Barn boss a referee and coach - The Western Producer

ICON GETS IMPROVEMENTS
Jerry Schiels and Andy Steel add wood to patch the side of the Azure - S.
Brown grain elevator, a landmark between High River and Cayley, Alta. |
MIKE STURK PHOTO
XL FOODS | PROCESSING
XL plant starts slowly
to ensure food safety
JBS manages production | Workers trained on protocols
BY MARY MACARTHUR
CAMROSE BUREAU
Meat is leaving the XL Foods plant
in Brooks, Alta., for the first time
since an E. coli outbreak forced its
closure in September.
“They’re shipping the product out
and it’s going to retailers. Everything
seems to be in progress,” said Doug
O’Halloran of the United Food and
Commercial Workers union.
JBS USA took over management of
the southern Alberta plant from XL
Foods in October. The Canadian
Food Inspection Agency pulled XL
Foods’ license to produce after food
safety concerns.
Nineteen people became sick after
eating E. coli contaminated meat
from the plant.
As part of its relicensing agreement,
the slaughtered beef must be held
until E. coli tests come back negative.
When JBS took over management
of the plant, it said it planned to
implement its own tough food safety
system that is already in place at its
eight U.S. plants.
“They’re taking great care to ensure
all the i’s are dotted and t’s are
crossed,” O’Halloran said.
The plant slaughtered almost 2,000
head of cattle per day before it was
shut down. Workers cited line speed
as part of the reason why food safety
standards may have been compromised.
The production line began at a
slower pace when the plant reopened
to ensure all workers understood
food safety protocols. The line is still
operating at a reduced pace, he said.
“They’re doing what is necessary to
ensure everyone is trained properly
and the best product possible is
going out the door.”
Workers have also been given more
authority to raise food safety issues,
O’Halloran said.
“So far the changes with JBS have
been very positive,” he said.
“We’ve got our fingers crossed it will
continue to have a heightened sense
of food safety and worker safety and
get this plant back operating fully.”
NEWS THE WESTERN PRODUCER | WWW.PRODUCER.COM | NOVEMBER 22, 2012
PURATONE | CREDITOR PROTECTION
Puratone’s call for grain
angers farmer left in cold
54,000 bushels delivered | Several farmers considering lawsuit
BY ROBERT ARNASON
BRANDON BUREAU
MORDEN, Man. — Sitting at his
dining room table, Robert Wiebe
looks like a man who hasn’t slept
much since the middle of September.
It’s been two months since Puratone
entered creditor protection, but
Wiebe is still enraged because the
hog production company owes him
more than $300,000.
Wiebe, who farms north of Morden,
delivered 54,000 bushels of winter
wheat to Puratone’s feed mill in Winkler
in late August and September.
Puratone paid him for only 16,000
bu. of wheat.
“I hauled all my winter wheat to
them,” said Wiebe, who has sold
grain to Puratone for years. “They
owe me for 38,000 bu. I delivered
them about 54,000 bu.”
If it wasn’t for an excellent corn crop
on his 2,200 acre farm, Wiebe said it
would have been difficult to cover the
$300,000 deficit.
“I had a super corn crop this year
and I am going to survive. Last year I
would’ve had to re-mortgage or shut
down,” he said.
It will take several years to recover
from the $300,000 loss, he added.
“That was me and my family’s paycheque
for the year,” he said.
The two weeks after Puratone entered
creditor protection Sept. 12
were particularly stressful because
he didn’t know his corn crop would
pull him through.
“The first two weeks, there was no
sleeping,” he said. “It was a dry fall so
(I) didn’t think the corn crop would
even make average. What are you
going to have to sell? How are you
going to survive this?”
Puratone produces 500,000 hogs
per year and is the third largest hog
production company in Manitoba.
With record high feed costs this summer,
Puratone was losing $20 to $50
on every hog it sold.
Maple Leaf Foods announced in
early November that it was buying
Puratone’s 50 barns and three feed
mills for $42 million. The deal will
likely be completed by December.
In a statement, Maple Leaf said it
isn’t planning immediate changes
for Puratone’s barns, which have
remained operational during the
creditor protection period.
However, it is unclear how the $42
million will be distributed to Puratone’s
creditors.
A court appointed monitor, Deloitte
and Touche, is overseeing the creditor
protection process. Puratone
owes $40.8 million to the Bank of
Montreal, $40.2 million to Farm
Credit Canada and $5 million to
Manitoba Agricultural Services
Corp. All three are secured creditors.
A creditor list, which is available
online, indicates that Puratone owes
Robert Wiebe, who farms near Morden, Man., delivered 54,000 bushels
of winter wheat, but only received payment for 16,000 bu. He is out
more than $300,000 and may never receive payment for his grain. |
ROBERT ARNASON PHOTO
$20,000 to $300,000 each to dozens of
Manitoba farmers who delivered
grain to the company before it applied
for court protection.
John Sigurdson, who farms near
Riverton, Man., is out $60,000 after
delivering grain to Puratone’s feed
mill in Arborg, Man.
“As it stands right now … we are
looking for a lawyer that works in
bankruptcy and insolvency,” Sigurdson
said. “As soon as your grain got
there, it was made into feed and away
it went.”
Wiebe assumed Puratone was
bonded and that he would eventually
be paid for his grain. Besides, Puratone
had called and asked him to
deliver his winter wheat.
“They phoned me and kept bugging
me to bring in grain. They were
short of grain, they said. So I brought
grain in for three weeks.”
On top of his financial loss, Wiebe
said a telephone conversation in the
middle of September with Puratone
chief executive officer Ray Hildebrand
put him over the edge.
“When I phoned the CEO, the big
boy, he told me his pigs were more
important than my farm.”
The Western Producer phoned
Puratone for comment but the company
declined.
Because of his loss and what he
calls a flippant reaction from Puratone,
Wiebe has joined the group of
Manitoba farmers considering a lawsuit
to recover their money.
At this point, however, it’s not clear
who they will sue because Puratone
owes more money than it received
from Maple Leaf.
As well, Maple Leaf bought Puratone’s
assets rather than the entire
company, which means it isn’t
responsible for Puratone’s liabilities
under Canadian regulations.
“We had a specific agreement in
PURATONE OWES LENDING FIRMS
AND FARMERS
MORE THAN
$86 million
WHO IS LIABLE?
5
Since Maple Leaf Foods announced
Nov. 1 that it was buying Puratone,
several Manitoba farmers and
Manitoba MP James Bezan have
said Maple Leaf should compensate
producers who sold grain to Puratone
and never received payment.
In a response, Maple Leaf spokesperson
David Bauer said the following:
“Maple Leaf is investing over $40
million to acquire this business and
keep it operating. This includes
paying full price for the grain, as
part of the purchase price. Once
the deal closes, which we expect in
about a month, or a little less, these
funds will be paid to the court,
which determines how the funds
are distributed. We are already paying
fair market value for the grain
and the pigs. And we are equally
committed to paying fair and competitively,
going forward.”
place for the purchase of the assets,
which does not include the outstanding
debt,” said Maple Leaf spokesperson
David Bauer.
Keystone Agricultural Producers
president Doug Chorney has heard
more than a dozen complaints from
Manitoba farmers about the Puratone
deal.
He said it’s unfair that the entity that
replaces Puratone can walk away
from its financial obligations.
“We don’t think it’s acceptable for
this business to carry on and all these
farmers not getting paid anything for
their grain,” he said.
“This creditor protection … prohibited
anyone from taking any action
and now it seems like everyone gets
off without any responsibility.”
KAP is looking to organize a meeting
in the next few weeks with the
players involved, including Maple
Leaf, Puratone and producers, to see
if there is a way forward.
Bauer said Maple Leaf is open to the
idea.
“We’re open to engaging all stakeholders
as part of the process.”