EXPENSIVE EXPANSION: JBS USA announces significant investment in Utah | TSLN.com

EXPENSIVE EXPANSION: JBS USA announces significant investment in Utah

John Nalivka of Sterling Solutions said several beef plants across the country are considering or implementing updates to improve their abilites to produce value-added beef products. Photo by Carrie Stadheim

JBS USA, a leading processor of fresh and value-added quality beef products in the U.S., Jan. 29, announced a $75 million expansion project at its Hyrum, Utah, beef processing complex. The project includes a new state-of-the-art fabrication building, a new cutting-edge ground beef facility and a new distribution center. The complete project will allow for the increase of production levels by more than 400 head per day, improve plant efficiencies and expand the business’s offerings of high-quality beef and ground beef products for customers.

“Hyrum is simply one of the premier plants in our beef business,” said Bill Rupp, President and Chief Operating Officer of JBS USA Beef. “Well-known for the Blue Ribbon Beef brand, the Hyrum facility has been a proud member of the local community for nearly 80 years and is an ideal location for expansion to service the ever-growing beef market in the western U.S. Today’s announcement is a testament to our commitment to providing our customers with the best beef and ground beef products on the market and bolstering the long-term viability of this flagship facility.”

Originally built in 1936 by E.A. Miller Meat & Livestock Co., the Hyrum beef facility joined the JBS USA family in 2007 and processes nearly one-half million cattle per year. JBS Hyrum is a significant player in the international market, exporting approximately 20 percent of its production to countries including Japan, Taiwan, Korea and Mexico.

“The Cache Valley’s long-standing reputation for quality cattle, coupled with the growing Idaho dairy industry, uniquely positions the Hyrum facility for expansion,” said Steve Williams, head of cattle procurement for JBS USA. “While the U.S. beef industry has certainly faced recent supply challenges, we are confident that the expansion of our traditional cattle mix to include beef and dairy cows will result in ample cattle supply, create tremendous opportunities for area producers and ensure that Hyrum will continue to build on its legacy of quality cattle and quality products for years to come.”

The project has received all necessary regulatory approvals and is scheduled for completion and full operational capacity in spring 2016. The expansion will create more than 120 new jobs and provide an economic opportunity for local and area producers.

“We’re excited about our ability to significantly increase our ground beef capabilities to meet the growing demand of our customers,” said John Flynn, Sales and Marketing for JBS USA Beef. “Tapping in to the supply of beef and dairy cows already in the region will truly fuel our ability to produce more of our top-of-the-line ground beef and beef products.”

John Nalivka of Sterling Solutions said he’s worked one-on-one with the Utah plant before it was owned by JBS and has “always been very positive” about it.

The plant sits in a good location to service the west coast market and the export market, he said. “They’ve got a good labor force down there,” he added.

“It’s a plant in the right place. Like a lot of plants it needs to be upgraded.”

Nalivka said the upgrades are primarily geared toward the fabrication of value-added products.

Many producers worry that packing capacity is too high and that packing plants will close, shrinking an already small number of processing options, but Nalivka said competition exists between plants especially as they upgrade and focus on value-added products.

In regard to the new but non-operational beef plant in Aberdeen, South Dakota, Nalivka doesn’t see JBS’s upgrades affecting it directly but he said the South Dakota plant does have an uphill battle. Without the working capital and buying power the bigger plants have, keeping cattle moving through the plant on a regular basis is a rea challenge.

“I always ask how those small plants will compete,” he said. “What it really gets down to, they are competing with these companies like Cargill, JBS, they have deep pockets they can outlast you any day of the week.”

Because JBS also owns a cow processing plant in Arizona, Nalivka doesn’t expect the Utah plant to process any more Mexican cattle after the updates than it is currently handling. The Arizona plant likely handles more of their imported Mexican cattle.

JBS USA, an indirect, wholly-owned subsidiary of JBS S.A., the world’s leading animal protein processor, is a leading processor of beef, pork and lamb in the U.S., a leading processor of beef in Canada and a leading processor of beef and lamb in Australia. JBS USA processes, prepares, packages and delivers fresh, further-processed and value-added beef and pork products for sale to customers in more than 100 countries on five continents. JBS USA is also a majority shareholder of Pilgrim’s Pride Corporation, the second largest poultry company in the U.S. For more information, visit http://www.jbssa.com.

–A JBS news release constitutes the majority of this report

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