Consolidation is a fact of life in the agricultural industry, and there have been waves of it over time. In 2023, one of the biggest potential mergers has been the combination of Bunge and Viterra, which will have impacts on the grain procurement, handling, and processing sectors.
Of course, another major stakeholder potentially impacted are farmers and ranchers — those who feed these grain giants with the core commodities vital to their businesses.
This summer, RealAgristudies asked farmers and ranchers their opinion on consolidation in the agricultural sector generally and specifically about the potential merger between Bunge and Viterra. Below is a snapshot of results of the first sentiment survey conducted in July 2023 with a sample of 593 farmers from the RealAgristudies Insights Panel. The results can be interpreted with degree of accuracy of +/- 4 per cent at a 95 per cent confidence level.
Seventy-nine percent of farmers are concerned about the merger between the two grain companies, which is lower than the overall level of concern (90 per cent) that farmers have with consolidation in the agricultural sector in general. When asked which areas of agricultural consolidation were the most concerning, grain companies ranked third highest behind equipment dealerships, and fertilizer companies.
We asked farmers that were concerned about the potential merger what concerned them most. Farmers felt more strongly about poorer basis and fewer options to market grain than poorer service, unfair grading, and less convenience.
Overall, seventy percent believe that the merger should not be able to proceed, but the data gets more interesting as you dive into the demographics and we get a clearer picture of who is more for or against the decision. As you see in the chart below, as the farm gets larger by revenue their resistance to the merger declines. All of the revenue categories still voted no but the severity changes as indicated.
When we look at this same question of whether the deal should be allowed to proceed by age all categories but one were between 67 -76 per cent saying the merger should not be allowed to proceed. The age group of 45-54 were the outlier where 50 per cent said the merger should not be able to proceed.
Although all three Prairie Provinces are concerned about the merger, farmers in Saskatchewan (4.10) were more concerned than Manitoba (4.03) and Alberta (3.91).
This study gives a very clear picture of farmers attitudes and sentiments regarding an issue that impacts them. As a key stakeholder in agriculture, this RealAgristudies survey gives the farmer a voice on the matter. If you are interested in finding out more about the results of this study, contact me at [email protected].