Cattle experts glad to see feedlot staying with Alberta investor
JBS Lakeside’s plan to sell its 75,000 head feedlot near Brooks to MCF Holdings, a subsidiary of Alberta-based Nilsson Bros. Inc., is being met with positive reviews by cattle industry analysts.
“The first thing that comes to mind when I think about the sale is it is good it is staying with Alberta investors,” says Alberta Cattle Feeders Association president and CEO Bryan Walton. “I think having an Alberta investor is definitely positive.”
JBS announced last Friday it was selling its Lakeside feedlot for $50 million. According to Shaun Haney, founder of RealAgriculture.com, JBS appears to be selling feedlots North America-wide in order to pay $1.8 billion in fines it owes in its home country of Brazil. The fines were levied against the company for its involvement in a national corruption and bribery scandal.
“JBS has been riddled with scandal,” confirms Haney. “The bribery situation going on in Brazil has left them with a big fine to pay, and so they are trying to raise cash to make that payment ... Someone like Nilsson Brothers stepping up to buy the feedyard could increase the probability of JBS sticking around to operate the plant. If they mothballed the feedyard, it starts those corporate wheels turning in terms of asking: Do we need to be here? JBS is an important part of the Canadian domestic slaughter capacity.” Walton agrees. “The infrastructure is not closing, it’s just changing hands,” he says. “Nilsson Brothers has knowledge of the industry, and has been in the business for a long time.”
Nilsson Brothers is also no stranger to the Lakeside plant and feedlot, having sold both to JBS for $100 million following the E.coli outbreak there in 2013, which crippled the Western Canadian meatpacking industry.
“It’s kind of old homecoming week for Nilsson’s,” states Haney. “Those I have talked to in the industry see this as a positive thing though. It puts the feedyard back into the hands of Canadian ownership, and it also most of the current employees are going to be able to hold onto their jobs. Some of those employees probably worked for Nilsson going back to 2013, and so it’s also kind of a homecoming for them as well.”