Strankman con­cerned af­ter Western Feed­lot winds down op­er­a­tions

The Drumheller Mail - - NEWS - Pa­trick Ko­lafa The Drumheller Mail

The agri­cul­ture in­dus­try was rocked last week by the an­nounce­ment that Western Feed­lots had de­cided to wind down cat­tle own­er­ship and cat­tle feed­ing op­er­a­tions.

The com­pany, which has sites near Strathmore, High River and Mossleigh, said in a state­ment on Wed­nes­day it would con­tinue to feed and mar­ket its ex­ist­ing in­ven­tory, but af­ter that, they would be end­ing feed­lot op­er­a­tions.

Western’s share­hold­ers chose this course of ac­tion due to the cur­rent high risk/low re­turn en­vi­ron­ment in cat­tle own­er­ship, which is in­con­sis­tent with share­holder ob­jec­tives,” said in a state­ment.

Fur­ther, it cited be­yond stresses in the mar­ket con­di­tions, pol­i­tics and pol­icy played a role.

“In ad­di­tion to strong head­winds in the cat­tle in­dus­try, the poor po­lit­i­cal and eco­nomic en­vi­ron­ment in Al­berta are also con­tribut­ing fac­tors to this de­ci­sion,” reads a post on its web­site.

MLA for Drumheller-Stet­tler and shadow min­is­ter for Al­berta Agri­cul­ture, Forestry and Ru­ral De­vel­op­ment, Rick Strankman says this de­vel­op­ment is frus­trat­ing.

“There were mar­ket forces at play, but it is frus­trat­ing when govern­ment poli­cies and the po­ten­tial in­sta­bil­ity that is be­ing cre­ated by things like the car­bon tax and min­i­mum wage,” he said. “That plays a role in Western Feed­lot’s an­nounce­ment.”

He says the min­i­mum wage in­creases would drive up the over­all cost of labour.

“It means those with 10 or 15 years ex­pe­ri­ence work­ing side by side with a new em­ployee with­out ex­pe­ri­ence mak­ing $15 an hour, and they are mak­ing $20, it causes frus­tra­tions that their wage shouldn’t be a lit­tle higher. That puts pres­sure on the op­er­a­tions and the own­ers,” he said.

He says other poli­cies im­ple­mented by the Al­berta govern­ment could have a neg­a­tive im­pact, in­clud­ing the car­bon tax. While the car­bon tax does not ap­ply to mar­ket, it does to some value added pro­cesses.

“Peo­ple just don't know the width and the depth of ef­fects these poli­cies are go­ing to have. For ex­am­ple the Car­bon Tax is go­ing to cost a sin­gle maltser $90,000 per month, he said. They use ap­prox­i­mately 90,000 gi­ga­joules of nat­u­ral gas per month to sta­bi­lize mois­ture in malt­ing bar­ley. The tax on that gas is go­ing to be $1 a gi­ga­joule in Jan­uary. They will have to pass that tax on to some­one else in an­other mar­ket.”

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