Canadian Owned Packing Industry

[rkaiser]

That last thread was great stuff, but getting a little long in the tooth.

What are everybody's thoughts about linking a levy generated fund to some of the Canadian Packing proposals now on the table?

A share is a share, whether it's one or fifty, that will happen in any public company. If rusty's investors wanted to leave their substancial contribution in place, what would be wrong with producers kicking in levy money to get some damn wheels turning.

Or what about the Manitoba plant, or any other for that matter.

We've all been searching for ways to raise capital, and BIG C has heard from thousands who say they like the idea of contributing without giving the shirt off their back. Maybe it's time to push this thing to the next level and help those who don't have the drive left to help themselves.

Here's a petition drafted by one of our BIG C reps in Sasckatchewan for your perusal.

PETITION


PLEASE BE ADVISED THAT THE FOLLOWING SIGNATURES REPRESENT PEOPLE WHO STRONGLY BELIEVE THAT THE ONLY WAY OUT OF
CURRENT ECONOMIC DIFFICULTIES IN THE BEEF INDUSTRY IS TO BUILD CANADIAN, PRODUCER-OWNED PACKING PLANTS AS PROPOSED BY BEEF INITIATIVE GROUP – CANADA (BIG C).

WITH BRIDGE FINANCING BY GOVERNMENT, COMBINED WITH A LEVY ON CATTLE SALES TO REPAY THE DEBT, THE PLANT(S) PROPOSED BY BEEF INITIATIVE GROUP WOULD OFFER THE FOLLOWING ADVANTAGES:


 The development of alternate, overseas markets to lessen our reliance on the American market.
 By including BSE testing as a marketing tool in a state of the art plant, we can capture a significant share of the international market for beef.
 A producer-owned plant for over thirty month beef would kick start the sale and value of these cattle by adding necessary competition for the few plants that are currently slaughtering cows/bulls.
 An additional under thirty month plant would provide direct competition to the existing packers processing fed cattle.
 Producers would begin to realize the post-slaughter benefits of having birth to export control of their product rather than continuing to be dominated by the monopoly situation that currently exists in the packing industry.
 Unlike all other bailout programs to date, this plan allows taxpayers to be repaid for the investment that they make in the future of Canada’s farms and ranches.


OUR CURRENT PROCESSING SYSTEM HOLDS THE PRODUCER HOSTAGE IN A MONOPOLY SITUATION AND HAS DEMONSTRATED TRUE CONTEMPT FOR THE BEEF PRODUCER AS WELL AS THE CONSUMER.

[wd40]

rp - Where does this 500 head a day plant in Lethbridge put the need and numbers?

[rkaiser]

Any plant simply puts another player in the game wd, and every new player means competition for the multinational monopoly. We must be getting closer to supply at the moment, as suggested to me by a girl at Can Fax a couple weeks ago. 88 cent fats last week is a substantial increase for very little reason.
Competition is the key. New plants can and will compete with the BIG BOYS. All they need is the ingenuity and willingness to look at alternatives and technology. (BSE testing and things like biodigestion of offals etc. etc.)
If we over supply the market with infrustructure, who's to say that the antiquated plants of those BIG BOYS might just be the first to go.

I hope this plant in Lethbridge is successful, as I hope every other Canadian owned plant is. I'm going to need someone to sell my cattle to. After all I vowed not to use the **** artist pirates ever again.

Sent a couple of open cows up to Olds the other day. Second time since BSE that I've had to drop to that level, but also the second time I have put a ton of tag cement on the backs of very large ribbons. My statement to the boys at the mart was, "If I have to give these animals to Xcel, I'd like to make them look like presents."

[jensend]

rkaiser - i'm all in favor of the levy. it's the only way we can raise enough capital to take this industry back. the cumulative investment of all the cattle producers in canada has to be greater than the total investment of the other players and we should be using the power we possess. we're committing a good chunk of our calves to a branded program and hope just the duds go through the big packers from here on.

[jensend]

As a producer, I would be willing to participate in a levy but first I would want to know who controlled the funding and who they answered to with respect to fiscal responsibility.

[rkaiser]

You emerald!

[rkaiser]

Does that mean that the terms of reference for the Finance and Risk Management area of such an operation would be developed by the shareholders, or a management committee/Board of Directors ? I would hate to see such an operation get top heavy with administration etc. , as that just lessens the bottom line for the producers.

[rkaiser]

You got it emerald, the simpler the better. Set a simple set of rules up front and leave the bulk of the day to day up to management. Rules would, of course, be set by producers. An elected board of directors sounds fair.

[Bruce14]

Randy, did the Sask. gov't kick in the money for the feasablility study for Big-C and if so who is doing the study and when would it be completed?

[rkaiser]

Well Bruce,,,,, it seems that the Sask. government falls in an out of love with BIG C depnding on who else is in the picture. I think their announcement brought a lot of pressure from a bunch of other prospective proposals in Sask.
They are now saying that they are doing a pre feasability study, which concerns more proposals than just BIG C. We reminded them with a recent letter of their verbal commitment at two BIG C meetings earlier in the fall. Seems that the number of people at the meetings must have made them love us those nights. Still not a lost cause, however I personally see a few more hoops to jump there.
Good news is, Alberta Government have finally agreed to a meeting, as has Fed Minister Andy Mitchell. According to folks we know in Ottawa, the BIG C proposal is the talk of the AG Block.
Funny how people start to listen when they realize we are not asking for a handout, only a loan with guaranteed payback potential.

[rkaiser]

An elected Board of Directors and an independent audit annually would seem like a good way to create confidence.

[Bruce14]

Randy, That doesn't surprise me as the NDP in Sk. love to study and defer hoping it will go away.

I was at one of the BIG-C meetings and signed up and then spoke with minister Wartman. I was sceptical afterwards as it seemed more of a verbal show of support than anything else. I hope I am wrong but see Sask. losing out on another opportunity and as producers we can't afford to wait while they drag their feet, hoping this will correct itself. It won't.

Keep leading the charge and Merry Christmas.

[farmers_son]

rkaiser: Concerning a levy linking a levy generated fund to some of the Canadian Packing proposals now on the table...

There are examples within the beef industry where money, in this case a portion of safety net money, was set aside for industry development. See: http://www.albertabeef.org/CABIDF/01about.html. Your proposal is not unlike the CABIDF only with a focus on market development instead of research.

I think your proposal has merit and it might actually fly. As emrald1 has mentioned, I think the board of directors would need to be elected so the board would be accountable to the producers who would be paying the levy.

One stipulation I would like to see put on new packing plants that received funding from such a producer levy is that the funding was secured so that if the plant failed the plant remained in producers hands. I would be concerned if the plant went bankrupt that it could be sold by a receiver to Cargill or Tyson. Having the producers levy investment properly secured would prevent that. Something else to investigate is producers build the plants but lease them to groups who wished to manage them. That way if the management group went bankrupt the plant does not get sold by the receiver.

I think it would be necessary to be very careful about using debt financing in conjunction with producer levy because of the risk associated with being unable to repay the debt. Perhaps government could contribute forgivable loans to top up producer contributions but definitely be careful about debt.

Hope you have a good Christmas. Just waiting for the family to get up before the kids open the presents. The weather looks good this morning so it won’t take too long to get the animals all fed. I always thought that a nice warm day on Christmas was the best present the livestock can have so they can enjoy the day too. Have a nice day.

[farmers_son]

farmers_son, you make some excellent ponts. I too am waiting until daylight before heading out to check on the cattle, donkeys etc. One thing we can be grateful for this Christmas morning, is the lack of lengthy periods of extreme cold weather up to this point in the winter. Lower utility costs and feed bills are a present I, for one, am pleased about.
Have an enjoyable day with your family.

[rkaiser]

Looking forward to going out to the cattle this morning. My wife got off an evening shift last night, and heads in for a night tonight. RN.

Sunday mornings and holidays are my favourite time to be out doing chores. It's the only time it's quiet here between the #2 and 2A hiway at Crossfield. Half way through a five year deal that will see us back to a quieter, more secluded home again. The offer to come down here was too good to pass up; first generation cattleman trying to build some of the equity that second and third gen. families have. Our land developemnet is moving along well,,,,, thank goodness with the beef business the way it is. Should be in a pretty good position to purchase a good sized spread in 2007.
Just heard the fire truck go by, hope it's nothing serious.
Off to feed the cattle in the semi - quiet of Christmas morning.