“It keeps our feet inside the American border.”
– JOHN PREUN, MANITOBA PORK MARKETING CO-OP
Manitoba pork producers could soon be part owners of a hog slaughter plant in North Dakota.
The Manitoba Pork Marketing Co-op may join a group of hog farmers from northern U. S. states in taking majority ownership of a small plant in Minot, North Dakota.
The group called the Cloverdale Growers’ Alliance hopes to purchase a 66 per cent majority interest in the plant currently owned by Cloverdale Foods Co., headquartered in Mandan, North Dakota.
The new company will be called Cloverdale Meats. Its current owner will retain a minority ownership.
If Manitoba Pork Marketing chooses to participate, it will put up $200,000 of a planned $1.4 million shareholder investment in the plant.
The co-op’s board of directors expects to make a decision in early 2009.
Cloverdale Growers’ Alliance, which currently consists of about 60 hog farmers in North Dakota, Montana and Minnesota, has been supplying pigs to the Minot plant for the past decade. So has Manitoba Pork Marketing Co-op, although it is not a member.
By becoming a part owner in the plant, the co-op will secure a guaranteed American buyer at a time when U. S. country-of-origin meat labelling rules threaten to keep Canadian pigs out of the U. S. market.
“It keeps our feet inside the American border,” chairman John Preun said during a co-op district producer meeting last week. “It’s a good alternative market.”
Preun said the alliance agreed at a meeting October 29 to proceed with its purchase plans. An interim board of directors has been formed.
Manitoba Pork Marketing offi cials acknowledged the plant is not a silver bullet for its marketing program. The co-op sells up to 24,000 slaughter hogs each week. Only 400 to 600 of those go to the plant in Minot, which currently kills about 2,000 hogs weekly.
The plant is a kill-and-cut facility. Further processing occurs at Cloverdale’s facility in Mandan. The meat products are sold to the food service industry. This is an advantage to Manitoba producers because restaurants and food services are not covered by COOL. Consequently, the plant does not have to demonstrate country of origin, which major U. S. packers selling to retail must do, said Perry Mohr, Manitoba Pork Marketing general manager.
Mohr said the $200,000 investment could pay for itself quickly because the co-op now spends that much extra in two weeks shipping hogs to Alberta and other out-of-province destinations because of a shortage of slaughter capacity in Manitoba.
The co-op currently sells 18,500 hogs a week on contract to the Maple Leaf plant in Brandon. It markets another 300 hogs weekly to the Springhill Farms plant in Neepawa, plus 400 to 600 to the Cloverdale plant. Roughly 5,000 hogs a week are shipped to the Olymel plant in Red Deer, Alberta and to any other plant in the U. S. that will take them, Mohr said.
He said the co-op could sell more hogs but there is no other reliable market for them. Maple Leaf recently went to a second shift and is killing roughly 83,000 hogs a week, close to its 86,000-head capacity. Springhill Farms has purchased 1,500 weekly hogs from the co-op in the past but has bought only a few hundred lately. Most hogs killed there now belong to the new owner Hytek.
Mohr said the U. S. was always a reliable buyer of surplus Manitoba hogs until COOL came into effect September 31. Most major U. S. pork packers now refuse to buy Canadian slaughter hogs because of the extra cost of segregating them. Pigs born in Canada and finished in the U. S. will be similarly affected next spring.
Manitoba Pork Marketing is able so far to sell all its members’ hogs but only barely. Mohr predicted a crunch over Christmas when Maple Leaf and Springhill close briefly for the holidays. That’ll leave 54,000 co-op hogs ready for market but with no place to go. [email protected]