SIOUX FALLS, S.D. (KELO) — James Halverson isn’t afraid to dream big.
A proposed brand new $1 billion meatpacking plant with new processing technology to process 8,000 head of cattle a day located in southern Rapid City is one of those dreams Halverson would like to see become reality.
“We scream bloody murder that there’s not enough competition in this industry and this is what could move the needle,” Halverson told KELOLAND News Wednesday. “We need competition. We’re pretty excited. We hope that it works out.”
The South Dakota Stockgrowers Association Executive Director said he’s worked a little bit with Megan Kingsbury, the president and partner of Kingsbury and Associates who is leading the project. Halverson added Kingsbury has a western South Dakota background with both ranching and business.
“It’s a monumental task,” Halverson said about a proposed beef and bison meatpacking plant. “There’s a reason this industry has gotten so consolidated because it’s a tough dying industry to be in. I don’t pretend to know the challenges.”
In media reports with the Rapid City Journal, the Black Hills Pioneer and Drovers beef magazine, Kingsbury has said the proposed facility would be 1-million square-feet located in Rapid City’s industrial park near S.D. Highway 79 and Old Folsom Road.
Elevate Rapid City, the economic development office in Rapid City, told KELOLAND News the organization does not have a comment in reference to this project.
Kingsbury told KELOLAND News Wednesday the idea for the new processing plant came as a way to help family ranchers and farmers stay profitable.
“If we leave it the way it is, it’s going to be extinct in the next generation way of life,” said Kingsbury, who added more future press releases and information about the plant will be coming through the research and development phase in 2022.
Kingsbury, who has family ties to the Keystone area as well as the Grimes Cattle Company near Kadoka, said the facility will focus on bringing and developing new robotic technology to make meat processing easier and safer.
Halverson said the idea of a tech-driven plant creates a lot of possibilities.
“We know competition drives innovation,” Halverson said. “We haven’t seen competition in the beef packing industry in this country in 30 or 40 years. How far behind are our current beef packing plants? How much greater could this plant be?”
Kingsbury said this new meat processing plant would challenge the so-called big four meat packing giants in the beef industry. In the United States, 26 major plants process 80-85% of the beef. Those plants are owned by four main companies — JBS, Tyson, Cargill and National Beef.
When asked about how daunting of a challenge operating a beef packing plant can be, Kingsbury said the challenge speaks for itself.
“Nobody has done it yet,” Kingsbury said. “The fact that nobody has done it would mean that it’s probably not very easy.”
The lack of competition in the beef industry has grabbed the attention of President Joe Biden, Gov. Kristi Noem (R-S.D.) and other politicians throughout the country.
Grabbing the ‘bull by the horns’
Along with the lack of competition, the S.D. Stockgrowers Association and numerous other beef-related industry organizations have been fighting for more informed consumers, country of origin labeling for USA beef, stronger antitrust enforcement and federal investigation into the main beef processing companies.
A new massive meat processing plant would cut straight to the point and directly impact cattle producers in South Dakota and across the country.
“This kind of takes the bull by the horns no pun intended,” Halverson said. “This is going to be real competition. We’re cautiously optimistic, but it’s definitely going to be a great thing if it happens.”
Halverson said too often cattle producers are receiving a take it or leave it bid on their cattle. He said one extra bid for high quality would create more needed competition.
“It’s gonna send shockwaves through the system,” Halverson said. “You’re gonna have to be sourcing cattle from quite a ways away.”
Halverson said more cattle producers in western South Dakota typically raise many calves and then ship them out.
“One of the first things that comes to mind is there’ll be a much better chance to bolster that feeding industry here,” Halverson said. “Genetics and those types of things have improved along with crop production.”
Kingsbury said the goal is to fill the plant with 90% of livestock from sale barn auctions. She said to sustain 8,000 cattle head a day there will have to be some contract obligations between feedlots to keep the flow of the plant.
“We will be the low cost producer and we will be paying the farmers and ranchers top dollar,” Kingsbury said. “We can keep to that 90% goal of being that second bidder in the cash market and putting that competition back in the free market system in America.”
He said the longer South Dakota can hold onto cattle and the less they get shipped out, the better the economy in the state will be. He said the opportunities and economic impact would stretch far and wide.
“I’d love to see some more fed cattle auctions in this part of the country,” Halverson said. “It’s hard to really even imagine all of them at this point in time but it would be an absolute game-changer for the economy in western South Dakota and the entire surrounding region.”
Halverson said there’ll be plenty of opposition but he encouraged people to look past “old paradigms” and ideas of “sweatshop packing plants.”
“The old Smithfield packing plant in downtown Sioux Falls doesn’t nearly emit what it once did when I was a kid driving by there,” Halverson said. “I hope that people can put some of those old thoughts behind and get behind this project.”
Smaller processing plant breaks ground near Hot Springs
While the proposed plant in Rapid City has only been recently announced, a smaller processing plant held a groundbreaking last week.
Dakota Territory Beef partnered with United Ranchers Cooperative and aims to process 25 cattle a week.
South Dakota Republican Representative Dusty Johnson attended the groundbreaking and praised co-op president Neil Sanders, Dustin Luper and Julie Ellingson for taking on the challenge.
Halverson said every option for producers helps.
“That’s what we need, because we grow a lot of cattle here,” Halverson said.