Natural Valley Meats

[ProFarmer]

Is this slaughter plant on hard times already should I send any animals to use my hooks. I been told payment is getting beyond 200 days.

[cattleman2]

My understanding is if you put your cows on hooks you might be donating the beef as you may not get paid...
--> Heard that they are trying to get people to transfer their accounts payable (meat on the hook) to either class 2 or class 3 shares (equity position) to help clean up their balance sheet.
-> I think that this is a never ending money losing proposition that a whole bunch of farmers are going to be severely hurt by...

Small plants can not compete with those big bad multinationals in a commodity game.

[farmers_son]

“Small plants can not compete with those big bad multinationals in a commodity game”. Actually that would be wrong. Size is not the only determinant of business success and really the packing industry has moved beyond a strictly commodity game. Proper financing and debt/equity ratio can be just as important as size in sorting out just who stays in the game and who does not, whether we are talking packing plants or farms.

I have no direct knowledge of this business, Natural Valley Meats, but paying attention to the balance sheet is important and they should not be faulted for taking care of business. The reality is that the big packers are not paying for 33% of the cows they are taking in right now. You ship 3 cows to Tyson, they pay you for 2 if you are lucky. Sometimes they only pay you for 1 ½ cows. The reality is that no matter what cut of meat you are looking at, and cows produce more than hamburger as Cowman pointed out in another thread, the price of those cuts remains at or even higher today than in 2002 yet the price Tyson and their lot pay us is only a fraction of what we received in those days. The further reality is that without an alternative to selling our cows to the big bad multinationals we will continue to receive pennies on the dollar for the real value of our animals.

Will Natural Valley Meats survive…I do not know. However at some point primary producers will start to realize the real question of survival is directed toward themselves and can the men and women actually producing the product survive if the only place they have to sell their produce to is the pirate multinationals.

It never fails to amaze me how people would rather accept the surefire road to failure, that is staking their future on the multinationals who will surely use their market power to drive the primary producer into the dirt than direct some business to a firm that offers competition to the big boys with the associated hope of a future for themselves and their children.

[cswilson]

Well sunshine getting paid for 1 1/2 is way better than getting paid for zero. For those plants to compete they pretty much have to become what they were set up to combat. No amount of sunshine prophecies is really going to change that-it would of ben nice if it would of worked but from the sounds of things it isn't.

[farmers_son]

Cswilson: I know what you mean...I recall selling fats to a Calgary packing plant many years ago. We got the cheque alright but the cheque was through an Alberta bank that had folded the day before. Not a fun moment and one we remember to this day, although it turned out alright.

I guess the point I was trying to make was the big packers are ripping us off royally all the time yet we seem more concerned about potential of a loss from the small packers. It is far too easy to ignore the losses we are experiencing daily at the hands of the pirate packers. The last load I sold to Tyson came back with 5 dark cutters for no good reason I can think of. Not to mention cow prices, those losses happen all the time yet that seems to be more acceptable and easier to live with.

I don't think the present situation with no competition between the two big packers is the answer. I recall you mentioned something a while back about smaller community abattoirs. Maybe that is the answer if they could sell meat federally. I expect as the industry seeks alternatives to selling to the big packers that some start ups will fail but the need is real and the market will eventually find and support an alternative. I think the model of a successful alternative market for slaughter cattle will not be like the big packers. As an example the small packer’s success could be found in their ability to share profits with the producers, which probably means producers will share in the equity of the plant.

Necessity is the mother of invention and some way to create fair pricing for our live cattle is necessary. Consider this, even though there is unused packing plant capacity right now, can you imagine the big packers custom killing cows so we could sell our own product federally? No way! The big packers want to restrict our access to the wholesale market forcing us to go through them. It is not sunshine, it just facing reality to say that we need to get paid a fair price for our production and a fair price is not defined by what Tyson, Cargill and XL are paying for live cattle on a given day. The wholesale price of beef remains stable with historical levels, we can’t say that for live cattle prices. If we could get paid the wholesale beef price we would be better off over the long term.

[kpb]

farmers_son, do you know how much it is costing at the current time to slaughter, cut and wrap a fat steer at a local slaughterhouse?

I haven't done one for a while and I'm wondering what the current cost would be.

kpb

[grassfarmer]

kpb, the charges we paid this fall were $40 slaughter charge, 50 cents/lb cut/wrap/freeze, 3 cents a lb disposal fee (all based on hanging weight)then another $25 per quarter for processing quarters versus halves. It adds up!

[cowman]

Just wondering if you think the small abbatoire is making a good profit or not?
If that steer weighs 1200 and dresses 60%(hot) you get a carcass of 720 lb.? Of course cold there will be a shrink of about 3% or 21 lbs.? Is it hot weight or cold weight you pay the 50 cents/3 cents on?
Now using the 53 cents hot weight plus the $25/quarter I come up with a $531 cost? Is that about right?
Does the abbatoire give you the heart, liver, kidneys, tongue etc.? How about the headmeat(around 5 lbs I think)? How much does he get for the hide? It seems to me a hide was once worth about $80? Do you pay extra for running outside round/flank steak through a needle machine? How much extra for beef sausage?

[grassfarmer]

Cowman, he tells me they are struggling to stay in business at these prices and I tend to believe them. Our carcases averaged 690lbs this year and half of them were sold as quarters. The quartered ones cost us $506 to get processed, the half/whole carcases $100 less. Organ meat we take and distribute among the customers who want it, wat are you calling head meat? I don't know the current hide value but we don't get it I know that. Beef sausages cost $1.50/lb extra and we really encourage guys to take some if they don't like too much ground beef in their order. What is a needle machine?

[cswilson]

Maybe there's an opportunity for one of those mobile abbatoirs that you see talked about in the 'Stockman Grassfarmer'.Not sure just what the answer for the cow deal is-trust me I do think about it but unfortunately my banker likes cheques deposited that are good.Maybe we need to get those off the trailer beef sales going from city to city like in the first year of BSE-hit the major centres on a regular schedule. Or better yet get a think tank put together and see what comes out of it-I'd go to one as long as it didn't turn into a piss and moan contest about the ABP-the CCA- and whatever else.

[cowman]

grassfarmer: Head meat is the meat along the cheeks. Regularily taken off in a big packing house...not sure about a small abbatoire...it is basically sausage meat and no I'm not sure about the 5 lb. thing...I'm trying to remember over 20 years ago!
A needle machine is basically a tenderizer...how you get those "minute steaks" from a flank steak? One time I got the outside round "needled" by the local abbatoire...I think he charged me 20 cents a pound...again a lot of years ago...and the old memory isn't improving any!
Incidently I went to this garage sale this summer and this guy had a needle machine(A Hobart) for $300. I offered him $200 but he didn't take it.

[kato]

We've got neighbours who sunk a pile of cash which they could have put to better use into this plant. When they told us it was $100 a hook, and that was for rent for a four year period, and it had to be paid again after that time ran out we backed right off.

One neighbour shipped fats in June, and as of a month ago, he hadn't been paid. Another one, who has invested $5000 in renting hooks has been told he may as well take his cattle somewhere else is just as impressed. They told him they had no market for the beef, so didn't want the cattle.

How do you get your investment back, when it was 'rent'? You don't.