New Beef plant

[cowman]

Just got a little flyer for a meeting tonight to promote a new beef plant in the Edmonton area. It was Ranchers choice or Ranchers own or something like that.
Now the business where I saw this flyer just got it on Monday! Now that is pretty encouraging! Pretty good organization there, right? Advertize two days before you make your presentation!
Anyway the bottom line is 400 head a day, moving to 800 a day on a double shift. $5000 down gives you the right to kill 15 cows a year!
I hope to take it in but right away I have a feeling this proposal is a loser? I sometimes wonder if the people who are promoting some of these plants have any kind of clue about the meat business? How many of them stand a snowballs chance if that border ever opens?

[bombay_43]

Is that the one in Beaver County, or the near Spruce Grove ?

[grassfarmer]

If it's Ranchersown it's the one at Spruce Grove emerald. Why the perpetual negativity cowman? a plant to kill cows is what we need - with no clue when the border may open to live YOUNG cattle you can be damn sure it won't open any time soon for older animals. I don't think it has much chance of happening before the 7 year time period talked about initially. You are quick to run down anyone that is trying to improve things by saying they don't know how to sell product. Well I know nothing about selling beef but we have been selling our old cows as ground beef this year and netting $4-500 compared to the $200 figure they are worth at auction.I'm a complete amateur and as I said am only taking ground of most of them. I'm also paying hefty kill cut charges at a custom plant that is Provincially inspected. Contrast that to a properly run business with options for the fat, better cuts etc and I would think that it would be possible to extract $600 per old cow fairly easy. So then we would have an extra buyer in the market for cows - prices may even move up. It's time to quit whining and start helping ourselves.

[grassfarmer]

According to reports Ranchers Own's Business Plan is impressive. It's up to the industry whether they want to back a plant for older cows, or take the licking they get selling them at the market or keeping them and calving them until the poor old girls expire !!!!

[cowman]

Well I don't believe I've always been negative, but I will admit I'm sceptical at times?
I did not make it out to the presentation...business calls, sort of thing.
I wonder why it costs $5000 for slaughter space at this proposed plant, while the NGC plant at Pincher Creek is asking for only $2500 for 50 cows?
Now if this plant at Pincher Creek can build and operate a plant with that kind of investment why not let them build a few more? If I was wanting to get into the beef business instead of the cattle business, then I would think it would make a lot more sense to invest in the Pincher Creek facility?
It sort of amazes me that if all this fantastic profit is available how come we don't have Canadian investors lining up in droves to build plants? Not necessarily ag people but the local butcher types? It seems the only expansion even being done is to tap into government money.
I wonder how come our beef industry evolved into the system we had pre-BSE?
The fact is the American packers were just more efficient and had a better bottom line, and when(if) things return to normal, I suspect we will rapidly move back into that system?

[grassfarmer]

Because they received help from Government both financially and in terms of laws governing them. Farmers do not benefit from this "increased efficiency and better bottom line" that was never the plan. We need more independant plants. So Pincher Creek plant sounds better on paper? who knows these are only paper projections and time will tell who prospers. It's no use hoping that PC plant wants to build them across the province - they just want to build one so lets all get behind the plants in our area. At this stage it is no use trying to predict who will be viable in 10 years time - just get the plants built and killing cows so that we may be around in 10 years time to review the situation.

[ivbinconned]

Gencor: Dairy farmers take action on BSE crisis,spearhead opening of innovative meat processing facility

FOR IMMEDIATE RELEASE

Dairy farmers take action on BSE crisis, spearhead opening of innovative meat processing facility

GUELPH, ON (October 6, 2004) -- Local dairy farmers tired of waiting for a resolution to the BSE crisis have opened Gencor Foods Inc. - an innovative, producer owned and operated $12-million meat processing plant in Kitchener – and it’s quickly earning cross-Canada attention as well as a national client base.

In fact, the facility is one of the first of its kind in Canada, and may soon become a template for other producer owned and operated plants, according to Brian O’Connor, general manager, Gencor The Genetic Corporation. Gencor’s board of directors, comprised of 12 dairy farmers – made the decision to enter a segment of the industry known for its tight profit margins in December, 2003.

The integrated approach – allowing farmers to quickly react to market issues and trends - is attracting much attention right across Canada, with farmers calling from Alberta, Saskatchewan, Manitoba, Quebec and the Maritimes.

“They want to know how we did it, how we structured it,” he noted. Mr. O’Connor encourages other farmers to follow Gencor’s example “but it’s a difficult process,” he warned.

Miller Thomson LLP partner Frank Brewster, lawyer to Gencor The Genetic Corporation for the past 10 years, worked with the company’s board of directors to gain key industry knowledge from Fergus-based, meat packing and processing consultants Mallot Creek Group Inc. He assisted Gencor Foods Inc. with its agreement of purchase and sale for the facility – a former meat packing plant - and helped with the financing.

Funds contributed include: $5.5 million from the federal government’s Farm Credit Corporation; $2 million from the provincial government’s Can Adapt Property program; and, $5 million in loans from the Bank of Montreal. Special grants from the Ontario Ministry of Food and Agriculture were also contributed.

“The board of directors of Gencor The Genetic Corporation are a group of dairy farmers greatly affected by the border closing. They decided to apply long-term solutions to the BSE crisis,” noted Mr. Brewster.

Dairy farmers have seen prices plummet from 60 to 32 cents per pound for ‘cull’ or older, cows. That’s due to a closed American border following the May, 2003 diagnosis of bovine spongiform encephalopathy (BSE) in a single Alberta breeder cow.

In the past, 70 per cent of dairy farmers’ cull cows were processed in the United States.

“That part of processing is completely gone,” explained Mr. O’Connor. This led farmers to a venture that would have seemed unthinkable just one year ago, he noted. However, key initiatives from the federal government including a decision to suspend supplemental meat imports, “gave our group the opportunity to get into processing.”

“If someone was going to step up to the plate we were the logical ones to do so,” added Mr. O’Connor.

According to Brent Taylor, Gencor Foods Inc. director of finance, “the board felt it was time to take and stand and make systemic changes.”

Processing up to 65,000 pounds of meat per day, a typical Gencor Foods Inc. order may range from 10 cases to 40 skids. Clients include wholesalers based in Alberta, Quebec and southern Ontario. However, Mr. Taylor has set his sights on supplying to industry giants Schneider Foods and Maple Leaf Foods.

Gencor Foods Inc. employs 65 people and operates under Canadian Food Inspection Association standards. A $1.2 million expansion to the facility is slated for a February, 2005 completion.

[cowman]

When I read this article I don't see any mention of any money put up by the producers? Seems it is mostly government money?
Now I don't know how much government money Cargill or IBP got when they built, but I doubt it was as sweet a deal as this plant in Ontario?
I assume you have done your homework if you intend to invest in this plant and have come to the conclusion it will work for you? Then that is a good thing!
Personally I would not invest in any plant, because I doubt any of them will make it, but then that is my right too?
I still believe it is also my right to ask questions and express my "negativity"? I've lived on this old planet a few years and I know a wee bit about business and what works and what doesn't! Maybe I'm totally wrong and things will look completely different ten years from now...or maybe it will be the same...who knows?
It's your nickel. Spend it how you see fit.

[15444]

Well that plant in Kitchener seems to be worth the cash to those that invested. For the week of October 12 - 16, 2004, cows/bulls? are averaging $400 dressed. Low price is $0.206/lb and high price is $0.698/lb, with an average price at $0.598/lb.