Farmers Union looking for partners to help buy DemKota beef plant in Aberdeen

Patrick Anderson
Sioux Falls Argus Leader

A group representing South Dakota farmers is in the early stages of preparing an offer to buy the DemKota Ranch Beef plant in Aberdeen.

The South Dakota Farmers Union is in conversations with its counterparts in Minnesota, North Dakota and Montana and is looking to join with beef and dairy cattle groups in the region to make an offer on the plant, the organization’s President Doug Sombke said Friday.

The DemKota plant, which continues to experience a growing number of coronavirus cases among employees, is currently owned by a San Francisco, California-based investment firm.

“The whole point would be to have things that we control right here in South Dakota,” Sombke said. “It helps farmers and ranchers be owners.”

White Oak Global Advisors bought the beef plant at a 2013 auction as part of the bankruptcy proceedings of its previous owner, Northern Beef Packers. The California company formed a South Dakota-based limited liability corporation to run the plant.

Representatives with White Oak did not immediately respond to requests for comment for this story.

The plant has typically harvested more than 1,000 head of cattle per day.

As of May 11, the plant has become a growing hotspot for new coronavirus cases, responsible for 76 of the 127 positive cases reported in Brown County.

Acquiring the DemKota plant wouldn’t be the Farmers Union’s first involvement in the meat packing industry. The South Dakota group is also a partner owner of Redwood Farms Meat Processors, a small pork processing plant in Estherville, Iowa.

The organization is still looking for capital to buy the Aberdeen plant, but if successful, it would only be the start of longer-term effort to create more packing options for farmers, Sombke said.

Decades of consolidation in meat packing, underlined by the implementation of factory-style procedures and sometimes violent labor disputes, has left the industry struggling to cope with breaks in production caused by the coronavirus.

Four companies — Tyson, Cargill, JBS and National Beef — control more than 80 percent of the United State’s beef packing industry.

It’s a trend Farmers Union has been pushing against for years, Sombke said.

The DemKota Ranch Beef plant is just south of Aberdeen. American News photo by John Davis
The DemKota Ranch Beef facility in Aberdeen is being eyed by South Dakota Farmers Union for possible purchase. Photo by Shannon Marvel/Forum News Service
The DemKota Ranch Beef plant is just south of Aberdeen. American News file photo by John Davis
The DemKota Ranch Beef plant is just south of Aberdeen. American News photo by John Davis