Rancher's Choice - Now or Never

[kato]

Got a letter in the mail today from Rancher's Choice Beef Co-op. Here's the latest news.

Location: The City of Dauphin REALLY WANTS this plant located there. They have offered land, a tax break on the property for three years, sewer and water hookup, etc.

The Plant: They have been offered a plant. It is located in the United States, and was built in 1998. It is state of the art, and exceeds present requirements. No lagoon required, as the City of Dauphin is offering sewage service. A construction company in Vancouver has given an estimate to dismantle it, move it and rebuild within 6 months.

Jobs: 70 jobs minimum created. Spinoff industries are already making inquiries.

Producer benefits: We all know those.

Finances: The stumbling block. (Of course, what else?) The lenders say there is not enough money in the pot. However, the lending institution they are dealing with will accept as equity, a letter of credit from your lender. This will enable the $100.00 per cow share to be deducted from the sale of the first cow. There is a bit of an administrative cost, but I don't think it's too high.

The plan is to kill about 250 cows a day, and a customer has already comitted to taking the beef from about 160.

This thing is so close to going through, it would be a crying shame if it didn't happen. Apparently the owner of the U.S. plant isn't willing to wait forever, so there is a deadline of October 5th.

What gets me is the fact that the government has been hollering all over about how they want to help these producer owned plants get going. Where are they now? I don't see them lining up to help. What will it take to get them to put their money where their mouth is?

With a few more plants like this one, as well as a big one from the Beef Initiative Group, we just may be able to come out of this whole fiasco in better shape than we could ever have imagined.

If anyone here is within a reasonable distance of Daupin, you can contact the Co-op at this address. I'm sure they would love to hear from you. This thing is not restricted to just Manitoba cattle producers either.

It's up to us to help ourselves.

www.rancherschoicebeef.ca/contact.asp

[topper]

Kato: no use waiting and wishing for our governments to help out. It ain't going to happen. I've talked to a lot of producers that are waiting to see if the plant gets up and running and then they will invest. I guess most people have bad memories of deals gone bad in the past but they have to somehow get over that and invest in this plant. You are never going to get a better deal than they are offering on the payment from the first cattle you put through the plant. Get off your butts producers and make this happen.

[topper]

Michael McCain CEO of Maple Leaf Foods was the keynote speaker at the Growing Alberta Luncheon yesterday in Edmonton. When asked about beef slaughter plants, his comments were to the effect that he didn't regard them as a good investment.
His reasoning was that once the border opens the smaller plants won't be competitive. He said that Maple Leaf Foods has investigated the possiblity of getting involved in beef slaughtering but does not see it as a good business venture for the company.

[rusty1]

What's the capital cost going to be?

[kato]

In this weird market, it's not the big boys that are going to have an advantage. It's the co-ops with their built in supplier loyalty. If you own the plant, you will take your cows there. If you have no stake in it, you will shop for the best price.

There's no need to commit all of your culls, just a few. It's not an all or nothing deal.

If enough people commit even a quarter of their usual culls, the plant could work, and they are still left with other cattle they can speculate on. "Bigger plants will outbid them" is a common comment. Big deal, if it's only on a few cows. It won't be the end of the world. If the plant makes a profit you share in it as well.

Contact them and check it out. If this thing falls through, it will set a poor precedent for other plants who want to get going. The naysayers will point to this plant and say "See? They had all the homework done, and made the best possible deals to get it started, and it still didn't go." Not a good start to our independence is it? Eh?

[kato]

I think around 16 million.

[bnyoung]

Am I to understand that this plant is in the states and that a Vancouver company will dismantle it and move everything north of the border.
Dumb question, but where is Dauphin, I'm in Ontario

[kato]

Western Manitoba, just north of Riding Mountain National Park. East and a bit south of Yorkton Saskatchewan, and about two hours north of Brandon.

Apparently the plant was built in such a way that it could be dismantled. Must be metal, I would think.

I don't think 16 million has to be raised right now, that's the projected total. I'm not sure how much they need to get it going.

[jensco]

Michael McCain is assuming that the border will open. There is no definite time frame on this and definitely not until the US election is complete and the new government in place. Also, who says we need to compete with the larger slaughter plants, especially if new local markets are created. Funny, he opened a large pork slaughter facility in Brandon that is now struggling to keep staff and now pork prices are down. Was this a poor investment?

The plant in the northern US was forced to close when BSE hit. They were slaughtering all Canadian culls. The plant is not very old. Unfortunately, there wasn't a Manitoba company that wanted the moving job - kind of scarey.

Even with government support, there still needs to be producer support. Are producers not investing because of risk to themselves or because they don't see a viable future for the industry (or both?). It would be a shame if there are no changes that could maintain a viable industry!

[kato]

You have to remember where McCains are coming from too, when you listen to their advice.

They have the big pork plant in Brandon. Staffing is an issue there, as the turnover in these plants is always horrendous for the first few years. Last thing he wants is a big beef plant scouting for trained workers. LOL