Risk Management

United Grain Growers was a company which began in Winnipeg, Manitoba, located in western Canada. Their main objectives were to provide commercial services to farmers and market agricultural products. It started off as a small operation but later became a publicly traded company in the Canadian stock exchanges back in 1993. The company was run by a board of directors, which was composed of fifteen people, twelve of whom must be elected by delegates from different regions. In November of 2001, United Grain Growers merged with Agricore to become Agricore United.

United Grain Growers was separated into four different business divisions. They were Grain Handling Services, Crop Production Services, Livestock Services, and Business Communications. The Grain Handling Services roles were to identify the sources of grain and to deliver them to exporters and domestic end users. They owned large country elevators which were where the grain was transported, graded, purchased and stored. However, the grain handling industry was and still is regulated by government agencies. The Canadian Wheat Board markets the grains on behalf of the farmers and the Canadian Grain Commission regulates grain handling and maintains quality standards. As a result, United Grain Growers needed an operating license in order to participate in the market.

The Crop Production Services division provided input such as seeds, fertilizer and other products. They also provided consulting, agronomic and financial services to farmers. The Livestock Services segment provided inputs of cattle, hogs and poultry to producers. Lastly, the Farm Business Communications division provided important information needed to run a profitable business in this industry. They created newsletters and kept information on weather, market prices, and agricultural news. The Business Communication division was the smallest business unit in the company.

Out of the four business divisions, the Grain Handling Services...