A Manitoba Cattle Enhancement Council director remains confident that a proposed beef slaughter plant in Winnipeg will go forward, even though the federal government has pulled a $10 million loan and the Manitoba Beef Producers want to terminate a checkoff that supports the project.
David Wiens, a dairy farmer from Grunthal, Man., said it’s too late in the game to give up on Keystone Processors because nearly everything is in place to go ahead and build the slaughter plant.
“It does have a proven business model…. There’s a great management team in place,” said Wiens, Dairy Farmers of Manitoba chair. “We’ve got a major private bank that’s still committed to the tune of $18.2 million, even after the feds withdrew their support.”
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The Manitoba Cattle Enhancement Council (MCEC), a body formed in 2006 to boost beef processing in the province, announced in 2009 its plan to renovate a Maple Leaf Foods hog plant in St. Boniface and convert it to a beef slaughter plant.
The plant, called Keystone Processors, was expected to slaughter 250 to 500 head per day, with most of the beef going to the emerging market for kosher and halal meat.
Construction of the $35 million project was expected to begin this year, but those plans were set back when the federal government announced in July that it was backing away from Keystone Processors.
The federal government withdrew its support, said agriculture minister Gerry Ritz, because the Keystone Processors’ business plan “had not met the appropriate criteria to ensure the responsible use of taxpayers dollars.”
Following Ritz’s decision, Manitoba Beef Producers (MBP) issued a statement, asking the provincial government to eliminate the two-dollar checkoff on cattle sales that supports MCEC.
“Looking at the results of farmer’s dollars, it’s probably in the range of $6 million …. The question is, what have farmers received for that investment?” said Cam Dahl, MBP general manager
“It would be good if there was feder-ally regulated beef processing in Manitoba. But what we do believe is there has been enough of farmers money put into MCEC.”
The Beef Producers call to end the checkoff is a concern but Wiens said that decision might have been made during a moment of frustration.
“I do know the beef producers made those comments (but) I don’t know if it was in the heat of the moment.”
Wiens noted that many producers in Manitoba have supported the project over the last several years because they can opt out of the $2 levy.
Yet, MCEC collects 70 percent of all check-off dollars, which indicates that Manitoba farmers do want to sell their cattle to a federally inspected plant in the province, Wiens said.
In its summer newsletter, MCEC noted that other players back the project, including Keystone Agricultural Producers, Jerry Bouma, an Alberta based agri-food consultant and the Beef Industry Alliance, a coalition of producer organizations.
Wiens and the other MCEC directors remain optimistic that Keystone Processors can be viable, if they find a private investor to step forward and fill the $10 million void.
Keystone processors timeline
2006:Manitoba Cattle Enhancement Council (MCEC) formed to promote beef processing in the province
July 2008:MCEC buys hog plant in Winnipeg from Maple Leaf Foods
December 2008:Plant begins limited operations as Keystone Processors
November 2009:Federal and Manitoba governments commit $17.5 million to renovate the hog plant and convert it to a 250 to 500 head per day beef plant
March 2011:MCEC secures $18.2 million bank loan
July 2011:Federal government withdraws its $10 million loan, which was part of the Slaughter Improvement Program
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