June 15, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

On August 26, 2022 I wrote an article titled The Shifting Landscape of U.S. Meat Processing in which I outlined the long history of consolidation in the industry, eventually resulting in a market dominated by only four major meat packers – Cargill, JBS USA, Tyson, and National Beef Packing. 

This not only strictly limited options for ranchers and cattle operations, but created meat supply chains that are significantly more vulnerable to unforeseen pressures, such as COVID-19 or cyber attacks. 

The fallout, including issues concerning plant workers, supply disruptions, price volatility, and consumer hoarding, also drew the attention of Congress, which turned a lens on the industry to examine the level of competitiveness, and to put forward plans and initiatives, including an overhaul of the Packers and Stockyards Act, to support independent operators as they maneuver to gain a share of a hopefully, more resilient market. 

On the ground, however, some ranchers decided to take matters in-hand, raise capital, and launched their own meat processing businesses. I highlighted two such projects – one of which was Sustainable Beef LLC.

Within days, Walmart announced it wanted in, backing the endeavor by acquiring a minority stake in the business as part of a broader strategic partnership that aligns with its commitment to increase access to affordable, high-quality beef to its customers, while boosting beef industry capacity for long-term economic viability for ranchers. 

“At Walmart, we are dedicated to providing high-quality, affordable beef to our customers, and an investment in Sustainable Beef LLC will give us even more access to these products,” said Tyler Lehr, senior vice president of merchandising for deli services, meat, and seafood, Walmart U.S., at the time. 

Now, Walmart is deepening its commitment. After requesting $257 million in industrial revenue bonds for the project, the company announced it is building its first owned and operated case-ready beef facility in Olathe, Kansas.

Set to break ground later this year, once open, the facility will package and distribute select Angus cuts from Sustainable Beef in North Platte, Nebraska to Walmart stores across the U.S. Midwest. 

“The new facility will offer greater visibility into our supply chain, bolstering our capacity to fulfill demand for quality beef while creating more than 600 Walmart jobs in the Olathe community,” stated the company. 

It was back in 2019 when Walmart initially announced its entry into the beef industry and its intentions to create an Angus beef supply chain. 

“As clean labels, traceability and transparency become more and more important to customers, we’ve made plans to enter into the beef industry creating an unmatched system that allows us to deliver consistent quality and value,” said Scott Neal, senior vice president, Meat, Walmart U.S. in April 2019. 

The company acknowledges that the way customers shop for food has evolved in recent years, and part of this evolution is tied to engagement, with consumers seeding greater transparency in food supply chains. 

Finding its place in the value chain, Sustainable Beef has stated it will work with cattle feeders and ranchers to understand the critical elements of the supply chain cycle, including grain sourcing and grazing management.

Animal care carried out by ranchers will follow the Five Freedoms of animal welfare, and antibiotic use and reporting across herds will be expected to take a consistent approach with Walmart’s Position on Antibiotics in Animals, which asks suppliers to adopt and implement American Veterinary Medical Association Judicious Use Principles of Antimicrobials. These guidelines are expected to support Sustainable Beef in improving and refining the beef supply chain and provide quality beef to customers.

Not only will this endeavor and strategic plan benefit consumers, but the larger regional economy, as well. 

“Technological advances in the food supply chain continue to reshape the industry,” commented Laura Kelly, Governor of Kansas. “Walmart’s innovative new facility further solidifies Kansas’ position as one of the nation’s top food and agriculture states.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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