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Friday, September 23, 2016

Western Feedlots to suspend operations

Christian Davis - Alberta's Western Feedlots Ltd. is a custom cattle feeder operating feedlots near Strathmore, High River, and Mossleigh. According to their website, "Western Feedlots Ltd.’s shareholders have decided to voluntarily wind down cattle ownership and cattle feeding operations. Western will continue to feed and market the existing cattle and after they are marketed, Western will be suspending feedlot operations. Western will not be hiring employees, or purchasing feed grain or feeder cattle after that time. Western will continue farming operations for the foreseeable future."

"Western’s shareholders chose this course of action due to the current high risk/low return environment in cattle ownership, which is inconsistent with shareholder objectives. In addition to strong headwinds in the cattle industry, the poor political and economic environment in Alberta are also contributing factors to this decision."

"Western would like to thank all our employees, suppliers and customers for their years of dedication and support and their continued understanding and cooperation."

In a statement reported by Global News, Western Feedlots CEO and President Dave Plett said the company is “taking this time to focus on our employees, assisting them in any needs they have to more forward and relocate to other employment.”

Canadian Cattlemen, the industry's magazine of record, reported the closures are likely to "depress prices of young cattle and the grains used to fatten them, and may increase sales to the U.S., industry officials say."

Wildrose MLA Derek Fildebrandt, in a post on his Facebook page and presumably in his role as Finance shadow minister, blamed Alberta's NDP government, quoting Plett as saying “Alberta used to have the Alberta advantage…Of late, a number of moves have made it much more difficult to do business in Alberta as opposed to other jurisdictions.” Fildebrandt said "The instability created by the threat that new taxes, royalties and regulations can be imposed at any time does real harm to investment. Businesses need to be able to plan for the long term, and governments impervious to even basic economics make that very difficult."  There has been no official government comment on the very recent announcement at the time this article was published.

According to The Western Producer, Western Feedlots was established in 1958. Plett told the Producer that many of Western’s 80 staff will eventually be laid off.

According to the most recent Alberta Government's Economic Dashboard for livestock prices, published September 15, 2016, "Cattle prices in Alberta dropped 21.7% in July 2016 compared to the same time period a year earlier, to $139.51 per hundredweight (down from 178.26). This reflects a national trend for cattle prices that saw decreases in every province in Canada in July. Calf prices followed suit, with a 30.6% fall in Alberta prices between July 2015 and July 2016. Hog prices countered this trend, increasing 1.2% over the same time frame."

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