Beef producers: New Angus plant a waiting game

Farm Forum

Though a turnkey beef plant on the outskirts of Aberdeen sits dormant, some area beef producers said they believe it will reopen in time and offer a boost to cattlemen in the region.

“I’m confident that it will open again,” said Herman Schumacher, who co-owns the LDL Cattle Company near Ipswich. “I’m certainly hopeful of that, and I think it will happen eventually. I tend to look on the bright side of things, but I think that’s how a lot of cattlemen feel.”

Operational for a time in 2012, the plant — which was expected to provide Aberdeen with a significant longterm labor force injection and be a boon for area beef producers — has sat idle, leaving many more questions than answers.

Formerly called Northern Beef Packers, the plant was sold at a bankruptcy auction in Sioux Falls in December and is now owned by White Oak Global Advisors, an investment firm based in California. As of Tuesday morning, a federal bankruptcy judge had yet to rule on a case involving a lien placed on the property by a former contractor.

With the future of the plant still seemingly up in the air, Randy Bauer, of Bauer Feed Yard and Farms near Mina said White Oak could simply be biding its time.

“In view of the limited supply of cattle, the feeling is that they’re maybe treading water here,” Bauer said. “I don’t know that for sure, but I suspect that they might be. As far as I know, the intentions of the owners are to eventually have (the plant) maybe sold so that it can process cattle. There are a lot of dollars invested in that facility, and it’s pretty much a single-use facility.”

Now called New Angus after the sale, an up-and-running beef plant in Aberdeen would change the landscape of the local beef market, according to Bauer.

“Right now, we’re paying anywhere from $38 up to $60 or more per head just to haul the animal to market,” Bauer said. “That money would come back to this area. As feeders, we would be able to pay more for the calves or the cattle we buy. It would add value to something that we’re basic producers of here in this region. We’ve got the cattle here and, with grain prices where they are, I would expect we’d see the cow herd increase.”

While the situation surrounding the beef plant remains controversial in certain circles — one area beef producer declined to comment for this story, citing the divisive nature of the topic — Schumacher said the reopening of the beef plant would only make sense.

“We’re hauling as far as 300 to 450 miles right now,” Schumacher said. “In this region, in the Dakotas, Nebraska and Montana, we have some of the highest-quality beef around. To have that plant running would be a great thing. We’re seeing record prices now, so we’ll see what happens. As far as packing houses go, I can tell you that this plant in Aberdeen is state-of-the-art and I can’t see it sitting there forever.”

While he said he wasn’t sure what the beef landscape in South Dakota would look like with an operational beef plant in Aberdeen, Warren Symens, of Symens Brothers Limousin near Amherst, said it would likely be positive for area producers.

“We’d be getting a little more,” Symens said. “It’s hard to know exactly. I know some people are discouraged that the plant isn’t running. I know this, though — existing plants are looking for cattle all the time.”

Absolutely!Aberdeen executive director Julie Johnson said she’s been encouraged by what she knows of White Oak’s plans for the future of the plant.

“I think they’re doing their homework and working on getting it right,” Johnson said.

Aberdeen Mayor Mike Levsen also seemed upbeat about the plant’s future on Tuesday.

“The way for White Oak to recover value for their investment is to get the plant operating, and all their interaction with me has been related to doing just that in a responsible and systematic way,” Levsen said. “They don’t require city involvement in most of what they need to do. For those things where the city is involved, like inspections and permits, they are proceeding as any business would.”

Messages left for several White Oak officials were not returned as of Tuesday evening. A White Oak receptionist said Monday that one of the individuals who could potentially comment on the status of the beef plant was traveling and unavailable.

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