SARTO, Man. – It aims to give beef producers more control over how their cattle are marketed. It’s a closed “new generation” co-operative.
But organizers want to make sure farmers don’t confuse Prairie Beef Alliance Co-operative Ltd. with Northern Plains Premium Beef, a co-op that has so far failed to attract enough investors.
Cattle producers in Manitoba and Saskatchewan hope to sell shares in a new co-op sometime in the new year, said James Bezan, a cattle producer at Gunton, Man.
The co-op is looking at several ways for producers to capture some of the profits from slaughtering cattle, whether it be building a new plant, buying an old one, custom killing or a joint venture.
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The co-op may be the main supplier for a retrofitted packing plant in Brandon. Bezan’s company, IBG Inc., has an option to lease the old Burns plant from new owners Carvell Trading Company Ltd., an Israeli consortium.
Carvell is spending $20 million on renovations to the plant and will build to IBG Inc.’s specifications.
Carvell has identified markets for kosher and halal meats, prepared according to Jewish and Muslim rituals.
But Bezan said his company is looking at a variety of markets to serve from the 600 head-per-day plant.
Because a plant that size can’t compete with major packers, it will need producers to be majority shareholders, employees to be minority shareholders to avoid union difficulties, and require other people from western Manitoba to invest.
IBG Inc. has done preliminary work on markets that currently aren’t served well by the high-volume commodity beef business.
“The key is to displace U.S. beef in non-traditional markets, some place where they don’t hold the hammer,” said Bezan.
Bezan said farmers are interested, but want more information.
“They’re still a little turned off from Northern Plains, so we’re fighting that stigma,” he said.
“They came up here, they talked big, flashy show, and didn’t deliver.”
Northern Plains never considered a joint venture, said Bezan, while the new co-op is searching for investors.
“We want to really take a hard look at using other peoples’ money to build the capital asset, rather than trying to raise that revenue from local sources, including producers,” Bezan told the Manitoba Cattle Producers Association annual meeting.
Northern Plains didn’t have solid markets nailed down, and was working on too many products, said Bezan.
Prairie Beef Alliance is working with consultant Peter Gall, who has been involved in meat packing and marketing his entire life.
Prairie Beef Alliance will need about 2,000 producer-investors. Bezan said shares will likely cost $50 each, with a minimum of 10.
He explained it costs about $50 per head to ship cattle to Alberta processors.
