It's Just The Beginning

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Jun 1, 2004
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I took this from Ranchers Net - thought some might be interested here:

Livestock farmers in Ontario, tired of waiting for a resolution to the BSE crisis have opened Gencor Foods Inc. - an innovative, producer owned and operated C$12-million meat processing plant in Kitchener, according to a release from the group.

The facility is one of the first of its kind in Canada, and may soon become a template for other farmer owned and operated plants, Brian O'Connor, General Manager, Gencor, said.

Gencor's Board of Directors, comprised of 12 dairy farmers - made the decision to enter a segment of the industry known for its tight profit margins in December, 2003.

The integrated approach, allowing farmers to quickly react to market issues and trends, has attracted attention right across Canada, with farmers calling from Alberta, Saskatchewan, Manitoba, Quebec and the Maritimes.

"They want to know how we did it, how we structured it," he noted.

Miller Thomson LLP partner Frank Brewster, lawyer to Gencor, The Genetic Corporation for the past 10 years, worked with the company's Board of Directors to gain key industry knowledge from Fergus-based, meat packing and processing consultants Mallot Creek Group Inc. He assisted Gencor Foods Inc. with its agreement of purchase and sale for the facility - a former meat packing plant - and helped with the financing.

Funds contributed include: C$5.5 million from the federal government's Farm Credit Corporation; $2 million from the federal government's CanAdapt program; and a $5 million operational line from the Bank of Montreal. Financial support for this project was also provided by the Government of Ontario through the Ontario Ministry of Agriculture and Food under the Mature Animal Abattoir Fund.

"The Board of Directors of Gencor are a group of farmers greatly affected by the border closing. They decided to apply long-term solutions to the BSE crisis," said Brewster.

Cattle farmers have seen prices plummet at auction barns from 60 to 18 cents per pound for 'cull' or older, cows. That's due to a closed Canadian border following the May, 2003 diagnosis of bovine spongiform encephalopathy (BSE) in a single Alberta breeder cow.

Gencor Foods pays producers a fair price based on the value of the meat that they sell. Currently that price is 32 cents per pound.

In the past, 70% of dairy farmers' cull cows were processed in the United States.

"That part of processing is completely gone," explained O'Connor. This led farmers to a venture that would have seemed unthinkable just one year ago, he noted. However, key initiatives from the federal government including a decision to suspend supplemental meat imports, "gave our group the opportunity to get into processing."

Processing up to 65,000 pounds of meat per day, a typical Gencor Foods Inc. order may range from 10 cases to 40 skids. Clients include wholesalers based in Alberta, Quebec and southern Ontario. However, Gencor has set his sights on supplying to industry giants Schneider Foods and Maple Leaf Foods.

Gencor Foods Inc. employs 65 people and operates under Canadian Food Inspection Association standards. A $2 million expansion to the facility is slated for a February, 2005 completion.
This is my response to the opening subject:

Now we just need a few more across the country - and we can go on our own way.

I have registered with these folks - they buy direct - NOT from the sale barn. After hearing one of their folks speak at a cattlemans meeting, I understand they plan to build a reliable group of shippers who can send at least a few on a regular basis. They call you a couple of days in advance and let you know they are ready to take your animals. You take your animals to a central gathering point and they are then shipped by truck to the plant.

Lots of beef cattle go here - as well as dairy. In fact I have three fat Herefords to go - all just under 5 years of age - but open - so they leave in a couple of weeks.

NO DOWNERS will be accepted at all.

Contact info is below if you want to read it - including some pricing.

Tuesday, October 19, 2004.

Gencor Foods Inc.
305 Arnold St.
Kitchener, ON
N2H 6G1
Fax: 519-744-9206
[email protected]

Gencor Foods Cattle Settlement Summary

Current Period - Week of October 3 - 8, 2004

Average Hot Dressed Weight Average Price - 664.6 lbs 63.5¢/lb

Range High: 73.8¢/lb Low: 24.6¢/lb

Average Settlement per Animal - $422.02
I think the problem in Manitoba is apathy and a lack of money. Ranchers Choice Beef Co-op is supposed to be buying a plant from the States and moving it up to Dauphin, Manitoba. However, I've heard that alot of money that was promised by producers just hasn't shown up. My problem with Rancher's Choivce is that you are supposed to supply them with one cull cow per year, for every share you buy. Having just set up on the new farm in 2001, most of my cows are fairly young and still producing great calves and I think that after I take what I want for beef and hamburger for me and my extended family, I'd be hard pressed to guarantee even one cull cow per year.
The operation in Ontario does not expect a producer to guarantee delivery of any animals. However they do promise to remain competitve and hope to build a loyal following. As far as I am concerned, as long as it is run by a Canuck group and not sold to multi-nationals - as long as they are at least competitive - I will certainly support them.

There are already expansion plans in the works along with additional holding barns planned.

When you register with Gencor, you are requested to estimate your output - but it in no way obligates you to send in a specific number of animals.

Do not know how many animals you have, but if the herd is 25 in size or better - well, I would be surprized if you did not cull out at least one animal per year. We always do a minimum of 8 - 10 % and in some years we go a bit harder. That is on top of what we use to feed the family and a couple of neighbours who are in a bit more trouble than we are.

In your part of the world - as I understand it - if you do not use your hook and provide a cull, you can release that hook to another producer. You might want to reconsider.

Take care,

I guess like alot of other producers, I don't want to risk my money when times are bad. My wife is currently back in school, so the cattle were supposed to be my 2nd source of income. That really hasn't panned out as well as I had hoped. LOL. It seems that every dollar I get is already earmarked for frivolous stuff like food and shelter and feed to get my cattle through the winter. We're trying to make it through this schooling and BSE thing without accumulating any more debt than necessary. My oldest son is also in university this year and although he is fairly independent, he needs the odd transfusion of cash as well.
You are right that we usually send at least one or two older cows for hamburger every year but that stuff is an easy sell to city people when you explain that it is grass finished on land that hasn't had any chemicals applied on it in over 15 years. Its about as close to organic as they come. Yet in some ways, I feel obligated to help get that plant up and running. On the other hand, if the Japanese move that $40 million plant in like they are talking about, then this Ranchers Choice plant probably won't work.
Another piece of info I took from Sash on Ranchers Net - pay close attention to the last paragraph


Cdn Beef Officials Pleased With Asian Meetings

Winnipeg, MB, Oct 19, 2004 (Resource News International via COMTEX) -- Canada is moving closer towards resuming beef trade with Asian markets, said senior Canadian industry representatives who accompanied Agriculture Minister, Andy Mitchell, on his recent trip to the region. Indications that Japan was interested in coming up with one deal for North American beef, as opposed to two separate deals, was of particular importance.

During the week of Oct. 11-15 The Canadian delegation met with government and industry officials in China, Japan, Korea and Hong Kong in an attempt move along efforts to reestablish the beef trade which was put on hold when BSE was discovered in a Canadian cow in May, 2003.

Discussions primarily revolved around the measures Canada has in place to address the BSE situation, while advancing the case to increase market access for Canadian products.

Stan Eby, president of the Canadian Cattlemen's Association (CCA), was pleased with the reception the Canadian delegation received during it's trip. He pointed out that China signed protocols which should allow for the reinstatement of Canadian bovine semen and embryo imports.

Ted Haney, president of the Canada Beef Export Federation, felt China was now set to begin substantive negotiations on granting access to Canadian beef.

Progress was also made in Japan. "Japan is quite anxious to see trade resume," said Eby. He said the country indicated it would like to see one deal for North America, rather than separate agreements with the US and Canada. Japan also showed a great deal of interest in Canada's mandatory identification program.

South Korea is closely watching both Japan and the US and have noticed that the US is asking for more access in Korea than it currently grants to Canada, said Haney. The Korean position was that the US should either scale down it's request and only ask for the access it already grants to Canada, or increase the access for Canadian beef into the US, said Haney.

Haney also visited Indonesia and Taiwan, prior to meeting up with the Ag Minister. Indonesia has already opened it's borders to US beef, but remains closed to Canada. He thought the discussions in Indonesia were positive and helped establish links between the US and Canada when it comes to animal health.

The reestablishment of trade with Indonesia would also help open the door to nearby Malaysia, Thailand and Vietnam, said Haney.

Taiwan is also close to opening it's borders to Canadian beef, and would like to do so on a similar time frame with the US, said Haney. He thought an information campaign was needed now to help deliver information about the Canadian product and explain the safety.

Expanding Canadian beef exports is important as the country works to increase it's slaughter capacity and reduce it's dependence on the US, said Haney.

Canadian beef exports for the first six months of 2004 came in at roughly 260,000 metric tons, said Haney, which was relatively on par with the pre-BSE levels. Of the exports, 75% moved to the US, only slightly above the 73% seen during the first six months of 2002. The Canadian industry is working to increase total annual exports from 520,000 metric tons to 1 million tons by 2007, said Haney. At the same time, the goal is to have non-US destinations account for 50% of the exports, as opposed to current levels of roughly 25%.
"Canadian beef exports for the first six months of 2004 came in at roughly 260,000 metric tons, said Haney, which was relatively on par with the pre-BSE levels. Of the exports, 75% moved to the US, only slightly above the 73% seen during the first six months of 2002."

Bez, if this part is true, most Americans are going to say that it appears to be problem solved for you. This isn't a very accurate representation of your plight or very good publicity without mention of the backlog of live cattle, is it?

Figured someone would notice that.

it's not as rosy as some would like to believe. The only positive I can see is that we are working to reduce our dependency upon the U.S. of A.

Stay well,

We have 11 Holstein cull cows ready to go as soon as we get the call. Unfortunate that all the gov't and Humane Society inspectors are so eager to slow them down. Also they're having a hard time finding enough people who know how to do the job with the new regs on removing SRMs.

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