Manitoba abattoirs have used only a small portion of the $2 million provincial government program announced last year to expand the province’s beef slaughter capacity.
The main aim of the fund was to support expansion of provincially inspected abattoirs, giving them the ability to slaughter up to 10,000 more cattle per year.
However, less than $250,000 had been drawn from the fund as of Feb. 17.
One of the deterrents, according to abattoir owners, is uncertainty about what would happen if they expanded and the U.S. border then reopened to Canadian cattle exports.
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The abundance of cattle available to Manitoba abattoirs likely would shrink under that scenario because major packers, such as those in Alberta, would become more aggressive buyers of Manitoba slaughter cattle.
“Most of the guys are a little bit leery of that,” said Jim Holmes, owner of Carman Meats Ltd. and president of the Manitoba Meat Processors Association.
The first phase of the fund was meant to provide abattoirs with $1 million for things such as operating expenses, feasibility studies, refrigeration space, training and beef consumption promotion.
About $248,000 was drawn from the first phase and while it helped promote beef consumption, no abattoir expansion has occurred.
“There’s only a couple out there who are seriously considering taking on the risk,” said Al Handford, a senior consultant with Manitoba Industry, Economic Development and Mines.
The second phase of the fund was a $1 million loan program to support abattoir expansion. It remains untouched because Manitoba meat processors decided the program offered them nothing beyond what they could already get from banks and other lending institutions.
“All of us can go to the bank and borrow money cheaper than we can get it from the government,” Holmes said.
Handford said the province remains open to ideas on how to use the remaining money to expand slaughter capacity.
One of the reasons the $2 million fund was established last year was that Manitoba cattle were not moving to Alberta packing plants as quickly as they had before BSE was discovered in Alberta last May.
That was a problem for Manitoba producers, because at least one of the BSE recovery programs announced last year required producers to send cattle to slaughter to qualify.
Business generally has been brisk for abattoirs in Manitoba and Saskatchewan over the past several months. There is no sign of that demand letting up, said Larry Erber, executive director of the Saskatchewan Meat Processors Association.
