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South Dakota Packing Plant Taking Baby Steps Forward To Open

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Ranchers wait for the opening of Northern Beef Packers in Aberdeen, SD, but there are more hurdles to jump for the packing company.

The cow-calf industry looks much the same today as it did 100 years ago. Horses are still largely used to round up the cattle that graze on rolling pastures and miles of wide-open spaces. The cowboy may carry a smart phone, and his beef cows might be more efficient, but the concept is still the same -- cattle convert grass into protein that humans can consume.

On the other end of the beef industry chain – at the packer level - things have changed a little bit. As the industry becomes more consolidated, the tight-margin business of packing plants has eliminated many companies, leaving four major players -- Tyson, Cargill, JBS and National Beef.

According to High Country News, “About 35 million cattle are slaughtered in the U.S. annually by 60 major beef-packing operations processing around 26 billion lbs. of beef. Four firms control over 80% of all the beef slaughtered."

Read about these four major players here.

Knowing how tough the processing and retail end of the cattle business is, it’s rare to see a smaller company attempt to enter the scene, and many have tried and failed. However, that’s exactly what Northern Beef Packers in Aberdeen, SD, is trying to do. The grand opening has been pushed back multiple times over several years, but producers who signed up to be a part of the South Dakota Certified Program have patiently waited to be able to market their cattle through this value-added, age-and-sourced verified program.

These producers' hopes were buoyed this week when the The Jamestown Sun reported some progress in the right direction for Northern Beef Packers.

“The Northern Beef Packers plant in Aberdeen is being allowed to slaughter more cattle after passing a city inspection. The long-delayed plant earlier received permission to slaughter up to five cattle to test equipment. The American News reports that the city is allowing the plant to ramp up to slaughtering 200 cattle on both Thursday and Friday. Plant officials have not said how many cattle they are actually slaughtering.”

According to the report, the plant cost more than $109 million to build, and construction started in 2007. There have been several problems that have delayed the opening, including financial issues with investors, flooding and lawsuits. If opened, Northern Beef Packers will be able to process 1,500 cattle/day, with cattle coming in from the Dakotas, Nebraska, Iowa and Minnesota.

If opened, what do you think of Northern Beef Packers chances of success in this tight-margin business? If so, would a value-added program like South Dakota Certified benefit producers in the area? Any bets on if the plant will open before 2012 concludes?

Discuss this Blog Entry 6

Frank Schlichting (not verified)
on Oct 25, 2012

The cow calf industry looks the same as it did 100 years ago? Not around here. We use quads to chase cows, trucks to haul them and make hay with machines they never dreamed of 100 years ago.

John R. Dykers, Jr. (not verified)
on Oct 25, 2012

The key word I noted in your article is AGE verified. Recording birth date and parentage is the main step the purebred producers do differently from commercial cattlemen. Tenderness is the main quality that consumers require in beef. Age is the primary determinant of tenderness. There are many other aspects of a great eating experience and they vary from customer to customer, marbling, thickness, cut, rare or well done, but they are useless if the beef is tough. We vertically integrated our Purebred Charolais, built our own processing plant, and sold directly to consumers and restaurants and CharLean was a recognized quality product. We had created enough demand for our lean tender beef in a niche market to command price that made us profitable when I ran out of energy and the younger generation had not acquired the expertise to continue. It is a very difficult thing to do. An entirely different set of skills once the animal is slaughtered. My main recommendation is to sell it frozen and brag on the increased safety of doing so. Have an attractive clear package that shows the meat. Small portions. Hope you have a congenial team with multiple talents. Good luck. John Dykers
919-663-2436 johndykersmd@dykers.com

D. A. (not verified)
on Oct 25, 2012

We wish this plant the best of luck and hope that it will open as soon as possible, to the benefit of the people in the Dakotas and beyond as well as to area cattlemen. Region-based ownership and management of packing plants offers the kind of return to localized responsibility and local efficiency that needs to happen nationwide if the beef industry is to keep up with what consumers and cattlemen want and need.

David Coile (not verified)
on Oct 25, 2012

I hope that the plant will be able to open. This sounds like a small business that is trying to make it. This is an example of the small bussiness plan that Mitt Romney is talking about to be encouraged across the United States.

Maung ko (not verified)
on Oct 27, 2012

I want to transfer pilgrim's pride chicken plant transfer from Nacogdoches to south dakota packing plant because my family is they live at south Dakota.

Gary (not verified)
on Nov 6, 2012

This is exactly what the country needs, smaller companies employing locals, building local economies and creating niche items. Everyone can buy and offer boxed beef from the BIG 4. How about the story behind the box! There will always be a place for Northern Beef Packers in this country. Good Luck Guys!

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BEEF Daily Blog is produced by rancher Amanda Radke, one of the U.S. beef industry’s top social media “agvocates.”

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Amanda Radke

A fifth-generation rancher from Mitchell, SD, Amanda grew up on a purebred Limousin cattle operation in which she and husband Tyler are active. She graduated with a degree in agriculture journalism...

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