Biofuels giant POET is an ag industry ally. But it's opposing a new South Dakota pork plant. Why?
POET is a significant backer of an initiative on November ballot that would prevent new "slaughterhouses" in Sioux Falls, South Dakota. The South Dakota Pork Producers and South Dakota Soybean Association say it's concerning that an ally in agriculture opposes the opportunity to expand capacity.
SIOUX FALLS, S.D. — The farmer-owned cooperative planning to build a hog processing plant in northeast Sioux Falls ran into an unexpected opponent earlier this year.
It was POET, the Sioux Falls-based biofuels giant.
Sioux Falls voters will decide in November whether to approve a measure that will prevent future “slaughterhouses” from building in the city limits. The question was put on the ballot by Smart Growth Sioux Falls, a group formed with the support of some local businesses, in reaction to initial approval of Wholestone Foods plan to build a processing facility near the intersection of Interstates 90 and 229.
POET's inclusion in that list surprised agricultural advocacy groups, who see themselves as partners in the growth of biofuels that they helped forge through hard work.
The question is why.
The point that some people raise, but that POET declined to address directly, is that the company’s founder and CEO Jeff Broin owns a home and a gated luxury housing development about 1.5 miles from the Wholestone site.
Organizations that represent pork and soybean farmers in the state say POET's support of the local ballot initiative is disappointing given the long relationship between farmers and the biofuel producer.
“It’s disheartening,” said Brad Greenway of Mount Vernon, South Dakota, whose family farm is one of the 190 Wholestone members.
Greenway was slinging pork sandwiches to hungry farmers on Wednesday at DakotaFest, the massive agricultural products and technology show held each August in Mitchell. POET’s opposition to the plant was a background discussion among the commodity groups and producers gathered for the show.
Greenway’s family grows corn, soybeans and even some wheat, along with pigs and cattle.
“We are customers of POET, which I thought was one of our ag allies," he said.
Odor, pollution concerns?
Smart Growth Sioux Falls objects to the potential for odor, pollution and disruption of quality of life and contend that animal processing is better suited for more rural areas.
Wholestone and their backers say that imagery is based on the Smithfield plant which opened in 1911, doesn't reflect the technology of modern operations and discourages industrial development in Sioux Falls. The site is zoned for industrial use and would be near a large pre-cast concrete facility and the city's wastewater treatment plant.
The Broin family built POET, today the largest producer of biofuels in the world, after purchasing their first ethanol plant in 1987 in Scotland, South Dakota. The private company operates 33 plants across the Midwest with revenues reportedly exceeding $8 billion in 2019.
That growth of biofuels over the past three decades has created new markets for grain farmers, who’ve supported with words and money the public policies that made it possible.
They’ve sold corn to POET to make fuel and purchased the dried distillers grain at the other end of the process to feed livestock.
There’s a synergy to the system that makes it work with the goal of getting as much value out of agricultural products as possible.
That cooperative spirit took an emotional hit in April, when a group of businesses opposed to the Wholestone facility sent a letter to Mayor Paul TenHaken and the Sioux Falls City Council.
That list included POET.
A spokeswoman for POET declined an interview with Forum News Service.
“POET has joined the broad coalition of concerned citizens and businesses that supports pausing this project and looking for alternative sites outside city limits,” the company said in a statement. “POET remains dedicated to growing value-added agriculture across rural America, but as one of Sioux Falls' largest employers, we share the concerns citizens have voiced regarding odor, water, and quality of life issues in our city.”
POET move disappoints allies
Greenway’s dismay is a sentiment expressed by the South Dakota Soybean Association and the South Dakota Pork Producers Council. Collectively, commodity groups are a powerful social and political force in South Dakota.
In addition to showcasing the latest machinery and equipment, DakotaFest is nearly mandatory attendance for public officials. This week’s event included a gubernatorial forum and a panel with the big three of the congressional delegation to discuss the upcoming Farm Bill.
At the S.D. Soybean tent, Jerry Schmitz, the association’s executive director, took a few minutes from mingling with members and discussing policy to address the Wholestone plant.
The Soybean Association is firmly behind Wholestone, he said. Soybean meal is one of the main food sources for swine.
Schmitz understands that there is concern about pollution and air quality, which is the primary focus of the Smart Growth for Sioux Falls effort. That’s the legacy of the Smithfield plant, formerly John Morrell, the sprawling 111 year-old plant near downtown and Falls Park.
That’s an image that people have, he said, but it’s an old one that doesn’t reflect today’s technology.
“From the very beginning (Wholestone) has to be extremely careful about any emissions that they have,” Schmitz said. “Folks will drive by that plant and not even recognize it’s there unless they see a sign. It will be a rare day when they smell anything. The water will be pure coming back out. We know that in the past those things didn’t happen.”
Glen Muller, executive director of the Pork Producers Council said his members need additional harvesting capacity for their product. He stressed that includes Smithfield, which processes nearly 20,000 pigs every day and employs about 3,700 people. Farmers need both plants, he said, and they buy a lot of dried distiller grain from POET.
“To have one of our allied industries opposed to the expansion in the swine industry is very concerning to our producers,” he said.
CEO's home, development nearby
Broin's house is in the Imani Ridge development in Sioux Falls. Imani Ridge is part of the Cactus Heights neighborhood, which is across the Big Sioux River near Great Bear Ski Valley, southeast of the Wholestone site.
Imani Ridge is currently owned by the Silvercreek Trust, according to city property records.
Silvercreek is tied to POET in campaign disclosure documents related to a Initiated Measure 25, a ballot initiative in 2018 that dedicated money from tobacco taxes to reducing tuition for students at the state’s technical colleges.
The preliminary subdivision plan for the Imani Ridge development filed in 2016 with the Sioux Falls Planning Commission listed the owner as the Broin JT Trust.
The Broin JT Trust is owned by Jeff Broin and his wife Tammie Broin "for the benefit of the Broin family,” according to documents filed with the Federal Election Commission in 2011.
Jeff Broin himself is listed as the applicant and owner on the residential rezoning of Imani Ridge, in a 2017 Sioux Falls Planning Commission agenda .
Plant's future far from settled
It’s a “not in my backyard” theme that is familiar to pork producers, who often face pushback to locating or expanding facilities.
It’s fair to ask questions and make sure everything is done properly, said Greenway, the Mount Vernon farmer. But it’s also fair to say that projects like Wholestone are good for the wider community, regardless of where you live.
That was true for him when POET opened an ethanol plant six miles from his farm in 2006.
“I support it because I support local,” he said. “I am just asking for the same thing here.”
The POET spokeswoman referred to the location of POET corporate headquarters, which is in an office development west of Interstate 229 near Cliff Avenue, rather than Broin's home, in a separate statement.
"The proposed location near POET headquarters puts a fine point on the issue for all the employees who work and live nearby, but regardless, these projects belong outside of city limits," the statement said.
The debate over the Sioux Falls ordinance is just beginning.
Officials with the Pork Producers and Soybean Association both say they plan to conduct a campaign to educate voters about the benefits of Wholestone and the quality of the science to insure clean air and water. Getting that perspective into the public discussion will be difficult, as will overcoming the image and memories of the Smithfield plant.
The list of notables rolled out by Smart Growth Sioux Falls won’t make that any easier, said Schmitz, from the Soybean Association.
“We are all partners in the industry and we need to work together,” he said. “I hope that there aren’t certain individuals who confuse the issue and use money to move industry in one direction. I think the welfare of everyone needs to be taken into consideration.”