Canadian cattle producers are trying to figure out what to do with their cull cows.
Some are proposing designated slaughter plants. To be successful in the long term, these operations will need a dynamic, inventive business plan.
Kevin Grier, livestock analyst with the George Morris Centre in Guelph, Ont., told the Saskatchewan Cattle Feeders Association last week that the cow kill business usually runs on razor thin margins.
It is clear the border closure due to BSE has created an opportunity, some would say necessity, to kill more cows in Canada. But Grier warned that although cows, because of their age, will likely be the last animals allowed for export, one day exports may resume.
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And when they do, the market will revert to what it was before May 20 when the economics weighed against expansion in cow kill. A lot of cheap cow meat was imported from Australia and New Zealand and American packers offered the best price for Canadian cows.
Grier said the pre-BSE market for cow packers was “vicious,” resulting in few entrepreneurs interested in the sector. It was a commodity business – hamburger – and the only way to differentiate the product was by price, he said.
That is not to say that a new cow packer couldn’t be successful, but it would need a sharp pencil and superior management.
But is there another way to increase cow slaughter and provide better returns to producers without investing heavily in a new plant?
I think it might be possible to have producers work closely with provincially inspected slaughter facilities and with institutional food services, restaurants and the public to increase cow slaughter with only modest investment.
Many provincial plants are busy, but it might be possible to put even more cattle through them with better co-ordination and perhaps minimal investment.
It would be critical to have a waiting market for the meat. Cattle producers could work with users such as government and crown corporation staff cafeterias, restaurants and even consumer buyer groups to get involved in a “buy local” campaign.
This could be a stopgap measure that would run until it becomes clear how long borders will be closed to cows. If it is confirmed that a ban will last years, then perhaps a dedicated plant would be warranted.
