Here's one to ponder

[grassfarmer]

Bombay-43, I sent a cheque off to Ranchers Own in June and am interested in their progress. They want a cheque for $500 initially which isn't cashed until (or if) they start building. The remaining $4500 they will take in kind when we send cows there. I spoke to them recently and as you say they haven't sold all the shares they wanted to. They had planned to break soil in August and be killing by next April but they are now talking of going in September instead. They were looking to access funds from another source to get them going (I don't know who). The guy was frustrated that many producers were taking the wait and see approach hoping to join it once the scheme was up and running. I can understand that people are short of money but still... this is short termism of the worst kind. After all that has happened and all the talk of helping ourselves when it comes down to it - it seems it is only talk. Many seem content to stumble along blindly, not supporting initiatives like this and hope that they will wake up one morning and find cull cows are worth 50 cents/lb again - and we'll all be happy loading them on trucks to the good old USA.
I certainly had no great desire to own a stake in a slaughter plant before this all began but what have we got to lose? - with what cows are worth now and for the foreseeable future isn't it a fair gamble to send them to these guys that are trying hard to get a plant up and running?

[kato]

To see if labour is possible, here's an example.

The town of Carberry Manitoba is a small place. It is about 30 minutes east of Brandon. It is the home to Midwest Foods. This company processes potatoes. They employ about 700 people, and have an extremely low employee turnover. For a town that size this is a huge place.

If you've eaten french fries at any McDonalds in western Canada, and some parts of the States, they have come from this plant. It is consistently in the top ranks as far as quality control as well, so the calibre of the employess is high. They work some brutal hours, too, with rotating shifts as well. There are other large employers in the area, such as Maple Leaf and Simplot in Brandon to compete for employees.

These people have a union, but also have a 'no strike' clause in their agreement.

So how do they do it? They take care of their employees. Wages are very good, they have benefits, and pensions. Then there are things like this....The whole plant gets time and a half on the day of the local fair, if they have to work and miss the fair. I've never heard of anything like that!

Moral is good. The employees are kept informed of the company's plans and progresses.

If a business is run properly, and the employess are happy, anything can be done.

[cakadu]

Grassfarmer, sadly that is the way it usually is. Many adopt a "wait and see" attitude, even though it may very well be in their best interests to become involved at the early stages. I'm not sure how to appeal to people on an individual basis so that they can see "what's in it for me" and commit some resources - whether it be time, money or some sort of expertise. Everyone has their own reasons for getting involved in something and finding a balance to meet all those needs is often quite difficult.

Treating employees well - and it often doesn't mean well paid - so that they feel that they are a part of something is critical for high morale and low turnover. Working in a meat plant is likely not easy - particularly on the kill floor. Cutting and wrapping may be somewhat easier, although I couldn't really say because I haven't done anything like that (with the exception of wrapping wild meat and/or doing chickens at home).

Many of the processing industries have great difficulty in finding workers here in Alberta because we have the oil patch, which pays great wages for any level of education. How does a meat plant or a potato chip factory compete for labor when the oil and gas industry pays very well for even someone coming out of high school?

Attracting human resources to any part of agri-business is a challenge.

[rusty1]

grassfarmer said - "isn't it a fair gamble to send them to these guys that are trying hard to get a plant up and running?" I want to encourage you with a change of mind set. These plants if properly planned and focuses should become something were we can say "I sent them old cow to OUR PLANT!. These innitiatives are the opportunity for us to become "Price Makers" instead of ......... what we've been for far to long.
There is oportunity for us to put alot back into our industry is we all put our shoulders to the right plow.

Can you tell me what the capital cost of their plant will be on a per head basis. That's crritical. Divide the capital cost by the number of head per year.

Our plant will be around $200 per head maybe less.

[grassfarmer]

If I remember correctly they talked of needing $15 million to build a plant with 45,000 head annual minimum capacity - about $333 capital cost per head. Unfortunately all these numbers and schemes are academic unless producers and investors get behind them.
Rusty1, with your plan I note you talk of killing UTMs as well as OTMs - how likely do you think it will be that you can kill both in the one plant within say the next 5 years?

[rusty1]

Do you know how many dollars they expect to be able to net per head?

[cakadu]

What sort of mechanisms will have to be put in place in order to avoid seeing what we are seeing now in terms of "price fixing"? In other words, how do you see these plants not doing what the current plants are doing in terms of getting their inputs for the lowest possible price that they can? After all, business is business and even producers who put money into a plant will want to see some sort of return beyond being able to kill so many head per year.

The opposite of that is also going to be true. For example if a producer has the right to kill 50 fats a year and the plant is counting on having those animals to fill the markets that they find, what are you going to do to ensure that you continue to get those animals? After all, business is business and if the producer can get more money for those 50 fats elsewhere, how are you going to convince them to stay?

What is being done to ensure that loyalty works both ways?

[pmckenna]

In response to your last message, Cakadu, I think that although price will govern, that still can foster favourite suppliers - genetic thru retail. Many people do not trust the RFID program - but to build trust is to have data - and this system is impartial, with the exception of some errors that apparently included a double billing, or other unfortunates like that. But by and large, producers will come to demand from feedlots and packers, a reportability for sales at retail. Grading, yield, which brand it was is part of a dynamic, well run industry showing the world its best. Feedlots and packers, and retailers will want or need to engage. Sorry to repeat the same statement, but the lack of these programs held the industry back for too long.

[pmckenna]

What if co-operation (independent value chains) means prices are about the same from one to the next? They're costs may be similar. Will we say it is price-fixing? Because those prices may be in the nature of honest competition. Any comments from anybody?

[rusty1]

cakadau - are you a govt. employee?