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Published April 16, 2012, 09:39 AM

Minn. plant to displace ND beef kill

BUFFALO LAKE, Minn. — A beef kill plant being refurbished and expanded in a central Minnesota town is partly owned by a key beef custom client — Lincoln Provision Inc. — of the North American Bison Cooperative Inc.

By: Mikkel Pates, Agweek

BUFFALO LAKE, Minn. — A beef kill plant being refurbished and expanded in a central Minnesota town is partly owned by the president of a key beef custom client — Lincoln Provision Inc. — of the North American Bison Cooperative Inc.

The NABC is financially healthy and will continue to kill bison in New Rockford, N.D. But Lincoln Provision Inc. of Chicago, had been contracting with NABC and its subsidiary, North Dakota Natural Beef LLC, to kill and process beef, but that is changing. Lincoln Provision has moved its slaughter to a Buffalo Lake, Minn., plant, and soon will move its processing as well. NABC and NDNB will be looking for new custom beef clients.

Triple J Family Farms LLC of Buffalo Lake, Minn., about 45 miles southeast of Willmar, Minn., started limited beef slaughter the week of April 3, according to local news reports. One report said the plant eventually plans to kill 600 animals a day.

Dieter Pape of St. Cloud, Minn., president of both NABC and NDNB, confirmed to Agweek that the New Rockford plant will no longer do any custom beef harvest, and that the bison-only “fabrication” process of breaking bison carcasses into primal cuts and sub-primal cuts will be brought back to New Rockford, from Fargo, N.D.

“We’re separating the two companies (NABC and NDNB) more than we have in the past,” Pape says. Grinding and steak-portioning operations for the bison company will remain in Fargo, he says.

Pape confirmed worker reports that cattle, now killed at Buffalo Lake, Minn., are being shipped to Fargo to be fabricated, but that will end and the Fargo plant will replace the beef client. Pape said he understood the Buffalo Lake plant would be much larger than the 150 head per day of cattle that New Rockford was able to supply.

Meanwhile, the NDNB plant owes farmers $325,000 and must pay that “immediately,” the Grain Inspection, Packers and Stockyards Administration announced on April 9.

The Fargo facility is connected to a North Dakota State University meat teaching facility, which was built as part of a Beef Center of Excellence. Originally built for “natural beef,” produced without hormone supplements, the company has since shifted to processing conventionally produced, custom beef only and lost a key “natural” client, reportedly Whole Foods.

Recently, about 90 percent of the Fargo plant’s beef put-through has been destined for Lincoln Provision of Chicago, Pape says, confirming a worker report. He said he understood Lincoln Provision is involved with Triple J Family Farms but that he didn’t know the details. Pape acknowledged that when the Buffalo Lake plant opens a fabrication plant, now under construction, the Fargo plant will cease to provide fabrication services for the company.

“We (NDNB) have several other customers in place that will replace the current business,” Pape says. “We have some new customers that we’re working with now, and it’s a matter of transitioning them in.”

Triple J’s new impact

Indeed, Lincoln Provision has a connection to the Triple J plant. In an undated press release, issued only to local area media by Triple J the week of April 3, the company announced that the plant would be starting operations in two phases and is in the process of hiring an 80-person crew for the first phase. The second phase would add another 150 people.

The reports say the plant is owned by three partners: John Derner, a businessman in cattle, trucking and gravel companies from Milford, Iowa, his son, Justin Derner, and Jim Stevens. News reports note that Stevens operates “a meat packing firm in Chicago.” John Derner is a principal in the trucking and gravel businesses, among other things.

Jim Stevens Jr. is president of Lincoln Provision in Chicago, which has been in the meat business since 1917. Lincoln Provision is owned by Stevens, his brother, Mark, and their father, Jim Stevens Sr.

Jeff Eastman, the company’s plant manager, is the media contact, but declined to be interviewed by Agweek.

Triple J. Family Farms LLC was registered with the state of Minnesota on June 6 at a St. Paul address, which is also the address for Lincoln Distributing. Lincoln Trading International LLC is registered in Minneapolis, with a “home jurisdiction” at the same address in Chicago for Lincoln Provision Inc. Among the products listed in trade sites are gourmet steaks, frozen foods and packaged frozen meat products.

North Star Beef Inc. used to operate the Triple J plant, and installed a walk-up ramp, putting the kill floor on an upper level. In 2008, North Star Beef was described as the nation’s third-largest kosher beef slaughterhouse, then killing 330 head of cattle a day.

In 2009, North Star Beef closed at Buffalo Lake, putting 200 workers out of jobs. The company, then managed by a man named Bill Gilger, couldn’t get financing to lower the arsenic levels in the water. Arsenic is a naturally occurring contaminant in well water in some parts of Minnesota. The plant couldn’t use city-treated water at the time, because it contained 30 parts per billion of arsenic, Gilger said at the time. The plant also paid penalties for unauthorized dumping of waste and had a fire in June 2008, according to a kosher meat trade publication.

The Triple J news release said the arsenic problem was “resolved early this year” by installing a new water line from the city’s well source to the facility. Triple J has built its own new water treatment building and is working with Minnesota Department of Labor and Industry and Minnesota Department of Health to “ensure a practical and manageable application of the new treatment systems.”

According to John Hubin, a native of Buffalo Lake, who publishes a newspaper based in nearby Hector, Minn., that serves the area, said the city has a well about five miles north of town where the water has lower levels of arsenic. He says some of the demand for water has been mitigated with the closure of an ethanol plant on the west side of town. “The supply is going to be fine,” Hubin says

Hubin says the community also is getting ready for an influx of workers. He says the plant is likely to draw workers from a large area. One source may be Willmar, where turkey and pork operations already exist. He also said it is rumored some labor might come from Windom, Minn.

NDNB’s settlement

The U.S. Department of Agriculture’s GIPSA “consent decision,” reached with both NABC and NDNB, requires the companies to “cease and desist from failing to pay and failing to pay, when due, the full purchase price of livestock.” It says NABC/NDNB must make “immediate payment for livestock purchased until such time that they demonstrate to GIPSA that their current assets exceed their current liabilities.”

“Under the circumstances, I think the settlement is good for the producers in the long run,” says Pape, who underlined that the GIPSA settlement refers strictly to the cattle, not the bison.

Pape says the companies want to make sure the unpaid beef producers get paid “everything they’re due.” He says the $325,000 still owed to farmers will be paid on a “monthly schedule” from some pooled amount, but declined to say how long that might take.

GIPSA also assessed a civil penalty of $140,000, of which $125,000 will be “held in abeyance” until the company makes restitution to the unpaid sellers. Agweek on March 19 featured a story about Lloyd Wieland of Dazey, N.D., who was still owed $47,000 on animals delivered in late 2010.

GIPSA stepped in October 2010, and the company voluntarily stopped buying beef.

Pape doesn’t expect any employment changes in the Fargo plant. He says the company will have to add people at New Rockford.

“The bison company is a healthy organization — has been and will continue to be,” Pape says.

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