Open letter from Rick Paskal

[cpallett]

Beef Industry Participants
As a participant in the production chain of the beef industry I sit here tonight completely disgusted and disillusioned. As a feedlot operator we have invested and borrowed millions of dollars in infrastructure, land and inventory to participate in the beef industry. My family farm is now facing the closure of the XL Plant at Books. This closure will be devastating for my operation. I am farmer and I am not a regulator and have little to say about the oversight and regulations that Government of Canada and the government agencies provide to our industry. In that area we look to our best intellectual minds(the CFIA) to provide the best science available and we also look to our agricultural departments to ensure that the industry is able to operate with considerations for food safety and regulations that promote the growth of the beef industry. I believe the Agricultural Departments are there to provide the balance between science and economics and to create a competitive environment that is necessary for our beef industry to flourish.
To that point I look at who is responsible for managing the food safety aspects of the Ecoli issue at the XL plant in Brooks and who is responsible for managing the economic environment that was created as a result of the recall of beef products at the XL plant in Brooks. In regards to the food safety aspects of the recall, it is prudent that we take steps necessary to ensure that the consumer’s beef is safe. To that point the handling of the science in this particular Ecoli issue and the Government of Canada’s management of CFIA oversight on this issue in my opinion has been done wrong. It is also evident to me that no one in Government understands one of the basic principal of an industry and that being that you need money to participate in that industry. The Government of Canada’s agriculture department has given no consideration of the economic liability that they have inflicted on XL Foods, me as a feedlot operator and the industry’s primary producers. To that point the Government of Canada must take responsibility for the economic damage that has been inflicted on our industry. It is unbelievable to me that the Governments of this country initiated and forced the plant closure of the XL plant in Brooks for Ecoli. The Government of Canada have sent a message around the world to our beef customers that the processes and procedures that we employ in our processing industry does not have the confidence of our own agencies. Governments have a responsibility to create an environment which is attractive for business to operate in and at the same time instilling confidence in our industry. The fear mongering that has been create by our Agriculture departments and our Government agencies are deplorable. I am left trying to answer three questions;
1. What company would want to come to Canada and operate a processing facility in Canada and be subject to the liability that the Nilsson Bros. incurred?
2. Instead of suggesting that our food oversight systems in this country are strong and instill confidence, the Government of Canada and it’s agencies have left their own credibility subject to criticism. My point is who are we now going to sell our beef to? What confidence have we instilled in customers of Canadian Beef?
3. Why should I as a feedlot owner, buy feeder cattle, when the Government of Canada demonstrates to cattle feeders that they give no consideration for the investment that we as farmers make in our businesses? I bought feeder steers to consume my feed that I produce on my farm. That decision will cost my family farm dearly.
As a result of the mismanagement of the Ecoli issue, I ask for the resignation of the manger of the Agriculture department in Canada, Minister Ritz. Minister Ritz demonstrated to the industry that he is not capable of handling sensitive situations. I ask that the Government of Canada immediately engage in discussion with the Nilsson Bros. on a financial package for the XL plant and a indemnity agreement by the Government of Canada towards future operations of the XL plant that will remain in place until Canadian Beef products regain their value in the market place. In addition the Government of Canada has a responsibility towards beef producers (feedlot & cow/calf) to reimburse those producers for their reduction in income that they experienced as a result of the Government of Canada’s handling of the Ecoli issue at the XL plant. Time is of the essence. By the end of the day Friday October 12, 2012 workers will start vacating Brooks for other jobs. Feeder cattle prices will continue to erode until they reach a level where feedlot operators can factor in a profit with the idea of shipping the fat cattle to plants in Colorado and Nebraska. I do not expect that US slaughter plants that regularly accept Canadian fed cattle can expand production to match Canadian supplies. Also bear in mind that Canadian cattle are still subject to COOL regulations. This will be a short fix for this year only as the Americans have no corn crop. Next year they will take all our feeder cattle and Alberta will look just like Montana. Nice place to visit but a terrible place to do business.
If the Government of Canada chooses to do nothing, then the Government of Canada has an obligation to tell the industry ASAP.
I do not have a email address for Minister Ritz or any other Government officials. I ask that someone please provide me with that information so I can forward this on to him.

Rick Paskal


Paskal Cattle Company Ltd.
(p)403-732-5641
(f)403-732-4856

[grassfarmer]

I would respectfully disagree with Rick on this one. I
think he is pointing the finger at the wrong people
in the first instance. But at the end of the day do we
really want to be a cry-baby Government bailed out
industry? I thought this province and it's cattle
industry was supposed to be the last bastion of free
enterprise?
If we don't want to continue being free enterprise,
global market competitors I suggest we look at a SM
type system for beef. It would produce better
returns for cattle producers without costing the
taxpayer as much.
Me, I'm happy to stick with free enterprise.

[kato]

gerry.ritz@parl.gc.ca.

Took 3 seconds to find that.

This is only the first request we'll hear for a bailout. There will be more. I'm interested to see where they come from next.

I guess we're going to pay for this somehow, aren't we? Anyone who thinks XL will not use their captive supply and muscle to cut costs on cattle to pay for this is living in a dream world. So we will pay, whether by being taxpayers, or by being cattle producers.

No wonder guys are just throwing up their hands, dumping their cows, and walking away.

[cpallett]

Well ladies and gentlemen the tom-tom telegraph indicates that CFIA is going so far in an attempt to cover their butts on this one that their current proposed regulations for the re-listing of Lakeside will prevent the plant from re-opening.

You may want to consider the effect that will have on your pocketbook.

Randy, I should know better but I just can't resist pointing out that if the Nilsson brothers cannot make Lakeside work, then what chance does a producer-owned plant have? Better have a niche market with volume that is sufficient to turn a profit and steady demand in place before you jump in. That, plus lots of insurance.

[BFW]

Looks like the lawyer smells another class action lawsuit....

[cpallett]

No interest BFW. If the law has taught me anything it is that the courts are not interested in holding the government accountable.

There are few, very few, exceptions. The BSE class action may be one of those exceptions, but I'm in no real hurry to pour my life into another barrel full of snakes and frustration.

Doesn't prevent me from keeping my ear to the ground, however, and continuing to be disgusted at decades of governmental incompetence/negligence with no end in sight. Proud to be Canadian, but sometimes love is sure painful.

[rkaiser]

Love is not painful my dear Mr. Pallett, is is fulfilling and exciting and unpredictable and - and - and....LOL

So you are learning things are you Cameron, same here. Why would a producer owned, or a Canadian Beef Alliance plant be able to make it where NB did not? Same thing bud - learning. Thank you NB and thank you as well to the Price family who tried and failed at Balzac. Lots of lessons for us - or anyone else who takes this on - to learn from. Reading over realms of documents from the Balzac failure and now a few notes from the labor union at Brooks is about all it will take. Funny you brought up the word "love" Mr. Pallett. Kinda goes along with care; and care is what was certainly missing in Brooks by the sound of it.

I am not overly shocked by Rick Pascal's letter, and have to take GF's position on this one and respectfully disagree. In fact, I say let the XL plant in Brooks burn. Well I guess that since it is mostly concrete, bring on the bulldozers and wrecking balls. That shithole has been propped up far to many times with taxpayers money. If the government is going to throw any money around, it needs to be in the form of a loan or a loan guarantee to someone or some group ............ that "cares" about the entire industry.

NB made enough money while they were operating to let the plant putrefy, and as far as their losses beyond investment --- like you say, hope they had some insurance beyond the millions they poured out of the plant into their numerous other ventures.

What I don't understand about Rick Pascal is why he is not taking advantage of the situation and re enabling his groups 250 head a head plant at Innisfail. The plant could quite easily be upgraded to 400 head a day and help the problem he is talking about on his family farm. The markets that are lost forever to NB would be a cake walk to step into "NOW".

Do we fear the biz because of this situation Cameron... Hell no. We know that we have you making sure the CFIA steps up to the plate ---- LOL And as far as NB being irresponsible and passing the buck to CFIA alone --- give me a friggin break..

[perfecho]

... and news reports yesterday reminded us of the 1.6mil XL received from tax payers money to step up their grind capabilities. And we are outraged at third world government corruption .....

[gaucho]

I can't help keeping my mouth shut on this one, "eat Cake Rick and NBI!"

How many others went down trying to move ahead and no one was there for them. NBI and their family asking for cash because of their arrogance and profit greed, cutting corners and not following their HACAPP... no way. Its unfortunate for this industry to loose a packer if they go down, that said there are also others out there that have a much better global vision for market diversification rather than just domestic.... "Erika always says everything happens for reason, this may in deed be the best hing that happened for creating change in our businesses"

[GaryE]

Sorry, I won't be as polite as Randy or GF
To lobby for government assistance for XL is a poor idea and shows feedlot mentality of quick fixes with long term negative results. While I realize that we need competition and slaughter capacity, most of these problems have been brought about by XL themselves and the complacency and neglect of the CFIA. An independent audit showed that there were inconsistencies in May but no changes were implemented. CFIA has noted that XL was not following their own guidelines but did nothing...kind of like a cop who knows you're speeding but doesn't say anything until the crash.
My main problem however is with my memory and its poor at the best of times
I remember BSE and when Lakeside and Cargill could not bid on cows because they wanted to ship to the US, XL gave us less that $.20/# for our cows.
I remember that when Rancher's Meats sold its assets that XL purchased $10million worth of equipment for about $200,000 in a quick fire sale
I remember that when XL offered to purchase Brooks that there were statements that Moose Jaw and Calgary would not be closed.
I remember the payment for BSE offset by the government to XL of close to $50 million and instead of going to producers, it went to buy Nilssons a ranch in southern Alberta.
I remember a grant of close to $3 million from ALMA that went to faster SAFER hamburger
Now Rick, you want me to support the idea of government giving XL more money...i don't think so

[wilagro]

Gary...there is nothing wrong with your memory. Sharp as ever.

[kato]

Here's a question..

When XL was processing 2400 head a day, they had the same number of inspectors as when they doubled the production.

Why were they allowed to double the production without increasing inspection to match it? Who decides how many inspectors are needed in what plant?

I suspect that the CFIA would have preferred to increase inspection, but that they were refused funding to do it. If you follow the inspection bungling far enough it lands right on the desk of our Ag Minister, and P.M.

Ironic how there was no shortage of funds to send inspectors out to sit at auction marts and community pastures to hunt down those darn farmers, isn't it?

I bet there are funds for XL, but don't ever let a potential competitor, or a cattle producer ever have the nerve to ask for one thin dime. That just wouldn't do.

Priorities priorities priorities....

[ASRG]

I've always had a high regard for Rick, so maybe I am a bit biased.I think he usually has a very good take on the situation?
I'm not much of a fan of NB, but at the end of the day we have to realize they were the only game in town....when Tyson wanted to close Lakeside down?
Yea I know it was kind of a sleazy deal and between them and their evil sister, Cargill, they probably tanked the Rockyview plant with predatory practices......but what is the alternative today?
Close the plant and put them out of business? Build a bunch of smaller plants?
The smaller plants of the past went out of business for a reason....they never made enough money!
If one big packer becomes the reality...we can kiss our big feed lots good bye, and the whole system that fed that food chain? If that is the ideal we don't need all the cow/calf outfits that rely on selling calves or yearlings to those big lots?
Maybe the average/to poor person needs to quit eating beef?

[kato]

My read on it is that Rick is expressing what we cattle producers of all types have known for a long time. That is, we cannot trust the Canadian government to have our backs. The best interests of everyone in the beef business is NOT on the government radar. I think that's another reason the industry in general is contracting.

Trust has been lost.

Whether it's misguided priorities, misguided funding, under funding, overwhelming red tape and regulations, or a total lack of support, it doesn't matter. Pretty much everyone who's raising, feeding, or processing cattle has come to the conclusion that they're on their own.

We'll all come at this with our own biases, depending what where our own operations are, but the bottom line is that nobody has one solution that will fit all. We do have one objective though. That's to have an industry that works. One where there's enough profit in it to keep all the players in business, rather than one having to bankrupt the other to survive.

We need a re-invention here. It has to start with consumer confidence, that's the basis it all rests on. With the big processing plants comes great power. But with great power comes great responsibility. Which has not been lived up to, and not taken seriously enough.

Now we need XL, CCA, ABP, all the other cattle organizations, CFIA, and the government to take their share of the responsibility and get things working.

[SheriMonk]

You can reinvent all the confidence you want, but
that's going to be tough without that plant.

Here's an article I just posted today:
http://www.albertafarmexpress.ca/news/hang-on-all-
things-will-pass-xl-chief-nilsson/1001762914/

An op-ed to follow shortly.