Let's just say

[rkaiser]

Already then folks. Let's just say, for the sake of dreaming, that you were part of a group that could make a producer owned packing plant not only real, but function and operate sustainably. How would you proceed? I realise that guacho and maybe a few more would rather not participate with either a group of armchair warriors, or a collective effort by a large group of producers to actually make something like this happen, but hey life is all about choice after all.

I will start the ball rolling by saying that this plant or plants would need to use there size and strength to raise wholesale prices rather than commoditize and lower price for the sake of fellow domestic value chain producers. The way I see doing this is for the plant to remove even more high quality barley fed Canadian branded beef from our country. Of course this would take things like adhering to European hormone free protocol and even bringing up the seemingly age old story of BSE testing for marketing purposes.

Kathy video on Japan not only proves that nuclear catastrophes are horrendous events, but also proves that events like this create winners and losers. We would have to be totally naive and even a bit uncaring to think that we could not help the people of Japan by meeting their requirements for beef safety and at the very least asking, them if they would like to purchase BSE tested, Canadian grain fed beef.

I will attempt to steer myself away from making this thread another BSE testing challenge and open my mind to what the rest of you have to offer.

Dream with me a bit folks. Share your thoughts on the success of a producer owned plant.

I dare you to dream.....

[burnt]

Great idea! How would you propose to present a credible offer to the importing country? I cannot picture the existing cattle organizations enthusiastically jumping on board. Is your existing business model a starting point?

[smcgrath76]

Just for S & G...
1. ensure you have at least a secured
supply of cattle to cover overhead
costs.
2. ensure you can segregate/sort
cattle/carcasses and can offer
specialized services (eg: Aitch bone
hanging, special cutouts)
3. offer specialized packaging/labeling
(we are talking about several smaller
value chains here, rather than one
massive one)
4. If the plant is to be a conduit for
adding value, it will have to think to
retail (past wholesale). The problem
with wholesale is that the value
proposition is strictly price vs. value
based.
5. don't forget to think local as well
6. don't brand the product as "Canadian
Beef", use the specifics of the producer
or local area or breed
7. leverage some of the technology we
already pay for (eg: use CCIA tags to
put the producer's face on the package).
8. have a lot of very patient money
(take your estimate and double it (or
maybe x3))
Unless you are doing several thousand
head per day, you are looking at higher
labour and overhead per pound of output
(no way around it). If you can
differentiate the plant through
environmental/safety/fair trade/animal
welfare/etc. then that is a great step
forward to pulling in value to cover the
added overhead costs as well.
FWIW.

[rkaiser]

Listen burnt --- the idea of this thread was not to ask questions but to answer them...LOL And let's open our hearts and minds and allow the folks on here from ABP/CCA to join in; you never know what they might come up with... Cheers

Thanks for getting the ball rolling Sean, great points.

[burnt]

Soo sorry! I guess I skipped step 2 amd wemt right to step 3!!

[perfecho]

Well for my $.02 worth......Local Food....small, efficient (yes, it can work) People are tired of a small problem in a big plant causing BIG problems. Problems in a small plant are small problems and effect only a few people, not a nation. Animals are hauled shorter distances, you do not have import labour, which has its own issues, etc., etc. There are small communities around big markets that welcome industry and can supply labour.
Do believe there is a model for about 50 animals a day that shows profit, doesn’t need to be “feed lot alley” stuff.
Many consumers are willing to pay premiums for "ethically raised" food...not organic......just raised with dignity, concern and sustainability for the product and environment. With the cancer related issues, people have valid concerns about their food supply and to me this is the greatest trending market going.
The day of smaller is better, will return…..I know it has worked on our operation. So, Randy, next time we meet, I’ll give you a bill for my $.02 consulting job… ;-0

[kato]

As someone who spends a fair bit of time selling at the farmer's market, I second that. Don't underestimate the local market. There are more and more people out there who are changing their buying habits, and the ones I meet really do want to know where their food comes from. We have one vendor at our market who comes with a deep freeze in the back of his truck, and moves a lot of pork from it. He uses the market to make contacts, and his beef and lamb is always spoken for before it's even been processed.

Besides, smaller plants filling local markets have the benefit of being "under the radar" of the big boys.

That's my 2 cents, which is all I've got at the moment. LOL

[littledoggie]

perfecto, I couldn't agree more. Bigger is not better - especially when it comes to animal welfare. I have always been bothered by the huge distances that cattle are hauled and thought that it made perfect sense to have smaller processing facilities to supply a smaller region. Let the big guys do the exporting. Smaller is better. Smaller cares more for the animals. I believe strongly in respecting the cattle for what they provide for us humans, by giving them the best life possible while they are here. After all, everything dies sooner or later. Happy, healthy cows is what we strive for by providing them with proper nutrition, shelter and low-stress handling.

[per]

There is room for both models. A larger facility could accommodate value chains supplying larger markets both domestic and off shore. The 50 head model meets the needs of the smaller centers. There are plenty of large operators that meet the criteria for caring for cattle in an ethical manner. They understand like the rest of us that a properly treated beeve is also the most profitable happy beeve.

[rkaiser]

burnt - I like people who move to step three before step two at times - it shows passion...LOL

[rkaiser]

I would agree with all of the rest of you guys and tend to lean toward per's thougths. Only thing I continue to add is the export theme to deplete and Natural Canadian product even further. This will only drive up price for those 50 head plants and farm gate sales.

Canadians can afford to pay more for their food and especaily for food raised conciously and presented that way. That is why we do not need to compete with Cargill and the "Boys" any more. They will supply those who don't think they can afford a high quality healthier product -- yes I know grassfarmer --- that is a marketing statement and not a fact.

Marketing is what this is all about though guys. And we all know that some people will refuse to pay and if the Canadian herd numbers drop even further --- Cargill will save the day for those folks who have no patriotism nor care about Canadian ranchers well being and will bring them beef from their plants in Brazil.

[kato]

"Cargill will save the day for those folks who have no patriotism nor care about Canadian ranchers well being and will bring them beef from their plants in Brazil. "

Boy, that says it all! The scenario I see coming is that the Canadian beef supply drops to the level that these guys decide to pack up and move out. Where does that leave us? In a tight spot, that's where. Either we live in a one bidder world, or the government coughs up a whole lot of OUR money to pay them to stay.

Which is why we need to have an alternative. Which is also why we need this discussion. I would prefer a situation where we had the one big processor, balanced by twenty or more small to mid sized processors, than one where we had a choice between two big ones.

[rkaiser]

Please don't get caught up in the Cargil or Tyson leaving Canada story Kato. They have ABP/CCA sucked in to that one up to their hind axles. Will not happen. They are both here to stay. Too much money in the business to leave. That's why they will never show their real books to anyone including government. Or the fact that Tyson is hooked in with the Brothers Nil.

[kato]

I still predict that the next time someone (guess who?) needs to upgrade a plant, the threat to leave will come out, and a cheque will be presented for the upgrade.

Along with a statement about how highly regarded the beef industry in Canada is, and how we will all benefit from this generous support. After all, money given to Cargill will always trickle back to the farm, right???

But for a bunch of producers trying to get off the ground? They will get exactly what the Manitoba plant got last week. A statement in the paper about how the money earmarked for beef processing is going to process pork instead.

The elected ones can say what they like, but unless you're a multinational in Alberta, there is only lip service for the beef producing sector of our economy. In fact, they have so much support for cattle producers that assistance announced for flood compensation in this province this spring has had help for cattle producers dropped from it. The federal government refuses to pay it's share.

Whatever enterprises we, as cattle producers want to get started to help find markets for our cattle need to be planned with no government support included in the budget. They've already proven that they will make the promises, but don't really have the will to follow through. Once the story's off the news, the promise is canceled. We're on our own, guys.

[rkaiser]

Kato --- "I still predict that the next time someone (guess who?) needs to upgrade a plant, the threat to leave will come out, and a cheque will be presented for the upgrade."

you bet Kato -- just had another one of those last week here in Alberta. And as always CCA supported. Will they support a serious new venture - I think so. Lots of money has gone out to smaller programs and I feel it is available once a new group gets real serious. Don't know what happened in the Manitoba deal. Do you know the details? Why was the money pulled and redirected?