A new, federally incorporated co-op that pledges to eliminate the $20-$25 western freight discount on lambs and breathe new life into the Canadian sheep industry will be ready to launch this fall.
The Canadian Lamb Producers Co-operative (CLPC) grew out of the Saskatchewan Sheep Development board’s 2010 Canadian Lamb Initiative, which tested the feasibility of a producer-owned and -controlled marketing arm.
Since then, meetings have been held in seven provinces across the country that were attended by over 400 lamb producers. So far, 150 have signed on.
Terry Ackerman, the former general manager of the dairy-based Organic Meadow Co-operative in Ontario who is now tasked with setting up the co-operative, said the goal is to recruit at least 300 initially, and 650 within two years.
The past six months were spent negotiating with seven provincial governments from British Columbia to Prince Edward Island to allow the venture an exemption from having to release a prospectus before soliciting membership shares.
“As soon as we’re given permission to sell them shares, then we’ll take their money and start buying lambs,” said Ackerman. “That should be within 60-90 days by the time we get everything ironed out.”
The co-op will be the only federally incorporated co-operative in the agriculture sector, and will own and control a corporate entity called the Canadian Lamb Company, staffed by professionals in charge of marketing value-added products such as kebabs, meatballs, sausages and other processed items ready for stocking on retail shelves both in Canada and abroad.
Producer members must pay a $500 fee and a one-time $30 fee for each lamb they intend to ship. A minimum commitment of 25 lambs per producer is required, and the maximum allowed is a number equal to 25 per cent of their ewe flock.
In exchange, the co-op will arrange pickup of their lambs from collection points in each province and pay a five-cent premium per pound over the Ontario auction price. After three years, dividends will start flowing back to producers.
“We’re going to take the Cooks-town, Brussels and Kitchener price average by weight and add five cents per pound to make the price that producers in Western Canada will get paid,” said Ackerman.
Carcass data feedback
Processing will be contracted at two federally inspected facilities, one in Alberta and Abingdon Meat Processors in Hamilton, Ontario.
High-tech Viewtrak grading equipment worth $1.3 million, similar to that used by the pork and beef industry, will be used at the plants to provide web-based feedback on the quality of each lamb slaughtered. The Alberta government has agreed to cover the cost of developing a grading index algorithm that will work on sheep carcasses.
“Producers will be able to log on and see their lambs being graded for the first time ever in the world,” he said, adding that the data will help them select optimal breeding stock.
Traceability throughout the food chain will be in place, with each carcass DNA swabbed.
“If there’s a recall, I can tell exactly which lamb and which farm that meatball came from,” he said.
Saskatoon head office
The co-operative’s head office is based in Saskatoon, and the marketing arm in Guelph, Ont. It will own “no bricks and mortar,” which Ackerman describes as the “kiss of death” for any business venture. Instead, all functions, from processing, fabrication, warehousing, distribution, transportation, finance to legal, will be outsourced.
“There’s one thing that farmers agree on: Do not allow farmers to run the business,” said Ackerman, adding that the success of the Organic Meadow co-op model shows what can happen when farmers work with a separate entity staffed by professional managers. Even though the co-operative’s goal is to grow the market in Canada for lamb by providing producers with incentives to expand, there has been interest from importers from China, Singapore, Mexico and even the U.K., who seek the grain-finished “taste profile” of Canadian lamb.
Brian Greaves, a sheep producer from Miniota, has already signed up. He’s impressed by the business model, the grading system, marketing strategy, and the spread-out structure that seeks to diversify the source of lambs to reduce risk.
“To me it sounds like a good deal,” he said. “But, like anything, it costs money to invest in it.”