Market Place Commodities Ltd.
In business since 2007, Market Place Commodities Ltd. (MPC) has a simple goal: to market buyers and sellers and provide them with access to true price discovery, solid pricing options, ability to lock in profits and ensure timely movement of commodities.
With offices located in Lethbridge and Bentley, Alta., the company commits to serving farmers and livestock producers, actively trading commodities grown and produced by farmers across Alberta, Saskatchewan, and Manitoba. MPC primarily buys and sells feed commodities in Western Canada and the western United States. The company trades cereal grains, oilseeds, pulse crops, co-products, proteins pellets, feed ingredients, purchasing many of these commodities directly from producers and from biofuel production facilities in Western Canada.
MPC sells about 80 per cent of commodities to the livestock industry in Alberta, and about 20 per cent to the United States. The products traded in the U.S. vary from livestock products to products for human consumption such as mustard, flax, rye, oats; to clients such as distilleries and pet food producers.
Jim Beusekom, President of Market Place Commodities, told The Canadian Business Journal, “What makes us unique is that we help the vendor and the customer, negotiating purchases and sales of commodities with both parties rather than focusing on customer sales. It is as crucial to have successful and profitable vendors as it is to have successful and profitable customers. We help the growers to move product they have grown and assist them with price discovery. We are actually the ones purchasing the commodities; therefore we control the execution of the deliveries, and we do it on timely basis and our clients depend on us. On the other hand, the customer has the need for the product to run their operation, whether it’s a livestock operation, an ethanol plant, distillery or a pet food producer. Just like the seller, the buyer seeks to buy quality product at a competitive price, and they look for timely deliveries.”
When we asked how the commodity business operates, Beusekom said, “This industry is built of few factors. First of all, we are very transparent on how we do business and we are very open about how we arrive at the price basis for both the vendor and the customer. Secondly, we have a very efficient contracts’ execution. Our clients can count on receiving their commodities to be delivered within the certain timeframe, and our trade settlement procedure is accurate and efficient — from accurate invoicing to quick payments and customer support. We have a unique standpoint, as we spend as much time focusing on vendors as on customers, because they are both equally important to our success.”
“When it comes to settlement, it’s important for the vendor to know that there is money to settle the trade and that the settlement is timely, and some companies in the industry may have issues with being able to settle trades. In this aspect, commodity trading is an industry that’s based on trust, so the settlement is very important as it’s the farmers’ livelihood, and it’s important that all parties are satisfied with the transaction once it’s all done,” said Beusekom.
“Our success is based on having the right people, and the success of this business is in the personal service to buyers and sellers. This is a trusting business, and we are entrusted with large sums of money, so we take our service very seriously. In this sense, commodity trading is a relationship business, and to provide a good service we need to work together with both the vendor and customer, and execute and settle contracts properly in order to be successful. We believe in close contact with our customer, whether it’s across the table or over the phone. The technology has provided us with many advantages such as integrated software and communication systems, text messaging, email and so on. All of these technologies had increased our efficiencies and allowed us to provide better value to our customers and vendors. Nonetheless, the personal approach in building relationships, and executing contracts timely and settling contracts timely will always be the priority and focus here at Market Place Commodities.”
Market Place Commodities is the principal involved in the commodity trade. The company negotiates the price and the shipment timeline with the seller of the commodity. When the timeframe to move the commodity comes, the producer sets up the pick-up and delivery. Within seven days the settlements are set up, stating the load information, weight, commodity grade and the price, and the payment is forwarded onto the seller. “The technology gave us the ability to react quickly to changing market environments, pricing changes, export and import, and allows us to move commodities more efficiently and be more profitable.
Commodities arbitrage – the movement of commodities – is a critical component of contract execution where we synchronize the traders and the logistics to move grain efficiently to the right customer. This makes us more competitive regarding purchases, sales and margin increases.”
“Some things change. Technology changed the way we execute deals – not necessarily closing deals across the table – but the basic rules of business and markets never change. Markets will always be here with their ups and downs, their potential price volatility and unpredictability; the negotiations will never change in terms of bartering out the best deal between the buyer and the seller, where the merchant earns his part; and the last thing that never changes is the fact that we at MPC never forget that we are in a relationship business, and that our relationships depends on building trust and accountability.”
Since its inception in 2007, the MPC has gained presence in the Western Canadian and the U.S. commodity trading market and currently moves around 500,000 tonnes of grain annually. To keep its finger on the industry pulse and to create new market opportunities, the company partners with Alberta Barley Commission, Alberta Pulse Growers and Global Organic Alliance. But the fact remains that the company has been able to build relationships with the farmers and the producers due to its business transparency and unrelenting drive and ability to provide effective price discovery and commodity delivery and timely payment delivery. MPC continues to expand its reach throughout Western Canada and western United States.