Quebec’s cattle producers shut Colbex cull plant

Eastern Canada’s largest packing plant for cull cattle has stopped buying animals and halted its operations indefinitely.

The Federation des producteurs de bovins du Quebec (FPBQ) said Monday afternoon it has to postpone the implementation of its proposed fiscal recovery plan for the producer-owned Levinoff-Colbex beef plant at St-Cyrille-de-Wendover.

The group said it expects to meet shortly with the plant’s creditors.

The federation also said Monday it would do whatever was needed in the meantime to help ensure continued marketings of cull cattle through auction markets.

The FPBQ had been planning a provincewide series of meetings with cattle producers starting Wednesday, at which it expected to line up farmer commitments for a new co-operative ownership model for the plant.

However, it said Monday, the timeline to meet all the conditions required for that plan to succeed is now too tight for any option other than to put the plan on hold.

The federation said Monday it would continue to work with governments and stakeholders to assure the plant’s future financial stability and longer-term viability.

Its goal, it said, remains the preservation of cull slaughter capacity in Quebec and "obtaining a fair price" for producers’ slaughter cattle, hence the reason it bought a controlling stake in the plant in 2006.

However, the federation said Monday, market conditions in North America’s beef processing industry have further deteriorated since the beginning of 2012.

Furthermore, it said, the tightening in 2007 of federal regulations on abattoirs’ handling and disposal of specified risk materials (SRMs, the tissues known to harbour BSE in infected cattle) has added costs for Canadian beef packers that their U.S. competitors don’t have to pay.

Renewal plan

Levinoff-Colbex has been the main cull cow packer for producers in Quebec, Atlantic Canada and Ontario since Kitchener’s Gencor Foods plant shut its doors in 2008.

The Colbex plant at St-Cyrille, northeast of Drummondville, was opened in the late 1970s and merged in 1998 with Montreal processor Levinoff.

The packing plant was the focus of a blockade by cattle producers in 2004 in the wake of the BSE crisis, when the bottom dropped out of the market for cull cattle from dairy and beef operations.

Through a $20 per head levy on incoming cull cows from 2004 to 2007, Quebec’s cattle producers bought 80 per cent control of the plant and began paying 42 per cents per pound for cattle delivered there.

Producers in 2008 voted to contribute $53.86 per cull cow for a capital injection of $30 million into the facility, then voted last month to pursue the co-op ownership model.

The FPBQ’s renewal plan had called for producers to buy preferred shares of $1,000 each, which the new co-operative would use to take over the 80 per cent stake in the Colbex facility.

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