DICKINSON, N.D. -- They don't know exactly when in 2015 they'll start production, but the new owners of an Aberdeen, S.D., meatpacking plant say they'll give cattle producers in the region several months of notice.
"We're seriously dealing with what our five-year program will be," said Robert Cooper the new president and CEO of New Angus LLC. The company is trying to reopen a shuttered, multi-million-dollar, high-volume beef kill in Aberdeen, and the managers spoke to cattlemen gathered at the North Dakota Stockmen's Association annual meeting in Dickinson.
Cooper says New Angus is a placeholder name and the plant will accept non-Angus cattle.
The parent company of New Angus, White Oak Global Investors of the San Francisco area, had been a lender for the former owners, Northern Beef Packers, who built the plant for more than $150 million but then idled it in 2012. It only processed beef for about 14 weeks and fewer than 13,000 total head, sources said. White Oak paid $44 million for it.
The Stockmen's convention is one of the first contacts a widespread number of North Dakota producers have had with the new owners.
ADVERTISEMENT
Cooper told attendees the plant will expand production only as the market allows and that managers haven't determined how close they'll be to the plant's 1,700-head-per-day rated maximum capacity on a single shift. If operated for 250 processing days in a season, it would handle 425,000 head a year on a single shift. A second shift would double those amounts.
The competition
The plant is a state-of-the-art facility for animal care and employee safety and comfort, Cooper said, adding that in order to survive among giants in the industry, the plant will have to compete. He said the trio of executives thinks the beef industry will move northward to take advantage of feed and other opportunities.
North Dakota and South Dakota have a total of 2.5 million mother cows -- 1.6 million in South Dakota, and 900,000 in North Dakota. They actually increased their herds while drought-stressed producers in the South cutback.
In Aberdeen, Cooper is working with Jim Mitchell, former chief operating officer for Global Protein Group, and now the chief operating officer for the new management. Keith DeHaan, originally from the Platte, S.D., area, is the executive chairman. DeHaan runs a company called Food and Livestock Planning Inc., in business since 1998, formerly based in Bismarck, N.D.
Cooper has been in the beef business since the 1980s and has been associated with numerous U.S. and international beef projects, including some successful branded beef ventures with North Dakotans in the 1990s.
Industry at its peak
The backdrop of the beef plant is general prosperity in the industry, with some key policy threats.
ADVERTISEMENT
Jason Zahn of Towner, N.D., outgoing president of the association, acknowledged that the industry is seeing unprecedented profits, with local corn prices going to $2.25 per bushel. Producers will be inclined to run the feed through a cow or a calf.
"Everything's kind of lined up just perfect," Zahn said. "If you added $7 corn to this, it would be a different ballgame." He said he personally thinks the industry is "at our peak" for profits.
"For me, it was sitting back and watching some cattle on sales on the Internet and seeing that first $3-a-pound calf sell," Zahn says. "Remarkable. It wasn't so many years ago we were seeing calves sell for $2 a pound. And it's continued to climb," with tremendous feeder cattle futures prices.
"I'm very optimistic that the cattle industry is going to do well for awhile," Zahn says. Cattle futures prices for the far months are still very good, with good demand. We're hoping this thing is going to stay high for awhile. Most of the state had good grass, good feed."
Julie Ellingson, executive vice president of the association, noted the organization has 2,996 members -- just shy of a goal of 3,000 and the most since 1995. She noted that the organization has risen to challenges including the Measure 5 on the November ballot. The group said the measure, the Clean Water, Wildlife and Park Amendment, would put up an estimated $150 million of oil tax revenue into the hands of a conservation group that could use the money to purchase land and would be required to spend funds raised within every biennium.
Ellingson urged members to take home "Vote No on 5" placards and to dust off any placards for when the organization opposed an earlier Measure 5 animal care measure in 2012. She said North Dakota's stockmen are the state's true conservationists.
