Upgrades are on tap for a major pork packing plant in western Manitoba, using federal funding that has the province’s cattle producers asking now to call quits on a checkoff to support beef packing.
The federal government on Wednesday announced a $10 million repayable loan for work at the HyLife Foods pork plant at Neepawa, about 75 km northeast of Brandon, from the government’s Slaughter Improvement Program.
The program money will help fund upgrades to the plant’s “wet area,” expansion of its cooler and cutting areas, new equipment and “improvements to the work flow to enable further processing.”
“The federal government’s investment together with our financial commitment to HyLife Foods will help position us to succeed with our plant upgrades and value-added product mix,” HyLife president Don Janzen said in the federal release.
The HyLife plant started life in 1986 as Springhill Farms, owned by a group of Hutterite Brethren colonies in the province. HyLife, Canada’s biggest hog production company (known until this year as Hytek Ltd.), bought the plant in 2008 and renamed it HyLife Foods in April this year.
According to Manitoba Pork, which represents the province’s 500 hog producers, the upgrades will boost HyLife’s processing capacity to 1.4 million pigs per year and provide for another 250 jobs at Neepawa.
The announcement by area MP Robert Sopuck follows the federal government’s withdrawal of conditional approval for those funds to support Keystone Processors, a beef slaughter plant project in Winnipeg.
The Keystone plant had been backed by Manitoba cattle producers and the Manitoba Cattle Enhancement Council (MCEC), which the province set up in 2006 to administer an investment pool funded by a compulsory but refundable levy of $2 per head on all cattle produced and sold in Manitoba.
The approval for the $10 million federal loan for Keystone was announced in late 2009 and was considered at the time to be a “key initiative” of the Slaughter Improvement Program.
However, the federal government has since decided Keystone was “unable to demonstrate that it could meet the conditions of the program.”
In a separate statement Thursday, federal Agriculture Minister Gerry Ritz said the federal ag department has conducted “10 separate reviews” of Keystone’s application since 2009.
“After numerous deadline extensions spanning nearly two years, (Agriculture and Agri-Food Canada) notified both the MCEC and (provincial Ag Minister Stan) Struthers that its business plan had not met the appropriate criteria to ensure the responsible use of taxpayers’ dollars,” he said.
Ritz didn’t specify what criteria were left unmet, but Manitoba’s cattle producers, who along with the province and MCEC had put up $7.5 million for Keystone, aren’t ready to pursue that matter further.
“We are disappointed that this effort to expand beef processing in Manitoba has not been successful and it is unfortunate that federal funds are moving outside of the beef industry,” Manitoba Beef Producers president Jay Fox said in a separate release Wednesday.
“However, it is time to stop throwing good money after bad and end this tax on farmers,” said Fox, who farms at Eddystone.
The MCEC was set up in the wake of the BSE crisis to back development of beef slaughter capacity. Manitoba’s producers had faced few feasible options to ship animals to export-eligible plants following the 2003 closure of the U.S. border to Canadian cattle.
“The funds currently collected by MCEC would be put to far better use if the government of Manitoba were to immediately end the $2 per head MCEC tax and let these farm families keep these badly needed funds in their own pockets,” Fox said Wednesday.
MCEC had no official comment as of Thursday.
International operator takes Man. beef packer’s helm, Dec. 30, 2010
Man. beef plant up for federal loan, levy funds, Nov. 3, 2009