So far 11 claims totalling $950,000 have been filed, including one from P. Quintaine and Son Ltd., of Brandon for $137,150.

Quebec farmers pressured Levinoff to sell them to a plant after an export ban on Canadian cattle following the discovery in May, 2003, that an Alberta cow died of bovine spongiform encephalopathy (BSE).

The farmers there, in Ontario and Western Canada, wanted to own packing plants to have a place to market their cull cows. None of the ventures has been able to survive against resumed competition from packers in the United States.

Levinoff-Colbex owes far more than its assets, starting with $7.2 million to Bank Nationale de Canada and followed in order by the Federation des Producteurs de Bovine du Quebec at $20.8 million, employees at $600,000 and others at $5.3 million.

Among those “others” are several livestock auction markets in Ontario that are licensed under the beef financial protection program. The receiver is R.S.M. Richter Ltd.

Antibiotic-free choices lacking in U.S. grocers

new york / reuters Four U.S. store brands — Food Lion, Sam’s Club, Food-4-Less and Save-A-Lot — only sell chicken, beef, turkey and pork products raised with antibiotics, according to a Consumer Reports study released June 20.

Stores with high amounts of antibiotic-free meat include Trader Joe’s, Publix, Giant, Shaw’s and Stop & Shop, it said.

Whole Foods only sells food raised without antibiotics, it said.

Consumer Reports said it went to 136 stores of almost three dozen supermarket chains for its study.

Antibiotics in meat can lead to health hazards, including antibiotic-resistant illnesses and reduced ability for immune systems to fight off disease, it said.

Also, 86 per cent of consumers thought customers should be able to buy antibiotic-free meat at their local supermarkets, a Consumer Reports survey of 1,000 people found.

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However, when U.S. supplies increase, Grier predicts Canadian prices will again fall below U.S. levels as U.S. packers renew their reluctance to buy Canadian cattle and hogs.

And it’s not only U.S. COOL that should worry Canadians, Grier says.

“If COOL is not defeated (in the current complaint Canada and Mexico have filed at the World Trade Organization), it could become a barrier to trade that impacts many nations.”

He points to measures already taken by the European Union and South Korea.

The George Morris Centre prepared reports about the impact of COOL on Canadian prices after packers and retailers were forced in late 2008 to label meat to identify the country in which animals were born, raised and slaughtered.

In the first three months of COOL, Canadian cattle prices dropped by $3 to $4 per hundredweight below U.S. prices, weaner and feeder pig prices by $3 to $4 each and market hog prices by $10 each.

Canadian exports to the U.S. dropped by 60 per cent for pigs, and stayed down for 2009, while Canadian cattle exports dropped by 40 per cent and in 2009 were about 20 per cent below pre-COOL levels.

Grier says predictions that Canadian meat exports to the U.S. and other countries would increase did not come true, so the full burden of COOL fell on Canadian farmers. Some went out of business; almost all Canadian farmers cut back.

On the other hand, there were no benefits for either U.S. or Canadian consumers, Grier says, and COOL “served no commercial interests.”

The World Trade Organization appointed a panel to deal with the Canadian and Mexican complaints about the U.S. COOL rules and it has finished gathering testimony and evidence and is expected to issue a ruling this year.

There could, however, still be months and perhaps years of wrangling ahead, even if Canada and Mexico win this case. There could be appeals and even if the U.S. loses appeals, the U.S. might still retain COOL rules and then await the outcome of further WTO negotiations to determine what penalties would be appropriate to impose on the U.S.

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It has taken 10 years to implement the project, formally known as the West Hawk Lake Zoning Initiative, said Curtis Littlejohn, a director of Ontario Pork and the Canadian Pork Council.

The Manitoba community near the Ontario border is best known as a cottage and recreation area. It was chosen because it’s a “choke point” for highway and rail connections between the East and West, and the surrounding Canadian Shield is a buffer between the Prairies and Ontario’s farm country.

It’s believed that closing the choke point would prevent a foreign animal disease outbreak in one half of the country from spreading to the other. That would, in theory, allow the disease-free region to continue exporting even if the border and ports were closed to animal exports in the other region – or at least allow for a quicker reopening for half of the country.

The initiative was hailed as a good idea for the first two years and then there were roadblocks and resistance from international trading partners, said Littlejohn.

Now there is general acceptance, but it’s far from clear what the practical outcome will be, he said.

The initiative is intended to reassure all of Canada’s export customers, but the United States is clearly the top concern. It has embarked on a two-year exercise to come up with rules to govern trade on the basis of the West Hawk Lake division.

“As for the others, we’ll just have to wait and see what they do if we have an outbreak,” Littlejohn said.

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Dr. Brian Hill of Woodstock, Ont. was sanctioned by the College of Veterinarians of Ontario following a recent disciplinary hearing. He was earlier convicted of criminal fraud and sentenced to nine months of house arrest for violating the Health of Animals Act.

Following a complaint, a Canadian Food Inspection Agency investigation revealed inconsistencies in the information provided by Dr. Hill to the complainant, Holstein Canada and to the CFIA. The information appeared to misrepresent the numbers of embryos collected from the complainant’s cows and the sires used for fertilization.

The investigation concluded that between

January 2006 and December 2007, Dr. Hill made false written statements in 103 Veterinary Certificates to six veterinary inspectors regarding 7,670 embryos he exported.

The case has been dubbed “one of the largest, if not the largest, cases of livestock fraud in Canadian history.”

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It hasn’t happened yet, nor is it likely to happen without plenty of warning. But the fact remains that the gases and tiny particles coming from barns include ones that are officially deemed toxic and open to regulation.

Dr. Bill Van Heyst, an environmental engineer at the University of Guelph, told poultry producers here what he’s done so far to measure the air pollutants from chicken facilities, and it’s a long way from being a comprehensive picture for the industry.

His work so far has been in a room of 545 layers in a barn at the University of Guelph’s Arkell Research Station. Now he’s looking for an egg producer situated near Guelph to volunteer his facility for the next phase of research.

What he’s learned so far is that volumes of small particles, about 10 microns wide, spike when the lights come on and birds begin to stir.

Volumes of the tinier particles, less than 2.5 microns wide, tend to be more stable over a 24-hour period.

These tiny particles are a health concern because they can go deep into lungs, get into a person’s system and prompt adrenaline levels to spike. That can, in turn, cause a heart attack.

Ammonia gases are another issue. They spiked whenever the manure belt was activated.

Van Heyst said that likely happened because the crust on manure laying on the belt was broken, allowing pent-up gases to escape.

Ammonia is a greenhouse gas. So are nitrous oxide and methane which are also emitted from barns. Methane is a bigger issue with ruminants than with poultry, but it is emitted from poultry litter because of the activity of microbes.

Van Heyst said his first goal is to quantify the air pollutants from typical poultry operations. The next steps will be equipment and management practices that will reduce pollution and that will likely lead to development of best practices.

It’s only at that stage that governments would begin to consider regulations, he said. But regulation is the likely approach because there are few ways of reducing air pollution without increasing farm costs.

Van Heyst was speaking at the regional poultry producer update session here, organized by the Ontario Ministry of Agriculture, Food and Rural Affairs and the Poultry Industry Council.

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That’s according to Dr. Mike Leslie, poultry nutritionist for Masterfeeds, at a producer update meeting here recently. The higher the drying temperature, the greater the degree of bonding, he said.

However, there are enzymes that can be purchased as additives to break those bonds.

Much of the harvest was also light on bushel weights, he said, particularly east of Toronto and north of a line from Guelph to Stratford and west to the lake.

The lightweight corn will have less energy. Feed mills can compensate by blending with heavier-weight corn or by discounting the price.

There are logistics challenges to keep Grade 3 corn (54 or more pounds per bushel) and Grade 5 (50 lbs. or less) in separate bins, he said. There’s also the challenge of making sure staff draws from the right bin to make feed.

Compounding that situation is sometimes needing to segregate feed ingredients according to toxin levels.

Pigs can tolerate no more than two ppm (parts per million); turkeys are quite tolerant and can consume up to six ppm. Broilers can handle toxins better than layers and broiler breeding flocks, which are kept longer and thus consume more feed and are more prone to having their immune systems compromised by the toxins.

So far there has been enough Grade 3 corn in Ontario to meet demand, Leslie said, but if it runs short, the price gap with Grade 5, which is plentiful, will widen. In other words, rations made of only Grade 3 corn will carry a higher price premium.

There is a lot of toxin in the corn from some parts of the U. S., he said, and the toxins in corn from the southern U. S. tends to be more difficult to deal with.

This is an issue that feed mills can’t avoid simply by refusing to buy U. S. corn, or first testing the corn when they’re shopping, he said, explaining that ethanol plants may be buying U. S. corn and the toxins will show up in their DDGs (dried distillers grains). The process triples parts per million.

Other byproducts where toxins are concentrated are wheat shorts and middlings.

Corn grading is not precise for bushel weights. For example, Grade 5 corn could be anywhere from 48 to 51 lbs. per bushel, he said. And bushel weights can vary from farm to farm, so mills have to keep on top of what they’re grinding to ensure there’s enough energy in the ration.

EXPENSIVE TESTING

The most accurate test for toxins, he said, is too expensive – $100,000 for the equipment and $100 per test – so most of the testing is simpler, faster and less expensive.

But it’s also less accurate. The ELISA and colorimetric tests that most mills use are calibrated to results from more expensive HPLC equipment, he said.

Feed mills start the season with a lot of testing to determine what type of crop is coming in from farmers, then they develop their strategies for the rest of the season, he said.

For example, strategies for a “bad” toxin year will be quite different from the 2009 harvest which was a good one in terms of toxin levels.

In dealing with this year’s bushel-weight challenge, some mills might choose to go with Grade 5 corn and price poultry rations low; others might choose to exclusively use Grade 3 and will need to price their rations higher. Others will blend the two grades.

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Among those creditors are 22 from Manitoba.

About two dozen people showed up for a meeting of creditors here recently and voted to exclude seven media people.

Taves’ preliminary report says she doesn’t know whether contract claims for future production of breeding-stock pigeons will qualify as a claim, nor does she yet know whether the personal contracts Galbraith signed will be rolled into Pigeon King International Inc. If so, there won’t be much, if anything, for the producers because the corporation had virtually no assets and massive liabilities when Galbraith voluntarily put it into bankruptcy more than a year ago.

Counted among those liabilities are unfilled contracts which typically ran for 10 years, and that boosted the total to more than $40 million.

In the case of the personal bankruptcy, Taves wrote that “claims for the future purchase of birds by Mr. Galbraith appear to be contingent and may be disallowed.”

Those claims total $573,525 from 234 Canadians and $122,250 from 185 Americans. There are 11 trade creditors claiming $127,468, including a number of credit card companies claiming a total of about $75,000.

Taves also reports that there are 35 proven claims by Canadian breeders totalling $14,657,614 and six proven claims by American breeders totalling $249,177. Only three trade creditors’ claims are proven for a total of $12,994.

Galbraith values his property in Cochrane at $600,000, but Taves estimates it may be worth only $300,000.

The Waterloo Regional Police have scooped all of the records BDO Dunwoody had gathered from Pigeon King International Inc.

According to a search warrant taken out by the Royal Canadian Mounted Police and a report from police, they believed Galbraith was operating a Ponzi scheme. The joint investigation continues.

The typical investment was $500 per breeding pair of pigeons and a contract to sell back offspring at $50 a pair.

Some of the pigeons produced about 16 offspring per year, but other “breeds” produced fewer offspring. None were from the breeds that commercial producers favour for meat production, known as squab and some were offspring of a previous Galbraith venture with racing pigeons.

Contracts were honoured by using the investment money from newcomers.

Galbraith talked about building pigeon-processing plants in Ontario and the United States to slaughter birds and sell meat, but had not come close to building any of the promised facilities before the business collapsed. There were investors across Canada and the United States left holding contracts for about $40 million worth of pigeons.

The police report also indicates that an international watchdog organization identified two $150,000 money transfers as “suspect.” Taves reported that money flowed into PKI International, then to another Galbraithcontrolled company, then to a third Galbraith-controlled company and then back into PKI. She says she can’t figure out why he did that.

The police report also indicates that they are investigating two loans, one from Hutterites in Alberta for 12 per cent interest and another from an Ontario investor for 18 per cent. Galbraith’s brochures advertised investment opportunities, and that part of his business appears to contravene Ontario regulations which require a licence that Galbraith did not have.

Taves reports that salaries “did not appear to be excessive.” Galbraith took about $400,000 a year from 2006 to 2008 when he declared the company bankrupt.

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They at least have some hope of recovering some money, whereas most of the investors who dealt with Pigeon King International Inc. will get nothing because the company had nothing left to cover about $40 million worth of contracts to produce pigeons.

Galbraith yielded to bankruptcy in December, 2009 and BDO Dunwoody of Waterloo began gathering information about assets, liabilities and claims.

Investors who dealt with Galbraith before he incorporated his pigeon-rearing venture as Pigeon King International are the major claimants in liabilities that total more than $833,000.

His main asset is a $376,000 home he built at Cochrane after he walked away from Pigeon King in Waterloo.

Canadians have filed about $574,000 in claims and investors in the U. S. about $122,000.

Police from the Waterloo Region, the RCMP and the U. S. have been investigating for years, yet so far no charges have been laid. The Waterloo Region Police Force says it’s reviewing more than 60,000 documents gathered from across Canada and many states in the U. S.

Some have noted that the farmers who held personal contracts with Galbraith probably were in business for two years or more, so most would have realized significant operating profits during that time. In fact, many may have more than covered their capital and operating costs.

It’s more recent investors, under Pigeon King International Inc., who suffered the greatest losses.

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Arlan Galbraith, the Pigeon King, has yielded to creditor pressure and has gone into personal bankruptcy.

His lawyer filed a “consent decree” in Superior Court in London, avoiding a hearing where witnesses were prepared to testify about his failure to honour contracts to buy breeding-stock pigeons.

The next steps are now up to BDO Dunwoody of Waterloo, Ont. , to determine the extent of Galbraith’s assets and liabilities.

BDO Dunwoody is also handling the bankruptcy of Pigeon King International Inc. , the company Galbraith formed to continue his business of selling breeding stock to investors and contracting with them to buy back offspring to be sold as breeding stock to more investors.

That business has been described as a Ponzi scheme, and prompted officials in Iowa to ban him from the state.

At that point more people began questioning Galbraith’s promises to build pigeon-processing plants in the United States and Canada.

estimates as high as $40 million

Galbraith and his Pigeon King Internat ional fai led to honour.

He attracted investors from across Canada and the U. S. Many of the investors were Mennonites in Ontario, Pennsylvania, Ohio and Illinois. One of the largest contracts was with a Hutterite colony on the Canadian Prairies.

Waterloo Regional Police, the RCMP and law officers in the United States have conducted hundreds of interviews to collect evidence, but so far no charges have been laid.

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Dr. Brian Hill, who pleaded guilty to the charges against him, was sentenced to one year by Judge Peter Isaacs in provincial court, but will serve only three months in prison and the rest under what amounts to house arrest.

Hill still faces several civil lawsuits, including ones from farmers who believe he stole high-value embryos.

Hill’s lawyer, J. Murray Nielson of London, said Hill doesn’t owe farmers anything. That’s hotly disputed by farmers involved in the frauds and the judge said it’s at odds with a joint statement filed with him by lawyers for Hill and for the federal and provincial governments.

That statement includes an estimate by Hill that he took about $1.2 million worth of embryos. That came in answer to an estimate from investigator Roger Weber for the Canadian Food Inspection Agency who estimated he took $2.1 million worth of embryos.

The statement notes that the frauds besmirch the reputation of Canadian Holstein and Jersey breeders and the Canadian dairy industry.

It also appears that most, if not all, of those overseas customers have not been told that they have been defrauded.

The Chinese, for example, set “extremely high qualifications” for donor cows – so high Hill was only able to “qualify” six, yet he sold the Chinese thousands of embryos, many of them taken from scrub cattle, including some that were picked up at community auctions for as little as $100 each.

Hill falsified documents, including breeding slips, embryo identification, embryo collection dates, the identification of the dam and sire and the health status of the donors. He also used blank breeding slips obtained from Gencor Genetics to falsify artificial insemination documents.

Some of the embryo documents listed dams that had been dead for years. In one case, the documents indicated he collected embryos from one donor cow two weeks apart, and got 18 embryos both times.

The false documentation slipped past the scrutiny of frontline officials for the Canadian Food Inspection Agency. They only began to identify the fraud after Stanton Bros., north of London, filed a complaint.

That eventually led to the identification of more than 40 farmers who were deceived over a period of four to five years while Hill exported to 15 countries.

The guilty plea applies to 29 dairy farms and 7,670 embryos and 103 false documents for exports to Cyprus, Russia, China and Ukraine.

Hill also collected $52,325.28 in government grants for “export and promotional activities.” He registered a property at Thamesford as a CFIA-approved embryo collection centre.

The CFIA is supposed to periodically audit these collection centres.

Hill exported embryos to Pakistan, China, Ukraine, Cyprus, Spain, Russia, Lithuania, the U. S., Japan, Australia, France, Germany, the Netherlands, Dominican Republic and Finland during the period when he was forging documents.

He was serving on the board of directors of the Canadian Embryo Transfer Corporation (1996-2002) and was chairman of its certification committee and president for 2000-01. The Canadian Food Inspection Agency uses the corporation’s certification as its quality control on veterinarians it approves to deal with embryo exports.

He was a founding member of the Canadian Livestock Genetics Association, was elected a director in 2003 and vice-president on Sept. 14, 2007.

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