Meat Packers Screwing Albertans

Props to Alberta New Democrat Brian Mason for digging this up:

A draft report prepared for the Alberta Beef Industry Council paints a disturbing picture of the impact of the Alberta governments mad cow compensation package.

The report claims that Alberta packers have seen their gross margins increase by 200% since May of last year, in spite of the closure of the US border to Canadian beef. Margins are double what American packers are receiving.

According to this document, the gross margin of Alberta packers has tripled since mad cow, said New Democrat MLA Brian Mason, who obtained a copy of the report. At the same time cattle producers are going under, packers are making a fortune.

Evidence in the report suggests price fixing by meat packers. According to the report, meat packers simply discounted the price they were prepared to pay for the cattle by the amount of the government support payment.

“A compensation package should keep the industry afloat,” said Mason. “It’s not supposed to triple the margins of one segment of the business.”

The Alberta government BSE relief plan supported feedlot owners by topping up the price of their cattle. Mason says packing plants buy cattle at rock-bottom prices; increasing their margins, then sell to the grocery chains at the same rate as always.

Two large American companies, Cargill and Tyson, slaughter 90% of the finished cattle in Alberta, said Mason. They are setting the purchase price for beef, then selling to grocery stores at the same, pre-mad cow rate.

The $800 million BSE compensation plan padded the bottom line of packing houses, said Mason. The Tories left the smaller cow-calf operations in the dust, while once helping out their corporate friends. — NDP Press Release

While I normally take anything said by a New Democrat with a grain of salt (or the entire salt shaker), the stuff here from Mason is on the level. This is exactly the same thing I’ve been hearing from all of the ranchers I know over the past year. They’re getting screwed by the packers.

When the $800 million in aid money finally trickled out to farmers, the meat packers immediately discounted what they were paying for beef by the same amount. The net result? Two American companies just sucked up a large pile of our tax dollars thereby screwing farmers out of a fair price for their cattle, consumers out of a discount in the grocery store, and taxpayers out of their hard-earned money.

If you’re an Albertan and this sort of thing pisses you off, please e-mail Premier Ralph Klein and demand he get an investigation going. Klein has done such a remarkable job of avoiding this issue that I’ve started digging to find out if he’s been taking any campaign contributions from two certain meat packers…

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