Saskatchewan’s only major chicken processing plant has been bought by an Alberta chicken co-operative, which plans to expand the facility’s output.
And most Saskatchewan poultry producers are joining Edmonton-based Lilydale Co-op to try to gain the benefits of value-added processing.
The developments are a much different approach from that planned last January when Saskatchewan producers announced they wanted to buy the Sunnyland Poultry Products plant at Wynyard, Sask., said David Keet, a Saskatoon-area broiler producer and a director of the Chicken Farmers of Canada.
Back then, the province’s poultry producers had a new national agreement in hand, allowing them to double production over the next four years.
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They also wanted the chance to profit from vertical integration, so they were organizing a new generation co-op to buy the plant, which was owned by 11 shareholders, including several fast food franchise holders.
Producers who joined and invested in the co-op would get the right to deliver birds to the Wynyard plant.
“We sort of had a deal but we couldn’t tie anything up until we had the co-op ready to go. We had to back off, set up the co-op and then start discussions again, but that is when Lilydale expressed an interest in it,” said Keet, who headed the effort to form the co-op.
The Saskatchewan producers decided it would be best not to compete with a fellow co-op, so they abandoned the new generation co-op idea and struck a deal to join Lilydale.
“Everyone has agreed, pretty well, to join Lilydale co-op. Part of the deal will be that we will have to make an investment in the co-op to become equal partners to Alberta producers,” Keet said.
Saskatchewan broiler, turkey and breeder producers will all be involved, he said.
The plan is that production from the Wynyard plant will expand in step with Saskatchewan’s chicken production.
Lilydale officials were unavailable for comment, but Keet said the plant processed 250,000 birds a week last year – meeting a little more than half of Saskatchewan’s demand.
“We weren’t producing what we were consuming … We were at 62 percent last year. Everybody has to share that responsibility – the processor, the producers – because we just weren’t that aggressive in the past.”
Keet expects that in four years the plant will process 500,000 birds a week.
Meanwhile, the task of allocating the new production quota is ongoing.
One third of the new production will go to those new to the industry, while the rest is divided among existing producers.
And the industry in the province will have to modernize and become more quality conscious.
“We have to increase farm size. We have to become more efficient and look at what makes sense as far as transportation and the location of farms. We don’t want to build new barns 500 miles away from the plant,” Keet said.
“We are excited about the future here. It is nice to see it happen.”
