B.C. packer study gets funding

KAMLOOPS, B.C. — The British Columbia beef industry is conducting a study into the viability of constructing a federally inspected packing plant.

Recently announced funds from the provincial agriculture ministry will allow for further consultation.

B.C. Agriculture Minister Lana Popham announced $450,000 in funding at the B.C. Cattlemen’s annual meeting in Smithers earlier this year.

“This money will allow us to continue further with the work we have been doing studying the viability of a federal packing plant in B.C.,” said Kevin Boon, general manager of the B.C. Cattlemen’s Association, which is co-ordinating the study.

“We see it as an opportunity to grow not only the cattle industry, but also the feeding industry and the grain industry in B.C.” he said.

Improving value for the B.C. industry is the aim of a plant, Boon said.

“The cattle industry in B.C. is really untapped for processing, he said.

“We can get a significantly higher return per whole carcass if we can process here and seek specialty markets both at home and in Asia, Europe and the Middle East for individual cuts, rather than exporting whole carcasses or selling all into the local market.”

The new funds are supporting an advisory committee with members from across the industry.

“We have told the committee we really want to be challenged on this,” he said.

“We have to have people at the table who will tell us when something won’t work. We don’t want a failure.”

The committee’s first job is to assess the three studies that have been completed so far and see if they should proceed further. A value chain analysis has determined a market for local beef.

“B.C. product can demand a premium, as can hormone- and antibiotic-free,” said Boon. “Animal welfare is important to customers, but not something they are willing to pay more for.”

“Next, we looked at the viability of a plant in the central location of Prince George versus shipping to Alberta,” Boon said.

He said the economies of transportation are such that a distance of up to 700 kilometres is realistic.

“This gives feedlots that are already in the province more opportunity to fatten,” he said. “It will also support the growth of a larger feeding industry likely in the Nechako area, and more feedgrains to be grown in the Peace region.”

A business plan has also been completed.

“We built a model using the information we had available. The target is a daily run of 200 head for a total of around 50,000 head a year,” Boon said.

That would equal about one-quarter of the 200,000 head in B.C.

“We’re not set on this as the best size for the plant,” Boon added. “The most critical factor going forward is whether we have supply.”

The new funds will also provide for more work on a governance model, with a next generation co-op being proposed, similar to that of Ontario company Progressive Pork Producers, which owns Conestoga Meat Packers.

“It’s really more of a co-operation than a co-op,” said Boon. “Depending on how we build the governance structure, there is the possibility for producers to be significant shareholders ….

“Producer buy-in is certainly a key to this project ….

“We need to have the commitment to deliver product to the plant on a year-round basis. If those who supply the plant are also investors, they have an opportunity to share in the profits.”

The focus will be on a B.C. brand, but the plant should be able to cater to smaller runs such as grass fed as well.

“With a 200 a day production, that is a nice size to cater to a specialty program.” said Boon.

“Total cost for a plant that size would be $25 to $27 million including equipment and it could provide 80 full-time jobs by 2020.”

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