Prairie hog farmers can buy into N.D. hog plant

(Resource News International) — Hog farmers in both Manitoba and Saskatchewan will have the opportunity to join a producer co-operative looking to buy a controlling interest in a hog slaughter plant in Minot, N.D.

That’s according to Daryl Dukart, general manager of the Cloverdale Growers’ Alliance Co-operative (CGAC), a group of producers from North Dakota, Montana and Minnesota who have supplied Cloverdale Food Co., the plant’s current owners, with hogs for the past decade.

“We have had past visits with individuals in Canada. While nobody expressed a 100 per cent interest in going ahead with this, they were interested in what the plan is going to look like,” said Dukart, a rancher from Dunn Center, northwest of Bismarck.

At it currently stands, a letter of intent to buy a controlling share in the plant has been signed and a business plan is being developed.

Dukart said his group will be ready to approach Canadian and U.S. hog farmers in one to two months’ time with the final plan. The group must first decide what type of equity shares will be available and how many the group will be able to offer to Canadian producers.

Hogs from both Manitoba and Saskatchewan are currently slaughtered at the Minot plant, Dukart said.

As far as Dukart is concerned, at this point in time, the co-op will not change the cash price hog farmers receive, but producers who belong to the organization and sell through the organization will receive an annual dividend.

“Most producers know the pork processing margins in a packing plant for strictly slaughtered hogs is very small, probably a three to four per cent profit margin. But if you look at it from a positive side, there is probably a US$1 to $2 in additional revenue that will come back per head.”

For now, financial terms of the deal are not being disclosed. According to an article by the Associated Press, Cloverdale will remain a minority partner in the slaughter plant and will continue to be responsible for management. The article also reported that T.J. Russell, Cloverdale Food’s president and CEO, said all 50 full-time workers would retain their positions.

Dukart emphasized that although the CGAC is the group driving to create the new producer-owned organization, it will have a new name once additional partners come on board.

Dukart said he understands the crisis now facing Canadian hog farmers.

“I realize that even as we struggle down here in the U.S., the environment is a lot worse for pork producers up there than it is for ours. It’s not a pretty picture that is painted when I talk to Canadian producers.”