050423 Cargill Buys Canada Plant

April 23, 2005

Cargill is set to flex its muscles with the purchase of a second major packing facility in Canada.

A Canadian Cattlemen's Association spokesperson said the announcement demonstrates the growing strength of Canada's beef processing sector.

Cargill, which already operates a major beef processing facility in High River, Alberta, recently announced production cuts at seven U.S. facilities due to the tight supply of market-ready cattle and the continued closure of the U.S. border to Canadian cattle.

Cutbacks have taken place at Cargill plants in Fort Morgan; Plainview and Friona, Texas; Dodge City, Kan.; Schuyler, Neb. Milwaukee, Wis., and Wyalusing, Pa.

Mike Chabot the general manager of the Fort Morgan plant said that, contrary to rumors, the plant has not cut back to 32 hours and four days of work but is continuing to operate on the 36-40 hour, five-day work week that was put into effect January 2004. The reduction from fulltime work came because a single case of Bovine Spongiform Encephalopathy (BSE) was found in the U.S. causing Japan and other consumers of U.S. beef to close their borders to the product.

Chabot said that in the coming weeks he is expecting an increase in cattle and will be extending work for Cargill employees.

A strategic plan to reposition the Canadian beef cattle industry has been developed by the CCA to be effective whether or not there is a prolonged disruption of the U.S. market. A key aspect of that plan is expanding slaughter capacity in Canada.

While the CCA continues to work with new entrants to the packing industry to remove any impediments to their sustainability, the announcement from Cargill is welcomed as indication of recognition by a world- renowned meat processor of the advantages of operating in Canada.

"Canadian slaughter increased 24 percent in 2004 and is expected to increase a further 19 percent by the end of 2007," CCA president Stan Eby said. "It's clear that Cargill wants to be part of that growth. Other aspects of the strategic plan to reposition the Canadian beef cattle industry include building on the Canadian advantage of our mandatory cattle identification program to include age verification and aggressive expansion of international markets for Canadian beef."


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