Organizers of some of the packing plants proposed for the Prairies have been forced to change their share structure to accept partial payment of shares in cows.
Dennis Duncan of the Canada Farm Direct packing initiative said few farmers have been able to come up with cash to pay for the shares in the producer-owned packing plant, but they can come up with some money and a promise of cull or fat cattle in the future.
“We’re finding producers are just so short of cash they can’t participate,” Duncan said.
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“They’re having a hard time paying their power bills, but they’ve got a tonne of cull cows. It’s a really big problem and it’s growing every week.”
Under the amended share offering, producers can put a 10 percent down payment on shares that cost either $10,000 or $100,000 and contract the rest with cull or fat cows.
The group hopes to buy one of the Prairies’ four major packing plants. So far it has raised about $8 million.
Brent Gitzel of Ranchers Own Meat Processors said it too has started offering cattle producers the option of paying for part of their $5,000 shares in the delivery of animals.
“It’s just another option for producers to use,” said Gitzel, a director in the company that hopes to build a plant near Edmonton.
Producers have the option of paying $500 up front and then having the rest deducted from cattle deliveries.
The Ranchers Own directors began another membership drive Oct. 16 to raise money for the federally inspected plant. Gitzel said the company has between 300 and 500 members and is aiming for 6,000 members before the Dec. 15 membership cutoff.
It hopes to start construction early in the new year.
Neil Peacock, chair of the Tender Beef Co-op, said his company is taking the same approach.
“It makes a total difference to them because some of them can’t even borrow money from the bank to buy shares because they’re so strapped,” said Peacock, whose company plans to build a plant near Dawson Creek B.C.
Shares cost $60 each and producers must pay half of it in cash. The rest is paid when animals are delivered.
“Right now in the farming community 60 bucks is a big deal,” he said.
Cattle producers own about 80 percent of the shares in the multi-species plant. Elk, bison, sheep and goat producers own the rest.
Construction is expected to begin at the end of November and the plant should open by spring.
