Rancher's Choice

[15444]

Apparently the federal funding for the Rancher's Choice Co-op plant, designated for Dauphin, Manitoba, has been rejected.
What bullshit. Time to burn the Parliment buildings to the ground!

[cakadu]

What was the reason given for the rejection? Is it even remotely plausible?

How much effect is this going to have on the ability for the plant to go ahead?

[15444]

http://www.canada.com/winnipeg/story.html?id=0bb3830c-39dd-43ed-b767-bf5c6099867e

[cowman]

I wonder if Mitchel thought the price tag was too high? Seems to me they were talking around $17 million for a pretty small plant?
Not saying he was right to reject putting money in but how did the numbers look?

[farmers_son]

There is no way to evaluate the numbers in this time of market uncertainty. The numbers government needed to look at is the importance of the beef industry to this nation and the absolute need not only for increased packing plant capacity but increased competition within the packing industry.

According to http://www.cattletoday.com/forum/post-53157.html the cost of the plant was $16 million and the Province of Manitoba had already committed $11.5 million. The proposal was to purchase a U.S. plant and relocate it to Dauphin. That was just the kind of signal we needed to send to the U.S. If the feds could send a message to the Americans that we are going to take part of your packing industry and build up our own and have that message cost only $5.5 million they should have done it.

Still waiting for a similar committment from the Province of Alberta. Why isn't Alberta supporting the province's beef producers like Manitoba is?

[Bez]

Well, let's see....

Last year the feds gave China a bit more than 50 million dollars in ag aid. I believe they also send similar support to India and Pakistan.

All three countries have hungry people - plus the following: A nuclear weapons development program, a space program - or ballistic missile program, modern armies, navies and air forces - in fact if memory serves me, China has the worlds largest standing army - called the Peoples Army.

We support the folks with larger economies and larger populations. China is forecast to have double digit economic growth for the next 5 - 10 years.

Seems to me they should be sending aid to us!

Be that as it may, what was needed in Manitoba was a tiny drop of piss in the bucket compared to what the lying libs gave to sponsors in Quebec.

Seems to me we ag types are truly a lost species.

Bez

[topper]

I think it's a crime that the feds don't support this kind of a project but I have to say it is also very disappointing to see the producers not wanting to help out either. I know a lot of producers who are sitting on the fence waiting to see if the plant goes ahead. Then if it gets built they will be the first ones crying to get their cows slaughtered. I know some will say "We just don't have the money to put towards a plant right now". Well that excuse doesn't fly because Ranchers Choice will let you buy shares and have the price deducted from the cows when they are slaughtered. How can you beat that for a deal. I was at a Ranchers Choice meeting a week or so ago and they said that out of province producers are welcome to join as well so hopefully some will.

[kato]

They've already got some of our money. We've got some cows lined up for them too! LOL

[Braveheart]

The concept of producer owned plants has merit for all the reasons discussed many times in this forum. However, when government money becomes involved, things get a little cloudy. For instance, there are some abbatoirs in Manitoba that have approached the government for loan guarantees or grants to expand and were turned down. Now Ranchers has some MB gov't support, so eventually those "rejected" abbatoirs will be competing against gov't money if and when Ranchers' Choice comes on line.

The moral hazard is that by helping one firm become established we may be hurting already established and previously sustainable enterprises with a taxpayer supported unfair advantage.

[Braveheart]

The concept of producer owned plants has merit for all the reasons discussed many times in this forum. However, when government money becomes involved, things get a little cloudy. For instance, there are some abbatoirs in Manitoba that have approached the government for loan guarantees or grants to expand and were turned down. Now Ranchers has some MB gov't support, so eventually those "rejected" abbatoirs will be competing against gov't money if and when Ranchers' Choice comes on line.

The moral hazard is that by helping one firm become established we may be hurting already established and previously sustainable enterprises with a taxpayer supported unfair advantage.

[cowman]

I would also point out that most taxpayers would "appreciate" it if government tried to spend their money in a conservative fashion? Just because the last bunch were a bunch of spendthrifts doesn't mean we want the present bunch to be?
I suspect that Mitchel might have some doubts about the viability of this plant? Maybe we do need this plant today but what will happen to it down the road when the border is fully open? And who will be left holding the bag if it fails?
Good questions to be asking if you are spending the publics money?

[farmers_son]

And obviously that would apply not only to small abatoirs but Cargill and Tyson and all existing players in the packing industry.

Don't we need to focus on the problem, not enough packing capacity and not enough competition in the market, rather than focus on government assistance to provide producers with an alternative way to market their product will adversely affect the existing players?

Government intervention is called for in times of market failure. The question is should the government intervention come only in the form of ad hoc handouts and subsidies. Or should the government help producers help themselves by providing assistance for producers to own the means of marketing their own beef instead of continuing to be dependent upon the very same existing players who really were a big part of the problem since May 20.

The status quo is not working and the status quo is not where the industry wants to be 2 years from now.

If producers owning a packing plant causes existing abatoirs and packers to sharpen their pencils, is that such a bad thing?

[jensend]

http://www.theglobeandmail.com/servlet/story/RTGAM.20041202.wcows1202/BNStory/National/

seems like they get what they want. what do we have to do to get a similar deal. our checkoofs should be able to do the same as their union funds.

[topper]

Cowman: The government has two choices to make. Either invest in more slaughter capacity for these old cows or keep on paying out cais payments. Either way the taxpayer gets the bill. We are in a much tougher situation here in manitoba because we have even less access to slaughter for our old cows than you do in alberta. As far as it interfering with existing plants, I can't see that happening as this plant will be mostly deboning and shipping boxed frozen beef to others for further processing. I don't think any of the small abbatoirs around the province are doing this or have the cfia inspection that is required to do interprovincial trade. Maybe someone could correct me if I'm wrong on that. I have to agree with you that this plant could be on pretty shaky financial ground once the border opens to OTM cattle but I can't see that happen for quite awhile and by the time it does a big part of the debt should be gone if it is managed properly.

[kato]

The rumour I've heard is that it will open to beef from OTM cattle along with live younger ones. That's what the last rule contained before R-Calf shot it down, if my memory is correct.

That can only be a good thing for the new plants. The day a live cow gets on a truck for Nebraska is a long way away yet.