Thursday, July 14, 2005

The Real Story of Alberta's BSE Crisis



Mad Cow Crisis was made in Alberta




"Shoot, Shovel, Shut-up"
Premier Ralph Klein


The Death of the Alberta Packing House industry, Lack of Feedlot Inspections, and Privatization,led to the BSE Crisis

NEWS FLASH:

By BETH GORHAM
U.S. border closure seen bringing permanent split in North American beef market

Canada's red meat processing industry has annual sales of $11.4-billion, employs 34,000 people, and is the fourth-largest manufacturing sector after cars, petroleum and lumber.

That increased capacity won't go away when the U.S. border is reopened to live cattle from Canada, Laws said.

"The bricks and mortar investments that we've been making to process the cattle that we used to export to the U.S. are quite literally 'concrete.' They will not be dismantled if the border opens later this month.

"At the end of the day the Canadian beef industry will be stronger than it was before and better able to compete on the international stage."

Even if the border is reopened, the meat packers are confident that Canadian ranchers will make sure they stay in business, Laws said.

"This is a growing industry in Canada," he said. "We know Canadian farmers will not soon forget that border closed and that they need to keep supplying this extra capacity that was built in Canada."

In contrast, U.S. meat packing plants have been closing or operating far below capacity, said Patrick Boyle, president of the American Meat Institute.

He said 7,800 jobs are gone in the U.S. industry, although he blames that on a combination of factors, not just the lost access to Canadian cattle.

The price of ground beef in the United States has risen so sharply that low-income consumers are shifting to other types of protein such as pork and chicken, he said.

"The changes that are occurring in the U.S. beef industry will become permanent and so too will the corresponding changes that are occurring here in Canada," he said.

"Former partners in trade, in an integrated market, will now become fierce competitors in international markets going forward, unless we can restore trade to our two countries."

Which proves my point in this article, that we need to have an indiginous Alberta packing house industry that is a cooperative between producers and plant workers. Otherwise we remain a branch plant of Tyson, XL and Cargill, who will profit from Canadian beef processing while the market declines in the U.S.

The BSE (mad cow) crisis revealed that farmers in Canada were at the mercy of corporate agribusiness, in particular Tyson, Cargill, and XL Foods, American based Agribusiness corporations.

Alberta is the largest beef producing province in Canada, we have lost our home grown meat packing industry over the last three decades, and are now dominated by 3 American direct marketing Agribusiness Corporations. This has exasperated the impact of the BSE crisis in the province, and as a result Federal and Provincial funds for BSE supplemental payments did not go to farmers but to Tyson, Cargill and XL Foods.

"The farm income crisis is not due to farmer “inefficiencies”, but is in fact attributable to
the dominant market power of a relative handful of very powerful corporations. Nowhere
is this more clearly demonstrated than in the beef processing sector. Over the past two
years, a number of investigations by the House of Commons Agriculture Committee, the
Senate Agriculture Committee, the Alberta Auditor General, and the federal Competition
Bureau, into allegations of excessive profiteering by Cargill, Tyson, XL Foods and other
packing companies have brought to light important information about this sector.
The big players in the Canadian beef packing industry are the federally-inspected plants.
There are currently 19 federally-inspected beef packers in Canada, ranging in size from a
weekly slaughter capacity of 25 head in Lacombe, Alberta, to 22,000 head in Brooks,
Alberta
.

The two largest packers, Lakeside (Tyson) and Cargill, are both currently ramping up
capacity by approximately 4000 head per week, further increasing their dominance over
the industry. XL Foods, with its two plants in Moose Jaw and Calgary, is the third largest
player in the game with a combined slaughter capacity of 9,000 head weekly. Better Beef
Ltd. of Ontario is currently the fourth-largest packing plant with a capacity of 8,500
weekly, nearly matching XL’s output.

The Alberta Auditor General’s report, which followed the money trail in the wake of the
Alberta government’s BSE-related assistance programs, was released July 27, 2004. This
report revealed that only three federally-inspected meat packers: Cargill, Tyson
Foods (Lakeside) and XL Foods, controlled “at least 90%” of the capacity in
Alberta. Between 1989 and 2002, thanks to generous financial incentives from the
Alberta government, the province’s feedlot sector grew rapidly, as did its share of the
slaughter capacity for the country. Alberta is the fourth-largest region in North America
(behind Texas, Kansas and Nebraska) for cattle inventory, and is also the fourth largest
cattle-feeding region. Alberta’s cattle on feed inventory peaked at 1.6 million head in
2000. Between 1989 and 2002, Alberta’s cattle slaughter capacity grew by 81%, and
currently the province accounts for 72% of the entire Canadian slaughter industry."

National Farmers Union Submission to the Federal Competition Bureau June, 2005

Regional Consequences of the BSE Crisis By David Kilgour, MP for Edmonton - Mill Woods - Beaumont September, 2004

The immediate banning by the U.S. government of our live animals after one cow in one herd in this province was found to be BSE-positive on May 20, 2003 created a huge oversupply of products. The U.S. had received about four-fifth of our beef exports and almost all of our live cattle; the ban meant catastrophe for most in the industry. It also proved to be a “recipe made in heaven” for the packer subsidiaries of two American food giants; Lakeside (Tyson) in Brooks and Cargill in High River, which were licensed by Washington to sell boneless beef from animals under thirty months of age into the U.S. These two packers now effectively control access to the American market for our entire Western beef export industry, which comprises cow-calf operators, backgrounders and large and small feedlots. In May of 2003, there were seven American plants located within a day’s drive from Prairie Canada. Now there are only the two in southern Alberta which have access to the U.S. Not surprisingly, this has resulted in a huge oversupply of animals overdue for processing across Canada.

PRIME TIME CRIME
Mad Cow and the Canadian Food Industry

Collapse of the Packing House Industry in Alberta
Sets the Conditions for the BSE Crisis


Alberta saw a bust in the meat packing industry in the province begining in the later years of the 1970's as packers diversified into other industries, shut down plants, retired staff and in some cases consolidated holdings through mergers and acquisitons. Such was the case with Gainers.

Tory administrations from the 1970s to the early 1990s tried their hands at diversification, but took risks by using public dollars to prop up existing businesses or to help set up new ones. The province ended up with a long string of financial misadventures involving nearly $2 billion worth of government loans and loan guarantees to businesses. For instance, the province took a $209-million hit by the time Edmonton's Gainers meat-packing plant went under, and lost $164 million in MagCan, a magnesium plant.
Tom Ogle, Edmonton Journal

It was not just an Alberta or Canadian phenomena but one that impacted on the whole industry across North America.

In contrast, a much more rapid consolidation has recently swept beef and pork processing.
Since 1980, the number of slaughter plants has plunged from more than 600 to about 170 for cattle and from more than 500 to about 180 for hogs. The number of meat processing firms has also dwindled rapidly, boosting the market share held by the industry’s largest players, especially among beef processors The rapid consolidation has vaulted the beef processing industry into “highly concentrated” status, the highest rank in the classification scheme the U.S. Department of Justice uses in its antitrust oversight.
The New U.S. Meat Industry
By Alan Barkema, Mark Drabenstott, and Nancy Novack


Following the Leader: IBP and the Restructuring of Canada's Meatpacking Industry
Associate Professor
Michael J. Broadway
State University of New York at Geneseo
Culture & Agriculture

Spring 1996, Vol. 18, No. 1, pp. 3-8

Posted online on December 10, 2004.

(doi:10.1525/cag.1996.18.1.3)
View Table of Contents


As I wrote in the University of Lethbridge Student paper The Meliroist in 1978 during the Packing House strikes in Canada, the industry had become an interlocking oligopoly.

While CEO's and power brokers on the boards of Gainers, Swifts, Burns and Canada Packers did not sit directly on each others boards, they sat on other corporate boards, in particular GE Canada, where they could meet and collude.

They did this during the Swifts/Canada Packers strike in '78 when Burns would not hire striking workers from Canada Packers in Lethbridge, while having job openings available in their Calgary plant. I am pleased to say my article was used by UFCW in hearings in Ottawa to prove collusion by the big Packing Houses.

At the same time this was the begining of the end of the old Packing House industry, more of it's workers in the U.S. were retired, leaving the packing houses as gravy operations, all capital expansion had been paid off, aside from retirement costs and paying a reduced work force, the packing houses were shear profit makers, allowing companies like Swifts to move from being the company that produced butter ball turkeys for Thanksgiving, to becoming Esmark Corp. a diversified company that owned Wonderbra.

In Canada the meatpacking industry was solidly based in Alberta, with Burns being owned by A.E.Childes of Calgary, Gainers being owned by the Gainer family in Edmonton, and Canada Packers being owned by the Toronto Harris family.

In fact the old Canada Packers plant in Edmonton would be sold to Gainers, when Peter Pocklington owner of the Edmonton Oilers, and switch and bait capitalist crook, took over in the eighties. It had been a Canada Packers plant and then a Swifts Plant. Pocklington bought up Swifts Canada operations and then all the Packing houses in Edmonton under the name of Gainers and consoldated them into one operation, from which he milked the profits and the gouged the workers pension funds to fund his venture capital purchases. He eventually bought up Canbera foods in Southern Alberta, and became for a short time the sole monopoly Agribusiness for tertiary agricultural foods production in Alberta.

"
If you can't win, change the rules!" Peter Pocklington

He forced UFCW into a strike at Gainers in 1986, and a bitter labour battle insued at the old Canada Packers Plant known as the Battle of 66th Street. It was a show down between a Conservative Party Capitalist, Pocklington, and the labour movement in Alberta. Pocklington lost, the battle and the war, but in the end so did the workers, as he declared bankruptcy, selling off Gainers to the Alberta Government ,to pay off his loans he owed them, who in turn sold it at fire sale prices to Burns.

The impact of the Gainers Strike cannot be underestimated, it proved once and for all the Tory Government in Alberta was decidedly Anti-Labour. It exposed the neoptism of the Government and its business friends like Pocklington. And it would give rise to the current Klein Reich which vowed never again to be involved in business.


Gainers was a meat-packing company which used to be effectively controlled by Peter Pocklington. Beneficially, he owned all the shares and he was the sole director of Gainers. It encountered financial difficulties and went through a difficult strike. The provincial government loaned it money, in return for many kinds of security, under a master agreement and some ancillary documents. Later another lender demanded more security. The government consented to that happening, in return for some additional security to the government from other Pocklington companies, and a standstill agreement was signed. Ultimately the loan went into default, the government foreclosed, and became the effective owner of Gainers.
Gainers Inc. v. Pocklington Financial Corporation, 2000 ABCA 151


The draconian revamping of class relations, and the gutting of any sense of labour entitlement, was evident in the aftermath of the 1986 Gainers' strike in Edmonton, a six month battle that culminated in the dismantling of the provincial Labour Relations Act that convinced 10,000 Canadian entrepreneurs that Alberta had the least pro-labour legal system in the country. Sections of the new Labour Relations Code made it more and more difficult to secure union certification and allowed the Lieutenant Governor to revoke labour charters if a union participated in a so-called illegal strike.

What, in this context, is the specific threat of globalization? In Alberta, before this term was in common use, Peter Pocklington utlized his capacity to open a meatpacking plant in California to send a threatening message to Gainers strikers. And that should make the essential point. Globalization is not all that new. It is perhaps more intense in our time than it has been in the past, but capital has been global since its birth, regardless of whether we date this in the late 15th century or in the 18th century.

System Failure: The Break-Down of the Post-War Settlement and the Politics of Labour in our Time. Keynote speech delivered by Professor Bryan Palmer on May 7,2004 at the Alberta Federation of Labour membership forum

Peter Pocklington was right about one thing: he is at the centre of a high-level conspiracy coming out of Alberta Treasury Branches. The ATB is, after all, conspiring to get $50 million Pocklington owes it. But the self-made millionaire is wrong about most everything else he's saying about Edmonton and Alberta.

In fact, the man Edmontonians love to hate had better be on the next Greyhound bound for anywhere, before pitch-fork wielding peasants storm his Glenora fortress, drag him behind a horse to Sir Winston Churchill Square and put him in stocks while adults ridicule him, children throw rotten tomatoes at him, blackflies feed off the debris and he fills his pants with a week's accumulation of millionaire droppings.

For years, Edmontonians have been telling this guy to hit the road. As far as some folks are concerned, Pocklington isn't even an Edmontonian, he's a character out of a Dickens novel. Look at the record. The guy started out as a used-car dealer. Anyone can do that, but no one earns much respect.

His behavior, however, went beyond merely tacky. Pocklington became positively hated in some quarters when his employees at Gainers went on strike. Pocklington took advantage of Alberta's anti-union legislation allowing scab workers to replace strikers. The 1986 strike became a lightning rod for labor unrest in Alberta and eventually became one of the most violent labor disputes in the province's history.
Richard Cairney, SEE Magazine:Thursday, July 30th., 1998


Canada Packers was sold to one of the McCain family in the Maritimes who bought Maple Leaf Foods. Burns continued to run the old Gainers plant into the ground and eventually sold it off to Maple Leaf Foods. Maple Leaf Foods over a decade after the Battle of 66th Street, forced UFCW to strike, and used it as an excuse to gut the operations and close the last operating packing house in Edmonton.

Maple Leaf Meats: Time to Bring Home the Bacon

MacDonald questions Minister’s apathy given the Edmonton Edge

It is time for the Minister of Labour to start doing his job and work toward keeping the Maple Leaf hog processing facility in Edmonton, says Alberta Liberal Labour Critic Hugh MacDonald.

MacDonald was referring to Labour Minister Murray Smith’s unwillingness to get involved in the labour dispute between the facility and its workers. “The advantages of upgrading the Edmonton Maple Leaf hog processing facility are many,” said MacDonald. “It is hard to understand why Maple Leaf would even consider leaving Edmonton when the competitive edge is so apparent.”

“The future of one of Edmonton’s oldest processing industries depends on strong forceful mediation between the UFCW and Maple Leaf Foods,” said MacDonald. “The department of labour can provide leadership in this ongoing dispute before it leads to a violent nationwide strike. This game of ‘corporate chicken’ cannot continue.”

“Maple Leaf Foods and Executive Vice-President Patrick Jones, in particular, must realize threats and intimidation will not work to resolve this labour dispute,” said MacDonald. “Let’s not repeat the strike of 1986."

In an interim quarterly report to shareholders in May 1997, Maple Leaf credits a significant part of its 20% increase in operating earnings to its 1996 acquisition of Burns Meats/Gainers. “If this is the case, why is Maple Leaf anxious to abandon their operation in Edmonton?” asked MacDonald.

They forced the UFCW into an untenable national strike, which resulted in the closing of packing plants in Edmonton and Burlington, Ontario, and the opening of a super plant in Brandon, Manitoba. Edmonton packing plant workers got shafted by Maple Leaf Foods and the Alberta government. Albertans got the shaft as the last large scale packing plant that was Canadian owned closed.

Had the government upgraded the old Canada Packers plant on 66th Street, and allowed it to be run by the unionized workers,using their pension fund to capitalize further operations, it would have remained a viable pork operation.

While smaller plant operations began in Red Deer for Pork Production, most of the beef operations in Alberta had already closed down, leaving the field open for
American Agribusiness Corporations like Cargill, XLFoods and Tyson to move in.

Canada Packers Inc.

Canada Packers Inc. formerly, Canada Packers Limited, was formed in 1927 in Toronto,
Ontario through the amalgamation of the Harris Abbatoir Company, Gunns Limited and the William Davies Company - Canada's oldest meat packing company. The architect of this merger was J. Stanley McLean, Secretary-Treasurer of the Harris Abbatoir, who became the first president of Canada Packers Limited, a post he held for 30 years.

The merger of the William Davies Company, Gunns and the Harris Abbatoir Company was largely out of economic necessity. While the 1920s were roaring for everyone else, the meat packing industry was reeling from excess capacity that had been built up during the war. When the post war boom ended in the fall of 1920, packers were unprepared and sustained heavy losses.

The one exception was the Harris Abbatoir Company, whose president James Harris and secretary-treasurer J.S. McLean quickly recognized the war boom was over and moved swiftly to do what had to be done - cut costs and focus their business.

By 1927 the Canadian meat packing industry was in a crisis, the likes of which would not be seen again until the 1980s. At the end of January, Gunns was refused further credit. Without this, the company could not purchase livestock. They approached Harris and in early February all shares of Gunns capital stock were transferred. In June, Harris also acquired from Allied Packers the plants and inventories of The Canadian Packing Company Limited. In August, the shareholders of both Harris Abbatoir Company and William Davies Company agreed to merge their interests into a new holding company called Canada Packers Limited.

For more than 50 years, Canada Packers Inc. dominated the meat processing industry and was a leading researcher, processor and marketer of a wide range of meat and agribusiness products in Canada and abroad through its interests in Britain, Germany and Australia and its international trading group based in Toronto.

However, the 1980s for a number of economic reasons proved to be the most difficult time for the company since 1927. Thanks to geographic and product diversification, Canada Packers was able to withstand the serious blow to its beef business.

By 1990, when Canada Packers merged with Maple Leaf Mills to form Maple Leaf Foods, the company had exited the beef business and refocused its meat business on pork and poultry. Maple Leaf Foods today is Canada's leading pork processor and a global competitor. Maple Leaf's Prime poultry is Canada's leading brand.

As this article shows the Gainers plant ( which was the old Canada Packers Plant) was a viable operation until it was closed and gutted by Maple Leaf for its equipment. The plant could have been upgraded, had the Klein government bothered to spend money on it instead of selling it off to Burns.

Canada Packers Plant - North Edmonton
By Ivan Hall, P.Eng. ASHRAE NAC Historian

A short article in a May, 2001 edition of the Edmonton Journal rekindled my interest in this facility; now gone. I had taken some photos of the inside of the power plant when it was being demolished; not knowing its illustrious origin or innovative past. It was, for all intents and purposes, a well known industrial plant that had seen better days and was now gone.

In fact it had exploded onto the Edmonton landscape in 1936 in the midst of the Great Depression. The sheer size of the facility made a huge impact on the city at that time. It immediately received national accolades for its innovative design and went on to serve this community for 50 years; employing more than 1000 during its peak production years from the 1950's to '70's.

According to writeups in the Edmonton Journal throughout 1936, Edmonton had targeted for a major meat packing plant since 1927. At that time, virtually all the western Canadian meat packing was concentrated in Winnipeg; more specifically St. Boniface, Manitoba. Canadian packers were vying after the British bacon trade which was supplied by Denmark by more than a 3:1 ratio over Canada.

The Depression had deferred serious planning for such a move as companies fought for their very survival. When finally begun, both design staff and Canada Packers staff worked for almost two years to ensure strategic placement of equipment was synchronized with production flow. Experts in the various departments were asked to critique space allotments as well as interdependent process flows and overall functionality. These reviews resulted in the construction of a scale model for presentation to the owners prior to letting of tenders for the work.

The plant architects were a partnership of Professor Eric R. Arthur, head of architecture at the University of Toronto and A. P. C. Adamson. It made use of the International Modernists style of exterior presentation. Their design was described as a balanced asymmetry composed of abstract cubes constructed with a reinforced concrete frame and unrelieved brick curtain wall laid in the German garden bond pattern. Their efforts won them the gold medal of merit in 1936 from the Royal Architectural Institute of Canada ( RAIC) and the Ontario Association of Architects (OAA).

Facilities in the United States, Great Britain and Denmark were toured and many equipment manufacturers were questioned in order to perfect the design of this 'to-be' state of the art plant. Everything from the type of flooring to lighting intensity to size and type of mechanical equipment was taken into account. Unlike European designs that were generally horizontal operations interconnected with moving belts or trucks, the designers followed the American practice of moving production vertically with minimal horizontal movement. From the killing floor, carcasses moved from the third floor to finished product emerging on the main floor. Gravity chutes and short horizontal moving chains reduced handling and speeded processing of perishable product.

Sod turning took place March 16, 1936 and the plant was operationally completed September 14, 1936; although the official opening did not occur till November 4, 1936. At its peak construction period, almost 400 tradesmen in 35 trades were employed on the million dollar project. The contract was awarded to Bird Construction Limited - then of Moose Jaw, Saskatchewan. It was very welcomed relief from the Depression and challenged the trades that had been virtually idle for years. Special note was made of the bricklayers, most of whom had been unemployed for four years, who had to relay the boiler house brick because it did not initially meet inspections.

Notable subtrades included Dominion Bridge Ltd. for structural steel, S.B. Noble Electric for electrical and the Highlands Tinshop for sheet metal and ventilation. Even the University of Alberta was drawn into the project; professor Harry Webb performed rebar steel and concrete testing using the university test facilities. Statistically the structure contained 1.1 million bricks, 6 hundred thousand board feet of lumber, 2 hundred and twenty thousand sections of tile, 14 thousand tons of concrete, 22 thousand feet of pipe and 50 miles of electrical wire in 12 miles of conduit; to quote just a few.

Of particular note was the Spanish cork used to insulate the coolers and freezers. Thirteen carloads of cork arrived in time for the project, despite Spain being embroiled in open civil war. Each cooler received a 4 inch thick layer of cork on the walls and ceiling while the freezers received a similar 6 inch layer treatment.

For ASHRAE, the main interest is the power plant. It contained, amongst other things, the refrigeration plant. This cooling plant was based on 3-75 ton Carbondale duplex ammonia compressors for the 'high temperature' cooling and 1-50 ton booster compressor for the 'low temperature' or sub freezing work. Each was driven by a Canadian General Electric synchronous motor, direct coupled to the compressors. The DC power was provided by a motor-generator set. These were supplemented by a large Linde compressor and several York compressors. The Linde was, in turn, replaced with Vilter screw compressors. There were 2 Baltimore Aircoil cooling towers on the roof of the power house which provided chilled water to the shell and tube ammonia condensers; one large and one small. The larger tower was converted to an evaporative condenser in the '70's.

The plant manufactured its own ice using an ice making machine that consisted of a large water drum and press; the walls of the drum being subcooled by ammonia refrigerant. Water was sprayed on to the drum and immediately formed ice crystals on the drum walls. An auger arrangement with several 'knives' continuously scrapped the crystals off which were carried out of the drum by the water and into the press. The press produced 2-ounce briquettes from the crystals at a rate of over 1 ton per hour. Fifty tons of ice were produced daily and was led by chutes into waiting refrigerated rail cars for rapid, planned loading of fresh product for shipment across the continent. In later years only flake ice was produced.

The power plant also contained the three large Babcock & Wilcox steam boilers, which were fired on natural gas - rather innovative for the times. Steam was generated for process steam for sterilizing and scalding, as well as for heating. Electricity came from local utility power. There was a large BroomWade air compressor and condenser/drier supplemented with an Ingersoll Rand air compressor; both to supply compressed process air.

Apart from the main abattoir and packing operations, the plant contained a chemical laboratory for safety and quality testing, facilities for 'pickling' and smoking meat, hide curing cellars, edible and inedible fat rendering and a vegetable oil refining plant. This was believed to be western Canada's first vegetable oil refinery. Here cottonseed, peanut, palm, coconut, sesame ad corn oils were refined for sale. Crude vegetable oils arrived in sixty thousand pound rail tank cars to supply the refinery.

Notables attending the opening included premier Aberhart, Arthur Meighan- leader of the senate, J.S. McLean - president of Canada Packers and J.A. Clarke - mayor of Edmonton. Wilton B. Tranter, general manager of the plant stated fully 200 households would benefit from direct employment in the facility. C. J. Long, an English-born engineer was superintendent of the plant and had worked side by side with the design team from its initial development. It is interesting to note that housewives were specifically targeted to tour the plant on opening day. Copies of Canada Packers booklet, " Tasty Meals for Every Day" were liberally distributed. The "Maple Leaf" brand of shortening, sliced bacon and hams was being deliberately established.

Thus started a major meat packing industry in Edmonton. It would eventually grow to four major plants including Burns, Swift and Gainers and become a major industrial sector for Edmonton; joining agriculture, oil refining and transportation. The small city (then only 90,000) would, over the next half century, rise to a position of dominance in the prairie region of Canada. The Canada Packers plant was, unwittingly, a harbinger of success to come.

acknowledgements:
- Eugene Chorneyko, retired operating engineer, Canada Packers
- Reg Bruce, RET, Pace Refrigeration
- Mike Sadava, Edmonton Journal
- Ib Froberg, retired plant supervisor, Canada Packers


The integration of the American packing plant operations in Alberta, where they own feed stock, that is their own beef, their monoploy in the beef market, where independent farmers have no recourse but to sell to Tyson or Cargill, is what exasperated the BSE crisis in the province.

The faliure of the Alberta government, after the Gainers debacle, to assure producers, packing plant workers , and consumers, that we had an indigenous home grown packing plant operations for Beef, created the crisis we now face with the border closings to Alberta beef.

After the beef has left the farm the government is busy trying to close the gate. What Alberta needs is an indigenous producer/worker cooperative operating our own packing houses. This would allow for real competition in the market place now dominated by two American packing houses. Whose profit ratios last year were boosted by the corporate welfare cheques they got from the Alberta and Canadian Governments, money that would have been better spent on creating the infrastructure that Pocklington and the Klein government so gleefuly destroyed in the ninties.

Farming co-op forges ahead
Last updated Jul 26 2005 10:56 AM MDT
CBC News
A farming cooperative in Northern Alberta is going ahead with plans to build its own meat processing facility. Members of the Peace Country Tender Beef Co-op say they're not deterred by the long-awaited reopening of the American border to Canadian cattle. The co-op was conceived during the protracted border closure and industry upheaval which started with the discovery of a case of Mad Cow disease in 2003. It has grown to about 600 members. Member Seth Barnfield says the past few years have taught him that Canadians need to become less dependent on the United States. "We've got to get more value added, we've got to get more processing in our country or we're going to be behind it all the time," he said. "We're seeing it all the time, we're shipping everything out, like our lumber, and we're just killing our small communities." The co-op is converting a curling club in the small town of Berwyn into a meat processing plant due to open this fall. The organization is also working with the Canadian Food Inspection Agency on plans for a new slaughter house for 2006. The Canadian cattle industry was decimated by the closure of the U.S. border. Exports losses have been tagged at $7 billion. The federal government and the provinces poured more than $2.5 billion to keep the industry afloat.


PRIVATIZING INSPECTIONS = BSE CRISIS

In the United States the Reagan regime in the eighties relaxed the requirement of Federal Meat Inspections, another attempt to get the government out of business, leaving the Meat Packers to do self inspections. The result has been an increase of cases of e-coli in food that have made news headlines for causing death and injury to consumers.

At least on two occasions prior to the BSE crisis, e-coli outbreaks in the United States were blamed on Federally inspected beef from Canada, and CBS 60 Minutes pointed their fingers to Alberta as the culprit. The company was Iowa Beef Producers
(IBP) , which originally owned the non-union Lakeside Packers in Brooks, and was mixing meat from Alberta with its American beef, and selling it in the US. IBP sold Lakeside to Tyson.

The reality however was that the companies involved were mixing Federally inspected Canadian meat with their tainted self inspected American meat. But because it was ground beef, there was no way of identifying it as Canadian Beef or American Beef. Such is the interlocking connections between the packing houses in Canada and the US and the interlocking connections between Canadian Beef production and American Beef production. They both feed into the American market.

What the cattlemen detest most is the meat inspection system. The story of how Upton Sinclair muckraked the slaughterhouses some one hundred years ago and Teddy Roosevelt jumped in and fixed them all up is pretty much fiction. The simple fact is the meat inspection system isn't any good and anybody who even attempts to stand up to the Big Boy ranchers does so at his or her peril. Look what happened to Bill Lehman, who throughout the early 1990s worked as a meat inspector at Sweetgrass, Montana, a busy port of entry for Canadian beef. By his own count, Lehman himself rejected "up to 2.3 million pounds of contaminated or mislabeled imports annually." The reasons, according to Lehman, included "pus-filled abscesses, sticky layers of bacteria leaving a stench, obvious fecal contamination, stains, metal shavings, blood, bruises, hair, hide, chemical residues, salmonella, added substances, and advanced disease symptoms."

After some children died from an E. coli outbreak in the 90s, Lehman told about his work: "I merely walk to the back of the truck. That's all I'm allowed to do. Whether there's boxed meat or carcasses in the truck, I can't touch the boxes. I can't open the boxes. I can't use a flashlight. I can't walk into the truck. I can only look at what is visible in the back of the trailer." He told one interviewer how he did his inspections: "I've just inspected over 80,000 pounds of meat (boxed beef rounds and boxed boneless beef briskets) on two trucks. I wasn't running or hurrying either. One was bound for Santa Fe Springs, California, the other for San Jose, California. I just stamped on their paperwork 'USDA Inspected and Passed' in 45 seconds."

Mondo Washington
by James Ridgeway
Slaughterhouse Politics
Ranchers Fought Rules That Might Have Prevented Mad Cow
Village Voice, December 31, 2003 - January 6, 2004


In Alberta following in the footsteps of the Republicans south of the border, the Alberta Government spent the ninties privatizing and outsourcing many government operations it considered expendable. One of those was the Livestock Inspection Services. It first reduced funding for these services, limited the hiring of Inspectors, then it privatized the service. It put the commercial agribusiness sector in charge of self policing through the privatized LIS. The Privatized LIS obviously missed inspecting feedlots in Alberta for animal parts in the feed, which was banned at the same time as LIS was privatized. The result was that cattle in Alberta have not been properly inspected for BSE nor has effective inspection been conducted on those businesses represented on the Board of Directors of LIS.

How LIS Got Started
In 1992, the Government of Alberta created the Livestock Advisory Committee. This committee had representatives from the Alberta Auction Markets Association, the Feeders Association of Alberta, the Western Stock Growers, the Alberta Cattle Feeders Association, the Alberta Cattle Commission and the Alberta Livestock Dealers and Order Buyers Association. The Livestock Advisory Committee recommended the privatization of livestock inspection and related activities. This initiative was consistent with the Crown’s goal of wanting to facilitate business and industry. The passing of Bill 41 in the spring of 1998 allowed for a contract between a private company (LIS) and the Crown to unfold. The Board of Directors is represented by Alberta's livestock associations to give equal voice to each and every part of the livestock industry.


The neopotism continues with the new Minister of Agriculture Doug Horner whose cousin , Craig Horner of the Alberta Beef Producers sits on the LIS board of directors. Craig is the son of right-wing politician Jack Horner, the Alberta Cowboy in Ottawa. Doug is the son of Hugh Horner, former provincial Agriculture Minister, and brother of Jack. They don't represent farmers and producers as much as they represent the agribusiness interests that the farmers sell to.

Horner follows late father into agriculture portfolio

Jeff Holubitsky
The Edmonton Journal
November 25, 2004
EDMONTON - When Doug Horner found out he was going to be Alberta's agriculture minister, one of the first things he did was arrange to have his late father's desk moved into his new legislature office.

"He has the same desk that dad had when he was minister of agriculture," Horner's constituency manager Carol Stewart said Wednesday, shortly after Premier Ralph Klein announced the makeup of Alberta's new cabinet.

"He's extremely happy that it's agriculture, because he knows and loves agriculture," she said.

Horner's family and business backgrounds make the appointment appropriate.

His father was Dr. Hugh Horner, Alberta's agriculture minister from 1971 to 1975, and one of the young politicians who linked arms with Peter Lougheed to change the province's political landscape more than three decades ago. Hugh Horner, who also served as deputy premier, died in 1997.

Doug Horner's father was not his only political connection. The new minister was not available for comment Wednesday because he was travelling to attend the funeral of his uncle, Jack Horner, the colourful former federal politician who crossed the floor of the House of Commons to join the Trudeau government in 1977.

Horner, 43, was an international grain trader with a business education and banking background when he was first elected to represent Spruce Grove-Sturgeon-St. Albert in 2001.


During this whole BSE crisis in Alberta no-one has challenged the failure of the privatized LIS to do its job. Had the LIS remained a public service, the howls from the Tories and their Agribusiness friends would have been loud and voracious about the failure of the LIS inspectors to do their jobs. And it would have been used as a bully pulpit for right wing attacks on the public sector. However now that the LIS is privatized, with its neoptistic connections in the Alberta Government and the agribusiness lobby, the silence has been defeaning

AGRIBUSINESS INTERGRATED FEEDLOTS=BSE

The third aspect of how the BSE crisis was homegrown in Alberta is the lack of inspections of feedlots and the dominance of the feedlot business by integrated agribusiness monopolies. Along with cattle feed, they produce and mill other feed, sell fertilizers, raise cattle and pork, chickens, etc.

These companies use Alberta to host cows from across Canada for feeding prior to being sent to slaughter. In the globalized economy they operate in many countries, dealing with integrated operations raising a variety of farm animals prior to their going to packing plants.

Sometimes they contract directly with a packing house, who then can claim their animals as their own, which was one of the reasons that Tyson and Cargill were able to profit from generous BSE grants that should have gone to farmers.

Alberta houses hundreds of thousands of heads of cattle, in its feedlot operations, including cattle from the U.S. When BSE was discovered in cows in the U.S. they claimed their animals were from Alberta, in effect because they had been fattened up here in a feedlot. At the same time Feedlot inspections by LIS were being privatized, feedlots were expanding their operations here in Alberta.


Canada Gears UP
Rick Purnell
Sep 1, 1999

It wasn't long after commercial cattle feeding began in the U.S. that Canada got in the game. It's proven to be a viable player. Alberta alone is fifth in cattle feeding behind Texas, Kansas, Nebraska and Colorado. Anne Dunford, senior marketing analyst with CanFax in Calgary, Alberta, says commercial cattle feeding began in the late 1960s. During the early '70s, about 500,000 head were fed annually. Today it's 2.4 million head. "Growth has been primarily fueled by ample feed supplies and the proximity to feeder cattle," Dunford says. Approximately 80% of the national cow herd is located on the nearby prairies. She adds that 250 feedlots in Alberta have feeding capacity greater than 1,000 head. These represent 90% of the fed cattle marketed in Alberta. Average capacity of these feedlots is 6,280. The largest holds 102,000 head and three operate with a capacity of 75,000 head.
Economics
Finished cattle mostly end up at packing plants in Alberta, Saskatchewan and Ontario or at U.S. plants in Washington, Utah, Idaho and Colorado. Selling methods include sealed bids, private treaty, formula or grid pricing and forward contracts. Estimates show about 14% of the 1998 fed cattle supply was packer-owned. Despite normal industry consolidation, industry leaders display a relatively bright outlook for feeding in Alberta and the surrounding region. Ron Axelson, manager of Alberta Cattle Feeders Association, says several factors point toward growth. One is environmental regulation.
"Currently, there are no existing environmental laws pertaining specifically to feedyards," Axelson says. "We're governed by laws under the Environmental Protection and Enhancement Act and the Health Act. These come into play if an event contaminates water sources or puts public health at risk. That's not to say regulations are lax - there are examples of action being taken by the authorities in justified instances."

Lax environmental laws, lax inspections, the privatization of LIS and its failure to implement a BSE inspection of feedlots, the Alberta Advantage of the Klein government is directly responsible for the BSE crisis we now face.

Alberta officially has forty percent of the cattle but just over seventy-percent of all Canadian cattle are fed here. That's because other provinces send their cattle here for the final months of feeding ... on feedlots.

There are four thousand feedlots in Alberta, and most of them are small.

But there are thirty-three feedlots with over 10-thousand head of cattle each, and those larger feedlots represent more than half of the beef production here.

Some people call them factory farms. The people who own them prefer the term intensive livestock operations.

Alberta is at the centre for a few reasons: Ottawa abolished a fee called the Crow Rate in the early 90s, and suddenly the price of feed dropped.

And two big U.S. slaughterhouses moved into Alberta, Cargil in High Prarie ... and Iowa Beef Producers, later Tysons, in Brooks. So the beef industry here is essentially self-contained. CBC Radio The Current 2003

And here is an irony the Americans who are lobbying to halt live Canadian cattle being imported into the U.S. are using our feedlots for their own cattle, which they are selling to Cargill and Tyson.

US Appeals court reserves on mad cow decision
A U.S. federal appeals court has reserved its decision after being asked to overturn a temporary injunction keeping the border closed to live Canadian cattle.

The U.S. Department of Agriculture had been ready to reopen the border on March 7, but the ranchers' lobby group R-CALF convinced a Montana judge to block that decision, arguing that Canada doesn't adequately test for mad cow disease.

Editorial from Denver Post July 16
Sensible ruling on beef imports


How do you spell hypocrites: R-CALF, read on.


The Alberta Express

Playing both sides of the field

08.23.2004

By Sheena Read

To sue or not to sue, that is the question.

At least it is for a group of Alberta feedlot owners and ranchers who are taking the stand that some American cattle owners are operating under questionable practices by buying cattle in Canada and profiting from a closed border situation.


In July, a group of southern Alberta feedlot owners prepared to roadblock a shipment of 250 head of beef destined for Cargill Foods in High River from Chinook Feeders near Nanton.

These cattle had been discovered to be owned by members of Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA), an American lobby group that has been actively trying to keep Canadian beef out of the USA, and to keep the borders closed.

The cattle had only been in the Chinook Feeders lot for three weeks, and had been flipped through several owners in what the Alberta feedlot owners say is an effort to disguise who the real owners are.

The cattle had come in weighing an average of 1180 pounds, and went out three weeks later at 1215.

When the owners of Chinook Feeders discovered what they had been feeding, and what was about to go to Cargill, they passed the word along and the roadblock was scheduled.

As word leaked out regarding the impending roadblock the shipment was cancelled, only to be re-scheduled and processed later. This marked an end to Cargill processing R-CALF cattle in Canada.

“We will not knowingly purchase or take on or do business with cattle directly or indirectly associated with R-CALF members or those affiliated with R-CALF,” says Cargill spokesman Robert Meijer.

Meijer says that Cargill is counting on help in identifying where those cattle are, and this is going to be a hard task in light of the rapid changing of owners.

“Everyone’s got to work together on this.”

This is now a Canadian-based policy, which does not extend across the border to American cattle on American soil. It will be in place, Meijer says, until the border opens to Canadian beef.

“We don’t accept the position that R-CALF has taken in the US,” says Meijer.

There are an estimated 80,000 head of American cattle sitting in feedlots in Alberta right now.

In May, R-CALF successfully lobbied to block additional exports of Canadian beef into the US, citing that there was a question of the safety of Canadian beef. A Montana district court judge placed a temporary restraining order on importing of beef products, which was followed by the United States Department of Agriculture and R-CALF reaching an agreement where the USDA will not reintroduce more products until a decision is made on the proposed rule to import these products, live cattle and beef from cattle over 30 months.

The issue of questionable practices comes from when the cattle were first purchased by the R-CALF members.

Some of these 80,000 were bought last fall, but 300 to 400 head were bought as recently as Feb. 28, causing speculation that the R-CALF members were expecting the border to open to Canadian beef in spring, as was anticipated, and were planning on profiting off the Canadian BSE-induced low prices.

What threw a wrench into the plan was the discovery of the second BSE-infected cow in Washington State that had Canadian origins. This delayed the border opening, and also delayed the moving of those 80,000 head across the border to much higher sale prices.

The question remains on what to do with the American cattle sitting in the feedlots.

Canadian Cattlemen for Fair Trade spokesman and feedlot owner Rick Paskal says, “Who cares what happens to them? It’s not a question of them being treated inhumanely.”

The consensus between some of the feedlot owners during an August 12 press conference is that the animals will continue to be fed, and the R-CALF owners will continue to be billed for that. The cattle can also be removed and placed on hay and will continue to be healthy animals. Left long enough, they will become oxen, and can be used to plow fields, they joke.

If feed bills cannot be paid by the R-CALF owners, then ownership rights will transfer to the feedlots.

Larry Nolan of Nolan Cattle has about 200 head of R-CALF cattle in his lots. On Aug. 10 he received an offer from the owner to have ownership signed over into his name.

“I guess they’re getting pretty frustrated,” he says, because nobody will slaughter them.

“I’ve been offered a good price on them,” Nolan says, but he refused it. He doesn’t want to get stuck with them either.

“We don’t want anyone slaughtering these cattle, even if it’s third hand,” Nolan says.

John vander Heyden has three feedlots in Picture Butte operating at a third of capacity. He doesn’t have any of the R-CALF cattle in his lots, but he’d like to, just for the opportunity to get some enjoyment out of having those cattle in his lot and watching the rising feed bills that will make the R-CALF people squirm.

“If our beef is supposed to be so unsafe, what the blazes are they doing coming up here and buying thousands and thousands of cattle?” he asks. He adds that those R-CALF buyers were “drooling for the opportunity to make money off keeping the border closed. It strictly has nothing to do with science, and everything to do with profit.”

It goes against everything that vander Heyden believes in.

“We do business very honourably in our three feedlots. You do what’s right,” and that’s a way of life still in the cattle industry, where a handshake is still as good as gold, he says.

Allan Lively of Highwood-Pincher Creek Livestock Auction says he will not knowingly sell any of the R-CALF animals.

“It would be political suicide,” he says.

Lively is of mixed thoughts on the R-CALF situation. On one hand, he thinks that because the R-CALF animals are fats, they wouldn’t be moving through the auctions.

He doesn’t think there are many R-CALF animals left in Alberta though, and thinks that many have been sold and processed even before the animals were discovered at Chinook Feeders.

Chances are slim, though, that animals would have been recognized as being R-CALF, after being sold and re-sold as they have been.

However, Lively says if there’s one thing that this situation has done, it has made the auction markets in High River and Pincher Creek more aware of what cattle are coming in, and they are checking them more closely.

R-CALF is a non-profit organization founded in 1998, which now has 10,000 members in 46 states. Its mandate is to represent US cattle industry in national and international trade issues and to ensure continued profitability and viability of US cattle producers.

Its founding case in 1998 was filing a live cattle and anti-dumping (selling at below the cost of production) case against Canada and Mexico, and a countervailing (subsidizing) case against Canada.

Vander Heyden says that his operation was one of those investigated. Although the case was eventually settled in favour of the Canadian operators, and no wrongdoing was found, the issue still cost thousands of dollars and lost hours to deal with.


Agribusiness and its friends in the Klein government are directly responsible for the BSE crisis we now face. The failure to save our indigenous packing houses, the outsourcing of the LIS to the business interests they were supposed to inspect, the failure to inspect and regulate feedlots, all of it contributed to the current crisis and all of it can be laid at the door of the Klein government.

The Alberta BSE crisis, as was the case in Thatchers England, is the direct result of privatization. And it has only been in Alberta that any cattle with BSE have been found. Yet the impact has been felt across the country.

But the chickens have come home to roost. Unfortuntely when this govenment got hoisted on its own petard for the past two years those who have suffered the most are neither the politicians or their relatives and pals in the agribusiness industry. It was the farmers and workers who got the shaft of this petard.

And now it looks like with a strike imminent at Tysons Lakeside Plant in Brooks, thanks to this governments anti-labour laws, farmers will face another crisis this summer.

Like the BSE crisis, one created by the government that says it speaks for them.

Celebrating Mad Cow Disease:

The absurdity of protectionism

By Miriam Martin


Corporate History of an Integrated Feedlot Agribusiness

Ridley Inc. (Feed-Rite Mills).

Ridley Inc. was founded in Winnipeg, Manitoba as Feed-Rite Mills Ltd. in 1939 by Cyril L. "Andy" Anderson. As a veterinary nutritionist Andy Anderson was an early proponent of scientifically formulated feed rations for improving the productivity of livestock herds and poultry flocks. Anderson's success was based on a strategy to deliver animal nutrition, health and livestock management products in any form required by the livestock producing customer. Feed-Rite grew gradually after the Second World-War, building new feed production plants in Manitoba, Saskatchewan and Alberta and eventually became the largest feed production company in Western Canada.

In 1994 privately held Feed-Rite was acquired by the Ridley Corporation Limited, the largest animal feed producer and salt refiner in Australia. As a publicly traded company, (ASX:RIC) Ridley had been seeking growth opportunities beyond its traditional Australian markets and Feed-Rite was its first international acquisition. With a new management structure, Ridley set about to grow its North American investment through further acquisitions in Canada and the U.S., most notably the acquisition in 1997 of Hubbard Milling that doubled the size of Feed-Rite's production capacity. (See A Brief History of Hubbard Feeds.)

Feed-Rite has since been renamed Ridley Inc. and now trades as a public company on the Toronto Stock Exchange. Ridley employs more than 1,000 people and manages 34 production operations in Canada, the U.S. and swine breeding facilities in the U.K., Canada and Germany. The company continues to build on strengths of adding value to bulk commodities by applying its technology and expertise to the handling, processing, marketing and distribution of its products. Ridley's commitment to quality products and customer service was the impetus for achieving ISO 9001 certification for the Winnipeg feed manufacturing plant and distribution center in 1997, the first feed production plant in North America to achieve ISO 9001 certification. After more than 60 years from Andy Anderson's first formulated animal rations, Ridley Inc. remains deeply committed to its customers in the livestock industry.

Significant events in the history of Ridley Inc.


1939
Feed-Rite Mills Ltd., established by C. L. Anderson, begins producing feed from a single plant on Higgins Avenue in downtown Winnipeg, Manitoba.

1967
Feed-Rite builds second feed plant in Brandon, Manitoba.

1975
Feed-Rite builds third feed plant in Humboldt, Saskatchewan.

1977
Feed-Rite begins construction of a new large-capacity plant in the St. Boniface district of Winnipeg, renown for its concentration of meat packing plants.

1978
Feed-Rite acquires an existing feed mill from Solar Feeds in Manitou, Manitoba.

1981
Feed-Rite moves head office administrative staff to the St. Boniface plant and closes the old downtown Winnipeg plant.

1984
Feed-Rite expands its reach of operations into Alberta with a new plant in Linden, Alberta.
Constructs a fully automated micro ingredient premix plant adjacent to the St. Boniface feed plant.

1987
Feed-Rite builds new feed plant in Arborg, Manitoba.

1988
Under a World Bank contract Feed-Rite constructs a micro premix plant for the Beijiao Poultry Company in Beijiao, Guangdong province of the People’s Republic of China.
Feed-Rite builds a premix plant in Saskatoon, Saskatchewan, a premix plant and store in Red Deer, Alberta and a feed supply store and warehouse in Prince Albert, Saskatchewan.

1990
Feed-Rite builds new feed plant in St. Paul, Alberta.

1992
Feed-Rite obtains the exclusive production and marketing rights in Western Canada of Cotswold purebred swine stock. Cotswold Western Canada Ltd. established to produce and market the pigs from a hog facility in Malonton, Manitoba.

1993
Feed-Rite constructs feed mill and farm supply store in New Liskeard, Ontario, center of the Clay Belt farming region of northern Ontario. Under a World Bank contract Feed-Rite constructs a micro premix plant for the Shanghai Poultry & Egg Company in Shanghai, Peoples’ Republic of China.

1994
Ridley Corporation Ltd. acquires privately-held Feed-Rite Ltd. Based in Sydney, Australia, Ridley is Australia’s largest feed manufacturer and salt producer.

1995
Feed-Rite Ltd. acquires Quality Feeds Alberta Ltd., of Lacombe, Alberta.

1996
Feed-Rite acquires Green Valley Feed Service Ltd. of Grunthal, Manitoba and Farmix Ltd., a livestock premix manufacturer based in Mitchell, Ontario.
Feed-Rite USA, Inc., acquires the assets of Zip Feed Mills, Inc., including feed production plants located in Sioux Falls and Huron, South Dakota and Grandin, North Dakota.

1997
Feed-Rite acquires the Western Canadian operations of Daco Laboratories Limited, a livestock premix manufacturer with plants in Lethbridge, Alberta and Winnipeg, Manitoba.
Ridley Corporation acquires the feed production assets formerly owned by the Hubbard Milling Company, Inc. of Mankato, Minnesota, renamed as Hubbard Feeds Inc.
Feed-Rite Ltd. changes name to Ridley Canada Ltd. and issues common stock publicly trading on the Toronto Stock Exchange (RCL).

1998
Ridley Canada Ltd. acquires Macleod Feed Mill Ltd. of Fort Macleod, Alberta.
Acquires the assets of PM Ag Product's Inc.s low-moisture block business in Texas, Indiana and Oregon and consolidates it with existing block operations of Hubbard Feeds.
Acquires the Cotswold Pig Development Company Limited which controls world-wide franchise rights for Cotswold pig breeding stock.
Acquires the feed business assets of Gringer Feed & Grain of Iowa City, Iowa.
Changes name to Ridley Inc. to reflect geographically expanded scope of operations.

2000
Acquires the feed production assets of the Animal Nutrition Division ("Wayne Feeds") of ContiGroup Companies (Continental Grain Company). Included in the acquisition are twelve plants located in Illinois, Indiana, Nebraska, Minnesota, Wisconsin, Kentucky, Iowa and North Carolina.

2002
Sells European operations of U.K. based Cotswold Pig Development Company Limited to JSR Newsham Limited. Continues U.S. and Canadian swine breeding operations independently as Cotswold Swine Genetics.
Acquires 50% shareholding in McCauley Bros., Inc., a manufacturer of specialty horse feeds based in Versailles, Kentucky.
Acquires 100% of shares of feed and premix manufacturer, Shamrock Feeds Ltd. of Saskatoon, Saskatchewan.

2003
Acquires feed milling assets of Heartland, Inc. of Bismarck, North Dakota.
Sells Cotswold Swine Genetics business to PIC (Sygen International).











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