By Sheri Monk

Northwest Consolidated Beef Producers (NWCBP) sent a letter to all members last week warning that Canada’s major beef processor be trying to break the group apart.
The beef producers group markets fed cattle (called fats), ready for slaughter. Members are primarily feedlots of varying sizes – mostly in Alberta and Saskatchewan, but there are also a handful from Manitoba.
The letter, dated Jan. 22, is signed by the company’s marketing manager, Vern Lonsberry.
“This letter is to make all members aware that on Thursday, January 21, we were notified by XL Lakeside that they will no longer bid competitively on the Northwest show list if we continue to sell cows on behalf of our members. It was further stated that they would pursue individual members with attractive bids, thus attempting to break up the organization.
Northwest cannot and will not bow to these tactics. In our three years since inception, Northwest has become the largest marketer of fed cattle in Canada due to the commitment and resolve of our members. This resolve is now being tested.

Due to the changes and consolidation within our industry in the last three years, this resolve and commitment is more important now than ever and we must stand our ground on this matter. We ask our members to bear with us as we work through this situation,” the letter stated.
A senior spokesman from XL Lakeside, (owned by Nilsson Bros. Inc.) said the contents of the letter were news to him and the company has no plans to stop buying NWCBP’s fed cattle.
The non-profit organization was launched in 2006 with the intent of giving producers an edge when marketing their finished product.
“The number of cattle sold into the cash market has declined significantly. NWCBP feels that feeders are at a disadvantage in dealing with the packing industry. Feedlot managers face this disadvantage when they market cattle without receiving fair price disclosure and fair fed steer basis. This price disadvantage with the USA [sic] has cost the feeding industry a large amount of money when selling individually or into a grid system,” states the company’s website.

The group reportedly represents 60 per cent of the ‘show’ – fat cattle being offered at any one time in western Canada. The cows referred to in the letter are cull cows, typically old females too old to calve. Sometimes, they are younger animals not with calf and thus, not worth putting feed into over the winter.
However, NWCBP specializes in fat cattle – young animals finished on grain or barley to be sent direct to slaughter. Cull cows do not represent the group’s main interest and many of its members currently sell their cows at auction or through private arrangement with the processors.
One member who wished to remain anonymous said he doesn’t use the organization to sell his cull cows because they charge a $10 per head fee for marketing them. Another member said they believe XL Lakeside wants to curtail NWCBP’s cull cow marketing to drive the animals into auction houses owned by Nilsson Bros.
Slaughterhouses need to move as many animals as they can through their doors to operate efficiently and volume is a strategy the XL entities are well-known for. The XL Foods plant at Moose Jaw is still closed. Right now, the company maintains it is closed because of labour negotiations, but initially, the plant was closed last year because the company said there were not enough cull cows in the market to operate profitably.

In recent weeks, cull cow prices have risen slightly, about 10 cents per pound. While some theorize the increase is due to anticipated demand for hamburgers during the upcoming Olympic Games, most analysts attribute the increase to the lack of cull cows brought to auction in the first part of January during the cold snap.
The Badger was unable to find anyone on the board or management team of NWCBP to comment on the matter before deadline.