ESTEVAN, Sask. – An international co-operative is moving forward with plans to build a beef packing plant.
About half the money needed to produce a prospectus for Northern Plains Premium Beef Co-operative has been raised, said interim director Al Manshreck of Deloraine, Man.
A group of cattle producers from Minnesota, Montana, the Dakotas and Manitoba want to offer shares in the plant by Jan. 1, he said. They also want Saskatchewan producers on board.
The group needs $600,000 for the prospectus, a report containing details of the undertaking, and has received half through various North Dakota industries and the state’s Agricultural Product Utilization Committee.
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The co-operative is now asking producers to contribute $1 per head to help raise the remaining 50 percent.
“If the shares go on sale Jan. 1 and sell out, it will take 15 months to build,” Manshreck said.
Shares in the $35-million project will likely cost $50 each, and give the purchaser delivery rights.
Serve U.S. market
The plant would be expected to handle 300,000 head annually and service premium beef markets in North America, primarily in the United States, Manshreck said.
Three large companies control about 80 percent of the product now, Manshreck said, and wholesalers are not getting the product they want to sell.
“They move what they have and maybe don’t look real close at the product that is laid on the consumer’s table,” he said.
In the U.S., packers pay one price for carcasses graded yield one through yield three, despite the fact that yield one is a better carcass, Manshreck said.
“We don’t have to compete head to head with IBP or Cargill or ConAgra,” he said. “If we’re paid a premium then we’ve got a way to market and make money. It’s a goal that’s worth going after.”
There are about 3.8 million cattle in the four states and two provinces involved.
Manshreck said the plant will likely be built where the most shares are sold, but even if it is in North Dakota that means less shipping costs for producers like him.
Duane Filson, a Woodrow, Sask. producer, said the project sounds good, but he’s cautious.
“It’s exactly the kind of thing that I personally thought would really fly,” said Filson, who chaired the former provincial Livestock Policy Advisory Council.
However, he said American producers might not be as enthusiastic if the plant is built in Canada. And he wonders if producers will contribute to the funding of the prospectus.
Filson said it’s important to “get the Saskatchewan cattle feeders and stock growers associations on side and make them understand there’s an opportunity for some returns.”
