Local initiative gaining support

Saskatchewan government throws support behind the Beef Initiative Group

By John Barlow
Editor

A made-in-Alberta initiative to address the mad cow crisis is getting overwhelming support in Saskatchewan while the local government remains cool.
Last week the Saskatchewan provincial government announced it will back construction of a producer-owned beef processing plant in the prairie province — a project spearheaded by the Beef Initiative Group (BIG).
BIG is an organization founded by local ranchers including vice-presidents Grant Hirsche of High River, Doug Fraser of Okotoks and president Cam Ostercamp of Blackie.
“This is huge news for us,” said Ostercamp. “The Saskatchewan government recognizes their problems will continue if and when the border opens.”
Last week representatives from BIG toured Manitoba and Saskatchewan after a trip to Ottawa to lobby for federal support of the project.
Saskatchewan Agriculture Minister Mark Wartman attended a BIG meeting in Tisdale, Saskatchewan last week and he was convinced to pledge his support for the initiative.
“These guys are not whistling in the dark,” said Wartman during an interview on Friday. “They have done their research. They have a good idea.
“We are seeing some producers have hope and if we can find a long-term solution there will be a lot of happy people in this industry.”
The BIG concept is to build a slaughter plant with a capacity to process 1,200 to 1,500 head per day.
The plant will be for cull cattle, cattle over 30 months old, and be financed through government bridge funding that would be repaid through a $3 levy applied to every producer-owned animal. The levy would have a sunset clause so once the debt is repaid the levy will cease to exist and producers who have paid into the plant through the levy will become owners in the facility through shares.
Ostercamp said a lease operator will manage, market and operate the facility — it will not be operated by the producers.
One of the focal points of the proposed facility is that it be designed around BSE testing — all animals processed at the plant will be tested for BSE. In doing so it is hoped the plant can market its product to global markets such as Japan and China.
That is an idea that appeals to Wartman.
“I have seen what happens when we depend on one market,” said Wartman referring to the fact that close to 80 per cent of Canadian beef exports go to the United States.
The United States has closed its borders to live cattle imports from Canada since May, 2003 when one case of mad cow disease was discovered in Alberta.
There has been little movement regarding the opening of the border and the Canadian cattle industry has been crippled in the process.
Cattle prices were $1.10 per pound in May, 2003 before mad cow, but plummeted to as low as 37 cents per pound in July, 2003. Prices have rebounded somewhat to about 80 cents per pound.
Although the Saskatchewan government has agreed to support the project, it will not bankroll construction of the facility.
“We don’t have the treasury to fund it, but we will back the feasibility study,” confirmed Wartman.
Wartman said he saw the number of Saskatchewan ranchers putting down their $100 BIG membership fees in Tisdale and that convinced him that the government needed to be involved somehow.
Ostercamp said they will continue to lobby for federal bridge financing (an estimated $125 million) and proceed with the feasibility study which will address issues such as location.
“This study is crucial because this is a concept that is unique to North America,” explained Ostercamp. “This will be the cornerstone of an industry that is missing export potential for producers who surrender that to American-owned packing plants and we want to change that. We want to lay the foundation of a Canadian producer-owned packing industry.”
Ostercamp said he hoped the feasibility study would be complete in January, 2005.
Construction will depend on federal support of which Ostercamp is confident will come to fruition.
“It is politically sexy because it will demonstrate to taxpayers that the federal government is investing in long-term infrastructure with a solid payback plan in place,” said Ostercamp.
Should the feds commit to the project, supporters hope the facility’s approvals will be fast-tracked so construction can begin as soon as possible.
Although the BIG vision seems to be gathering steam in Saskatchewan and Manitoba, Ostercamp said he is disappointed the Alberta government has failed to jump on board.
Wartman said he believes the Alberta government remains hesitant due to its ties to American packing plants in High River (Cargill) and Tyson Foods (Brooks).
However, he said sooner or later, Ralph Klein’s Tories will see the light.
“There are some real challenges in Alberta because of foreign investment in their slaughter market,” said Wartman. “I hope the Alberta government realizes where their producers are. But I have a hunch (the Alberta government) will get involved. I hope (BIG) gets all the help they need.”