BISMARCK, N.D. -- New, potential meat markets in Korea are the hot topic in the North Dakota livestock industry.
"That's really, really exciting," says Jack Reich of Zap, N.D., president of the North Dakota Stockmen's Association, which recently held its 80th annual meeting in Bismarck, N.D. "That could be huge for North Dakota. We'd be able to keep the fat cattle industry here, which would help everything. We've got the feed. We've got the people to do it."
Jack Kim of Seoul, Korea, and Hank Imm of Inver Grove, Minn., with SK Corporation-USA, addressed the meeting, saying they are interested in North Dakota because of its genetics, as well as alliances between producers and the public sector.
Kim and Imm report some results of a feasibility study for a beef kill plant. The study was partly paid for by a $100,000 grant from the North Dakota Agricultural Products Utilization Commission and contemplates a plant that would handle 250,000 head in the state, much of which would go to the Pacific Rim.
Kim and Imm described their company's "two-step strategy," which includes custom processing now to get some North Dakota-fed beef available, cut to the company's specifications. Custom-kill arrangements would start in 2010. Company officials met with North Dakota Natural Beef, a cooperative with a kill plant at New Rockford, N.D., during this visit in North Dakota.
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The two described their own plant at 750-head per day, which is the high end of the 500- to 750-head ranges they had previously discussed. Construction would begin in the second or third quarter of 2010, with completion in the second or third quarter in 2011.
Working out details
Logistics, locations and engineering are yet to be worked out.
Lance Gaebe, a policy assistant to North Dakota Gov. John Hoeven says the state's feedlot industry may have to be expanded "some" to meet the needs. The state produces about 1.8 million calves a year and only finishes about 100,000 head in the state.
"But there are a number of operations that 'background'" feed livestock. "The livestock are here. We'd have to enhance the finishing end."
The group has been working with North Dakota Feeders Council with how they'll be able to schedule and finish cattle year-round, Gaebe says. Other work has been done to verify that the potential business is backed by marketing know-how and has financial backing.
Gaebe says the Koreans want to build a separate reputation from the large-scale processors in the U.S., especially when they've had challenges in quality.
The Koreans haven't "made a specific ask" on financing issues.
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"They've got a lot of financial partners in Asia," Gaebe says. "I would envision it would involve the Bank of North Dakota, but there's no detail on that yet."
He says it may take a year for the organization to hone those numbers.
Reich says it's encouraging that the plan is not for an equity drive among producers.
"They're looking at doing this mostly on their own," he says.
He says he doesn't "think anybody cares" that this won't be an ownership opportunity for the local producers.
"It seems like when there are efforts for local producers to do it, it's hard to get it to work a lot of times -- ethanol plants, whatever. It seems like it'll run four or five years and it gets sold for 20 cents a dollar and someone else comes in and makes it work."
The South Korean businessmen are already in the meat business.
"There are some hoops to jump through, as far as age and source verification, a prerequisite on anything that goes through their plant," Gaebe says. "That's all right; if it's value-added for our producers, we're very, very excited about that."
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Gaebe expects that the location of such a plant would have to do with several factors -- welcoming communities, access to livestock, transportation and workforce. North Dakota's cattle are concentrated in the western half of the state, while the feeding areas are in the southeast part of the state.
"One of the challenges will be having livestock finished year-round," Gaebe says.
That'll take some staging and organization among the feeders.
Power development
Some NDSA members attended a meeting at the same hotel, led by county Farm Bureaus and focused on the Northern Plains Heritage Area.
The heritage area would regulate areas along the Missouri River, toprotect the land from things such as wind power development or even livestock developments.
The Farm Bureau is working to make sure private property rights aren't circumvented by the area, and that it doesn't "corrupt local planning by adding federal dollars, federal oversight and federal mandates to the mix" in land use. The organization's concern is there, despite landowners' ability to either opt out, or not be included unless they opt in.
Reich says the NDSA is monitoring the situation.
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"If it's going to make it harder for people to put in feedlots or put up a building, we're not going to be for that," he says.
He says wind turbines offer economic diversification for ranchers and other landowners.
Personally, Reich says he'd rather have wind turbines, but notes he's not all that keen on the power plants in Mercer County, or the coal mine within a mile of his house.
"I don't particularly like that viewshed, but I like being able to turn on a light when I want to and being able to have a nice warm house," he says.
He says he also likes the economic benefits.
Among the other honors handed out at this year's event are Top Hand: Wade Moser, Bismarck, former NDSA executive director, received the award which last was presented in 2002. Rancher of the Year: Ray and Tim Erbele, Streeter, N.D. Honorary NDSA members: Joe Kalberer, Hazelton, N.D., cattleman and former brand inspector; and Bert Moore, Elkhorn, N.D., former North Dakota State University professor and livestock judging team coach.
