Sunterra

[greybeard]

I to am not usually a supporter of Government involvement. It often seems to be like the kiss of death .But the fact is the government is very involved in the beef industry today .King Ralf has already anted up hundreds of millions with debatable results. More is being called for. The $ 22 million for this plant is what, $10 per animal in Alberta?
It could easily push the price that much due to added competition in the market. One more bidder.
Jebbesen’s comments on contracts / alliances with major user’s interests me. I think this is the way it went in Britain. Grassfarmer may be able to comment.
As I understand New Zealand also has gone with joint ownership of plants by retail / wholesalers and producers, with the producers supplying to the spec required. Niche marketing I guess.
We are a long way from worrying about predatory pricing at this stage of the game. I indeed do hope the big boys do run the price of cattle up so much no one else can afford to buy any. I suspect we are a little smarter and won’t be as quick to go for it. When competition comes back in the big two will have to anti up extra just to get people to hold their nose and deal with them. This is supposed to be a reputation business and they have certainly built one that will stick with them for a long while.

[jebbesen]

The CP plant in Red Deer is still available for an operation, is that correct?

[cropduster]

Hey ,Rusty maybe that HTF money would be better spent buying SK.??????????

[cowman]

jebbesen: I said their was a lot of activity around the CP plant in Red Deer in early January. Now I assume it was the Sunterra group having a look? So I further assume they decided they didn't want it, from what Price said on the Rutherford show. So if you are interested have at her! It was a fairly decent old plant built around 1970! CP kept it right up to date until it closed about1990? They had installed a pasteurizing unit and an electro shock system in the later days. It had a cow boning line that was capable of handling up to 140 head a day and the kill was around 700-750/day when it shut the doors. This plant did not close because it was unprofitable! It closed because CP sold to people who were not interested in meat packing.
In fact it was a very profitable plant that paid the total cost of itself in three years when it first opened!
I suspect the equipment left in it could be a little shaky but the fact is the building is well made, the barns and pens were fir, the boilers should be alright. It is a good solid well built plant and if you know anyone who is interested it might be worth a look?

[jebbesen]

When consumers, primarily those in the cities, support Alberta/Canadian beef, these consumers are not thinking of large corporate feedlots.
The majority of beef consumers have never touched a cow, never mind know the political and econimical issues involved in the real business of agriculture.
The majority of consumers already believe that by supporting Canadian beef sales, they are supporting the small, local producer. I see this as a market advantage for the average producer...

[jebbesen]

Thank you, cowman! I have a number that just came to me from the City of Red Deer for a Miles Kliner, so I will ask him about it. I don't know... might be a dead end, but I am interested. Perhaps it makes more sense to build a new plant... but I don't know what obstacles Sunterra was weighing when it looked at the plant in Red Deer. Perhaps it was proximity... perhaps it was funding. Perhaps it is more expensive to bring up to spec... but I will ask. Thanks... love to know your thoughts on it.

[magpie]

From what everyone’s thoughts are on this topic I get the impression we are on the same page. I think if we constructed a plant of very significant stature it would require involvement of all stakeholders from three provinces. This BSE problem affects a lot of business in every town. If there is a silver lining in this whole mess, it might be a packing plant that enables ranchers, farmers an opportunity to share in the success or not, rather than have the profits flowing south never again to be spent in our town and villages. “crawling up the food chain”. Some one is making a lot of profit as we see prices have not come down at meat counters. Like Greybeard said government is already involved and with an election possibly on horizon, maybe with some spin doctoring we might take this idea to a political platform, I’m not sure. A packing plant that is directed from the bottom up and not top down would be I think more responsive to producers. A facility that is able to mass supply along with accommodating some of the niche markets.With the ID program, this could I’m sure be accomplished, not unlike US without national program.I feel that Canada will be a dominant player in niche marketing in the future because we will have stiff completion from ag powerhouses like Brazil. Soybeans are just that example.
Just to throw out something at the politicians to get their ear. How do they plan to supposedly cut emissions in the koyoto deal? Does not a strong vibrant cattle industry contribute to thousands if not millions of carbon sequestering acres of forages and pastures? Some governments are pushing ethanol production, So what are they going to feed the by product to?

[cowman]

jebbesen: Miles Kliner was the last manager of the CP plant. I believe they keep him on to take care of the plant.
If it is feasable the old CP plant would make an excellent cow plant as there is basically no market for cull cows in central/north Alberta. The plant has a CPR rail line right beside the plant and at one time just about all the dressed beef went by rail to Montreal. The Olymel hog plant is right across the road.
It just seems to me that it should make sense that a person should be able to refit this plant cheaper than building from the ground up. In early January a lot of the equipment was hauled out to a local scrap company. I suspect it had become rusty and seized up. Some people say the rail is still there while others say it was removed. Have a look and keep us posted.

[ValueChainFX]

Cow,am to refit plant would be fine for the short term, but the costs to bring them up to date and allow you to meet new regulations is to high! I still wonder how these folks intend to build a big plant and find the help needed to make it happen. The small plants around Alberta make more sense in the long term for all of us (the old egg in a basket thing) We need to train people and go into the value added product to produce a return that will actually work for you. Many a cooperative plant has gone under by trying to do business as usual and the new gen coop model allows you to go beyond that!

[cowman]

Valuechain: I totally agree with you about the small plants. What good does another Cargill/IBP clone in Calgary do me? Give me a small local plant that will process my cows, bulls, open heifers! Build twenty small plants across the west and give farmers a market, the counties a tax base, and provide some good jobs for the locals(I mean isn't this what saving the rural areas is all about?)! Further the massive government investment needed in this Sunterra thing gives me a queasy feeling. The Alberta government did the same thing back in the 80s...that is how we ended up with two dominant American Packers and one(XL) so deep into the governments pocket they couldn't let it go down.
But I'll bet you dollars for doughnuts that old Ralph and Shirley will be lining up to pass out the money to Sunterra or Ranchers Inc. or whatever they call themselves? They never seem to learn from their past mistakes?
It seems to me it would make more sense if they would do everything possible to facilitate these smaller new gen co-ops and pass some laws to protect them from the big Packer predators?