News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to MinneKota@gmail.com

Wednesday, February 28, 2007

Groping around in the abattoir?

This post is a big question mark about the beef packing business in South Dakota.

Ridgefield Farms, that erstwhile operator of South Dakota beef packing plants, has reared up in Aberdeen.

Monday night, Feb. 19, Dennis Helwig, one of the main movers of Northern Beef Packers being built south of Aberdeen, explained the history and proposed operation of the plant to the Brown County Democrats. Helwig, whose family runs the Hub City Livestock Auction on the south edge of town, said he got interested in the possibility of a beef packing operation in Aberdeen when he received a call from the CEO of Ridgefield Farms suggesting he give the idea some thought. After some meetings and discussions with Ridgefield personnel, Helwig decided he wanted to initiate the effort that would establish a packing house in Aberdeen, and he then visited with Norge Sanderson, another principal in the project, to see how it could be done. He was impressed by the chance to take advantage of a source of finished beef, becoming part of an instate value-added certification program, and providing an alternative market to the heavily consolidated beef packing industry. That, says Helwig, is how the project came to be.

Ridgefield's role in all this is bothersome. No explanation was made as to why a company that obtained state and community money in Huron and, then, Flandreau, would default on its commitments and hand off a project to Aberdeen.

A few years back, a number of beef producers put together the financing for a beef packing plant in South Dakota. The plan was abandoned. Although they never got to the point of specifying a location for it, Aberdeen was a consideration. Agriculture in East River South Dakota has changed during the last 20 years. An extension agent told me recently that there are misconceptions about where the big beef ranches are in South Dakota. Most people look at the west and West River as ranch country, but in fact some of the biggest cow-calf operations are in East River, and Brown County has its share of huge herds.

The change in agriculture involves a shift from growing wheat, flax, and sunflowers to becoming a part of the corn-and-bean belt. With corn a major crop in East River, beef breeders can either feed their calves themselves or sell them to regional operations that feed beef. The state offers opportunity to cash in on a regional market.

When Dakota Turkey Growers, a producer-owned plant, announced its construction in Huron, Ridgefield Farms announced at the time that it would build a modest beef operation adjoining the turkey processing plant. The plan was endorsed by the governor, and the state, a number of investors, including the Farmers Union, kicked in funds to get the project going.

What happened then is where the information gets muddy. Suddenly, Ridgefield Farms announced that it was abandoning its Huron plans and was moving the project to Flandreau. A rendering plant was planned in conjunction with the packing plant, but some zoning and infrastructure issues came up and matters got contentious.

One beef producer told me that the Governor had encouraged the Huron investors, but when Ridgefield asserted its management prerogatives and did not take its orders directly from the Governor, he got torqued and pulled his support and told the investors to withdraw their funds. Another producer doubted this story. He said people with that kind of money don't take orders from the Governor as where to invest it.

Huron has a long history of being home to beef packing operations. When Ridgefield Farms announced its plan, it looked as if Huron could regain one of its industries and replace some of the 850 jobs lost when Smithfield Foods closed its pork plant in Huron in 1997. The latter producer cited said there has to be other matters involved in Ridgefield's withdrawal from Huron, including some matters involving the abandoned rendering plant and the Farmers Union.

This summer Ridgefield, after getting $850,000 from the Flandreau Development Corporation and the city, abandoned its plans there. The Yankton newspaper carries a story reporting that the state has written off almost a half million dollars in grants and the Corn Utilization Council another $100,000, and Sen. Frank Kloucek is forming an investigation task force.

There are a lot of questions about Ridgefield Farms floating around out there, and we can only add to them. Just what happened in Huron? Why did they abandon Flandreau? And just how much are they involved in Aberdeen?

Is there any information out there that is accurate and reliable?

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