JBS Natural Beef

[rkaiser]

Hay there folks. Looks like JNS is coming to save the beef industry in Canada and there is not a darn thing I can do about it.. LOL.. Does anyone have any knowledge or experience with their natural beef program? Scott?

 

[katrina]

Hi Randy!!! Nice to hear from you.... What's been happening in your world??

 

[Anonymous]

Beef recall was likely 'death knell' for revenue-starved XL Foods


By Matt McClure - Calgary Herald

October 18, 2012



CALGARY — Just three years ago, Brian and Lee Nilsson paid $145 million US to buy the Brooks packing facility and adjacent feedlot and fertilizer operations that made Edmonton-based XL Foods Inc. Canada's largest domestically owned meat processor.



But amid the country's biggest ever beef recall, the brothers are now handing the keys for their shuttered plant to multinational protein processer JBS USA, and offering to sell those assets, plus a packing plant in Nebraska and two other closed facilities in Calgary and Nampa, Idaho, to the industry giant for just $100 million US.


As revenue dried up after federal inspectors suspended the licence of the Brooks plant three weeks ago because of concerns it was producing product contaminated with E. coli0157: H7, industry analyst Kevin Grier said Thursday the Nilssons may have had no other option but to walk away.



"They were definitely not negotiating from a position of strength," Grier said.



"The list of potential buyers started and stopped with JBS."



As it steps into the breach hoping to get permission from federal inspectors to reopen the plant and kicks the tires on a potential purchase of XL Foods' assets, JBS was at pains in its news release to say it won't cover any of the red ink in which the Nilssons may now be drowning.



"Under no scenario will JBS USA assume any of XL Food's debt or liabilities," the release said.



While it is difficult to get a full picture of the Nilsson's current finances because they are a private company, land titles and corporate records show the brothers took on substantial debt when they attempted to swallow the massive Brooks operations from another industry giant, Tyson Foods, in early 2009.



To finance the purchase, a consortium of lenders headed by HSBC Bank Canada gave XL Foods a $225-million line of credit at an interest rate of 25 per cent.



A Vancouver-based company that shares the same corporate address as a plant owned by meat renderer West Coast Reduction Ltd. also extended a $35-million mortgage to finance the purchase. A West Coast Reduction official refused to confirm the company was the source of the funds, but Ridley Bestwick did say the company purchased offal and other products from XL Foods and rendered them at its plants across Western Canada.



As part of its 2009 purchase deal with Tyson, XL Foods paid $55.5 million in cash and another $51 million last March. The Arkansas-based company still holds $24 million in XL Food's preferred stock that is redeemable through March 2014.



Around the time it had to make the 2011 payment to Tyson, the Nilssons pledged their 75,000-head feedlot operation and other lands near Brooks as security on a $18-million mortgage from Metropolitan Life Insurance Co. at a rate 4.65 per cent and a $20-million loan from Bank of Nova Scotia at a rate of prime plus 10 percentage points.



Farm Credit Canada, a federal Crown corporation, is now on the hook for Metropolitan's loan to XL Foods, having purchased the life insurer's entire agricultural loan portfolio just days before the company's E.coli problems become public.



While all the loans and mortages are currently listed on land titles, it's unclear how much the Nilssons owed banks and other companies.



Tyson's financial reports show the Brooks operations had gross sales of approximately $1.3 billion US during the year before the sale, but a pre-tax profit margin of just 4.3 per cent in the months before it traded hands.



Grier, who works for the George Morris Centre, an agriculture economic research institute in Guelph, Ont., said his analysis of prices for cattle and the meat packers produce suggest the XL Foods probably did well in the first two years after they purchased the Brooks plant, but he expects that since then the Nilsson brothers may have been losing money.



"I think they probably had two good years, but as the supply of cattle became tighter they probably had to pay more than they would have liked to," he said.



While the Nilssons' vertical integration through their ownership of feedlots and auction marts around Alberta and Saskatchewan may have insulated them somewhat from this rise in cattle prices, Grier said they were also being hit by a high Canadian dollar that made their meat more expensive in the key U.S. market.



When American authorities closed the border to meat from the Brooks plant and the Canadian Food Inspection Agency pulled the facility's operating licence last month, Grier said it was likely the company's death knell.



CFIA isued a statement today saying all its decisions regarding recalls continue to be based on scientific evidence and a precautionary approach to protect consumers.



"Time will tell where the responsibility lies for contaminated product reaching the market, but millions have been lost by XL Foods and the entire industry in a recall that became a debacle," he said...



more

http://www.vancouversun.com/business/Beef+recall+likely+death+knell+revenue+starved+Foods/7412456/story.html

Several buyers talking at the sales ring yesterday noted that JBS purchase now puts them with a foothold across the continents of both North America and South America..

 

[Mike]

JBS - "Aspen Ridge" Natural Beef

No hormones

No antibiotics

They claim it's all 100% Angus. But we all know how crooked that statement is...........................................................