August 26, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

During the pandemic, the phrase “it’s a small world” became fitting when speaking of meat processing in the U.S.  Being dominated by only four major meat packers – Cargill, JBS USA, Tyson, and National Beef Packing – made meat supply chains in the country significantly more vulnerable to unforeseen pressures, such as COVID-19 or cyber attacks. 

The recent fallout, including issues concerning plant workers, supply disruptions, price volatility, and consumer hoarding, has drawn 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. 

Nebraska

Cattle rancher Rusty Kemp witnessed changes to the industry beginning in the 1970s that eventually resulted in 80 percent of U.S. cattle being slaughtered by only a handful of processors, and the percentage of every food dollar spent that ended up with ranchers and farmers falling from 35 cents to 14 cents, according to USDA data. 

Between 1977 and 1992, the number of livestock slaughter plants in the U.S. dropped from 2,590 to 1,387, according to census data. But Kemp and his partners are looking to reverse the trend.

Under the name Sustainable Beef, Kemp, his partner Trey Wasserburger, another cattle rancher south of North Platte, Nebraska, and their team decided to branch out on their own – a move that they stated is not meant to replace the country’s major meatpackers, but to fill gaps and provide alternatives to regional ranchers that will also boost local economies.

The team expressed to the New York Post their intentions that by paying higher wages and offering better work-life balance to their workers, along with paying higher rates to ranchers – who also happen to be shareholders in the business – would spark a resurgence in the industry. 

Planning to build a new meat processing facility is not cheap. So Sustainable Beef went to work and raised more than $300 million from ranchers to fund the project. 

A site in North Platte, Nebraska, has been secured with unanimous approval from North Platte’s Community Redevelopment Authority (CRA) for a contract with the group that enables tax increment financing for project infrastructure. 

The CRA acquired the 400 acre parcel for $142,500, which it then sold to Sustainable Beef, where it plans to begin construction this fall on a facility with the capacity to process 400,000 head per year, of which, one quarter will be cows – with all of the meat produced to be sold on the domestic and international markets. 

South Dakota

South Dakota’s Megan Kingsbury hails from a five-generation ranching family and runs both Kingsbury and Associates and Sirius Realty. Together, with their partner Farmers Union Industries, the entities are launching a $1.1 billion project to build a proposed meat packing plant to be located in the Rapid City, South Dakota, area.

Under the name Western Legacy Development Corporation, construction on the project is slated to begin in 2023, and take three years to complete.

“We’re excited to bring in our partner Farmers Union Industries where we are partnering together and they will be us on the bi-product facility side, this will flesh out our research and development phase over the next six months and we will break ground beginning of the year,” Kingsbury told KOTA TV in June of this year. “With a three-year timeline to first-line opening.”

Once fully operational, Western Legacy’s one-million square foot plant will have the capacity to process 8,000 head of bison and cattle per day and is expected to generate 2,500 jobs for the surrounding area. 

~ Lynda Kiernan-Stone is editor 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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