945, P & H had 34 elevators in Manitoba and Saskatchewan, which handled about 70,000 bushels or around 2,000 tonnes a year.

In 2005 the company had just 10 elevators, but they handled 62,000 tonnes each, Parrish said. “Some of our elevators handle in one day 2,000 tonnes, as much as those old wooden elevators handled in a year,” he said. “You can see the terrific change in the handling of the grain.”

When the number of elevators peaked at more than 5,200 in the 1930s, there weren’t many places for companies to add new facilities so they began to build more efficient elevators at their stronger points, Parrish said.

Then companies started swapping elevators and closing facilities that didn’t do much business. In 1974, a group of farmers built a concrete inland elevator at Weyburn, Saskatchewan, and Cargill built concrete elevators at Rosetown, Saskatchewan, and Elm Creek, Manitoba.

Parrish said Cargill was criticized for it, but turned out to be ahead of its time, implementing what had already begun in the United States grain belt. Parrish didn’t say it, but his company was ahead of the game too, having purchased old, but large concrete storage facilities in Winnipeg, Saskatoon and Regina in the early 1970s.

P & H built its first new concrete elevator in Yorkton, Saskatchewan in 1980. In those days Parrish said small elevators were always plugged with wheat because the Canadian Wheat Board (CWB) wanted to have inventory. Bigger facilities helped alleviate congestion.

Parrish, who worked on the floor of the Winnipeg Grain Exchange (now the Winnipeg Commodity Exchange), buying and selling futures contracts, said the exchange is misunderstood because it’s complex. “No doubt about it, there were scoundrels there as there are in all industries, but there were also a lot of pretty good fellows I think,” he said. “My assessment over 60 years is that the futures market is the best price discovery mechanism there is.”

But Parrish also defended the Canadian Wheat Board, saying it too has received undeserved criticism. “We are agents of the board and we try to find markets for them and I think they could use us a little better,” Parrish said.

He added that removing oats from the CWB was probably a good thing since the wheat board was preoccupied with marketing wheat and barley. Having more oat sellers seems to have made for a better market, he said.

“Maybe the weakness of a marketing board is that only a few people are trying to make all the market decisions,” Parrish said. “On wheat, it’s (CWB) pretty good because they’re trading (with) big countries, but smaller crops are a bit more difficult.”

If the Conservative government makes good its promise to remove the CWB’s single desk marketing powers Parrish said his company, managed by a fourth generation of Parrishs and Heimbeckers, will adapt and survive.

P & H has been in business almost 100 years. Parrish attributed that to the company’s reputation for doing business right. One of the first company bylaws was not to engage in futures speculation. “They didn’t build Las Vegas on winners,” he said, alluding to the similarities between speculation and gambling. (Futures markets, however, require speculators to make it easier to buy and sell futures for those who want to hedge, including grain companies.)

Over the years P & H has diversified. In addition to being an elevator company, the firm
mills flour and operates feed mills. “I believe this added to our strength to adjust to the
changing agriculture scene,” he said. “In this day and age for one company to last two or
even three generations is fairly rare. For two families to stay together for four generations I believe is very rare.”



 

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