If all goes well, there could be a new player in the western Canadian beef packing industry within the next 18 months.
The Federation of Saskatchewan Indian Nations is teaming up with the city and rural municipality of Swift Current to build a federally inspected plant in the southwestern Saskatchewan community to help address a shortfall in Canadian slaughter capacity.
“We’re hoping we can have a business plan done some time in the winter so we can get this going,” said Bob Kayseas, director of economic and community development with FSIN.
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He said the 500 first nations farmers in the province, the majority of whom are cow-calf operators, have suffered through the past 14 months of beef market instability just like other ranchers.
The federation said it is “acutely aware” of the need to address the BSE crisis and spark rural revitalization. With that goal in mind, it launched the Southwest Beef Initiative in conjunction with producers and rural developers in the Swift Current area. Committee members are now arranging funding for a feasibility study.
Kayseas said FSIN chose Swift Current for a number of reasons, including its strategic location in a corner of the province that is home to 360,000 beef cattle, nearly one-third of Saskatchewan’s herd.
The city has the infrastructure to provide the plant with 4.5 million litres of water a day and is located along the Trans-Canada highway.
Those were all key factors but there was another intangible reason for picking that spot.
“We wanted to be some place where we were not going to be in other first nations’ territory,” said Kayseas.
Location is the only element of the project that has been finalized. The business plan will determine other factors such as the size and cost of the plant.
Established packers think building a new facility is a risky undertaking. As soon as the American border reopens, the need for additional slaughter capacity will be greatly reduced, said Brian Nilsson, co-owner of XL Foods in Moose Jaw, Sask.
But Kayseas said the FSIN has a plan to prevent that “sucking sound” of cattle rushing south of the border. They are confident they can get support from area ranchers tired of being dependent on U.S. slaughter capacity.
“Producers don’t want to be this vulnerable any more,” said Kayseas.
The plan is to generate producer ownership in the facility, ensuring a steady supply of animals.
Another major impediment facing the project is that the shortfall in western Canadian slaughter capacity is disappearing.
According the Canadian Cattlemen’s Association, packers in Western Canada can process up to 55,000 head of fed cattle each week. With 58,000 head competing for those spots, the current weekly gap amounts to 3,000 head.
Expansion plans by existing packers are expected to fill that gap this fall, with an additional 7,000 head per week of capacity slated to come on stream by spring 2005.
That’s a concern for Dave Dmytruk, administrator of the rural municipality of Swift Current, one of the partners in the proposed plant.
“When this project was initially started, these expansions weren’t anywhere in the wind, so it may certainly have a bearing.”
Kayseas agreed the rapidly changing packing environment is a potential stumbling block.
“We’re going to have to think about how we’re going to deal with that. That’s certainly a big issue.”
