Here's one to ponder

[cowman]

I wonder how the whole thing would work? Would this money come out of the regular checkoff or be an add on? Actually do all cattle producers even pay the checkoff...I thought it was refundable or something in Manitoba? Would producers in Ontario, Quebec etc. be expected to pay a checkoff for a Sask. plant? I doubt they would be keen on that idea?
And finally would Cargill/IBP be expected to pay a checkoff on the cattle they own and slaughter in their own plants? Seems to me that isn't very fair? I mean why would they want to finance the competition, right? I wonder what the courts might say about that?
Not knocking the idea...just trying to understand!

[rusty1]

Atlantic PEI packing plant. Phone them yourself and ask the real questions. Ask for Kirk Magrath 902-437-2727

They won't talk to me?

[rusty1]

Checkoff would be seperate from ABP checkoff but taken off in a similar manner. Every animal sold. Once packers own the animal, however, they would not pay on the next change of hands. Yes, it would not be fair for them to pay, nor would you want packers to have control of this new plant when levies become shares. Working on the 4 western provinces at the moment. Remember, we used to ship live cows to Colorado to be killed. Transport to Saskatchewan would be a fair bit for some, but certainly no more than a Colorado freight rate.
Thanks cowman

[BFW]

RPKAISER
Are you proposing that every animal slaughtered, be it steers or heifers, cows or bulls, have some sort of levy attached to it to help fund a cow only slaughter plant? If so I have big problems with that or am I missing something?

[BFW]

I expect that lots of folks will have a problem or two to discuss. That is what discussion groups like this are for.

Not every animal slaughtered, but every animal sold, just like the current levy that goes to ABP etc.

[BFW]

Sorry BFW, should have added that each levy dollar contributed becomes a share in the company.

Read the first draft of the proposal on the BIG C web site:

http://beef-initiative-group.com/

[cowman]

Thankyou...rpkaiser for the info. One more question? Okay, when this plant is paid for and the levys have been converted into shares, does the checkoff end? Is it then basically a closed company? And I assume that at that time the shareholders would then recieve dividends if there is a profit? Could you buy and sell these shares just like any other company or how does that work?
I'm starting to see how this thing could work although I frankly have to tell you any company who proposes to set up shop should be looking at the most favorable economic location? And I suspect Alberta would be the place if they really intend to succeed? The actual majority of the cows are still in Alberta and I suspect Ralph will be in a "spend mode" in the not too distant future? The fact is in all likelyhood you could get a better deal in Alberta? And it is also true that Alberta has always supported ag more than Saskatchewan or Manitoba?

[cowman]

Lots of arguement for an Alberta location. After numerous invitations only Ag ministers from B.C., SASK, and MAN. have sat with BIG C to discuss anything. Maybe Shirley is still holding her wing over her poor little ABP, and CCA boys who don't like critisism, but sure know how to dole it out when it comes to BIG C.

A suggestion of a sunset clause has been attached to the plant proposal, but also thoughts of more infrustructure if and when profits are made. Other provinces etc.
Lots of details to be worked out, but I think the premise is good, and it sounds like you do too cowman.

[kato]

Would it be able to borrow from the old grain Pool model? I remember well how we used to go to the Pool first for our inputs and grain sales before talking to anyone else.

When the Manitoba Pool sold out to become Agricore, they underestimated the loyalty factor among the old Pool membership. I know we don't even deal there any more for crop inputs.

A new plant set up as a co-op would probably have the same member loyalty factor the old Pools had. That has to be a plus.

[BFW]

It seems to me that the feeding industry (whether backgrounding or finishing) will end up the majority shareholder of this "cow" plant as they generate the most checkoff dollars. Could there be a potential problem here?

[gwf]

With the producer financed packing facility, the proposal suggests that the producers would be given the option of whether the financial structure would be a public company or a Coop. The main thought to remember is that, a Coop has one member; one vote and the value of a producer’s equity will be equal to the value of one vote only. If the facility is a public company, your share, based on the number of cattle marketed (and levy paid) will have an intrinsic value that could be sold, or bought in relation to the capital investment in or valuation of the facility. If the plant is successful and is profitable, the value of ones shares will no doubt increase in value. If the project does not proceed, the levy funds would be returned. If the project proceeds and is not successful or is not profitable, the value of the shares will reflect this change in the value of each share.

In a public company, it is possible for someone to accumulate sufficient shares, as to gain control, but is also possible for the Board of Directors to reject or accept contributions from the levy. If levied contributions were not acceptable, those funds would be returned and would not result in shares being issued.

Most of us will be insignificant contributors though the levy process as individuals. With a mandatory levy, where everyone contributes with one purpose in mind; to increase the slaughter capacity for Canadian Beef for export, the benefits will be reflected through the marketing and barter system, and be reflected in the price paid for our cattle. One would hope that this would result in higher prices, partly and more significantly because there would be another significant buyer in the marketplace. If and when the facility was up and running, and the contributor of the levied funds felt that they wanted their money back (levied fund contribution), you would just sell the shares.

A levy contribution should be considered a risk. At half of one percent or less of the value of the sale value of an animal, there is not a lot stake, but the benefits could be very rewarding.

[cowman]

Well I guess it sounds all right...like gwf says...what have we got to lose?
I am rather dismayed at the lack of any government to step up to the plate and provide some sort of support! Doesn't even have to be much money...more of a facilator type of role? I mean they can blow money on all these really crazy ideas but not one cent or one minute of time to help get us in a position to solve this thing?
On the news last night they said the cow herd grew by about one million head last year in Canada! Now we all knew that was going to happen, and we all knew if that border didn't open we were going to be compounding the problem in a big way! So today we have that many more cattle to get killed and no more packing space? The CCA solution: pay the farmer money so we can compound the problem some more??? Does this policy make any kind of sense? What are these guys thinking?