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Editorial: Beef production and the view from Alberta

The view is different out here — and it’s not just the scenery.

Granted, Co-operator staff had the rare opportunity last week to visit with ranchers in and around Calgary that were specifically selected by their colleagues at Alberta Farmer Express specifically because they do things a little differently.

Nevertheless, it was an eye-opener listening to beef producers who see healthy soil as the foundation of their commercial success. Or chefs and meat cutters at Canada Beef Inc. who are demonstrating new ways to keep beef on the menu in Canadian and international kitchens.

Or Rich Vesta, an American entrepreneur with a story that could turn any skeptic about the prospects for more domestic meat processing on the Canadian scene — and there are more than a few — into a believer.

Vesta recalls sitting in a beef industry conference at which the keynote speaker referred to Alberta as the “home to world-famous Alberta beef — known only in Alberta.”

“That was a defining moment for me. There is a story here to be told and it hasn’t been told,” he said. “Part of the reason is, you’ve got American companies marketing all your cattle.”

Vesta, who made his fortune as the guy U.S. meat processors brought in to get struggling plants back on track, is hoping — no planning — to change that.

There was lots of buzz when he bought the mothballed Rancher’s Beef plant just outside of Calgary in 2013. The plant, built for $80 million in 2005 in response to the BSE crisis, hasn’t cut any beef since it went bankrupt in 2007.

He renamed it Harmony Beef and announced plans to spend $18 million in renovations and open a plant capable of processing 800 head a day and employ 325 people by June 2014.

Circumstantial evidence would suggest Harmony Beef is on the road to broken dreams just like every other effort to get a small- to medium-scale export-accredited meat processor up and running in Western Canada.

It is now June 2015. Renovation costs are estimated at $20 million. Vesta says he is now targeting early 2016 for opening. As he toured us around the facility last week we saw lots of construction workers, new equipment and cutting-line configurations that defy conventional thinking — but no sign it will be receiving any cattle or shipping any beef any time soon.

There’s a wastewater treatment permitting issue that needs to be resolved. Meanwhile, the City of Calgary is making noise about not wanting a slaughterhouse so close to town.

It all sounds sadly familiar, except for one thing — Rich Vesta.

Vesta readily concedes that if someone asked him about the feasibility of building a new plant in Western Canada today, he’d say “absolutely not.”

But he didn’t have to build this plant, and although he won’t disclose what he paid for it, it’s safe to assume he and two sons paid cents on the dollar. That’s often the way it goes in business.

Vesta was drawn to this plant by the fact that it has extraordinarily ‘good bones’; it was built to meet European standards at the outset. As well, it’s located in the heart of Canada’s cattle-feeding sector.

In Vesta’s world, big is not beautiful. There will be no 250-head-per-hour high-speed cutting lines. Once a carcass is on the hook, it will move only six feet every 30 seconds.

He says it is more efficient. Workers at each station have more time, which increases the proportion of the carcass that makes its way into the higher-value cuts instead of trim. It also improves food safety and reduces worker strain.

“We have an obligation to use every ounce of that animal — not every pound, every ounce,” said Vesta, who learned meat cutting from a Dutch master butcher in his home town in Illinois as a teenager. “He taught me dignity and respect for animals once they were harvested.”

It’s about money too. One of the many anecdotes he shared from his years working for the likes of Packerland, Smithfield and JBS, was how his cutting methods could add $60 to carcass values.

Vesta has similar ideas around carcass size. He’ll be paying premiums and discounts to attract the size of cattle that produces the cuts needed in the food-service sector. Hint: Carcasses that tip the scale at 925 lbs. won’t be the ones getting a premium.

If Vesta nails higher cut-out efficiency and right-size carcass size, the production from his plant will be competitive in the commodity beef market as well as specialty markets or export to Europe, Asia or the U.S.

He might also help rewrite the rules in the beef value chain. “From my perspective, there is a need to do some things a little differently in the beef business,” he says.

Amen to that.

About the author

Editorial Director

Laura Rance is the Editorial Director for Glacier FarmMedia. She is an award-winning journalist who has covered agriculture and rural issues for more than 30 years.

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