They announced this morning that XL will resume operations next Monday. That's the news that I think most of us were waiting for. Let's hope that some lessons have been learned from this fiasco!!
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I think we are all hopeful JBS can bring some short term stability to the plant and product will start to move back onto the market.
JBS has stated very clearly they will make a decision within 6 months on whether to buy the "assets".......not XL....just the assets? They will assume none of the debts or liabilities of XL!
I suspect JBS will be doing some real research into the cattle situation up here? They know their competitor Tyson Foods bailed for a reason....the fact is Tyson was going to mothball the plant in 2008 because they couldn't access enough cattle, at the right price, to operate at a profit!
Today there are less cattle available.
No one seems to know how much money XL owes, and to who? We can guess from some of the loans they had, that things probably were fairly desperate?
If JBS buys the "assets" and XL is left with the debts and liabilities (which will surely be more than the reported $100 million JBS is offering) who will be left holding the bag? How many of these bad loans were guaranteed by the Alberta government and possibly the federal government (we know FCC is owed $20 million).
If JBS declines to buy the "assets" then what? Will the Alberta government let the industry fail? Will the Harper government? Will they fall all over themselves offering JBS the world to keep operating the plant?
We need a real investigation into this gong show? We need the real facts on what went wrong and if this industry is financial viable, or if we are all going to be welfare cowboys? -
I'm sure JBS has already done their homework and will
buy the assets - you don't go spending $100 million
on a whim and then research the investment later.Comment
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grassfarmer: I don't think they have spent anything yet? The $100 million is only paid if they decide to buy?
The papers are quoting JBS as saying they will make a decision within six months on whether they will buy it or not?
I wonder how much they are being paid to manage XL? Who's paying that? I doubt they are doing it for free?Comment
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Paid???? They are going to be paid by you ARSG. IN the form of lower feeder cattle prices for their feedlot and a growing basis. Where are we now Gary? About $250.00 per head. Maybe you could explain basis for the folks on Agriville better than I can Gary E.Comment
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A further thought grassfarmer:
Maybe this whole "manage the plant thing before buying the assets" is little more than a scheme to muscle the province into giving them cash to pay for their purchase?
After all this is Alberta where the government just loves to throw money to their pals? JBS managed to muscle the Brazil government to bail them out before....maybe that is part of their business plan....get the government to pay for their private benifit? They picked the right place!Comment
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randy: About 16 cents a pound less in Alberta compared to Nebraska, on both fats and feeder steers. On a 600 lb. steer, $96.
Not sure how much of that is due to XL gong show?Comment
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