China to open Border and Trade

[rkaiser]

I'll do that expressially for you murgen.

[intr3est]

thanks bud, you're a scholar and a gentleman, but less emphasis on the gentlemen part

[PureCountry]

You mean you'd give him the scholar part? How well do you know the big lug?

[CattleAnnie]

Article
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Ranchers seek beef slaughtering options


by Chris Eakin
Tuesday March 01, 2005

Fairview Post — Peace country municipalities cooperated to organize a forum on alternatives in the meat packing industry, presented Feb. 25 in Fairview at the Dunvegan Inn.
There were presentations by Neil Peacock of the Peace Tender Beef Coop, Ivan Boles of Ranchers’ Own Meat Processing from Edmonton, Greg Griffin from Peace Country Premium Beef in Fairview, Marcel Mailloux of Mobile Meat Processing from St. Isidore and Freeman Iwasiuk, business development officer for the beef industry with Alberta Agriculture.
Iwasiuk presented information on several different co-ops with climbing share values, growing numbers of members and retail partners eager to market their product. He also included one – the Future Beef Operations – which went bankrupt within months of starting operations in spite of having many members, retail partners and a state-of-the-art facility.
Iwasiuk also presented information on some Canadian co-ops such as the Atlantic Tender Beef Co-op which he says has revitalized the beef industry in Atlantic Canada.
He explained some of the anticipated benefits of co-ops are an opportunity for increased profits, an ability to secure premiums for higher quality cattle and better opportunities to develop production.
On the other side of the coin, Iwasiuk said there are higher risk margins, the challenge of filling the plant capacity, labour concerns, costs related to larger competitors, developing markets for products and by-products as well as developing infrastructure.
Iwasiuk quoted Steve Kay of Cattlebuyers Weekly who spoke at NAIT in Fairview Jan. 16 as saying, “ Any new processing facility in Alberta will be hard pressed to remain viable without a value chain system or branded product.”
Iwasiuk explained some of his research had included focus groups which opened the eyes of some producers to what consumers want and how they perceive the product.
One finding was that consumers are willing to pay a premium for specialized products such as hormone free or organic beef, although there is a ceiling as to how much they are willing to pay.
The forum finished with the presenters taking questions from the floor as a panel.
One question was how important it is to have a retail partner.
Ivan Boles and Neil Peacock had different answers, though they agreed it was important to have retail partners. Boles explained that without a retail partner the producer is reduced to pushing his product into the pipeline without someone to pull it out the other end.
Peacock said that because a single cancelled order could be disastrous to a small packing plant with just one retail partner, the Tender Beef Co-op prefers to go the route of selling to a variety of outlets. He gave Lacklands as an example and said that meat stores could sell as much product as large box stores.
There were a few pointed questions for the panel for the co-ops, one being if they had contracts in place for the product.
Both Peacock and Boles explained they could not sign contracts until the plant was in place. If they did they would be creating a risk to investors if they were unable to fill orders if the plant wasn’t finished on time. They do, however, have letters of commitment.
Boles explained that some products which do not have a large demand in Canada will be exported to markets where customers are willing to pay more than the Canadian market.
Boles added they have identified 23 countries looking for those products but exporting requires volume which they won’t have until the plant is up and running.
Peacock was asked why the opening date for the Peace Tender Beef plant had been delayed and he answered that his group had been overly optimistic as to how quickly the bureaucratic wheels could turn.
He added that site clearing should be happening in mid-March and construction should be underway in April.
Peacock said that Peace Tender Beef still plans to go ahead with their electrical co-generation plant.
It will cost about $6 million, he said, and construction has to be started when the processing plant is near being finished as it takes 35-40 days to produce methane from the bio-digesters.
As the processing plant starts operations, the waste material will be placed in the bio-digesters to start fermentation.
Peacock was asked if he had a management team in place, given the shortage of qualified people.
He told the crowd that Peace Tender Beef has about half the team in place.
Both Boles and Peacock were asked if Olds College’s training program for meat processing was a good fit with their operations. Boles said yes but added that NAIT was right there in Edmonton.
Peacock explained that Olds was too far from the Peace Tender Beef plant’s location and said they are working with Northern Lights College. He also said their plan is to train employees in all aspects of the plant so they won’t be doing just one job all the time.
Boles said labour is an important part of any enterprise and treating employees right and offering them profit sharing along with a reasonable wage ($12-$18 per hour) will help.
The panel as a whole was asked how the border re-opening to Canadian cattle would affect things.
Boles said the border re-opening is not going to put things back where they were when it closed.
The price of oil has gone up from $24 to $50 a barrel, the value of the Canadian dollar relative to the U.S. dollar has gone up and it seems likely we will see the Canadian dollar on par with the U.S. dollar before it goes back to $0.70 US again.
Shipping cattle to the U.S. does not make economic sense with the cost of transportation as it is.
He also said that many trucks previously engaged in hauling cattle are now employed elsewhere or sold down into the U.S. so the trucking fleet isn’t there anymore.
He added that any packing house close to producers will have an advantage in the near future because of transportation costs.
Iwasiuk doesn’t see any large change coming in feeder calf prices and Peacock believes the industry will see a drop in the price of feeder cattle.
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Take care.

[cowman]

Well I hope the plant can make a go of it, but I don't think I'd be betting the farm on it? I mean a $6 million biodigestor? Does that really work? I woder what the pay back time is on that baby?
By late April Sunterra expects to be up to speed at their Innisfail plant slaughtering 300 cows per day. The plant at Salmon Arm seems to be hitting it's stride? Last week at Burnt Lake Auction (Red Deer) the XL buyers were busy stealing the cows until Ed Paul walked in and started buying. The price immediately jumped around 8 cents! Decent cows got up to around 35 cents.
I suspect we will see some better cow prices once young cattle start moving south? IBP Lakeside is chomping at the bit to get the cow line up and running.