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

Saturday, March 21, 2009

Axis of Weasels

An AIG culprit lurks.


Talking Points Memo has a photo gallery called Axis of Weasels: The Men Who Ruined the Economy. If you really want to know who is responsible for the mess the country finds itself in, check out this gallery of rogues.

Friday, March 20, 2009

John Thune stands up for flatulence and a truly stupid fairy tale

John Thune proposed a piece of legislation that will make a great campaign commercial for his opposition in 2010, should he have the temerity to run again. I state that caveat because of Thune's sterling record in representing agriculture. As a Congressman, he did not even belong to a caucus on agriculture, although he represented a state with an economy based on agriculture. After a campaign opponent pointed out this absence of interest, he did join some caucuses, and he also became the voice for some lobbies, as he is in the legislation (S527) he introduced last week.

The history of this bill is convoluted. And absurd. Totally absurd.

The bill is written to prevent the EPA, and others, from doing something they have said they will not do and cannot do, because they are not given the powers to do it, if they wanted to.



The best way to explain this farce is to use the example of Arvid, the Tooth Fairy. Arvid, as you might know, lives in Bloomington, Minn. When he is not working, he likes to hang out at the Mall of America. That causes problems for people who regard Tooth Fairy as a gender role mandated by scripture and Rush Limbaugh. These guardians of uprightness have circulated rumors about Arvid. They say he spends too much time trying on clothes at Victoria’s Secret, and with times so tight he finds it difficult to support his habit. So he not only takes teeth from under the pillows of sleeping believers when on his nightly rounds, but he might be, might be, mind you, tempted to take their piggy banks off their dressers.


The anti-fairy lobby looked at Arvid’s temptation, as they have imagined it, and calculated how much money Arvid might filch in a night, if he gave into that temptation that the lobby made up for him. He could haul in millions and put children out of the business of losing their baby teeth. They would have to lose them for free, with possible depredations of their piggy banks.


The anti-fairy lobby put out a news release on the magnitude of this potential loss and how it could ruin the baby-tooth industry if left unchecked, and asked if any U.S. senator would care to sponsor legislation to head off this threat to the free flow of baby teeth.


John Thune raised his hand. The anti-fairy lobby wrote the bill and John Thune introduced the piggy bank protection legislation.


That is essentially what happened in actuality, but the bill John Thune introduced was to prevent tax assessments on cow farts, pig belches, and other digestive emissions.


Here is the story. Denise Ross of Hoghouse blog wrote about it in The Mitchell Daily Republic. It began with a ruling by the Supreme Court that the Environmental Protection Agency must address the matter of climate change and exercise its responsibility to monitor and regulate pollutants that contribute to it. Specifically, the Court said that the EPA was derelict in its duty when it said that setting emission standards for automobiles was a matter of discretion. The Court said it was an absolute responsibility of the EPA to monitor greenhouse gases. So, the EPA issued a call for comments regarding the monitoring of those gases.


The U.S. Dept. of Agriculture responded to the call. It collects and monitors information as to how much gas livestock emits into the atmosphere as a part of its research duties. It supplied data to the EPA.


That is where the American Farm Bureau Federation stepped in and took charge of the data for its own purposes. The AFBF does not want the livestock industry to come under the same rules for controlling greenhouse and polluting gases as "smokestack" industries. As the USDA data shows, livestock is a major contributor to those gases. Many countries, such as Australia, are proposing control measures for livestock gases. The AFBF had a panty-knotting party over the data provided the EPA.


The EPA has a tax and cap proposal for controlling industrial gases, through which it could require industries to pay taxes on the gases they give off into the air. The idea is that in order to avoid paying those taxes, the industries would find ways to reduce or eliminate the gases they would be taxed for. So, staff members at the AFBF, under the direction of Mark Maslyn, director of public policy, applied the proposed tax rates to the gases burped and farted by livestock. According to their calculation, the tax could amount to:




  • $175 for each dairy cow

  • $87.50 for each head of beef cattle

  • $21.87 for each hog



Their conclusion was that farmers could not afford to pay these taxes and the rates would bankrupt the industry.

Factcheck.org has previously analyzed and demonstrated the contrived falsity of the Farm Bureau claims and the reporting of this in the media. That did not deter this phony legislation from being introduced or the Rapid City Journal Blog from lauding Thune's initiative.

The important facts behind this proposed legislation are:

  1. The EPA has never proposed imposing a gas tax on the livestock industry.
  2. The EPA does not have the authority to impose such a tax.
  3. The tax figures were contrived by the American Farm Bureau Federation, not by any established scientific or regulatory agency.
  4. This is a lobbyist-sponsored and lobbyist-written piece of legislation.
  5. It is a blatant attempt by dishonest conservatives to malign the government and the global=warming scientists with a false accusation.

John Thune has never been much for original thinking. His success has depended upon his reading of scripts prepared for him. For his successful election campaign, he merely recited the contrivances written for him by his campaign manager, Dick Wadham. For this piece of legislation, he is merely reciting the script prepared by the American Farm Bureau Federation.

In this piece of legislation, John Thune is reading a fairy tale.

Apologies to Arvid.











































































Sunday, March 8, 2009

The freedom to be a serf

Corey Heidelberger at Madville Times takes up some of the specifics of why the study that purports to show that South Dakota ranks among the top states for freedom is an exercise in ideology, not a legitimate "study." Sponsored by the Mercatus Institute at George Mason University in Virginia, the study claims to measure indices that indicate the status of freedoms in the 50 states. What the study really shows is that the news media are not following the criteria established for reporting on studies and polls, and it may show some failures in the academic community in allowing the study to be issued without challenge or criticism of its premise and methods. In consultation with the professional organizations of people who develop and apply analytic methods in polls and studies, journalistic organizations adopted standards for reporting on the results of polls and studies. Those standards require that the sponsors and conductors of studies be fully identified, and that any biases in their background regarding the subject of studies be included.

The journalistic standards also require a summary of the methodology, to put the audience of the report on notice of its procedures and potential areas that might be criticized.
When academics propose a study which will result in publication, they are required to establish the protocol--an explanation of the procedures and their limitations--they will use in conducting the study. Generally, a valid study includes evaluators who issue criticisms and recommendations for refining the protocol in ways that improve the accuracy and reliability of a study. For the Mercatus study on freedoms, none of the media reporting it followed the guidelines.

Corey Heidelberger noted the identities of the authors of the freedom study and how who they are may skew the study or indicate that it is an objective sham.
The authors have a history of pursuing a political agenda. Madville Times asks, who are the people who get all those freedoms in South Dakota? And that question gets at a major defect in this purported study.

The problem is one that a segment of so-called conservatives use time and again. They have their own, idiosyncratic definitions of concepts such as freedom, and apply them as if they are universal criteria. Often the definitions are skewed and just plain wrong. They are definitions based upon exclusions of concepts not favorable to those who offer them.

The authors of the Mecatus study say that their definition of freedom is the right to take any actions which do not harm the freedom of others. Then they endorse a belief statement from Norman Barry as the defining premise of their study:


[A] belief in the efficiency and morality of unhampered markets, the system of private property, and individual rights--and a deep distrust of taxation, egalitarianism, compulsory welfare, and the power of the state.


The huge national irony in that premise for their study is all that all the aspects of the current economic failure are embraced by the values expressed in that statement:


  1. Markets unhampered by any kind of regulation have brought the country to economic failure because of a predatory immorality among the financial ruling class.
  2. Those unhampered markets have been totally inefficient.
  3. The indiviudal rights of the powerful, CEOs and their minions have violated the trust and rights of the huge majority.
  4. The distrust of egalitarianism has produced a ruling class that has brought the nation under a state of economic feudalism and oppression.
  5. Under the guise of corporate private property, huge global corporations literally own the country and have made American working people a new, impoverished serfdom.
When it comes to ranking South Dakota as among the top three states for freedoms, one must ponder that in the context that the state perennially ranks at the bottom for individual wages, ranks in the 20 states with the highest poverty rates, is among the three states with the most regressive tax policies, has among the highest incarceration rates for adults, and has labor laws that regard employees as serfs who work at the whim of their employers with no rights that the employers do not want to grant them.

And when a statement of purpose expresses a distrust of egalitarianism, one must ponder if that statement refutes the premise that all people "are created equal."

This study may purport to measure someone's ideas of freedom, but they certainly aren't the concepts that our documents of history have defined.

Wednesday, March 4, 2009

Don't stand downwind from John Thune. He's having a really bad gas attack

KELO's website is carrying a story about Sen. John Thune raising an alarm that a proposed tax on cow and pig farts could destroy the livestock industry.

Here is the story:

South Dakota Senator is concerned a so-called cow tax could cripple the livestock industry in South Dakota.

The proposed tax would cost hog producers about $40 a head. Beef producers would pay an $87 per head tax. Dairy cows would be taxed up to $125 a head. All because in large numbers the animals emit significant amounts of methane.

"It basically would completely wipeout an industry that is critical to our state's economy and it seems to me at least, to be an incredible overreach on the part of the E.P.A." Senator John Thune said.

It's not a done deal, but the Environmental Protection Agency is trying pass the measure under the Federal Clean Air Act.

Thune says the greenhouse gas regulations were put in place to manage emissions from smoke stacks and vehicles, not livestock.


The only problem is that it isn't so. Factcheck.org blew this story away in December.

Here is their investigation of the rumor:


Is the EPA considering a tax on cows and pigs?
A:

No. The farm lobby warned that EPA "could" push for such a tax, but EPA never proposed any such thing and says it lacks authority to impose one anyway.
This one is a case study in how lobbyists sometimes justify their own salaries by loudly fighting against hypothetical but non-existent threats from Washington.

The source of this hokum is a misleading news release put out by the American Farm Bureau Federation on Nov. 20. The highly inaccurate headline read: "AFBF Opposes EPA-Proposed Tax on Livestock." In truth, however, the Environmental Protection Agency hasn't proposed any tax on livestock. In fact, the Farm Bureau's own documentation admitted as much.

Along with its news release, the Farm Bureau issued a backup document titled "How EPA Regulation Could Lead to a 'Cow Tax.' " Note the word "could," indicating a possibility, not a certainty. The document said: "We do not know what direction EPA might take in any final proposal." It said a tax on livestock might be among "potential consequences" of an EPA attempt to regulate greenhouse gases as pollutants under the Clean Air Act, as authorized by the Supreme Court. Livestock, of course, naturally produce methane, a greenhouse gas.

A flurry of scare headlines and misleading news releases followed the Farm Bureau's release. A Texas newspaper, the Palestine Herald-Press, headlined its story "Cow Tax?" and said the EPA was looking into it. The New York Farm Bureau said Nov. 26 that it was fighting an "EPA mandate to tax farm animals in New York," as though the agency had actually enacted some sort of tax. The Associated Press reported that a "proposed fee on smelly cows" and hogs was angering farmers. Before long, New York Sen. Charles Schumer, a Democrat, was denouncing the "cow tax" and saying that "these onerous fees could cost New York state farmers an estimated $120 million annually and put family farms at risk of going out of business." Other misleading headlines followed. Among them: "EPA's Proposal To Tax Livestock Gas And Flatulence," "EPA Proposes Cow Tax" and " 'Cow Tax' Uproar Underscores Greenhouse-Gas Divide."

What prompted all this is an "advance notice of proposed rulemaking" that EPA published July 30. This was far from a proposal to tax. In a preface, EPA Administrator Stephen L. Johnson stated: "None of the views or alternatives raised in this notice represents Agency decisions or policy recommendations. It is premature to do so." Rather, the EPA sought public comment on "potential regulatory approaches" to regulating greenhouse gases. As the Farm Bureau backup document itself put it: "The lengthy ANPR was not a proposed regulation but a preliminary notice seeking informed comments from affected parties on what the impacts of such a comprehensive regulatory approach might be." Nowhere in the long document is any call for a fee or a tax on livestock or the methane they naturally produce.

The Farm Bureau's document argues that if EPA goes ahead with a broad program to limit greenhouse gases, "[i]t is likely that methane, a GHG [greenhouse gas] associated with livestock production, would also be regulated in some form." It further calculates that this possibility could lead to a per-animal tax or fee of $175 for each dairy cow, $87.50 for each head of beef cattle and $21.87 for each hog. The Farm Bureau said, "[W]hile some claim a cow ‘tax’ or ‘fee’ is hypothetical or speculative, that does not make the possible outcome any less real." But real or not, it was the Farm Bureau that raised the notion of a tax and calculated the hypothetical fees, and not the EPA.
Blockquote
EPA issued a statement saying it isn't proposing a tax and doesn't have legal authority to impose one anyway:

EPA, Dec. 10: EPA is not proposing a cow tax. The CAA (Clean Air Act) does not include a broad grant of authority for EPA to impose taxes, fees or other monetary charges specifically for GHGs (greenhouse gases) and, therefore, additional legislative authority may be required if EPA were to administer such charges.

But just because a proposal doesn't exist doesn't stop lobbyists from lobbying against it, or politicians from publicly denouncing it, or newspapers from covering it.

-Brooks Jackson

Tuesday, March 3, 2009

What would Ted Turner do?

Ted Turner successfully launched CNN in 1980 when he noted that network news shows were turning more to serving popular entertainment tastes than they were serious news. Turner said he wanted CNN to be The New York Times of the airways, not The New York Post.

Now when it comes to serving what it thinks is audience demand, CNN is one of the worst offenders in skewing the news. No place is that offense more pronounced than in its coverage of the economic crisis and the government attempts to deal with it.

While AIG collects $150 BILLION in a rescue package, CNN fills its hourly news summaries with cable chatter. Every hour the network plays tapes of the RNC chair and Rush Limbaugh's piss and make-up routine in the Republican sandbox. They put on political party "strategists" who yammer and prattle and piddle with the party lines.

What CNN does not do, for example, is explain just what the hell AIG is doing with four rescue dispersements of taxpayer money, who is getting it, why it is needed, and why AIG is so important to rescue.

What CNN does is report on John McCain's hissy fits on the floor of the Senate, but it does not check into just what he describes as wasteful earmarks really are.

If you want the real news, you still have to go to The New York Times, The Washington Post, and Internet sources like ProPublica, and the PBS Newshour.

Cave paintings and primal screams are not dialogue

The coming week will be busy for Ward Churchill. He is the former professor of ethnic studies at the University of Colorado who got fired from his job two years ago. He and William Ayers, the U. of Illinois-Chicago professor of education who was a member of the Weather Underground, will be speaking at a student-organized forum on academic freedom this Thursday at CU. The Republican presidential campaign tried to use Pres. Obama's casual acquaintance with Ayers against him in the election campaign. Next Monday Churchill's law suit trial against the University of Colorado to get his job back begins.

A major news source that tracked and did some investigative reporting on Churchill will be missing from the coverage. The Rocky Mountain News, which was interred Friday in the mass grave to which popular tastes are consigning many newspapers, wiill not be there. But some evidence it found against Churchill might be.

The Churchill case is a confusing one. In an essay, he called some of the people killed in the 9/11 attacks "little Eichmanns," charging that they were clerks in offices that administered oppression against American minorities. Churchill could not be fired for stating his opinion, but the anger generated caused people to take a closer look at his scholarly writing and editing, and some complaints made about his work were revived and examined in detail.

Academic panels that consisted of 25 professor peers found Churchill's work at fault and recommended his dismissal. There are a number of acts for which a tenured professor can be dismissed, and Churchill was found guilty of them: gross incompetence, plagiarism, academic dishonesty (particularly in misrepresenting and misquoting the work of others), scholarly slovenliness, and general mendacity and deceit. As a member of a professors' organization that makes academic freedom and academic due process a prime area of activity, I was among a number of professors asked to review the reports and the procedure for dismissing Churchill. We unanimously found the charges against Churchill to be well documented and carefully presented, and the recommendations for his dismissal were based upon careful verification and analysis. Particularly convincing was the testimony of writers and scholars whose work Churchill plagiarized, misrepresented, and otherwise misused, including copyright violations.

Churchill is represented by civil rights lawyer David Lane who has assembled a roster of supporters, including some conservative professors, who claim that Churchill was fired for his unpopular statements regarding 9/11. Lane released a deposition from the former Colorado Bill Owen in which Owen said it was a good thing that the university ignored his recommendation to fire Churchill for the 9/11 comments because that would have been a violation of Churchill's civil rights and academic freedom. Owens stressed that Churchill was fired for academic misconduct.

Churchill claims that the charges of academic misconduct were contrived. However, William Ayers makes the point that many other professors have been found guilty of the same charges as Churchill but have been censured and otherwise punished, but allowed to go on with their careers. That is true. Some very prominent writers with academic rank have been shown to have plagiarized in recent years and allowed to continue in their positions.

As a former officer in a professors' organization that monitors issues of academic freedom, I was one of a number of people asked to review the charges against Churchill and the process that led to his dismissal. I found the charges were carefully documented and the process fair. So did all the other reviewers.

Where there was some disagreement was in the severity of punishment. I think that professors who violate any rules of academic honesty and basic competence should be dismissed. False and misrepresented information turns higher learning into lower lying. It destroys the reason for universities to be.

Over the years, I have witnessed the firing of many professors. Most of the firings had to do with professors getting caught poinking students, or each other. Quite a few involved matters of academic honesty. However, most of the professors fired for academic misconduct were untenured. Their contracts were simply not renewed. They had the right to appeal, but as in the Churchill case, charges of academic dishonesty are based upon written work, and such documentation is hard to refute or explain away. On the other hand, spurious charges of academic dishonesty are dealt with harshly, too. When someone makes charges that are found to be frivolous or false, they are the ones who receive the discipline. In higher education institutions of integrity, matters of acacemic dishonesty are taken very seriously.

But many institutions do not operate on that level of integrity. They are very quick to get rid of professors who get involved in some kind of sexual peccadillo, but they take cavalier attitudes toward matters of academic competence and honesty.

When professors blog or otherwise publish work. what they write comes under scritiny. Even if they claim that what they say does not represent their institution or profession, what they say does reflect on their university and their profession. Nearly every university subscribes to a set of rules for academic conduct which makes that clear. They have a right to express opinions and engage in political activity off campus, but the public still associates what they do and say with their college and the teaching profession. They can't get fired for unpopular opinions, but they can be disciplined if they use their position in their institution and their profession as a base of authority from which they launch their opinions.

What they cannot do, at least in professionial theory, is violate the rules of competence and honesty, even on blogs.

Some blogs are very careful not to engage in the kind of exchanges that are scurrilous, hateful, and defamatory. But for many, false claims, malice, and personal attacks are their total mission. My own writing has often been the subject of derogation both in comments it elicits and in other blogs. That is the nature of blogs. The ignorant, unprincipled, and--frankly--stupid have the right to express themselves. But when professors misrepresent what other people say, whether because of incompetence or artifice, they should be called into account. And that is a job for their institutions and their colleagues.

I don't think Ward Churchill has much of a chance of getting his job back. The competence and integrity of work he did while serving as a professor is the issue, not his offensive comments about 9/11 victims. (Ann Coulter made similar comments.) The regents and officials at the University of Colorado took measures to restore the integrity of their institution. That is how universities of integrity operate.

For institutins that do not take acdemic integrity seriously, we can only put them on notice that we will not support them or recommend them to students. And do what we can to either reform them or put them out of business.

As an excursion through the blogosphere shows, the verbal currency of our nation is in the same shape as our fiscal currency. Both are in a state of deterioration for the same reason: An intellectual and moral bankruptcy. . Restoring the integrity of the higher learning profession is essential to restoring the integrity of the nation.



Monday, March 2, 2009

Serious about the death penalty

I am uncertain about capital punishment. The number of wrongful convictions calls into question whether it should be part of the criminal justice system. But I have no reservations at all about applying it to people who use certain phrases that endanger the mental health and well-being of anyone who has to hear therm. They are:

  • He’s got a lot on his plate. This metaphor is applied to people who have much, much work facing them. But it alludes to someone sitting before a huge plate of food and being told “you can’t leave the table until you eat all that.” When someone has a lot of work to do, I am repulsed at the thought of the person gorging him/herself when he /she should be working up a sweat getting something done.
  • More bang for the buck. I suppose this refers to the size of a bomb that a dollar can buy, and not to financing the big bang that launched this absurd universe. But it raises the image of someone looking for a really cheap prostitute.
  • At the end of the day. This refers to how all the events in time will culminate when I am trying to end my day with a mellow draft or two of single malt.
  • Think outside the box. The problem with this is that not many people think in boxes, and the world would probably be a better place if they did. As a child during the depression, one of the luxuries we could afford was large cartons that children could crawl into, play house, or just be away from the world. I did some of my best thinking inside those boxes, and often thought of having one in my office on campus so I could crawl into it and escape the onslaughts of inanity that people kept confronting me with.
  • I’ve got your back. You haven’t. If you did, you’d have a beautiful ass, too. Snarky flippancy aside, though, people can mean a couple of things when they say this. One is that they support you or agree with you. The other, which was uttered when doing squad patrols on maneuvers in the Army, meant, “You just keep your eyes on the sector you are assigned to cover, and don’t worry about what’s behind you. I am watching anything that might harm your beautiful ass.” They could have simply said, “I’ve got the rear covered.
  • Since the beginning of time. And just when did time begin?
  • Have a nice day. Argo, bleep yourself. I’ll have any kind of day I damned please.
  • No problem. Yes, there is a problem. It’s you, you cliché-spouting idiot.
  • Hmmmmmmm. Go to the bathroom if you’re going to play with your mantra.
  • He’s on the cutting edge. I hope he slips. On his throat.
  • Awesome. Dayamn, dayamn, dayamn. You want to be awestruck? Stick your head in the snowblower.

There are many more thou-shalt-nots, but the stone tablets keep breaking.

Sunday, March 1, 2009

Northern Beef Packers: Big hat. No cattle.

The story about Northern Beef Packers, which is building a processing plant at Aberdeen, gets as convoluted as Illinois Sen. (for the moment, at least) Roland Burris' accounts of his contacts with deposed Gov. Rod Blagojevich. Last week a seventh contractor filed a mechanic's lien on the plant. Total liens at this time amount to $7 million:



  • Scott Olson Digging of Huron for $2.1 million for dirt work.

  • McNeil Refrigeration of Omaha, Neb., for $1.75 million for materials, installation and labor.

  • Industrial Builders of Fargo, N.D., for $920,916 for a pre-engineered steel structure and other work.

  • Red Wilk Construction of Huron for $834,113 for concrete materials, steel and labor.

  • Arctic Industries of Papillion, Neb., for $658,352 for wall and ceiling panels and labor.

  • MNDAK Concrete/Concrete Inc. of Grand Forks, N.D., for $592,767 for work on a carcass cooler.

  • Fargo Tank and Steel of Fargo, N.D., for $149,975 for beams, structural steel and a condenser framing system.

The man heading up the project, Dennis Hellwig, told the South Dakota Farmers Union convention in Aberdeen last weekend that the issues with contractors are being resolved and the plant should open in late summer. The state Farmers Union was involved in a beef packing plant that was originally planned for Huron.

The beef business is a subject familiar to me. As a former farm and business section editor, I covered the closing of the old Chicago Stockyards and the building of regional packing houses. I have habitually tracked what is happening to the beef business ever since. And raising beef has been an important aspect of my family's history. But the beef industry rivals the financial segment of the U.S. business community for the number of scams and failures it endures.

The movement of packing companies from a central location into the regions marked a big change in the market for beef producers. At the old livestock yards, commission buyers would bid on the cattle farmers brought to market. As the packing houses became regional operations, the competition for the cattle decreased. Farmers would sell to the packing houses closest to them. While cattle are still sold through various kinds of auction operations, the marketing options have declined, and many cattle are fed on contract with specific companies. In fact, many of the cattle on feed are owned by the packers. The company JSB, SA, which purchased Swift in 2007 has a feed lot in Colorado that has up to 800,000 cattle on feed at a time.

Four huge packers process 83 percent of the U.S. beef. For independent producers, the market is very limited. The operation of a regional beef processor such as planned by Northern Beef Packers provides an optional, potentially more lucrative market for independent producers in the region. For the beef industry in general, such an operation would appear to slow down the consolidation and control of beef production by a few huge corporations. But going into competition against the giants is a daunting task.

As of now, the four corporations that process 83 percent of the beef are:



  • Tyson, processing 36,000 head a day

  • Cargill, processing 28,000 head a day

  • Swift, now owned by JBS SA, at 16,700 a day

  • National Beef Packers, at 13,000 a day

The big four almost became the big three. JBS SA is a huge Brazilian connglomerate. It entered the U.S. beef business scene with the purchase of the former Swift. Co. Last year it announced the intention of buying National Beef Packers. At the same time, it acquired the beef operations of Smithfield. However, shortly before the election of 2008, the Department of Justice filed a suit against the JBS acquisition of National Beef. It was joined in the suit by 17 states, including South Dakota. The grounds of the suit were that the acquisition would create a monopoly which would effectively control prices and the market place. A week ago, JBS announced that it could not come to terms with Naitonal Beef and withdrew its plans . In this background of concentration and control of the beef market, beef producers have encouraged the development of Northern Beef Packers.

But the history of how Northern Beef Packers was initiated is a troubled one.

Some years ago, South Dakota beef producers solicited money for establishing a beef packing plant in the state. After looking at the concentration of beef processing and the marketing obstacles for beef products, the producers decided to end their project and return the money to the investors. Prospects for a beef plant were raised again when South Dakota turkey producers, largely composed of leaders from the Hutterite colonies, formed Dakota Turkey Growers for the purpose of building a processing plant in South Dakota. They built the plant in Huron, but in the formative stages of developing the plant Ridgefield Farms, a Connecticut company, announced that it would build a beef processing plant to take advantage of the waste disposal and transportation opportunities available in Huron. Before deciding on Huron, the Turkey Growers listed Aberdeen as a possible site for the plant. There was opposition to the plant in Aberdeen based upon openly racist objections. Many residents protested that illegal aliens and minorities would make up the workforce. Although the Huron location was chosen because of the infrastructure advantages, the racial undercurrents in Aberdeen were a factor that would return to confront Northern Beef Packers.

The plans for Ridgefield Farms to build a plant next to the turkey processing plant in Huron collapsed. What happened has never been explained. Investors withdrew their support, some environmental issues came up, and many rumors were in circulation regarding Ridgefield's relationship with state government. Ridgefield Farms announced that it was moving its project to Flandreau.

The planning for the Ridgefield plant received $850,000 from the Flandreau development organization. It also received support from Farmers Union Industries, headquartered at Redwood Falls, Minn. Then for a period of six months, the management of Ridgefield Farms made no attempt to inform investors of the project of its progress. In fact, there was no contact with investors at all. In a meeting in August 2006, 75 investors voted to have Ridgefield Farms turn over all its assets to Farmers Union Industries. That fall, the Flandreau project was canceled, and Ridgefield farms ended all operations.

Ridgefield Farms South Dakota registered as a limited liability company with Philip Friend as its president and 12 South Dakota residents as its managers in April 2004. It was dissolved by administrative order of the Secretary of State for delinquency in its annual registration in November 2006.

The company has left a legacy of legal actions:
  • In June 2006, Prairieland Processors of Commerce City, Colorado, won a $2.2 million judgment against Ridgefield and its CEO Phil Friend for nonpayment for cattle the firm purchased.
  • Last year, Farmers Union Industries won a judgment against Ridgefield for more than $1 million in Minneapolis federal district court.
  • Last September Farmers Union Industries filed a $3 million suit against Ridgefield in Sioux Falls district federal court for money it and others are claiming for the aborted Flandreau project.
Dennis Hellwig says that he received a call from Phil Friend, the CEO of Ridgefield Farms, suggesting that he look into setting up a beef processing plant and take advantage of the South Dakota Certified Beef program for the promotion and marketing of beef products.

Hellwig owned land near the Aberdeen waste water treatment plant and started plans to construct a processing plant at that location. The project first had to deal with a zoning issue. An Aberdeen residential area is about a mile from the site, and a number of suburban homes are situated in the area. People objected to the traffic, noise, odor, and air problems, but the city and the county supported a zoning change in the interest of economic development. Officials worked hard to obtain a zoning change and then the passage of Tax Incremental Financing (TIF) bonds. A major point in favor of the rezoning was that the processing plant would be located in neighboring proximity to the waste water treatment plant, greatly simplifying the handling and treatment of waste water from the packing operation.

The first alarm received by city officials that plans for the plant were not comprehensive, specific, and on track came when some men approached the county commission seeking its support for a different waste water plan for Northern Beef Packers. Their plan was to hold the waste water in ponds and sell it to farmers for irrigation purposes. I was working in the court house and city hall the morning after the proposal was presented to the county commission, and local officials were outraged. Some who worked hard for the rezoning on the basis of efficient waste water treatment felt betrayed. Others thought the scheme was hare-brained and would never pass the many environmental hurdles it needed to surmount.

At the time, any such matters impacting the environment had to be approved by the legislature. Northern Beef Packers had enough influence to get legislators to introduce a bill repealing the legislative requirement on the environmental issue. However, as soon as the new waste water disposal plan hit the desks of state and federal environmental officials, it was dismissed.

The result was that the support of Northern Beef Packers from local officials turned to diffidence, doubt, and, in some cases, animosity. Further doubt was created when an arrangement with a beef promotion and marketing organization was terminated. The key element for a viable beef processor is to have a reliable means to sell, distribute, and service its products. Without such a marketing arrangement in place, a beef packer has no reason to operate.

During its planning and construction period, Northern Beef Packers has sent out chaotic announcements about staffing. It has announced project directors and plant executives in the past, but the persons disappear without comment or notice.

The organization met with some very vocal opposition from Aberdeen residents who challenged the rezoning for the plant, but the most strident opposition was about the kind of people it might bring to town for its workforce. A referendum on issuing it TIF bonds passed with a very comfortable margin, however.

The company was organized as Northern Beef Packers, Inc., in September 2005 as a business corporation with 100,000 shares authorized, but none issued. Dennis Hellwig was llsted as president and agent. No other officers or directors were listed.

The corporation was dissolved in January 2008. Papers had been filed for Northern Beef Processors Management LLC, a limited liability company in February 2007. In January 2008, an amendment was filed to change the name to Northern Beef Packers Management, LLC.

In April 2008 a limited partnership named Northern Beef Packers Limited Parnership was filed. It lists Northern Beef Packers LLC as the only partner.

Dennis Hellwig is the only officer and agent listed in any of the filings.

A problem that has persisted in the beef packing schemes involving Huron, Flandreau, and Aberdeen has been the lack of information about the people and organizations. When the Ridgefield Farms plan in Huron was terminated, some people associated with the project said that investors had looked into the Ridgefield Farms company at its home base in Ridgefield, Conn., were alarmed by what they found, and pulled their support. However, what actually happened was never explained or reported.

After the Flandreau collapse, Sen. Frank Kloucek asked the state to investigate the company and its operations. No response by the state has ever been made public.

In all three towns where beef plants have been proposed, the development organizations have promoted and contributed to the projects. In Aberdeen, the Aberdeen Development Corporation gave Northern Beef Packers its full endorsement and particularly lauded its marketing arrangement. Some local beef producers and officials, however, have wondered just what the basis for the endorsements were. The key elements for a successful regional beef processing business are not in place, and the company has the liens hanging over it.

The decline of traditional journalism is partly to blame for the lack of information on development projects. Journalists who look into the management history and financial state of developing companies are hated in the business community, but they are loved by investors, as they supply a flow of information about the condition of companies and markets. With the explanation that business news organizations provide that service to investors, local news organizations have eliminated local economic news as a constant area of coverage. Try an internet search on the companies mentioned above, and you will find only sporadic information.

Beef processors do not have a good track record in South Dakota. The question is whether Northern Beef Packers will break the trend and eventually start processing cattle and selling beef. There is no information about the financial status or the management acumen of the company--except for those seven mechanic's liens.




Blog Archive

About Me

My Photo
Aberdeen, South Dakota, United States

NVBBETA