The Rural Voice, 2005-01, Page 38News in Agriculture
Good news for Gay Lea Foods members
Record production, sales, profits
and dividends were reported when
Gay Lea Foods Co-operative Ltd.
held its Zone 1 annual meeting in
Brussels, December 6.
"We had a good year, but we're
still not satisfied," Andrew
MacGillvray, president and CEO told
the co-op's members, recalling that
two years ago at this meeting he had
talked about the need to go from
being a good company to being a
great company.
Gay Lea's sales increased 16 per
cent, topping $330 million, and
exceeding the $300 million mark for
the first time in history thanks to an
increase of 21 per cent in milk
available for processing. "We took
advantage of all the milk quota we
had," he noted and strikes in Quebec
made extra milk available for
processing. The new Delta
evaporation plant in Guelph and the
company's predominant position in
aerosol whipped cream helped it take
advantage of the opportunities.
The company's profit of $9.6
million was also a new record and
enabled the company to pay out a
record $2,234,000 in member and
patronage dividends.
Peter Emsley, vice-president,
reported that the company's whipped
cream plant is probably the best
facility in North America and its 76
per cent growth rate is projected to
increase by another 28 per cent next
year because Parmalat has abandoned
the field leaving Gay Lea with the
only facility in Canada. It will begin
providing Wal-Mart with its private-
label brand and is producing products
under several other company's
brands.
Gay Lea hopes to increase
production to 16-18 million tins, then
look at investing to increase
production further, Emsley said.
Skim milk powder production
increased 26 per cent, MacGillvray
said now that the Delta plant has
been in full operation for an entire
year.
Brendan Wall noted the difference
the $52 million state-of-the-art Delta
plant has made to the company's
bottom line. In 2002 the old plant
was going all out to process 189
million litres of milk, he said, but in
2004, the new plant processed 288
million litres, a 52 per cent increase.
This allowed Gay Lea to go from
utilizing 66 per cent of the co-
operative's members' milk to 70 per
cent.
The yield from the milk processed
increased to 9.8 per cent of volume
from 9.1 per cent. "That's like free
powder from the same amount of
milk."
Because of the increased volume of
milk processed into skim milk
powder, Gay Lea didn't have to buy
cream from more expensive outside
sources to make its butter which was
up 15 per cent for the year.
"We made butter more than ever
from fresh cream," said MacGillvray.
"We make more money from this
than from reworking butter."
The new powdered milk plant also
allows more non -skim blends which
can be exported even when Canada's
quota of powdered skim milk is
filled.
The one sour note in the sales
report was the non-dairy business
where sales were down six per cent
partly because of the increase in the
value of the Canadian dollar.
The company will move to a new
head office in February as the result
of a need for expansion of production
at the Clayson Road plant in Weston.
The new office in Mississauga will
allow changes in how the
headquarters is organized and how
staff communicate.
The Gay Lea plant in Teeswater
was so busy processing additional
available milk into skim milk this
year that plans were delayed for the
transition into becoming a specialty
plant making milk powder
concentrate.0
Beef set-aside program explained at symposium
Joanne Handley of OMAF
explained the set aside programs,
funded through the province at Beef
Symposium 2004.
The program is basically a reverse
auction system, she said. A bid is
submitted at a price per head that
they would accept to set aside a
number of market -ready cattle. Those
chosen are based on the lowest bid
until the target number of set aside
cattle or the ceiling bid has been met.
The set aside is for 90 to 120 days.
To participate producers must
register with OMAF at 1-888-292-
5856. There is no application and the
minimum number of cattle that can
be bid on in one lot is 20. Auctions
34 THE RURAL VOICE
are 2:00 p.m, Monday to 2:00 p.m.
Wednesday. Thursday will be when
contact is made regarding
acceptance.
The bids are anonymous said
Handley with only the provincial
administrator having the information.
Eligible fed cattle must be an
average weight of 1,300 lbs for steers
or 1,200 pounds for heifers.
Successful bidders are notified by
OMAF. They must submit the CCIA
tag numbers and on-farm verification
agents will visit to verify the cattle
meet the requirements.
For feeder cattle, the calves must
be born in 2004 and owned by the
applicant. They cannot be sold until
September 1, 2005 or slaughtered
until January 1, 2006.
The number of calves eligible for
set aside has to be equal to the
greater of 40 per cent of the
applicant's beef cow inventory that
calved in 2004 or 40 per cent of 2004
beef calves owned by the applicant.
"Whichever is the greater of the
two," said Handley.
The producer, she said, will receive
payment of $200 per head. "One
hundred and ninety dollars are the
costs associating with holding the
calves until January 1, 2006. The
remaining $10 is for the costs
associated with the set aside tags."
Continued on page 35