Manitoba cattle producers have cut through the red tape that briefly stalled their efforts to sell shares in a proposed slaughter plant for cull cattle.
Members of Rancher’s Choice Beef Co-op Ltd. had hoped to raise $3.5 million by the end of March, but the share offering was delayed while they worked to satisfy the requirements of the Manitoba Co-operatives Act.
Those wrinkles, which included making changes to the co-op’s articles of incorporation, have since been ironed out, and president David Reykdal said the group is now aiming to sell the shares by the end of May and open the plant this fall.
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“We’re optimistic this is going to go ahead and that the producers are going to step up to the plate,” said Reykdal, a cattle producer from Vogar, Man.
Co-op members want to convert the Best Brands hog slaughter plant in Winnipeg into a facility that slaughters and processes cull cows and bulls. The provincial government has pledged $2.5 million, provided producers support the co-op through the share offering.
The project is expected to cost $11-$12 million, including buying the plant, converting to cattle slaughter and covering early operating costs. The share offering and the provincial commitment would help the co-op raise the rest of the money through financing.
Shares cost $100 each and would allow the delivery of a single animal per year to the plant. Reykdal said the order in which producers deliver to the plant will be influenced by the order in which they buy shares.
“Priority will be given in the order the cheques are received.”
The Winnipeg plant is expected to handle 250 head of cattle per day once it is in full operation.
Because Manitoba lacks cattle slaughter capacity, producers are forced to ship cattle to other provinces or the United States.
The BSE crisis caused a backlog of cull cattle in Manitoba as producers held onto animals that typically would have gone to market last fall or during the winter.
Many cows were bred and now have calves, but producers won’t want to keep them forever.
“A lot of them will come to the market this fall,” Reykdal said.
“When they come to market, we’ll need a place to slaughter them and that’s why we need this plant.”
Project manager Frank Sylvester said the plant would produce boneless beef that could be sold to customers for further processing into products like hamburger and sausage. Once it is certain that the plant will go ahead, the co-op can begin working on prospective customers in southern Ontario, Manitoba and further west.
“There are certainly enough cattle here to keep the plant going, especially with the structure that the co-operative has set up,” Sylvester said.
The plant might also have to buy cattle from neighbouring provinces, he added.
Jim Oliver, a cattle producer near Lakeland, Man., who owns shares in the proposed venture, is among those hoping the project goes ahead.
“I don’t see why they shouldn’t be able to make a go of it,” he said.
“We’re supporting it as much as we can.”
