by SUSAN MANN
Great Lakes Specialty Meats of Canada Inc. of Mitchell and the numbered company 2268204 Ontario Inc. collectively owe Farm Credit Canada $5.4 million as of May 23, court documents show.
The 2268204 company also owes the Municipality of West Perth $84,137.30 as of May 7 in taxes that haven’t been paid.
On June 10, Farm Credit Canada applied to the Ontario Superior Court of Justice in London to have PricewaterhouseCoopers Inc. (PwC) appointed as receiver of all of the companies’ assets, undertakings and property. The court granted that request. The companies agreed to the appointment of PwC as the receiver.
Trevor Sutter, spokesman for Farm Credit Canada, says “while the court process is going on we really can’t comment.”
David Schwartz, president of Great Lakes Specialty Meats and 2268204, couldn’t be reached for comment. He’s also the president of two other pork packers that have recently declared bankruptcy – Quality Meat Packers Ltd. and Toronto Abattoirs Limited. All of the businesses were owned by the same person, Schwartz, but Great Lakes Specialty Meats and 2268204 were run as separate companies from Quality and Toronto Abattoirs.
An affidavit sworn May 30 by Ayan Gangopadhyay of Ottawa, senior account manager, special credit, Farm Credit Canada, says “events of default described in the credit agreement and mortgage and security agreements have occurred and” Farm Credit Canada is entitled to appoint a receiver. Farm Credit “believes the appointment of a receiver will enhance the prospect of recovery by FCC and protect all other creditors and stakeholders.”
In an earlier interview, Ontario Pork board chair Amy Cronin says pork farmers have all been paid for the pigs they shipped to Great Lakes Specialty Meats. The company stopped taking pigs June 2 and workers were told to not report for work last week and this week.
FCC provided $6.3 million in financing to 2268204 and Great Lakes Specialty Meats around Oct. 12, 2011 “to assist 2268204 with the purchase of property and to provide working capital to” Great Lakes Specialty Meats, the affidavit says. Great Lakes Specialty Meats leases the property from 2268204 and carries on its slaughterhouse and meat processing business at the property.
The loan to Great Lakes Specialty Meats was guaranteed by Quality Meat Packers Ltd. and Toronto Abattoirs Limited.
Farm Credit sent Great Lakes Specialty Meats and 2268204 a demand for repayment of its loan and a notice of “Intention to Enforce Security” on May 5, the affidavit says.
The companies asked Farm Credit to postpone enforcing its security until 12 p.m. May 23 to allow Great Lakes Specialty Meats additional time to negotiate a deal with Kanematsu Corporation to provide a working capital loan and/or an injection of equity into the company. Farm Credit agreed to the postponement but its conditions for doing so were not acceptable to the companies and specifically Quality Meat Holdings Limited “was not willing to backstop the decrease in GLSM’s (Great Lakes Specialty Meats) collateral,” the affidavit says.
Earlier this week, Ontario Pork chair Amy Cronin noted that Great Lakes had lost its ability to ship product into Russia “because there were some issues that they had and they didn’t renew their license to ship into Russia, and so given that is such a high proportion of what they do at that plant, they needed to stop taking hogs immediately.”
Rachael Burdman, a spokesperson with the Canadian Food Inspection Agency (CFIA) could not confirm whether the agency, which certifies exports to ensure they meet the requirements of destination countries, had revoked Great Lakes’ export license. “To protect the privacy of information,” Burdman wrote in an email on Friday, "CFIA is unable to discuss confidential issues specific to one establishment or operator." BF
– with files from Better Farming staff
Comments
It really makes one wonder just is going wrong with in the Ag & Food Industry . Here we have an example of an primary production industry that is raking in record profits but the processor side is failing miserably . Is it the fact of having to compete with union wages , are these plants paying union wages ? I would think that it would not just be poor management of the companies since some of them are not just new start ups . Is this the current victim of our outrageous and ever increasing hydro rates ? I am sure it was like the straw that broke the camels back . Too many gov regulations that had to be complied with that the costs of could not be recovered because of cheap imports pushing prices down ?
Not sure folks but this is one story that should really make every one think and really want to figure out what and where the problems are for Agriculture processing in this country . The processing of agriculture products is considered to be value adding , creates jobs and is just another stimulus for the economy .
There has to be some thing wrong with the system here in Ontario because we are loosing processors and their jobs hand over fist these days .
Yes it is disturbing ill put one possibility out there these kill plants are paying top dollar for their product right now and their domestic competition just decided to increase their production by 4. Something percent. Social justice was why sm was brought in.Putting more chickens on the market to take advantage of the price of pork and beef after their long years of hard times. Is a social injustice.
Don't blame Chicken producers for giving the consumers what they want,after all that is what Supply Management is all about and right now the market demands more chicken.
That is the unfortunate thing about the Pork and Beef Industries when the demands are there the supply is not. Maybe if more Plants like Great lakes Specialty meats had taken a interest in our own domestic market than exporting to Russia or some other country they would have been better off and we wouldn't be talking about the retail price gap between Beef, Pork and Chicken.
Today's "fairy-tale in agriculture" award goes to the above, and, as usual, anonymous poster who can't seem to grasp the concept that supply management definitely does NOT give the consumers what they want, and that is chicken at a price available, in many cases, less than a mile away in the US.
In addition, the poster ignores the obvious fact that if price was part of the marketing mix for chicken, consumers would buy more.
Therefore it's pure crap to claim that chicken farmers give consumers what they want - and avoiding the truth is really what supply management is all about.
Stephen Thompson, Clinton ON
More chicken means more feed = higher price for feed = more whine from pork and beef.
More whine from pork and beef would = higher RMP payments for livestock. Chicken would then want RMP because pork and beef were using it to dump pork and beef into the USA. Then the USA countervails dumped subsidized pork beef plus chicken and the wanna be economists wonder what made USA upset?
Market demands are one thing but filling those markets is quite different . Chicken can be raised rather quickly . Pork and beef take a longer time to get an animal to market . Chickens lay an egg a day where as a cow will have one calf a year . Also there are differences in how long it takes to get an animal to breeding age .
Don't get me wrong I am not against chicken but the SM system as good as it seems does leave a number of things with alot to be desired . One big one being the concentration of control of the production of the product . I know I will get the usual new entrant garb thrown back at me but really how is any young person to get a start in the system unless they have a rich uncle that died and left them a pile of money . There should be a roll over of quota from old to new rather than just give out new allotments of free quota to the big so they can get bigger . Maybe quota should be stripped back after so many years but the person could produce for a spot market price contract . The other thing that should be done is to have SM raised on family farms not corporate mega entity farms . If SM is for the betterment of the people then more of the people should be sharing in the system .
I don't think its to the concern of Chicken farmers that it takes Pork or Beef longer to get to market,their only concern should be to consumers and the readiness to meet retailers increased demand for chicken products.From other reports this low supply in Beef and Pork is not going to ease in a year or 2.
It takes a pile of money to get into any farm venture these days and that includes Beef and Pork.The only trouble with the Non-SM sectors is after spending that wade of dough to get in you won't know in 2 or 3 years down the road if you will be making or losing money.
It will however be a big concern if the SM rights are taken away and cheap imports are allowed to pour into Canada . You best get the rose colored glasses off and get a cup full of reality . You can either change for the better or be forced out by cheap imports .
Is there also not a feed price manipulation that happens with chicken feed every month ?
If Beef and Pork can't compete with SM chicken at the retail level,as is happening right now, how can they possibly compete in a NON-SM world with supposedly cheaper imported chicken ??
It is you that has to get a grasp of reality.
You will how ever have to agree that SM is to blame for not allowing more producers to raise chicken and share the market .
We are after all in a free country . Should we not be allowed the freedom to produce for our own countries market ? Why should that production be limited to a chosen few ?
Something has to be wrong fcc is calling a 4.5 mil loan on a good size kill plant( that im sure a lot of their customers count on) a plant that when these guys bought in. I'm sure management in fcc thought it was a miraculous. Looks like they have paid off a fair amount . But they would lend a sm producer that amount for 200 acres interest only something is wrong
From what I understand loan security agreement was breached .FCC was just doing due diligence by c alling loan ,try selling all your crops,livestock or machinery or revoking any personal guarantee and see how long before your operating loan is called. I agree $4.5 mil. in meat business is pretty small loan but the whole QMP deal smells funny. It is hard to understand someone in business for 80+ yrs. with many price fluctuations could not have had a back up plan or access for more financing ,never good losing any processor but even worse when many producers are out a lot of cash . kg kimball
The bigger problem is that, for a whole host of reasons, agriculture in Ontario is, regardless of what its boosters claim, a stagnant industry which, by definition, cannot justify either new, or, in many cases, continued, investment.
Firstly, forget about the urban/rural divide - the rural/rural divide between the bullies who have quota, and their victims who don't, is even bigger, and widening even faster.
Secondly, processors, even though we have close to ten million people who are potential customers, just can't get big enough with the production we have - I'm advised that Conestoga Pork runs two shifts, but nobody else does because volumes just aren't there, and without two shifts, economies of scale when compared to US plants which do run two shifts, just don't work.
Thirdly, farmers themselves are part of the problem - we could have had a Chobani plant in Ontario, but the farmers who run supply management wouldn't allow it to happen.
Fourthly, too many people are mistakenly focusing on narrow issues like local food, and forgetting that volume pays the bills far better than selling locally.
Fifthly, stupid political decisions adversely affect the entire structure of agriculture - for example ethanol has put a strangle-hold on our livestock sector in the same way supply management has put a strangle-hold on everything else.
Stephen Thompson, Clinton ON
We may be somewhat narrow-minded if we think some of these closures are only happening in Agriculture.This Province is facing the end of an era in Blue-collar well-paid factory jobs.Whether its Quality meats,Kelloggs,Heinz,Campbell Soup or Schneiders in Kitchener,they are no different than closures in any other manufacturing sector.
The scenario is always the same,increased competition from imports,ageing production machinery and a pay-escalating workforce and you have a recipe for closure.Throw in ridiculous hydro increases just to make sure they are totally down!
A narrow minded thought would be to only think that SM has to go .
I was honestly trying to put out some food for thought as to where Ag is at and the road we seem to be destined to follow . These closures are really nothing new in ag all you have to do is look at the fruit & veg sector . We no longer have a fruit processor left east of the rockies . There at one time was a thriving veg plant in Exeter which the teachers union bought and sold piece by piece .
Ag is the number one sector in the province . What if any thing will it get us with the new liberals is any ones guess . Personally I don't think we will get any thing more than lip service from Gov and our farm reps . Too much debt , too many thingsneed attention , too many that can't see or are part of the schemes to make things look like Ag is all important . I don't trust any one any more . Been burned too many times with double speak from gov and farm representation .
You really have to wonder what the Fed's were doing when they pushed for those CETA and Korean trade deals. We never had the Processing Plant capacity to meet the Beef and Pork Quotas allowed to start with and now we have 2 few Pork facilities.
It is just 1 bad decision after another!
Why won't CFIA confirm whether a bankrupt company has had a licence revoked? A licence should not be a private document!
you can file a complaint here over CFIA policy and procedures
http://www.inspection.gc.ca/about-the-cfia/accountability/statement-of-r...
What would you say if I offered to buy a product from you at a unit price of $10, took complete control of it by changing its DNA for higher yielding better disease resistance with no real world proof of higher yields or better disease resistance and slapping a patent on the unverified claims of change. All while controlling a monopoly on specific additives that I say are required which I sell at whatever the market will bear. And at the end of it all sell the same product back to you the following year at a unit price of $600 with a binding legal contrac that you must sell it all back to me at whatever price I decide to give you for it and then charge $620 the following year? Sound like a mutually beneficial trade or maybe slightly one sided?
And now let's say it doesn't matter what you would say, you no longer have a choice. You want to be in Ag you have to pay me for the privilege.
Welcome to the Ag industry. It ain't the producer or the processors sucking the life out of the industry that they've managed to sustain for well over a century. It's the money for nothing bullshit artists.
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