Beginning in late 2023, cattle producers in Iowa and eastern Nebraska will have an additional market opportunity. Construction is planned to begin in spring 2022 for a $325 million federally inspected beef processing facility in Mills County in western Iowa. The new processing plant will handle 1,500 head daily, while employing 750 workers and providing an estimated annual economic impact of $1.1 billion.
Cattlemen's Heritage Beef Co. is a newly formed corporation led by project developer Chad Tentinger, founder and owner of TenCorp Inc. and an Iowa cattle producer. Tentinger hopes to provide a market for cattle raised by smaller, independent cattle producers, and plans to open the plant in late 2023.
The facility will be situated on the Mills-Pottawattamie County line in western Iowa, south of Omaha, Neb., and Council Bluffs near Interstate 29, giving access to infrastructure and labor. According to an economic impact study by Ernie Goss, economics professor at Creighton University and economist with Goss & Associates, the facility will provide more than 3,300 jobs through construction and have a total economic impact of $6.4 million.
Matte Deppe, Iowa Cattlemen's Association CEO, notes the processing plant will provide additional leverage for producers to market fed cattle.
"It's a situation where we will add 1,500-head harvest capacity per day in a consistent manner in our state. That gives a lot more leverage to margin up cattle based on true quality and other aspects the consumer desires," Deppe says. "From what we understand, the model will provide an opportunity to share profits all the way down to the cow-calf producer."
More opportunity after tough times
That's especially important with closures of packing plants in recent years, bottlenecks in the packing sector caused by the COVID-19 pandemic and other disruptions, in addition to several cattle organizations pushing for investigation into price imbalances in the beef sector.
"As we look at the market from the feedyard gate to the packing plant, we've seen quite a bit of consolidation in the packing industry," Deppe adds. "Anytime you can add new competitors to the market, it gives producers a better opportunity for bids, markets or strategies when we price-determine on cattle. This is a new company and a sizable amount of harvest capacity that will cause fed cattle demand in eastern Nebraska, and western, central and maybe even eastern Iowa, moving forward."
According to an Iowa Cattlemen's Association release, Cattlemen's Heritage wants to help young farmers enter the cattle business and stay in the industry. The plant will start by harvesting about 800 head per day for the first several months and ramp up to 1,500 head per day by the end of the first year. A full workforce will be hired to be on hand when the plant opens.
"It's a great opportunity from young producer's standpoint. Our industry is very capital-intensive," Deppe says. "Especially when you think about feeding a group of feeder steers, and all the capital investment required — not just in cattle, but facilities, feed and labor. From a young producer's standpoint, that's the succession point that's undercapitalized in any industry. I think what's interesting is Cattlemen's Heritage is looking at ways to offset some of that risk for the producer, which should help when they go to their local lending institution with a risky business model.
"Outside the cattle industry, when you look at the labor required, along with the secondary and tertiary businesses that will pop up and use byproducts, not only are we adding tax base to our state from an economic standpoint, from a labor standpoint and the products it's selling, but you're also insulating and growing the producer side of the supplier network," Deppe adds. "When we talk about the beef industry, it's all about economic impact. It's producers' involvement and investment in their local communities that make rural Iowa so strong."