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JANUARY 10, 2013 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
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HOGS | SELLING FRANCHISES
AG STOCKS FOR DEC. 31-JAN. 4
Genex outlines franchise plan
Canada’s unemployment rate fell to 7.1 percent in December from 7.2 last month. American unemployment stayed at 7.8 percent. All indexes rose. The TSX composite climbed 1.8 percent, the S&P 4.6 percent, the Dow 3.8 percent and the Nasdaq 4.8 percent.
Two income avenues | Shareholders reduce risk with revenue from hogs and compost
Cdn. exchanges in $Cdn. U.S. exchanges in $U.S.
GRAIN TRADERS NAME
BY BARB GLEN LETHBRIDGE BUREAU
MEDICINE HAT, Alta. — Bob Notenbomer envisions a one-acre greenhouse with heated concrete floors, roof panels that can open to the sky, sophisticated electronics and live webcams for operator and public viewing. Inside will flourish 3,000 feeder pigs. The current garden centre and greenhouse operator and former chief executive officer of Pure Lean Hogs Inc. has registered a new business, Genex Compost Company Ltd., which he sees as a new concept in hog production, family farming, humane animal handling and environmental friendliness. Notenbomer said he started working on the concept in 1993. “There hasn’t been one day since then that this hasn’t rolled through my head,” he said in a late December interview. His plan involves selling franchises in Genex so there will be multiple Canadian operations supplying hogs and compost in two revenue streams. Built to Genex design specifications, the greenhouse buildings would be one-person operations that involve group housing of 3,000 feeder pigs and daily collection of manure. A compost process would turn the excrement into usable fertilizer within 23 days. Genex has begun building the first barn north of Swift Current, Sask. Part of Notenbomer’s confidence in his concept is based on his past hog barn designs used at Pure Lean operations in Bow Island and Oyen, Alta. Those operations went under in the early 2000s because of market conditions and other challenges. “We know that the system will work. There’s every technical reason to know that this system will produce 9,000 hogs a year in a family farm manner and provide a good living for the people that run it,” Notenbomer said. “We will start with one barn, and hope for six, eight or 10 barns within five years.” Hogs will be raised in group housing with heated concrete floors and straw bedding. The operator can determine where the pigs congregate by adjusting floor heat, which facilitates daily barn manure cleanout using a small tractor. The only water needed is for hog consumption. Unmedicated rations will be provided through electronic feeders. Weight and temperature will be measured when each animal passes through a stanchion on the way to the feeder.
EXCH
ADM Alliance Grain Bunge Ltd. ConAgra Foods Legumex Walker W.I.T.
NY TSX NY NY TSX OTC
CLOSE LAST WK 29.22 12.20 74.47 30.24 6.22 13.15
27.06 13.09 71.99 29.20 6.49 13.15
PRAIRIE PORTFOLIO NAME
EXCH
Assiniboia FLP OTC Ceapro Inc. TSXV Cervus Equip. TSX Ridley Canada TSX Rocky Mtn D’ship TSX
CLOSE LAST WK 50.545 0.055 19.00 9.29 12.05
50.545 0.075 18.47 9.38 11.27
FOOD PROCESSORS NAME
EXCH
BioExx Hormel Foods Maple Leaf Premium Brands Smithfield Sun-Rype Tyson Foods
Bob Notenbomer, left, and his son, Logan, hold samples of composted and pelletted hog manure, similar to what they expect will be produced through the Genex Compost Company Ltd. Notenbomer’s concept involves raising hogs in a greenhouse type barn, shown below, then composting manure and selling finished hogs and fertilizer. |
TSX NY TSX TSX NY TSX NY
0.12 34.31 11.82 17.27 22.80 5.75 20.34
0.095 30.68 11.79 17.14 20.96 6.10 19.18
FARM EQUIPMENT MFG. NAME
EXCH
AGCO Corp. NY Buhler Ind. TSX Caterpillar Inc. NY CNH Global NY Deere and Co. NY Vicwest Fund TSX
BARB GLEN PHOTO
CLOSE LAST WK
CLOSE LAST WK 50.78 5.66 94.92 42.21 88.67 12.49
48.07 5.68 86.81 39.79 84.55 12.48
FARM INPUT SUPPLIERS NAME GENEX FACILITATOR
In good weather, the hogs will have access to an outside concrete pad within a larger enclosure. On hot days, a misting mechanism will be used to cool them. As for the compost, the concept involves an aerated concrete-floored channel with a compost turning machine mounted on the channel walls. The manure is composted in slightly more than three weeks to the point where it can be bulk stored or pelletized for shipment and sale. Bill desBarres is acting as a facilitator for Genex as it launches its first barn and seeks franchisees. “We’re going to address three different things,” said desBarres. “The family farm can come back, animal byproducts will have a market, which can hopefully reduce the cost of meat protein that goes to the table.” Added Notenbomer: “And the animals are going to have a much better life.” He said Genex operations will be different from current commercial hog facilities. “If a normal person that’s never seen a hog barn before walks inside those things, they look at this and they just think this is just absolutely amazing that we see this as normal, that these animals actually lay wall to
EXCH
Agrium TSX BASF OTC Bayer Ag OTC Dow Chemical NY Dupont NY BioSyent Inc. TSXV Monsanto NY Mosaic NY PotashCorp TSX Syngenta ADR
BILL DESBARRES
WESTBROOK GREENHOUSE SYSTEMS PHOTO
wall, on concrete, over a manure pit in a dark, ventilated building. We’re going to completely change that.” The all-in, all-out Genex operation will be turned three times per year, with a 10 to 14 day idle period between to allow sanitation. The number of hogs is determined by what the composting system can handle per day. DesBarres estimated the cost of a franchise at $2.5 to $2.7 million, although that has yet to be determined. It would include the structure, computers, training and support but not the land. A minimum 10 acres would be needed for one operation, said desBarres. “You would become a partner in the Genex team, and a shareholder, and each franchisee will be affected by the profits of each of the other barns.” Notenbomer said the two streams of income would protect operators from hog market volatility. From his experience in hogs and greenhouse operations he has learned there is a
demand for organic compost and has markets ready to buy the product. Genex will acquire the hogs for each franchise, set the criteria for the operation, provide the feed rations and market both hogs and compost, added desBarres. Notenbomer estimates that the average profit of $20 to $25 per hog could be doubled if the compost is also sold. However, he plans to proceed carefully, with his son, Logan, operating the first facility. Jennifer Brown, an ethology research scientist at the Prairie Swine Centre in Saskatoon, said Genex’s plans for hog handling sound promising. Increased interest in the humane handling of food animals makes it more important to show the public how animals are raised, she said. She knows of one American poultry barn that has online public viewing access of the type Genex proposes. As well, straw bedding and more space per hog can reduce fighting and the injuries that pigs can inflict on one another.
CLOSE LAST WK 102.67 94.97 95.40 33.63 45.71 0.96 96.11 58.62 41.03 80.76
97.82 93.15 94.20 31.62 44.71 0.90 93.08 55.21 39.71 80.19
TRANSPORTATION NAME
EXCH
CN Rail CPR
TSX TSX
CLOSE LAST WK 90.57 106.08
89.96 100.50
Toronto Stock Exchange is TSX. Canadian Venture Exchange is TSX Venture or TSXV. NAS: Nasdaq Stock Exchange. NY: New York Stock Exchange. ADR: New York/American Depository Receipt. OTC: Over the counter. List courtesy of Ian Morrison, financial advisor with Raymond James Ltd. in Calgary. Member of CIPF. Equity prices are from Thomson Reuters and OTC prices from Union Securities Ltd, Assiniboia Farmland LP. Sources are believed to be reliable, but accuracy cannot be guaranteed. Within the last year, Raymond James provided paid advice regarding securities of Cervus Equip. Contact Morrison at 877-264-0333.
Mosaic earnings dip CHICAGO, Ill. (Reuters) — Quarterly operating earnings at Mosaic Co. fell 30 percent to $560 million from $797 million a year earlier, with the company citing lower sales volume. However, net income of $629 million for the quarter ended Nov. 30 topped the $624 million made last year. A new agreement with China brings in lower potash prices, but Mosaic head Jim Prokopanko expects higher volume.