On August 8, 2022, the NALCO Group sought and obtained protection under the Companies’ Creditors Arrangement Act, R.S.C. 1985, C-36, as amended (the “CCAA”) pursuant to an Order of the Court of Queen’s Bench of Alberta (the “Court”), or (the “Initial Order”). As part of the Initial Order, Ernst & Young Inc. was appointed as Monitor of the NALCO Group.
Please find below correspondence from Ernst & Young Inc., acting in its capacity as the court-appointed Monitor of North American Lamb Company Ltd., Canada Sheep and Lamb Farms Ltd., Canada Sheep Holdings Ltd., Lamb Club Marketing Limited., Canada Lamb Growers Ltd., Canada Lamb Processors Ltd., and Canine Fare Ltd.. (the “NALCO Group”).
They will continue to be operational at CLP on a business as usual basis. Updates will be posted to the website (website link is in the below attachments).
Western Canadian Offer for Breeding Stock:
Western Canadian Offer for Breeding Stock: Offer for producers intending to keep breeding ewes in Western Canada – this will help the processing plant value if more ewes stay in this region. NALC has a group of producers called the Growth Group consisting of approximately 30 producers in Western Canada that supply the Innisfail plant with contracted finished lambs focused on off-seasonal supply. Approximately 6000 breeding ewes are available for this offer, more could be made available in the next week or two.
- $150 for open breeding ewes
- $175 for bred ewes expected to lamb November & December but not pregnancy scanned yet
- $200 for bred ewes expected to lamb November and scanned pregnant
- $250/ram for commercial Rideau breeding rams, max of 1 ram per 25 ewes sold
- $350/ram for commercial breeding rams, not tied to ewe sales
- Offer closes August 25, 2022 at noon. First come-first-served basis. Higher bids also given priority. Strong preference for full load quantities at this pricing.
- Must be moved by September 9, 2022, except for weaned critical stage ewes which will take 13 weeks to clear.
- Pricing based on FOB NALC Farms in Manitoba or Alberta. Buyers pay and arrange freight. NALC chooses farm of origin for the packages to streamline logistics while accommodating buyer preference as much as practical.
Market Pricing Contracted Growth Group finished lamb contracts will be honored through the restructure process for contracted volumes. The Innisfail plant will require more supply this fall as we restructure. Producers are requesting space at the plant and asking for pricing. To facilitate this process we are offering two options, subject to revision if needed:
Rail Pricing – Identical grid and market formula as our contracts, but no floor price. Base price on pay-weight to 30.0 kg as recently rolled out. The weekly average Ontario finished lamb revenue ($/head) published Wednesday is divided by 27 kg and rounded to the nearest $0.25 to set the pricing for Thursday through following Wednesday harvests. Based on comparisons reviewed in May 2022, this will outperform the Ontario auction returns by $14-$20/head, depending on feed pricing. As of August 17, 2022, this is estimated at $/lamb benefit with feed pricing trending downward.
Live pricing – Similar to the above, but the Ontario revenue is reduced by $15/head and divided by 125lb (56.7kg). Load maximum average weight is 125lb. Discounts on super heavy carcasses as done in prior years. Rail pricing is intentionally stronger to encourage producers to deliver required carcass quality to support plant operations moving forward. Rail priced deliveries have shackle space priority.