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FEBRUARY 28, 2013 | WWW.PRODUCER.COM | THE WESTERN PRODUCER
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PROCESSING | FOOD SAFETY
New owners upgrade safety measures JBS takes over | Company official says Brooks, Alta., plant is outperforming others in the industry BY BARBARA DUCKWORTH CALGARY BUREAU
BANFF, Alta. — A new management style has arrived at the former XL Foods Lakeside beef plant in Brooks, Alta., since JBS took over last fall. The multinational company introduced new technology, staff training and upgraded food safety procedures to make Lakeside Packers the best performing plant in the JBS chain, said Bill Rupp, president of the JBS beef division. The plant was closed last year because of E. coli 0157:H7 contamination and Canada’s largest ever beef recall. JBS sent cattle to the United States for bacterial testing to see if there was a difference between Canadian and American cattle from a microbiological standpoint. “If anything, they outperformed the control group we compared them to in the U.S.,” he told the Alberta Beef Industry Conference held in Banff Feb. 20-22. “Since October, it has been our best performing plant from a food safety standpoint,” he said. “We have done tens of thousands of tests for E. coli in that plant since we started it up in late October and we have literally seen a handful of positive results where we have had to take that meat out of the market and send it to a cooker,” he said. “We believe this plant is going to do very good things for JBS and the Canadian industry going forward.” Besides taking a new approach to food safety, the plant will also be
JBS, the new owners of the former XL Foods plant in Brooks, Alta., compared bacterial presence in Canadian cattle with American animals. The Canadian cattle outperformed the American control group. These cattle were gathered at the water trough on the Trask Ranch near Pink Mountain, B.C. | JOAN TRASK PHOTO melded into a global sales program to move beef across Canada, the United States and internationally. It has been cleared for export sales, with the most recent shipments sent to Mexico. JBS-USA is based in Greely, Colorado, where pricing decisions are
made daily on information from around the world. “We believe our best competencies is our international presence,” Rupp said. The company started as a familyrun business in Brazil more than 50 years ago and eventually developed
international markets and a network of sales offices around the world. The company can process 40,000 head of cattle per day and supplies a number of branded beef programs. JBS believes working closely with food service and retailers is a way to promote brands and build customer
loyalty, even as North America faces five consecutive years of declining cattle supplies and flat consumer incomes. Rupp said the relationships within the beef industry are often acrimonious, but it is time to realize pork and poultry are the real competitors by being cheaper and plentiful. “As long as we have those views, it is going to very difficult for us to continue against the other proteins and have an overall business strategy that really targets the consumer and really understands what the consumer wants,” he said. Wholesale beef prices are soaring, and Rupp said retailers’ ability to pass along higher prices is one of the great challenges of this year. Retail beef prices are record high and struggle against pork and chicken. Beef averaged $4.77 per pound and chicken was $1.86 last year, said market analyst Steve Kay. Ground beef accounts for more than half of all beef sales and usually retails at $1.99 per lb. It is now $2.49$2.99 per lb. These record prices are coming at a time of 25 to 30 percent overcapacity in feedlots and packers in North America, which is a signal that it is time to make big changes or go out of business. Some facilities are likely to close by the end of this year. “These packing plants are $300 million assets and it is not easy to put the padlock on the gate and walk away,” Rupp said. “There are going to be some more tough things happen in our market.”
WEATHER | FORECASTS
Forecast has U.S. feedlot owner preparing for drought Weather watch | Long-term weather forecasts show conflicting assessments for Western Canada this spring and summer BY BARBARA DUCKWORTH CALGARY BUREAU
BANFF, Alta. — J.D. Alexander’s corn harvest was 60 percent of normal last year. It left him short of feed grain but also short of optimism if long-range weather forecasts for continued drought in the United States are correct. The wells at his Nebraska feedlot are drawn down, and he is looking to buy more feed than usual. “We are short of feed for what we would normally produce,” said the past president of the National Cattlemen’s Beef Association. “At the end of the season, our water was a little bit challenging for irrigating. When you are watering the crops,
your water levels lower and you have to adjust your wells,” he said. Sixty-seven percent of the U.S. is in a drought that extends from Texas to South Dakota and is moving toward the Rocky Mountains. “We have set the stage for a very dry season on the Plains,” said Art Douglas, climatologist and professor emeritus with Creighton University in Nebraska. Canada is in a better position, he told the Alberta Beef Industry Conference held in Banff Feb. 20-22. He bases his long-term forecasts on sea surface temperatures, historical data, wind patterns and other global events. Surface temperatures in the Pacific Ocean are cooling, which indicates the return of La Nina and drought for
much of the U.S. “Anytime it is cold from Alaska to Hawaii to the equator, Western Canada tends to be wetter than normal,” he said. However, current forecasts from international weather and climate agencies are offering contradictory assessments of current conditions. “I don’t think the models know what is happening right now,” he said. Douglas believes the world is in a transition period and shifting toward La Nina conditions that favour drought for the American Plains. “This winter’s forecast going into the spring and summer does not have a strong confidence level that we would like to see at this time of year,” he said.
He thinks Western Canada is heading into a cool spring with adequate moisture levels because of extensive snow cover. Assessments of snow cover for the southern prairie provinces show it is holding 10 to 15 centimetres worth of moisture and as much as 20 cm in northern reaches of Alberta, Saskatchewan and Manitoba. However, southern Alberta from Calgar y to L ethbr idge is dr ier because there is little snow. British Columbia and western Alberta can expect a hot summer while the central Prairies should experience near normal temperatures. Central Alberta could find itself dried out, but slightly more precipitation is forecast for Saskatchewan and Manitoba. Douglas is also warning of a cooler
climate over the next three decades based on analysis of weak sunspot activity. The world could experience conditions closer to what was recorded nearly 400 years ago during a period called the Little Ice Age. Sunspots were scarce between 1600 and 1715, and cold winters in England and France were the norm. Sunspots have an 11 year cycle, with the last maximum peak reached in 2001-02. Less activity means there is less energy from the sun to warm the oceans. “The sun is starting to act differently,” Douglas said. “The next sunspot maximum will be lower than the one we have now, and we will see the oceans cool with the potential for a cooler climate.”