But now Manitoba’s opposition Tories say a property at 663 Marion Street in Winnipeg has been sold for half its value as the Manitoba Cattle Enhancement Council winds down its operations.

“Our information says that they sold it for about $650,000 unconditionally,” said Blaine Pedersen, MLA for Midlands. He added that the asking price had been $1.2 million — the same amount as the property was purchased for in 2008.

The provincial government wouldn’t confirm that figure when contacted last week.

“At the purchaser’s request, the sale price has been kept confidential until the sale is finalized, and therefore we cannot comment directly about the numbers,” said a spokesman for Manitoba’s minister of Agriculture, Food and Rural Development.

Questions

Where money from the sale ends up is of particular interest to Heinz Reimer, president of the Manitoba Beef Producers, who has more than a few questions about where producers’ checkoff dollars went.

“That’s been our concern all along, we haven’t gotten full disclosure on where that money went,” said Reimer. “And that has been a concern for Manitoba beef producers because we put a fair amount of money into it and we’ve never been privy to where that money went to.”

After purchasing the defunct pork-processing plant six years ago, the MCEC began to redesign it for cattle. Media reports at that time indicated it was expected to employ approximately 80 people by 2010.

That never happened.

“They purchased the property at 663 Marion Street for $1.2 million, they then spent $793,000 on plant redesign and renovations, then they spent $237,000 on demolition, because they decided they would build a new building,” said Pedersen. “So why did they spend almost $800,000 and then decide this building isn’t going to work and tear it down?… This is not prudent planning.”

The MLA said he obtained the figures through a freedom of information request, but that detailed breakdowns haven’t been available.

The province disagrees with that assessment.

“Every aspect of MCEC operations has been open to the public,” said Minister Ron Kostyshyn’s spokesman. “Mr. Pedersen is not only hiding this fact, he’s making up numbers.”

No paper trail

Pedersen said that the information that is publicly available is lacking.

“The financial statement is online, but that doesn’t tell you where money is spent, it just tells you how much is spent,” he said, describing the information as “pretty vague.”

Categories such as project management list expenses at $1.1 million, but don’t break down costs any further, Pedersen said.

Reimer said his organization passed a resolution at its last annual general meeting aimed at acquiring more information on how the MCEC money was spent.

The Manitoba Beef Producers began calling for the elimination of the $2-per-head levy in 2011, but it wasn’t until September 2013 that collection was halted.

In an emailed statement, the province noted that the “producer levy was never mandatory” and that $2.4 million was returned to producers who requested it. In total, just over $8 million was collected through the levy.

However, had the federal government provided the $11 million it has promised through the Slaughter Improvement Program, provincial officials said the planned slaughter plant would have gone ahead. Instead, those federal funds went to an expansion of Hylife Foods’ pork-processing facility at Neepawa.

Hogwash, said Pedersen.

“If you talk to the feds, the reason the feds pulled out is because the plant was not viable; they didn’t have a viable plan,” he said. “It’s very easy for the province to blame the feds for this, but in the meantime $12 million has disappeared out of cattlemen’s and taxpayers’ pockets with nothing to show for it.”

Frieda Krpan, a producer at St. Laurent, is the MCEC chairperson, but she declined to comment on the issue, referring queries to MCEC’s lawyer.

The post Sale of MCEC property raising questions appeared first on Manitoba Co-operator.

Some years back Co-operator reporter Allan Dawson quoted a farmer saying that basis is a licence to steal. Two March 22 opinions are cases in point where we as farmers take a back seat to the private trade margin traders.

In “The $5-million advantage of local processing,” Manitoba Cattle Enhancement Council’s figures are $130 per animal, including a minimum of $50 for freight as the farm gate difference between Manitoba and Alberta beef. However, without a local processor, the chain store local retail price likely includes a further minimum $50 dead meat reefer freight Alberta back into Manitoba. Why would the MCEC leave this money on the table?

In the letter “Pure luck now the management strategy,” compared to “cash,” the private trade discounts for delivering off-spec contracted canola future deliveries are exceptionally steep.

However, delivering canola according to future delivery contracted specs is child’s play compared to growing and delivering future delivery contracted specs for wheat. Furthermore, the current strike price put options for a November canola is about $27 per tonne, a risk premium that if not factored in, bites rather hard should the crop, without an Act of God clause, not materialize. Selling but a portion lessens that risk, but increases the farmer’s exposure of carrying sunk input costs of unpriced grain into a falling harvest price. In other words, by addressing only the contracted flat price, the letter writer has severely underestimated the full basis risk to farmers.

However the writer’s opinion that farmers who took advantage of the CWB buyback, as “the individual greed incentive to destroy the CWB” is simply untrue and deserves correction. In terms of pricing efficiency, the CWB buyback as a means to arbitrage the board is second to none in the private trade.

Even producer cars provide more basis risk to farmers to arbitrage a segment of the private trade’s supply chain, not to speak of the many ways in which the private trade erects outright obstacles to arbitrage, from buying out the competition to simply suspending a farmer’s right to make delivery against commission house future contracts.

Eduard Hiebert

St. Francois Xavier, Man.

The post Letters — for 2012-03-29 appeared first on Manitoba Co-operator.

Alberta cattle fetch more at auction than Manitoba cattle. A lot more.

“One of the main reasons why Manitoba’s prices are lower is because they are the furthest distance away from any federally inspected slaughter plants,” said Canfax market analyst Brian Perillat.

The simple fact is that Alberta producers have beef plants close to home, while Manitoba producers get prices that reflect costs including transportation, handling and various markups along the way.

MCEC along with the management team behind the proposed new Winnipeg-based beef plant crunched the numbers and discovered that Manitoba producers are losing out on more than $5 million a year compared to their Alberta counterparts.

The analysis shows the average price differential over the first 10 months of 2011 between Alberta and Manitoba on fed steers was $10.16/100 lbs. On an average fed steer of 1,300 lbs., that works out to about $130 per animal. We also know that the minimum price differential on other cattle is $50/head for transportation alone.

That’s the reality that Manitoba producers have put up with for a long time. And it’s one of the things that MCEC is aiming to change by having a federally inspected beef plant here at home.

“If you feel like your animals aren’t worth what they should be in today’s market, then you’re right,”said Doug Cooper, CEO of the management team seeking to build a new beef plant in Winnipeg. “Our plan calls for us to pay Alberta prices for Manitoba cattle.”

“When somebody asks what we’re getting for our voluntary refundable $2-per-head MCEC levy, I tell them that I might just be getting $130 per head more,” said Chuck Gall, MCEC member and cattle producer from Moosehorn, Manitoba. “As a producer, it’s in my best interest to support building a new plant here at home.”

Most industry watchers predict transportation costs will only rise alongside input costs such as feed. That means the interprovincial price differential will only get worse.

By investing in a local plant, MCEC is trying to level that playing field and give Manitoba producers a better chance at long-term profitability and sustainability.

MCEC administers an investment fund that is fed by a refundable $2-per-head levy on every head of cattle sold in the province. That money is then matched by the province turning every $2 into $4. MCEC’s mandate is to use that fund to invest in projects to strengthen the Manitoba beef industry, with a special focus on bringing federally inspected beef slaughter and processing capacity back to the province.

Federally inspected slaughter plants are permitted to export beef outside of Manitoba, which makes them eligible to sell to large domestic supermarket chains as well as into foreign markets.

Fully 85 per cent, or 7,400 out of 8,700, of Manitoba’s cattle farms decided on their own against applying for a refund in 2010.

“We talk to producers all the time and they tell us that they know the risk to our industry if we don’t get new federally inspected beef plant capacity back in the province,” said Gaylene Dutchyshen, vice-chair of MCEC.

“It’s a positive sign that so many cattle producers are voting with their wallets on this very important issue.”

The post The $5 million advantage of local processing appeared first on Manitoba Co-operator.

Co-operator staff / brandon

The Manitoba Beef Producers has given a thumbs down on the $2-per-head voluntary checkoff for the Manitoba Cattle Enhancement Council.

A resolution to eliminate the checkoff aimed at supporting beef slaughter capacity in the province was passed by a narrow margin of 24-21 after a vigorous debate at the recent MBP annual general meeting.

The province of Manitoba started this tax on all of our cattle and it s been over five years now, said Don Winnicky, director for MBP District 4. He added that arguments in favour of keeping the checkoff were mostly smoke and mirrors.

I m tired of paying this tax on my cows. There s absolutely nothing to show for it except for an empty parking lot.

In defence of the checkoff, Fred Tait pointed out that it is voluntary, and any seller of cattle can request that it be refunded. He added that the funding pool has helped a number of smaller provincially licensed abattoirs and processing plants get off the ground or improve their operations.

There s also the side benefit that for every dollar that the producer puts in, the province matches it, said Tait.

Tait said the recent withdrawal of $10 million in federal funding for the Winnipeg beef slaughter plant was done for political reasons.

I see the opposition to this effort… as more political than practical.

Chuck Gall, who has served on the MCEC board for two years, said that the checkoff represents a commitment on the part of government and industry to prevent the chaos that came after the first reported case of BSE in 2003 slammed virtually all borders shut.

To send a beef animal from Moosehorn to High Level, Alberta costs roughly $100. I need that $100 and you need that $100, said Gall.

Let s let the farmers decide if they want to leave their money in the levy or not.

Gaylene Dutchyshen, vice-chair of the MCEC board, said that proof of widespread support for the voluntary checkoff can be found in the fact that 60 to 70 per cent of all beef producers leave their money in the program instead of requesting a refund.

This small number of people in this room cannot speak for the larger number of people who are in support of the council and probably the idea of a public packing plant, she said.

Glen Metner said that when he started in the cattle business in the 1980s, gas was 32 cents a litre, and 500-pound steers brought $1.10.

There was lots of money to be made in this business, he said. I had 18 slaughter plants to sell my livestock to. The year that Cargill moved into Alberta, I have seen my net profit fall every year since then.

Metner added that the checkoff to support the MBP is voluntary too.

If you get enough people mad, you might have people taking their money out of here, he said.

Larry Clifford said that he doubted a small plant would ever be able to compete with the big packers without continued infusions of public money, noting that virtually all of the emotional ventures that came after 2003 have failed.

I believe that a regional plant would be advantageous to this province if it could survive, he said. Unless there s some strong subsidization coming, I just have my doubts.

Betty Green said she was afraid that the fact that the provincial cattle herd has fallen dramatically in recent years makes a small regional plant non-viable.

If you take a look at the MCEC budgets, 30 to 40 per cent of its budget is going to administration, she said. For that reason, I can t support it.

Gall defended the MCEC s administration expenditures, saying that much of the organization s current work is helping businesses assemble paperwork such as business plans and environmental applications.

That eats up a lot of our money, he said. If calves go to $2 per pound, the $2 checkoff is peanuts.

Joe Bouchard said that he was in favour of freedom of choice, but that debate at the MBP level on the MCEC checkoff was moot.

If this passes, does anyone really think that the government is going to get rid of the council?

A second opposing resolution, which called on the MBP to not take a position against the MCEC checkoff, was defeated.

Also, two other resolutions proposing that the checkoff funds be diverted to create a cattle insurance program to protect beef producers in the event of a dealer bankruptcy, or to fund a mustering fee for TB testing in the Riding Mountain National Park area, were defeated.

daniel.winters@fbcpublishing.com

The post MBP Votes Thumbs Down On MCEC Checkoff appeared first on Manitoba Co-operator.

Some are saying it s been a ho-hum campaign so far as Manitoba politicians head into the final stretch of their race to the polls Oct. 4.

But from this desk, one of the outstanding features of the 2011 election has been the farm and rural communities collective efforts to move beyond invisible.

For far too long, politicians have paid lip service to agriculture, paid no attention to food issues whatsoever, and virtually ignored the pressing infrastructure needs faced by communities outside major urban areas.

Not this time.

The Association of Manitoba Municipalities came out with its Putting Communities First campaign, highlighting what towns, villages and rural municipalities need by way of infrastructure spending to keep the rural economy from crumbling.

Keystone Agricultural Producers was a vocal member of the Manitoba Education Financing Coalition (MEFC), a group of cottage owners, realtors and the Manitoba and Winnipeg branches of the Chamber of Commerce seeking the removal of education taxes from property.

Food Matters Manitoba co-ordinated the first-ever debate on food issues in a provincial election, prompting participating candidates to see food as part of an integrated health and wellness policy for the province.

A coalition of livestock organizations rallied behind the Manitoba Pork Council s bid to end the province s moratorium on hog barn expansions and the Manitoba Beef Producers issued its own election wish list calling for the implementation of an ecological goods and services program and an end to the Manitoba Cattle Enhancement Council.

And in the middle of all this was Open Farm Day, an opportunity for non-farming folk to get out and see for themselves the diversity, both in type and scale, of agriculture and food production in this province. It s unfortunate however, that the list of participating farms didn t include more grain farmers.

Events like these don t change anyone s mind or open new markets, but they help make farming tangible. They put agriculture, and its importance, on the public radar.

To be sure, this election campaign has been long on instantly gratifying vote-buying announcements such as a new MRI here, a new community centre there, more rental properties, or more police officers. Both the governing NDP and the opposition Progressive Conservatives have bought into the Save Lake Winnipeg rhetoric.

The whole campaign has been woefully short of strategic initiatives, the kind of visionary and politically risky proposals that will be needed to carry this province forward.

And these sorts of announcements tend to be aimed at large population centres or major special-interest groups, because that s where the critical votes lie. That s not a good thing for those of us living and working in the rest of the province.

In order to be heard, we have to do a better job of spelling out why what we want is good for everyone else in the province too.

Manitoba s farm and rural leaders have done a stellar job of raising their issues profile during this campaign. The campaign isn t over Oct. 4.

The effects of these efforts are incremental. They can t be measured by what the politicians say and do today, but rather how receptive they are to these ideas post-election.

Between A Rock And A Hard Place

The board of directors for the Canadian Wheat Board is legally and morally responsible for acting in the best interests of the corporation.

That goes for the ones who were elected, regardless of which side of the single-desk debate they represent, as well as those appointed by the federal government.

Elected directors have an extra duty to represent the wishes of their farmer constituents. But ultimately, their first obligation is to the institution s financial integrity.

Directors for any corporation who fail to abide by that duty could be held to account legally. Presumably, that includes defending it from political interference that jeopardizes its ability to continue even if it puts them in the path of a federal minister s wrath.

No one should be surprised or angry that CWB directors are balking at the federal government s plans to eliminate the single desk, which is the supporting beam for the entire structure.

Yet these individuals have been labelled backward, unco-operative, and recalcitrant. They are accused of acting like spoiled little children and worse for their failure to prepare a plan for the board s continuation in an open market.

Oddly, it is those pushing the open-market agenda the hardest who seem the most frantic about perpetuating the myth that the CWB can and will survive. The business case for such a proposition is weak, a reality underscored by the fact that some of these same groups are calling for taxpayer subsidies to support its transition.

The federal government will do what it will do, but don t vilify the wheat board directors for doing their job. laura@fbcpublishing.com

The post Moving Beyond Invisible appeared first on Manitoba Co-operator.

Every meeting was literally a carbon copy of each other, with literally the same scripted questions, and sometimes the same people asking those questions.

In my personal view, I was embarrassed for the farmers who had come to the meetings to hear about the future, to our staff who worked hard in setting up these meetings, and senior management who attended.

Fact is, that the minister informed us when he visited the CWB offices back in May that this government is going to repeal the current CWB Act and replace it with a new act.

By doing that, the government then supersedes any requirement that is in the current CWB Act, therefore, making the requirement for a plebiscite invalid. Our internal counsel has advised us that the government does have the authority to do so, and also advised us that holding our own plebiscite will be non-binding on the government.

What has been missing at these meetings and the history of the CWB is respect for the producers’ opinions. Surveys show a growing percentage of farmers who are not supportive of the single desk, and the biggest group that expresses that opinion is farmers under 45 years of age. We’ve seen in all the producer surveys done since 1998 that there is not majority support for marketing barley under the single desk, yet what have we done? At the majority at these meetings, in all due respect, were well-seasoned farmers, many who even stated that they were retired, yet support the CWB monopoly and don’t want to see any changes.

Only individual farmers can decide what is best for their business. I cannot and will not tell my neighbour how to manage their farm, and what to do with their wheat and barley, and no one should feel they have the right to tell me what to do with my grain on my farm. Democracies don’t work that way.

Jeff Nielsen CWB Director, District 2 The word “democracy” has been used a lot in the debate over the future of the Canadian Wheat Board. Groups and individuals supporting the status quo are saying that Minister Gerry Ritz should respect the right of farmers to vote on this issue.

WBGA also believes in democracy, particularly the democratic right of a farmer to choose when they deliver their grain, who they sell their grain to and at what price they sell that grain for. That democratic freedom – to operate a business successfully – should never be taken away from farmers via a vote by other farmers. Canada is a nation built on the principle of freedom for its citizens and holding a vote to decide whether farmers are free or not goes completely counter to those principles.

Minister Ritz has consistently taken this position since his announcement to remove the monopoly of the CWB. The WBGA strongly supports the minister on his stand and encourages him to continue on the path of freedom for western Canadian farmers.

Ritz has it right, the results of the CWB vote are irrelevant. This is about the democratic rights of farmers and that should never be put to a vote. If the CWB and its supporters want to demonstrate democracy, they need to start by respecting basic business principles and property rights. Brian Otto

President Western Barley Growers

Association Warner, Alta.

Politics Behind Fund Withdrawal

Just when a federally inspected beef slaughter plant was weeks from construction, the federal Conservatives slammed the door on

Manitoba beef producers; $10 million that was promised under the Tory’s action plan in 2009 was withdrawn and given to Hylife Corporation to upgrade a hog slaughter plant. Federal Ag Minister Gerry Ritz blamed the beef plant’s business plan, even though a major bank thought a business model based on niche products and toll processing was good enough to commit over $18 million.

One begins to wonder if the broken promise to beef producers has more to do with politics than business sense. The proposed plant was the direct result of a pool of capital collected and invested by the Manitoba Cattle Enhancement Council. The provincial NDP established the council in 2006 and matched producer checkoff dollars to fund enhanced slaughter capacity in

Manitoba. It could have been a huge success but the federal Tories didn’t want the plant to be built and succeed.

At the same time as they were laying plans to dismantle the producer-owned Canadian Wheat Board, the Tories were already planning to take away market opportunities from Manitoba cattlemen. It appears that the Conservatives are all about lining the pockets of corporations at the expense of farmers and ranchers. Remember this when you go to the polls for the provincial election.

Peter Gulak Gilbert Plains, Man.

It’s Not Over

In his Aug. 4 editorial, John Morriss takes myself and others to task for our ongoing campaign to gain marketing freedom for Prairie farmers. He asks the question, “Why are they still fighting?” After all, according to Morriss we have finally won, the battle is over, and it’s time to move on.

I wish it were that simple. While the Conservatives are in power and have promised to change the wheat board legislation, they have yet to table anything, let alone get it passed. We’ve got a ways to go yet.

Besides which, as Allan Dawson recently reported, the wheat board itself is certainly not behaving as if things are over. They’re spending an awful lot of time, and producers’ money on meetings across the Prairies, expensive ads, a meaningless plebiscite and a telephone campaign trying to muster support for the single desk both within the farming community, and the general public at large. To say that they are not “co-operating” with the federal government is to understate the matter.

We may be in the third period, and things are looking good for marketing freedom, but it’s a bit premature to be heading to the dressing room for a victory celebration just yet. With all due respect to Mr. Morriss, we’ll stay in the game as long as the other team remains on the ice and won’t be letting up, until the final whistle and an open market has actually been won.

Rolf Penner Manitoba vice-president

Western Canadian Wheat Growers Association

Please forward letters to Manitoba Co-operator, 1666 Dublin Ave., Winnipeg, R3H 0H1 or Fax: 204-954-1422 or email: news@fbcpublishing.com (subject: To the editor)

The post Letters – for Sep. 1, 2011 appeared first on Manitoba Co-operator.

“We’re as anxious to get out there and make an announcement as anyone else, and we hope to soon. Everyone is kinda anxious,” said David Wiens, a director with the Manitoba Cattle Enhancement Council (MCEC).

Keystone Producers Ltd. and the MCEC were blindsided in late July by the federal government’s decision to withdraw $10 million in financing it promised the beef-processing company in 2009 under the Slaughter Improvement Program (SIP). The money was earmarked for the development of the Marion Street processing plant.

The funding instead went to an expansion of Hylife Foods Ltd.’s hog-processing facility in Neepawa. The former Springhill Farms facility is now owned by Hytek Ltd., which will use the money for upgrades to the wet area, expansion of the cooler and cutting areas, and new equipment.

At the time, the federal government cited unspecified problems with Keystone Producers Ltd.’s business plan. Wiens said MCEC still has not received an explanation for why the funding was pulled.

“It’s a niche plant, it’s not going to be a Cargill, and maybe that is what they were looking for,” he said. “But our plan has been getting a lot of positive feedback from the producers, and our potential customers.”

Market research done by the Astana Group on behalf of Keystone Producers Ltd. had identified a need for a slaughter plant specializing in halal and kosher products, with a capacity of 250 to 300 head.

Wiens said $18.2 million in private-sector funding has already been secured, and that the company’s management team is now seeking funding to replace the $10 million lost when the federal government pulled out. But he added it’s too soon to say where that additional funding might come from, or whether it would be from a public or private source.

“At this point, it’s been a long time in the making … but we’re talking about a delay of months, not years,” said a confident Wiens.

Formed following the BSE crisis five years ago, the MCEC is financed through a voluntary $2-per-head checkoff on cattle sold in Manitoba, which is then matched by the provincial government. Producer-owned Natural Prairie Beef Inc. joined with MCEC in 2008 to create Keystone Processor’s Ltd.

Manitoba Beef Producers says it will revisit its call for an end to the $2 checkoff, if the Marion Street plant becomes viable, but isn’t optimistic.

“My opinion remains the same if the MCEC doesn’t get results,” said MBP president Major Jay Fox. “We expect the MCEC to get results, they’ve had five years to work at this.”

But Fox added that he is pleased to hear the organization may now be looking to the private sector.

“I think that if they are going down a different path to get funding from the private sector, that that is the right path,” said Fox. “It has to be commercially viable.”

Wiens remains strong in his conviction that a federally inspected plant will provide benefits to Manitoba beef producers through reduced transportation costs and as a local outlet for beef cattle if the border closes.

“There is obviously demand out there, the potential consumers are worldwide, including the U.S.,” said Wiens. “The multinationals aren’t interested in doing this sort of work and we can benefit.”

shannon. vanraes @ fbcpublishing.com

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“Atthispoint,it’sbeenalongtimein themaking…butwe’retalkingabout adelayofmonths,notyears.”

– David Wi Ens

The post MCEC Moving Ahead Following Funding Loss appeared first on Manitoba Co-operator.

Citing unspecified problems with the Keystone Processors Ltd. business plan, the federal government has withdrawn $10 million in financing it promised the beef-processing company in 2009 under the Slaughter Improvement Program (SIP).

Officials announced last week that money would instead go to an expansion at the Hylife Foods Ltd. hog-processing facility in Neepawa. The former Springhill Farms facility now owned by Hytek Ltd. will use the money for upgrades to the wet area, expansion of the cooler and cutting areas, and new equipment.

“Manitoba’s pork producers have faced a number of challenges over the last few years, but Minister (Gerry) Ritz and his government have not wavered in their support,” said Manitoba Pork chair Kyle Kynoch. “Likewise, HyLife has continued to demonstrate its commitment to Neepawa and to building the best plant it can for the long term.”

Meanwhile, the Manitoba Cattle Enhancement Council, the major shareholder in the Keystone Processors project is vowing to press ahead despite the loss in federal backing.

“I’d call it a delay but I’m certainly seeing a good possibility our project will go ahead,” said David Wiens, an MCEC director.

“I’m not sure why or how this thing came off the rails,” said Wiens, a southeastern Manitoba dairy farmer and chair of Dairy Farmers of Mani toba. “It comes as a great surprise and disappointment.”

BSE LEGACY

The MCEC was formed by the provincial government in the wake of the BSE crisis five years ago. It is financed through a $2-per-head voluntary checkoff on cattle sold in the province, which is then matched by the provincial government. MCEC teamed up with the producer-owned Natural Prairie Beef Inc. in 2008 to create Keystone Processors Ltd.

MCEC purchased a mothballed hog slaughter plant in St. Boniface on behalf of Keystone with plans to recommission it and seek federal certification so products could be exported outside of the province.

Until last week, Wiens said the project appeared to be on target for a March 2012 launch. The plant had ceased operating and preliminary work to begin construction was underway. “Things were falling into place quite nicely,” he said.

Wiens said project managers complied with all of the numerous requests from federal officials for changes to its business plan, including lining up $18.2 million in private-sector lender support. They hired the Astana Group, a management team with international experience and an established track record in refurbishing slaughter plants and turning them into profitable operations. Market research had identified a market niche for a plant of 250-to 300-head capacity in the specialty meat export business, specifically with halal and kosher products.

“We certainly felt we had met all the requirements,” he said.

Wiens said the project’s business plan was deemed viable by a national bank that agreed to provide financing. That lender has since indicated it will continue to support the project, provided alternative financing can be found to replace the federal withdrawal, he said.

Wiens said the number of producers withdrawing their checkoff funds has also declined in recent months, which indicates to him producers are onside. As of this year, nearly 80 per cent of producers were opting to leave their funds invested in MCEC, which is up from 63 per cent last year.

PULLING OUT

However, Manitoba Beef Producers called on the province last week to end the $2 voluntary checkoff producers pay into the MCEC.

“MCEC has collected millions of dollars from Manitoba’s beef producers,” said MBP president Major Jay Fox. “To date those funds have not expanded Manitoba’s slaughter facilities and have not benefited Manitoba’s beef producers. We are disappointed that this effort to expand beef processing in Manitoba has not been successful and it is unfortunate that federal funds are moving outside of the beef industry. However, it is time to stop throwing good money after bad and end this tax on farmers.”

The MCEC 2010 financial statements show it collected about $1.32 million in producer levies that year, $415,000 of which was returned by producer request. The province contributed $903,000. It has $6.2 million in total assets.

Stan Struthers, Manitoba’s minister of agriculture, food and rural initiatives, said while he applauds the federal support for HyLife, he objects to how that support came about.

“Don’t do it at the expense of another important agricultural sector in Manitoba,” Struthers said, noting there had been no indication that the SIP program officials had outstanding concerns with the Keystone business plan.

“In one fell swoop the Conservative government has not only put this project in peril, these events could block further progress towards increasing slaughter capacity,” Struthers said. “I think they simply have a majority government and they are going to do what they want.”

Ritz said it is Struthers who is playing politics.

“It’s unfortunate that Minister Struthers is already engaging in election rhetoric at the cost of providing the facts to his producers and processors,” he said in an emailed statement.

“Since the conditional approval of funding for Keystone in October 2009, our department has conducted 10 separate reviews of its application,” Ritz said.

“We had expressed numerous concerns surrounding the application …, and it was made clear that a strong, viable business plan was necessary in order to ensure an investment of federal taxpayers’ dollars.

“After numerous deadline extensions spanning nearly two years, AAFC notified both the MCEC and Minister Struthers that its business plan had not met the appropriate criteria to ensure the responsible use of a taxpayers’ dollars,” Ritz said.

Federal officials associated with the SIP program said they could not be specific about how Keystone’s business plan failed to meet the program criteria saying it was “personal business information.”

Wiens said although the ongoing delays are frustrating, he still believes developing federally inspected beef-processing capacity can provide tangible benefits to Manitoba cattle producers through savings of up to $100 per animal reduced transportation costs, providing a local outlet for beef cattle if the border closes and through the benefits that accrue from being shareholders.

One of Keystone’s founders and its former president Kelly Penner said he’s no longer up to date on the company’s internal workings so can’t comment on the state of its business plan. But he believes the need for this project has never been greater.

“I’d like to see the border close tomorrow and wake everybody up,” Penner said. laura@fbcpublishing.com

———

“Itcomesasa greatsurpriseand disappointment.”

– DAVID WI ENS

The post Federal Funds Diverted From Beef To Hogs appeared first on Manitoba Co-operator.

The association that is the voice of Manitoba beef producers, and which is supported by its own voluntary checkoff, wants an end to the $2-per-head voluntary checkoff that supports the council. Presumably, that would also mean the end to the province’s matching funds.

The association says it’s time to stop throwing good money after bad. It points out that in the five years since the MCEC was formed to expand the province’s beef-slaughter capacity in the wake of the bovine spongiform encephalopathy crisis, nothing has developed. It says hard-pressed producers can use that money more effectively on their ranches.

The provincial Conservatives were quick to issue a release accusing the NDP government of bungling Manitoba’s chances of developing federally inspected slaughter in the province, saying Manitoba cattle producers have been paying into the MCEC fund for nothing.

In justifying its decision to transfer the federal financing support to the HyLife hog processor in Neepawa, federal officials cited problems with Keystone’s business plan and its failure to demonstrate it could meet the program criteria before the March 12, 2012 deadline. Officials refused to articulate the specifics, citing confidentiality.

Meanwhile, both the province and officials with the MCEC, which is the major shareholder in Keystone, say all changes requested by the federal Slaughter Improvement Program managers were made and the project was on track to meet its deadlines.

Perhaps there were unresolved issues with the Keystone project. That’s to be expected. It’s doing something that has never been done before in this province, so it’s in uncharted territory. But we suspect some of the posturing in the wake of this decision, and perhaps the decision itself, has more to do with an upcoming provincial election than incompetence of the project’s managers.

Manitoba has not had federally inspected beef-slaughter capacity since Burns Meats Ltd. closed in Brandon in 1990. That’s more than two decades. Re-establishing that, while the industry is going through the kinds of restructuring it has undergone in the past five years, is no small challenge.

Progress has been made – the hiring of a management team with international experience and a proven track record, development of a marketing plan and a commitment of private-lender financing to augment the $7.5-million contribution from the province and producers through MCEC. There was also $10 million in loans from the federal government, but as of last week is no longer available.

Somehow, the $35-million project needs to replace those funds.

The Keystone managers aren’t trying to compete with the large integrated packers that now dominate Canada’s livestock-processing sector and which fill Canada’s major grocery meat counters with meat products. They are aiming for a smaller plant that processes 250 to 300 animals a day and which serves specialized markets, such as kosher and halal, which are underserviced now.

Depending on the year, between 63 per cent and 80 per cent of producers marketing cattle have opted to leave their checkoff funds with the council, which suggests that at the grassroots level, producers are interested in seeing a local plant come to fruition.

Significant dollars have already been invested into this project, notably the $2.4 million the MCEC contributed towards purchasing the St. Boniface plant.

So at what point do people say “enough is enough” and cash in their chips?

For producers, it really comes down to two questions. The first is whether they believe having a plant that meets export standards brings value to the local beef sector.

It’s hard to argue with those who say it has been eight long, hard years in the beef business in Manitoba, and with this year’s flooding, there is no end in sight. Many ranchers could undoubtedly use some extra cash.

But the cost of this experiment to a producer selling 100 animals per year is $200. If and when this plant is launched, producers marketing beef to it will save $100 per animal in transportation costs alone. Halal and kosher meat products sell at a premium. And a local processor could be a useful buffer if disease or trade issues shut down usual export channels, as was the case in 2003.

Secondly, do producers believe this can happen? Because as every successful business knows, believing in the plan is as important as having a good one.

Granted, it’s not our money on the line, but we think it’s worthwhile for producers to hold out for a little longer. Why?

It would be nice to see the little guys win, just once. laura@fbcpublishing.com

The post Time To Pack It In? appeared first on Manitoba Co-operator.

in Manitoba during the week ended July 18, with light volumes being reported in both Brandon and Winnipeg.

Although volumes were light, prices were holding firm, with even some higher prices seen in the slaughter market.

But even though there was little activity at auction marts in the province, there was still plenty of cattle-related news.

The Manitoba Beef Producers has cal led on the provincial government to eliminate the Manitoba Cattle Enhancement Council (MCEC). Under the MCEC, $2 per head from every cattle cheque goes to the MCEC.

“The MCEC checkoff has been in place for about five years, and it has not enhanced Manitoba’s slaughter capabilities. We feel it would be best to leave that money in the hands of producers at this time,” said Cam Dahl, general manager of the Manitoba Beef Producers (MBP).

In a separate press release, Major Jay Fox, president of MBP, said beef producers in Manitoba are facing some of the most difficult times in recent memory, with ongoing floods and excessive moisture, while lingering market impacts of the BSE crisis have put many beef families on the financial edge. He went on to say that money collected by the MCEC would be put to better use if it stayed in farmers’ pockets.

Prompting the association was a recent announcement from the federal government, as the Slaughter Improvement Program gave $10 million to the HyLife Foods facility in Neepawa last week.

“The money that was announced for the Neepawa plant was originally planned for the MCEC, and this was an allocation of those funds,” Dahl said. “The federal government has indicated from Agriculture Minister (Gerry) Ritz that the MCEC did not meet the criteria of this program.”

The Slaughter Improvement Program consists of a total $60 million that the federal government is using to support sound business plans aimed at reducing costs, increasing revenues and improving operations of meat-packing and -processing operations in Canada.

Dahl said he was not aware of any further announcements from the Slaughter Improvement Program that would benefit Manitoba’s beef sector.

Another issue facing cattle producers throughout Manitoba is the recovery from flooding, something that Dahl said will be long lasting. However, he said the MBPA was pleased with measures the provincial government has taken to help farmers.

“There is a lot of hurt across the province, but we were very pleased with the package that the province announced back on June 30, as it addressed all parts of the industry,” he said. “It addressed feed shortage, it addressed the need for restoring flooded-out pasture and hay/forage land, and it addressed the transportation needs. That package is quite comprehensive.”

Dahl added that some of the application forms for some of the programs were already online, and he expected some of the funds could be flowing fairly soon.

“We will be watching closely to make sure that the programs are adequate, and they are delivered equitably, as the hurt is widespread across the province,” he said.

Dahl said at the forefront of many producers’ minds right now is the hay crop, with many areas seeing alfalfa and grass hay under water, or too wet to cut.

FROM THE AUCTION FLOORS:

(NoteallpricesinCdn$per cwt.Thesepricesalsogenerally representthetopone-third ofsalesreportedbythe auctionyard.)

Ashern Livestock Mart: Closed for summer. Sales to resume in August.

Gladstone Auction Mart: Prices unavailable from June 21 sale. Final sale in mid- July. Sales to resume in mid- August.

Grunthal Livestock Auction Mart :Summer schedule in place. No sales until August.

Heartland Livestock Services, Brandon:A total of 205 cattle were on offer in Brandon at the July 12 sale.

In the slaughter market, D1-D2 cows $65-$72; D3 cows $60-$65; feeder cows $54-$60, and good bulls $82- $88.

Feeder steers weighing 800-900 lbs. ranged from $108-$114.50; 700-800 lbs. $112-$124; 600-700 lbs. $120-$131.75; 500-600 lbs. $120-$132, and 400-500 lbs. $125-$138.50

Feeder heifers weighing 700-800 lbs. brought $100- $108; 600-700 lbs. $110- $120.75; 500-600 lbs. $115- $122, and 400-500 lbs. $120- $127.50.

Heartland Livestock Services, Virden:No sale held during the week. Weekly auctions to resume July 20.

Ste. Rose Auction Mart Ltd.:Sales finished for summer. Auctions to resume in fall.

Taylor Auctions, Melita: Sales concluded for summer. Auctions to resume August 18.

Killarney Auction Mart: No auction this week. Sales to resume in August.

Winnipeg Livestock Sales: There were about 257 cattle sold at the sale held on July 15.

In the slaughter market, age-verified/young cows ranged from $55-$70; D1 and D2 cows $63-$67; D3 cows $57-$63; shelly cows $49-$57 and mature bulls $80-$87.

Feeder prices were not available from the sale.

The post Flood Recovery Will Be Slow appeared first on Manitoba Co-operator.