Thursday November 27, 2014

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Man. beef processor moves on federal upgrade

If Calvin Vaags has his way, Manitoba will have a federally inspected ruminant slaughter plant capable of handling 1,000 head per week up and running within a year.

After three years of preparation, work has started on a $13 million expansion at Plains Processors, a small processing plant with a capacity of 80 head per week located between Carman and Elm Creek, purchased by Vaags in 2008.

The revamped facility is expected to employ 80 workers and provide export-certified processing to the province's cattle industry at a rate of up to 1,000 head per week -- as well as to producers of other ruminant species.

"We haven't done sheep on a large scale yet, but if I look into the future, I see the sheep industry in Manitoba really growing and again, no place for them to process locally and they have a huge freight bill going east," Vaags said in an interview as his investors and elected officials from three levels of government gathered at the site Saturday to wish him well.

Vaags, who operates a grain farm and cattle feedlot near Oakbank, entered the retail beef business when he opened the Carver's Knife outlet in Winnipeg in 2004. He later expanded to a second retail outlet and started supplying Manitoba beef by wholesale.

Vaags acknowledged his isn't the first attempt to bring federally inspected slaughter capacity back to the province in the wake of the 2003 BSE crisis, which disrupted export access for live cattle for years.

Despite provincial government backing, a producer co-op was unsuccessful in starting a cow slaughter facility near Dauphin. Another proposal, also backed by the province's Manitoba Cattle Enhancement Council (MCEC), was to rehabilitate a mothballed hog slaughter facility in Winnipeg. It has been in limbo since the federal government withdrew $10 million it promised the project in 2009.

The project is an expansion of plant that's been in operation since the early 1950s at a site that is centrally located in a rural area "where the community is welcoming to it," Vaags said.

As well, nearly half of the company's financial resources are coming from private investors in addition to federal and provincial support and commercial borrowings, he said. "There is actually five different financial components putting this together," he said.

While Candace Bergen, MP for Portage-Lisgar, and Manitoba's agriculture minister Ron Kostyshyn attended the pseudo-sod turning, neither disclosed the level of support their governments are offering. Vaags said the final details are still being ironed out, but commitments have been made.

The federal government announced in March 2011 it would commit up to $2.8 million in repayable contributions to the project through the Slaughter Improvement Program. However, that funding would have required the project to be completed by the end of March 2012, when the three-year, $50 million SIP ended.

MCEC gave a conditional approval of $920,000 to the project in 2011. Kostyshyn on Saturday confirmed talks between Vaags and the province are "in the final stages."

Manitoba Beef Producers president Ray Armbruster said his organization welcomes the addition. "We like this initiative with some private initiative and investment, and we support it going forward in that way," he said.

The scale of the facility won't be attractive to a 20,000-head feedlot, he said, but it would give cow-calf producers or small-lot finishers another option for adding value to their cattle.

-- Laura Rance is editor of the Manitoba Co-operator at Carman, Man. A longer version of this article will appear in the Jan. 31 issue of the Co-operator.


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