May 10, 2004

Canada Cattle Group To Increase Manitoba Slaughter Capacity

A group of Manitoba cattle ranchers is slowly moving ahead with a plan to develop increased slaughter capacity in the province.
 
Since entering into an agreement with Hercules Management Ltd. to purchase the Best Brands Meats pork slaughterhouse in Winnipeg, Ranchers Choice Beef Co-Op Ltd. has been working to raise the necessary funds to move forward, its president said.
 
Currently, a handful of smaller abattoirs account for Manitoba's relatively small beef slaughter capacity of 500 head a week, or 26,000 a year, sources said. However, the capacity is not enough to meet demand as 60,000 animals, out of the province's 600,000 head beef herd, are culled each year, with an additional 32,000 dairy cattle sent for slaughter on an annual basis.
 
Since the Canadian slaughter industry consolidated in Alberta, a large portion of Manitoba's excess animals have been shipped to the U.S. However, the U.S. border has been closed to live Canadian cattle since bovine spongiform encephalopathy, or mad cow disease, was found in an Alberta cow nearly a year ago.
 
"The cow numbers in Canada have increased dramatically in the past year, since BSE hit," said Ranchers Choice President David Reykdal. "If we get this one going in Manitoba, we'll be able to look after the Manitoba producers," he said, adding that, "we have established that there are markets for the beef, it's just a matter of getting them slaughtered."
 
Ranchers Choice must raise C$3.5 million to purchase the plant. Once it does, the provincial government has promised an additional C$2.5 million as an equity loan. The total cost of the project is estimated at C$11 million.
 
The Co-Op has been holding meetings with its 2,000 plus members across the province, selling C$100 dollar delivery rights shares to raise the equity. One share entitles the producer to deliver one animal per year, as long as they hold that share. The charge is a one-time cost and need not be repaid each year.
 
"People have been coming to (the meetings) and people have been signing up," said Reykdal. However, he added it is still too early to say just how much has been raised.
 
Reykdal was hopeful the money could be raised before the end of May as the Co-Op had originally intended to start renovations on the Best Brands facility by June and start slaughtering in fall 2004. "Everyday we're put back is one day less we will be accepting cattle this fall," said Reykdal.
 
"It depends very much on the producers. They have to take the time out from their seeding and calving of cows to fill out the forms, write out the check and send it in ... Without them sending it in, we cannot go ahead," said Reykdal. "I can't emphasize this enough."
 
Many producers are also short on cash in the wake of BSE. Reykdal was hopeful the federal government would come forward with promised cull cow money so producers will be in a better position to make a commitment.
 
At maximum capacity the Best Brands facility is expected to process 60,000 head a year. There is also room for expansion at the slaughterhouse. While the focus is currently on dealing with the glut of cull cows, Reykdal said the Co-Op would eventually look at slaughtering fat, younger animals.