By Carol Martin
Wednesday, April 15, 2009
Northern Quality Meats is progressing well with its recovery plan and has the support of the farmers who depend on it to get their product to local markets, says Tim Harris, chair of the troubled Desbarats-based abattoir.
Last week several members of the slaughterhouse’s board sat down with the people at Algoma University who are helping them with their business plan.
“Low cash flow since late last year put us in a bind,” Harris said. “We’ve been having some trouble keeping up.”
Harris says it’s too early to speculate on what direction the Sault area’s only abattoir will take in the future.
But there are a few items at the top of his to-do list.
The business plan is the most pressing task ahead for Northern Quality Meats, which currently employs five full-time and eight part-time staff.
During the busiest times of the year, te business has employed more than a dozen for temporary full-time work.
The main goals of the business plan will be to build a market for local meat products, to provide buyers with a consistent supply of product and to find ways to mediate cash-flow issues in a largely seasonal business, particularly by exploring value-added processes.
Harris said cash-flow issues have left Northern Quality Meats vulnerable, and Algoma University is looking into ways to access grants or loans to revitalize it and set it back on the path to viability.
One major contributing factor in the abattoir’s cash problems has been the world economy and demand for leather products.
“It’s normally slower in January, February and March,” Harris said. “That’s why we’ve come to kind of depend on selling hides in China in November.”
But last year, no one wanted hides and Northern Quality Meats took a major hit.
“With these cash-flow problems we haven’t been able to purchase as much product,” he said.
And without a consistent flow of product to the market, the abattoir loses customers when they go looking for what they need elsewhere.
But the abattoir has experienced a high degree of support from the 200 or so local farmers for whom it processes cattle and poultry.
Support that was demonstrated tangibly at a meeting on April 2.
“We had a lot of good general ideas and suggestions come out of our meeting,” Harris tells SooToday.com. “We kind of knew we had support. But now we know for sure where we stand.”
Harris said that several farmers at the meeting offered to volunteer to help with marketing, research and anything else that needed to be done for the business plan.
Some also offered to prepay some of their future processing costs.
Harris said the board we will work with the abattoir manager to collect what is necessary for the successful short-term operation of the plant.
He’s positive that this support, combined with the expertise being offered from Algoma University, will pull a viable plan together in time to revive the abattoir.
It’s vital to area farmers, he said, and to anyone in the area who wants to buy local meat.
“[The next closest abattoir] is just too far away for farmers to send their animals to be inspected, slaughtered and sent back,” he said. “The cost would be prohibitive.”
Northern Quality Meats is not the only abattoir experiencing difficulties, either.
“A lot of abattoirs have closed,” Harris said.
It’s very costly and difficult to keep up with all the ongoing changes demanded by the Canadian Food Inspection Agency, and Harris said that other abattoirs simply haven’t been able to continue.
Northern Quality Meats, on the other hand, could be revived just in time to take advantage of a trend toward buying and eating local foods, if a good plan is implemented soon, he said.
Harris said there’s a growing desire to know where the meat we eat comes from, how the animals lived and what’s been done to the meat between field and table.
Northern Quality Meats could be in a position to provide answers to those questions and to the perpetual question of what’s for dinner very soon.
The full text of a media release from Northern Quality Meats follows.
Northern Quality Meats, the only local abattoir within 200 miles, has been dealing with a cash-flow problem.
Like almost all small agricultural operations in today’s environment, it operates on a very narrow margin.
The collapse of the market for beef hides recently as the price plummeted from $35 (once as high as $90) to $5 each hide, created difficulties in what is traditionally the least-busy season, from January to March.
Northern Quality Meats was purchased out of bankruptcy in the year 2000 by 30 individuals, almost all farmers, who believed the facility was crucial to the agricultural community.
The shareholders elect a 10-member board, which administers the business, contributing their time as unpaid volunteers.
Seeking creative solutions, the board invited shareholders and local farmers to a meeting on April 2 in Bruce Station.
Over 80 people attended offering a wide range of suggestions.
One which can be of immediate help to the cash-flow problem was a suggestion that farmers pay now for service they intend to use in the busy season.
The board is processing all suggestions and is developing a business plan with the help of Algoma University and other financial advisors.
The board continues to believe the abattoir is crucial to this area.
Without it, no local meat will be available to Sault Ste. Marie and area consumers without it, and all animals except those for farm families will have to be sent to Sudbury or further for processing.