Northern Beef Packers had a busy year

Farm Forum

It was a roller coaster ride for Northern Beef Packers in 2012, but by the end of the year, the plant was slaughtering cattle.

Setbacks followed by accomplishments, followed by setbacks was the pattern.

Officials at Northern Beef had hoped to open in the spring, but financial difficulties, including an inability to sell its tax increment financing bonds, caused construction work to slow.

An influx of new capital in the late summer allowed the company to complete the slaughter line. The plant was issued a permit for limited production and testing in late September and the first few cattle were killed Sept. 28.

The company was cleared to slaughter up to 500 cattle a day in November, but delays in the installation of wastewater equipment caused the city of Aberdeen to restrict production to 125 cattle a day in early December.

The plant was also cited for multiple wastewater violations.

By the end of the year, production restrictions were lifted and the plant received its permanent certificate of occupancy. At full production, Northern Beef can slaughter up to 1,500 cattle a day.

While wastewater issues had never posed an immediate threat to the environment – because no wastewater had left the plant’s partially-full lagoons – Northern Beef was continuing to work on fixing problems cited in the violation notice.

Despite its tumultuous year, Northern Beef provided economic benefits to the region, spending millions of dollars on construction and hiring more and more workers. The plant employs more than 330 workers, Laure Swanson, marketing and public relations director for Northern Beef, told the South Dakota Cattlemen’s Association on Nov. 28.

The following are the major developments for the beef plant in 2012:

January: After missing a projected Jan. 1 opening, Northern Beef officials said the plant was nearly complete and that it was expected to open sometime in the spring.

February: Officials said the plant was 90 to 95 percent completed and would open in the spring.

April: Contractors, who had not been paid for labor and materials, filed liens against the plant totaling more than $475,000. The liens were filed during the first three months of the year. Northern Beef also had millions of dollars in past liens filed before Oshik Song and a group of 69 Korean investors bought the plant from Dennis Hellwig in 2009. The plant had sold only about $3 million of its $8.5 million TIF bonds as of April 10. The lack of finances slowed the pace of construction, Swanson said.

June: By mid-month, more liens had been filed for lack of payment. Thirteen liens totaling $1,339,029 had been filed since the first of the year. The plant still had $2 million in TIF bonds it had not sold. CEO David Palmer said the plant would open in July, but officials in charge of permitting said that was unlikely, if not impossible.

September: The beef plant slaughtered two cattle on Sept. 28, the first ones processed at the plant. The city of Aberdeen had issued a temporary certificate of occupancy to allow a test slaughter up to five cattle. Beef plant officials said they had received an influx of capital which allowed them to pay off liens and have enough working capital to operate the plant.

October: Northern Beef had paid off 38 of 39 liens totaling $13.9 million, according to Brown County Register of Deeds Office records. Northern Beef officials reported the plant had received a $35 million loan from White Oak Global of San Francisco. In mid-October, Northern Beef was cleared to increase production to 50 cattle per day.

November: The plant was allowed to increase production gradually as it met construction guidelines set by Aberdeen’s building inspection department. The plant was cleared to slaughter up to 500 cattle a day by the end of the month.

December: Production at Northern Beef was restricted to 125 cattle per day because the company had fallen behind on installing wastewater treatment equipment. The plant was also given a notice of violation from the city of Aberdeen for infractions of its wastewater permit, including failure to monitor pollutants, failure to properly operate its treatment lagoons and failure to have a certified wastewater supervisor on staff.

In late December, production restrictions were lifted. Northern Beef was granted its certificate of occupancy from the Aberdeen planning and zoning department. The plant continued to work on fixing wastewater problems cited in violations issued by the city of Aberdeen.