Agri Beef announces new plant
A new major beef packing plant is in the works.
The recent announcement came from True West Beef, a partnership between Boise-based Agri Beef Co. and cattle ranchers and feeders in the region, of their intent to build a new state-of-the-art regional beef processing plant in Jerome, Idaho.
The news brings a glimmer of hope to a cattle industry that has been hit hard in the past year, with an economic and capacity bottleneck etching deeper and deeper the line in the sand between cattle raisers and packers.
Plans for the processing plant are in the permitting stage with the city of Jerome, a town of around 10,000 north of Twin Falls, Idaho, in the southern part of the state. The processing facility will have a planned capacity of 500 head per day, and create at least 370 jobs. According to a press statement, it is an alternative model in the beef processing segment where large facilities have come to dominate the industry, as it will be smaller and flexible in scale and unique in structure, with livestock producers directly involved in equity ownership.
The Agri Beef team is quick to point out that planning is still in the beginning stages, and there are many questions they cannot answer yet, including how their ownership structure will look, what their cattle supply chain will be, and their timeline for construction and opening. “All we can say is, it will be as soon as possible,” says Wade Small, executive vice president of business development for Agri Beef. The public announcement was made as soon as they reached the permitting process with the city of Jerome. The announcement of the intention to build the facility include endorsements from Idaho’s governor Brad Little, Idaho’s director of commerce and director of agriculture, and members of the Jerome economic development community.
The new facility is not a reaction to the coronavirus pandemic – it was in the initial stages of planning before the pandemic hit, and progress was actually delayed for a few months but has now resumed. “We’ve been looking at expanding for a long time,” says Small, as demand for their Agri Beef branded beef, which include Snake River Farms, Double R Ranch, St. Helens Beef and Rancho El Oro, had exceeded the capacity of the Agri Beef-owned Washington Beef processing plant.
Small noted that they have a great team of experts in place in the Washington plant, and they will be relying on them for guidance as they plan and design the new state-of-the-art facility that they hope will bolster the cattle economy in the region.
“Keeping the cattle business going in the northwest is pretty important to us. We need it and everybody producing cattle needs it,” says Small. “It’s a good way to create a scenario that allows partners in the cattle feeding industry in Idaho and the West to benefit.”
Cameron Mulroney is the executive director of the Idaho Cattle Association. “Having a facility here in the state is a huge asset,” he says. “One thing we’ve learned through these tribulations with COVID and the (Tyson packing plant) fire is that we need the capacity to process these cattle and more ability to do that across the nation. It helps in price discovery, it helps in competition.”
Although an exact estimation of added value the new packing plant will provide is not available, a recent study of the packing industry by the USDA shows that the logjam with beef supply is consistently at the packing level. The Tyson packing plant fire of August 2019 was estimated to halt five to six percent of the nation’s beef processing capacity, and created a price spread between dressed fed cattle price and Choice boxed beef cutout value of $67.17 per hundredweight. In April 2020 the COVID-19 pandemic idled nearly 40 percent of the nation’s beef processing capacity, resulting in a price spread of the same comparison at over $279 per hundredweight. The issue has become a hot button among cattle policy organizations working to support fair and consistent prices for cattle growers, and an investigation by the U.S. Department of Justice into allegations of anticompetitive and market distorting practices employed by the meatpacking industry is ongoing. A movement to support and grow more local custom butchers – both with policy and state and federal grants – has also come about as a result of major packing plants halting buying of cattle.
“If we can add another dollar at each stop, it will benefit cattlemen across the U.S.,” says Mulroney.
Agri Beef is headquartered in Boise, Idaho, and has subsidiaries in the ranching, cattle feeding and beef processing sectors.
“This development is exciting for us and the region and the cattle industry,” says Small. “It’s something we’re planning will help improve the sustainability of the cattle business in the West for sure and hopefully the entire country.”
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