Federated Cooperatives Ltd. announced this week that it intends to close feed mills in Melfort, Sask., and Brandon.
The decision was made after the company conducted a full review of its livestock feed business.
The Melfort plant will close in August , and the Brandon plant will cease operations in October, FCL said in a May 13 news release.
Twenty employees — 10 at each location — will be affected by the closures.
Employees will be offered other positions at local co-ops or will be offered severance packages based on years of service.
Ownership and management of another FCL feed mill in Edmonton will be transferred to the Wetaskiwin Co-op in September.
The Wetaskiwin Co-op, based at Wetaskiwin, Alta., is one of the only local co-ops on the Prairies already involved in feed manufacturing.
Based on that experience, the Country Junction Feeds division of the Wetaskiwin Co-op will take over FCL’s Edmonton facility.
After the closures and transfers are completed, FCL’s prairie network of livestock feed mills will be reduced to three, down from six currently.
FCL will continue to operate feed mills in Saskatoon, Calgary and Moosomin and will make “significant capital investments” in its remaining plants.
The company cited “unprecedented competitor consolidation and a changing market in the feed sector” as reasons for the moves.
Patrick Bergermann, FCL’s associate vice-president of ag and home, said changing economics in the prairie feed sector prompted FCL to review its operations.
“We’ve seen consolidation both on the producer side of that equation as farm sizes in the livestock sector have grown … and we’ve also seen consolidation on the manufacturing side,” Bergermann said.
“Through some of those moves (by competitors) on the manufacturing side over the last few years, we’ve seen rationalization of facilities … and in order to make sure we had comparative operations going forward, we needed to take a hard look at our facilities as well.”
FCL also announced plans to modernize its remaining feed manufacturing plants.
Among other things, the company will invest in new bagging systems at all three of its remaining plants, said Bergermann.
That move will allow the company to bag feed products more efficiently and will accommodate distribution of bagged FCL feed products to retail Co-ops in Western Canada.
“After contributing to the western Canadian feed business for decades, FCL is making these changes to help ensure that it can continue providing Co-op feed products and services in the long-term,” the company said.
“While we don’t make these decisions lightly, by consolidating manufacturing and taking measures to refocus our resources in the livestock sector, we’re better able to serve our local co-ops and their producer customers across Western Canada well into the future,” added Ron Healey, FCL’s vice-president of ag and consumer business.
FCL feed plants manufacture livestock feed for cattle, horses, sheep and poultry.