Herding barn cats?

[rusty1]

The problem with out beef industry is that we are so self seeking, dogmatic, and independent we’re going to remain fractioned much to the glee of the big packers. Producer ownership of more slaughter capacity is the only thing that will bring long term stability and health back to the beef industry and bring hope to upcoming generations. Packer capacity is on its way but by multi-nationals. That will only serve to completely remove our birthright. The only hope is for us is to focus our attention on the right goals that bring mutual benefits to all aspects of the beef industry.
Northwest Cattleman’s Alliance is focused on building an organizational structure from all four Western Provinces, and from all four producer groups. It can be done “if we have enough want to”. The financial benefits are huge, exciting and very rewarding. THE ALTERNATIVE IS DISASTER!!! So get with the program.
Our consultants are just about in place and we will be announcing the TEAM this week. There is significant interest from the marketing side and considerable investment from service investors.
If we could just get our act together and start pulling in the same harness. NOW IS THE TIME

[charliep]

It looks like you are moving along well with this project rusty. Read your page again and find your ideas wonderful. How is it that you want us to help? I am personally in full support of any Canadian backed facilities, but don't really have the grand to invest in this with any threat of not getting it back. Besides that we have a little integrated market of our own that is working well. Sounds like you are moving ahead of most and would hope to see some sod turned in the very near future.
BIG C has loosely tied itself to an idea of a levy funded plant to kill mostly cows and bulls, but our group has never given anything but hope to all of the 50 or more plant proposals presented to us.
I see BIG C as a group supporting less dependence on the American market, and feel that we need to work on government and industry leaders to set policy for swift action in this regard.
Once again, how do you feel we (or I) can help?

[rusty1]

I’m sure there is unanimous agreement with everybody that we need more slaughter capacity.
I am equally sure that to let the multi-nationals pick up that slack will financially be of no long term benefit. We’ll all become surfs to them.
I also believe that these small 200 to 250 head per day cow plants will not survive very long. Economy of scale is critical for survival.
It’s going to be critical to have a large buy-in by producers from across the 4 Western Prairies.
I also believe that the Alta. Govt. and maybe the other 3 will get serious about support when someone shows enough grassroots support and a sound plan and proposal.
The Return on Investment (ROI) is significant for any investor. Our capital cost will be under $200 CDN per head, and the average targeted NET return per head prior to May 20th. has run from $25 to $40 US.
The benefits of a vertically integrated merit based supply chain to the producers are phenomenal. In the January newsletter of US Premium Beef for the last quarter of 2003 reports “the top 75% of USPB deliveries averaged grid premiums of $70.03 per head. On the size of the plant that we are proposing that’s over $26 Million dollars. Plus their retained earnings and membership dividends were significant.
WE can do the same if we have enough want to.
We would support the idea of a check off building the plant but we don’t think we have enough time to wait for the political will and process to get there.
A new slaughter facility is going to benefit anyone who markets cattle buy just bring another buyer to the table.
Therefore you WILL get your investment back irregardless of whether or not you sell cattle through the plant.
Therefore if you can pay your $1000 contribution in 4 equal installments (or 2) we all need to do it. The feasibility study will cost us about $100,000. The more people share in that process the less it will cost anybody. You will get your copy of the $100,000 report. If we build then you’re a part of it. If we don’t then what ever we don’t spend will be returned to participants on a prorated basis.
The other thing you can do is email the link to our web site to everyone on your list.
THE BEEF BUSINESS IS EVERYONES BUSINESS.

[rsomer]

There should be funding available for your feasibility study. Check with CARD, AVAC, even the ABP.

You say you can do it if you have enough want to. In addition to want to the key to success of these packing plant ventures is a qualified and capable management team. I would say that having your management team in place is critical and should be part of any business plan.

I agree with your vision on the need for a larger plant. I also expect there will be a significant over capacity of packing plants in the next five years. Your business plan and financing plan needs to include provisions for surviving a period of very low profitability. I suspect your projection of $40 a head profit is reasonable but of course that is an average. Expect an initial period of negative margins at startup and plan on how the business will cashflow its way through that.

Good luck with your project.

[cakadu]

I would take rsomer's points about a business plan one step further to say that you will likely not get funding unless you can show a solid management team in onside in your business plan. One of the things that the funders look at is who you've got to carry this thing through, from start-up to growth to commercialization and the transitional periods in between.

A note on CARD - it will not fund anything that is deemed to be "for profit" because the fund is not for that type of funding i.e. they can't fund one venture over another - that is for banks etc.

Having your ducks in a row is critical for financing success.

[cakadu]

Sorry, it's monday morning. That should read "...management team onside" not the way I've typed it in.

[cowman]

I wonder how come PEI can build a plant where the "hook" costs $60(one third down) and we can't even get one going here? Instead we are supposed to put up $1000 with no guarantee anything might happen? And how come we can't get it done for $60 instead of $100-$200-$250? I really think we need to import some of these PEI boys to show us how it is done? Because obviously they have it figured out better than us?

[rusty1]

I talked to a customer of mine who has a feed lot there in New Brunswick yesterday. He said that thing is doomed to fail and is already running into serious problems. He didn't buy into it nor have most feeders there.

[rusty1]

They can'get it done for that price. Nor can you afford to do it for $300 like some of the others.

[rusty1]

I'm suprised at you cowman. Of all people you should be able to figure out how big of a difference an extra buyer at the table for your calves is worth to you. And I'll bet it will be alot more than $1000 each fall. If another plant was built and you never sold it any calves but it created more demand for your calves what's that worth to you. What's a healther beef industry worth to you?

[cowman]

Rusty I wasn't saying it was a bad idea,only wondering how come PEI can get it done so cheap? According to Red Earth they are only a couple of months away from full operation. From what I understand you buy your "hooks" and you must supply the animal. It isn't a buyer of cattle at all. You don't own the "hook", you don't get your cattle killed.
Now I would say it does look attractive: $60/animal, one third down($20) and a "forgivable loan" for the $40? Apparently PEI put up half the money to build it! I wonder if Alberta, Saskatchewan, or Manitoba are putting up any money to build plants?
I find it strange that now we suddenly need more packers when about twenty years ago we had all kinds of them? Then in came the two big Americans and the others all quit because there wasn't enough cattle to go around. The only plant that stayed open was the most unstable one of all...XL. Of course the Alberta government had about $40 million sunk in that dog so maybe that explains it?
When the border opens I wonder what will happen to these new proposed plants? Not trying to be negative here, but I wonder? To survive our respective governments need to bring is some legislation to protect them from the big boys? As it sits now I doubt it would take Cargill/IBP very long to break them? Nothing really radical...maybe just some simple anti-trust laws like they have in the states? As it stands right now our whole industry up here must look like a money tree for these pirates!

[cowman]

By the way, if you ever wonder what we are up against do a search on Tyson/IBP/Cargill? Their list of sleazy business dealings and predatory business practices is impressive!
Delve deeper into Tyson and you will find an amazing story of rags to riches! Good friend of Bill and Hillary Clinton? Check out the things that went on at the Medina airport in Arkansas? Cocaine and gun running...two quick ways to amass a fortune and buy a president?

[kato]

We're still going to need a place to kill cows. I don't see them leaving the country any time soon.

For that matter when the border does open, will it open to feeder heifers? Maybe if they're spayed.

[rookie]

Cowman, just an afterthought to your comments... Maybe the guy who made the movie Farenheit 911 ( michael moore ) should be hired to investigate this wonderful business. He seems to get more results than the politicians... and its worth seeing Farenheit 911.....

[rookie]

I wrote Micheal Moore and asked him if he was interested about a month ago. Saw farenheit 911; interesting perpspective. What do you think about the announcement that the election may have to be delayed on account of terror threats?

Somehow I beleive that the cow kill plant is the missing link in this whole game. Not only do we not have a place now, but we have not really had a place for years. Our cows have been the back door to America for cheap offshore beef. What percentage of cull cows and bulls from Canada have been killed in the USA in the past 5 to 10 years.
These cows are what is haolding down the price of young fats as much as anything. Kill capacity for 30 month and younger is higher than ever, and is close to killing all there is to offer.
Young kill cows are being sold into the Canadian market place for at, or near, the fat cattle market as fast as Xcel, Levinoff, and all the litte boys can kill them.
I won't say that Tyson and Cargil will be satisfied to leave the cow market alone for a new potential plant, but it is a chance we have to take.
The biggest hurdle will be finding a market for these cow carcasses as long as we are tied to rules about testing to get them off the continent.
Okay we may not have to test them for some markets, but somehow we need to find out.
Who the hell are we going to find that will ask? Who are we going to find to sell some beef to Asia? All that CBEF wants to do is prove that they are right about NO MORE MARKET POTENTIAL. And join the USDA in the "HARMONY OF FOOLS" testing song.

Yes there are more markets opening every day, and I'm sure that CBEF will take credit for every one of those, but why not a more agressive approach. This industry is turned completely on it's head, and the group that professes to be in the know about export sales can only do business as usual.

Come back and tell me I'm blaming, or complaining, or wrong. Yes we need a plant to kill cows tommorrow, but we also need someone to sell those carcasses starting yesterday. Anybody know what Doug Price and his crew are up to these days? You can bet they have someone working in ASIA this minute.