New management at lakeside

[byronkentgraham]

JBS has take control of lakeside packers in brooks. This is very good news for beef producers and the 2000 laid off employees. They are a massive company and will get the plant moving a lot sooner than Nielsen brothers would have. There is light at the end of the tunnel, just need fat prices to go back to their previous numbers and calf prices to stay low, and it will be all good.

 

[Longhorn]

JBS has take control of lakeside packers in brooks. This is very good news for beef producers and the 2000 laid off employees. They are a massive company and will get the plant moving a lot sooner than Nielsen brothers would have. There is light at the end of the tunnel, just need fat prices to go back to their previous numbers and calf prices to stay low, and it will be all good.

Or...conversely...here is yet another Canadian company being sold out to the Americans (or Brazillians depending on how you look at it). JBS has been given a takeover option of the Brooks and Calgary plants, 50 mil in cash and 50 mil in shares, no liability nor debt.

Oh ya, the feedlot is rumored to be part of the deal as well...

I fail to see the positives so far other than they will be in a better position to smooth things over with the USDA inspectors that are doing the new audit. We still dont know how it will affect the workers in any way nor the cattle prices.

 

[Longhorn]

BROOKS, Alta. - The union and company taking over management of a troubled Alberta meat packer say they want to work together to make the XL Foods plant a success.
JBS USA operates eight beef plants in the United States and all employees are represented by the United Food and Commercial Workers union.
A JBS official says plans are to have a team at the plant in Brooks, Alta., as soon as possible that will reach out to the union and the community.
The Canadian Food Inspection Agency is reviewing how the plant is managing its E. coli procedures to determine when it can reopen — it was closed Sept. 27 due to tainted meat that has been linked to 15 people getting sick in Canada and which caused an extensive meat recall.
Doug O'Halloran, president of the union local, says he is cautiously optimistic about JBS and adds the company has food safety expertise that will help XL Foods regain access to the U.S. market.
JBS has had its own E. coli problems, including a 2009 recall in the U.S. of 172,000 kilograms of beef after 17 people became ill.

 

[Longhorn]

Weeks of worry and uncertainty in a southern Alberta community turned in a single moment to a wave of optimism with word that a U.S. company is taking over the plant at the heart of the recent beef recall.
JBS USA, a subsidiary of Brazilian-based JBS S.A., surprised almost everyone Wednesday with a late afternoon news release announcing it had assumed management of XL Foods in Brooks, Alta.
From its headquarters in Greeley, Colo., JBS also said its agreement with XL provides it with an exclusive option to buy the Canadian and U.S. operations of the company.
"We know full well the commitment it takes to manage world-class operations that produce safe and nutritious products for consumers around the world," said Bill Rupp, president and chief operating officer of JBS USA.
"We believe our experienced team will prove an invaluable asset in the management of XL Lakeside and we look forward to exploring our options to purchase XL assets in the near future."
Brian Nilsson, co-CEO of XL Foods, issued only a brief news release.
"This action is another positive step to relicensing the XL Lakeside beef plant in Brooks, Alta.," he said. "We welcome the assistance of JBS and their resources."
JBS calls its Brazilian-based parent company the world's largest animal protein processor; the American subsidiary has operations in both the U.S. and Australia.
It was an unexpected development in a dramatic saga that began last month when the Brooks plant — one of Canada's largest beef processors — was closed over E. coli contamination.
Earlier Wednesday, Brooks Mayor Martin Shields said the community has been in turmoil over the troubles at XL Foods. By suppertime, he was elated.
"That's positive news," he said, adding it was already spreading throughout the community. "This means the plant is going to be back in operation."
Shields said he had not been personally contact by JBS officials, but would welcome their arrival.
"They really are big," he said. "Obviously they're coming in to manage a plant with the option to purchase and what you would hope is they actually do purchase it, that it just isn't a drive-by happening."
The 2,200 people who work at XL were laid off last week. About 800 were recalled temporarily Tuesday to finish processing beef carcasses as part of a Canadian Food Inspection Agency assessment of the plant.
It had been a frustration for the United Food and Commercial Workers, the union that represents the workers.
Local 401 president Doug O'Halloran was tempered in his enthusiasm for the JBS announcement, but said it was good news.
"We've been calling for new management or new ownership since this took place and on first blush we certainly see this as a positive move."
The plant is still not out of the woods. The CFIA is expected to complete a report and make a recommendation to the federal government about the plant before the beginning of next week.
The CFIA said its review in the coming days will include how well XL Foods is handling E. coli controls, meat hygiene, sampling techniques and overall sanitation.
The federal agency does not spell out what those next steps could be or how soon the plant might be able to resume slaughtering cattle or sending beef products to market.
Cameron Bruett, JBS's head of corporate communications, did not want to comment on any interactions the company might have had with the government agency.
But he said the takeover will be swift.
"Immediately we'll be sending teams up to Canada ... to see how to proceed with that one facility," he said. "We're well aware of the present situation."
He said discussions between the two companies began in the last month, though he didn't want to say who approached who first.
"We think XL is an excellent company with an excellent operation," he said.
"Unfortunately, in this business at times food safety issues can arise. We think we're well positioned to assist in those matters."
He said JBS is approaching the Lakeside plant with a positive attitude.
"Our intent is to keep the plant running and utilize the available workforce, but of course we're going to have to review the labour situation there," he said. "Hopefully it will be a seamless transition — that is our goal."
On Tuesday night, the food agency announced yet another recall of beef from the plant, this time involving brands sold under different product names in British Columbia and Alberta.
The recall of more than 1,800 products now involves 33 retail chains across Canada. A list of retailers can be found at: XL Foods - List of Recalled Products - Food - Canadian Food Inspection Agency.
The meat packer, the second-largest in Canada, has not been allowed to export beef products into the United States since Sept. 13.
Fifteen people in four provinces have become ill from a strain of E. coli linked to the XL plant.
Some people have filed lawsuits against the company, including 15-year-old Cody Farmer of Nanaimo, B.C. In his statement of claim Farmer said that he required surgery after he was exposed to E. coli.
Erin Thornton of Vancouver has filed a statement of claim proposing a class-action lawsuit for people who fell ill from E. coli and those who had to throw out recalled beef. Other lawsuits have been filed in Ontario, Alberta, Saskatchewan and Quebec.
Statements of claim contain allegations that have not been proven in court.
JBS USA employs more than 60,000 employees in the U.S. It processes, prepares, packages and delivers fresh, further processed and value-added beef and pork products for sale to customers in more than 60 countries on five continents.
It is also a majority shareholder of Pilgrim's Pride Corp., the second largest poultry company in the U.S.
"Upon exercising the exclusive option to purchase the above assets, JBS USA agrees to pay USD $50 million in cash and USD $50 million in JBS S.A. shares," said the company's news release.
"Under no scenario will JBS USA assume any of XL Foods' debt or liabilities."

 

[mountaincatab]

https://www.snowandmud.com/forum/f76/e-coli-scare-68752.html

 

[byronkentgraham]

Or...conversely...here is yet another Canadian company being sold out to the Americans (or Brazillians depending on how you look at it). JBS has been given a takeover option of the Brooks and Calgary plants, 50 mil in cash and 50 mil in shares, no liability nor debt.

Oh ya, the feedlot is rumored to be part of the deal as well...

I fail to see the positives so far other than they will be in a better position to smooth things over with the USDA inspectors that are doing the new audit. We still dont know how it will affect the workers in any way nor the cattle prices.

Shouldn't effect prices. The demand will be the same and so will the supply.

 

[Longhorn]

Shouldn't effect prices. The demand will be the same and so will the supply.

True, but for me, I could give a crap about prices at this point, more concerned with losing control of the packing market, selling off to a foreign company. It is also setting the precedent that the US packers will be controlling the bulk of all packing plants in Canada, giving them to opportunity to form a monopoly...Long term, they 'could' affect prices in a very big way...short term, yes likely wont affect prices. Are you raising cattle for just one year? I didnt think so...

Hey this is just my opinion, but look at the US right now, they have lost tons and tons of manufacturing ability, some within the country and most offshore. Lets say just as an example the big US packers decide they dont want to play by Canadas rules, get pissed at CFIA, whatever, and just put their foot down, they have the ability to close most of the packing capability in Canada...Now you haul to Greely or elsewhere in the US...How will that affect your prices?

I could be totally wrong, but I dont like the feel of it at the moment...

 

[byronkentgraham]

True, but for me, I could give a crap about prices at this point, more concerned with losing control of the packing market, selling off to a foreign company. It is also setting the precedent that the US packers will be controlling the bulk of all packing plants in Canada, giving them to opportunity to form a monopoly...Long term, they 'could' affect prices in a very big way...short term, yes likely wont affect prices. Are you raising cattle for just one year? I didnt think so...

Hey this is just my opinion, but look at the US right now, they have lost tons and tons of manufacturing ability, some within the country and most offshore. Lets say just as an example the big US packers decide they dont want to play by Canadas rules, get pissed at CFIA, whatever, and just put their foot down, they have the ability to close most of the packing capability in Canada...Now you haul to Greely or elsewhere in the US...How will that affect your prices?

I could be totally wrong, but I dont like the feel of it at the moment...

Why would they shut down Canadian packing plants? It doesn't make business sense to shut down the very profitable plants here, just to move them down there and having to increase their buying prices so they can get Canadian cattle keep their plants running at full capacity.

I'm happy to see Nillson Brothers and their deals with Roberge to be gone.

As long as the plant is profitable it will stay open. It does about a 1/3 of all Canadian processing.

 

[Longhorn]

Why would they shut down Canadian packing plants? It doesn't make business sense to shut down the very profitable plants here, just to move them down there and having to increase their buying prices so they can get Canadian cattle keep their plants running at full capacity.

I'm happy to see Nillson Brothers and their deals with Roberge to be gone.

As long as the plant is profitable it will stay open. It does about a 1/3 of all Canadian processing.

When Tyson sold it, it was doing about 4% profit...not sure what you know about business, but a 4% margin is far from profitable...Why would they go south?? Simple....cheaper labor, from the same union, and higher profits. Just like today, whatever Cargil cant handle will ship south...Is every one just holding their cattle at home right now? No, tons are going south just with this little interuption. Im have a feeling there is a whole lot more at play here than meets the eye. Nillsons bought it for 145 million, and are firesaleing it at 100 million with no debt...Does that make a lot of business sense? If they can boost the profits, yes, likely no reason to ever leave...but lots of scenarios out there...

 

[barleyfarmer]

Hope this gets straightened out soon!In August my commission was $23 per head at Nilsson Bros Clyde and when I picked up my returns from Tuesday sale it jumped to $30 a head!There was no real increase in any of the other deductions!Isn't Excel an affiliate of Cargil out of the states already?

 

[Longhorn]

Hope this gets straightened out soon!In August my commission was $23 per head at Nilsson Bros Clyde and when I picked up my returns from Tuesday sale it jumped to $30 a head!There was no real increase in any of the other deductions!Isn't Excel an affiliate of Cargil out of the states already?

Excel is the brand name the Cargil packs their meat under which is confusing but different from XL Meats which is Lakeside.

 

[barleyfarmer]

Excel is the brand name the Cargil packs their meat under which is confusing but different from XL Meats which is Lakeside.

My bad !I googled it and got it figured out!

 

[byronkentgraham]

When Tyson sold it, it was doing about 4% profit...not sure what you know about business, but a 4% margin is far from profitable...Why would they go south?? Simple....cheaper labor, from the same union, and higher profits. Just like today, whatever Cargil cant handle will ship south...Is every one just holding their cattle at home right now? No, tons are going south just with this little interuption. Im have a feeling there is

Ya whole lot more at play here than meets the eye. Nillsons bought it for 145 million, and are firesaleing it at 100 million with no debt...Does that make a lot of business sense? If they can boost the profits, yes, likely no reason to ever leave...but lots of scenarios out there...

They sold at 100 million while not taking any debt or any lawsuits with them.

Even if they shutdown the plant, it's not like they will abandon a 100 million dollarplant. From our feedlot perspective next to nothing has headed south. We finally got some(50 loads) sold to Cargill.

Nillson brothers had no experience running a packing plant, and as one of their bigger suppliers, you could tell.

Cheaper labor? Where are they going to find cheaper labor than in Brooks? Those guys don't make very good coin.

Yes there are thousands of scenarios. For all we know JBS could buy the plant and sell it tomorrow, doesn't make sense, but neither does spending 100 million on a plant to shut it down.

 

[byronkentgraham]

messed up

 

[Longhorn]

They sold at 100 million while not taking any debt or any lawsuits with them.

Even if they shutdown the plant, it's not like they will abandon a 100 million dollarplant. From our feedlot perspective next to nothing has headed south. We finally got some(50 loads) sold to Cargill.

Nillson brothers had no experience running a packing plant, and as one of their bigger suppliers, you could tell.

Cheaper labor? Where are they going to find cheaper labor than in Brooks? Those guys don't make very good coin.

Yes there are thousands of scenarios. For all we know JBS could buy the plant and sell it tomorrow, doesn't make sense, but neither does spending 100 million on a plant to shut it down.

Im not sure if I am reading this sentence right, but....It should read JBS BOUGHT for 100 million and no debt and liabilities...

All the debt and possible lawsuits which have already started in BC will be Nillsons problems...

YOU guys may not have taken any cattle south but many others have. 4500 head a day lost x 20 plus days = 90,000 head. Cargil added what? One more day a week I believe? That didnt fill the gap.

I agree they wouldnt shut it down immediately for sure...but we are getting off topic, mine being that it is sad to see another Canadian business lost to a foreign company.

Heck, it might turn out to be the best thing that happened since Tyson owned it, but Im not convinced yet...thats all

 

[Longhorn]

messed up

Agreed!!

 

[byronkentgraham]

True, but for me, I could give a crap about prices at this point, more concerned with losing control of the packing market, selling off to a foreign company. It is also setting the precedent that the US packers will be controlling the bulk of all packing plants in Canada, giving them to opportunity to form a monopoly...Long term, they 'could' affect prices in a very big way...short term, yes likely wont affect prices. Are you raising cattle for just one year? I didnt think so...

There already is a monopoly Cargill owns 1 of the big plants in Alberta Nillsons owns 2.

 

[byronkentgraham]

Im not sure if I am reading this sentence right, but....It should read JBS BOUGHT for 100 million and no debt and liabilities...

All the debt and possible lawsuits which have already started in BC will be Nillsons problems...

YOU guys may not have taken any cattle south but many others have. 4500 head a day lost x 20 plus days = 90,000 head. Cargil added what? One more day a week I believe? That didnt fill the gap.

I agree they wouldnt shut it down immediately for sure...but we are getting off topic, mine being that it is sad to see another Canadian business lost to a foreign company.

Heck, it might turn out to be the best thing that happened since Tyson owned it, but Im not convinced yet...thats all

They are suing XL not nilsson brothers. JBS will have to deal with the lawsuits should they choose to buy the plant.

 

[byronkentgraham]

Excel is the brand name the Cargil packs their meat under which is confusing but different from XL Meats which is Lakeside.

XL is Nillson brothers company. They have one plant in Calgary, the one in brooks and the 2 in the US.

 

[Longhorn]

They are suing XL not nilsson brothers. JBS will have to deal with the lawsuits should they choose to buy the plant.

I disagree...As the CURRENT owners of XL the Nillsons will be responsible for any lawsuits...the sale details are as follows from the announcement

"Upon exercising the exclusive option to purchase the above assets, JBS USA agrees to pay USD $50 million in cash and USD $50 million in JBS S.A. shares," said the company's news release.
"Under no scenario will JBS USA assume any of XL Foods' debt or liabilities."