Iowa Beef Cooperative Meets
Initial Equity Drive Goals

The Iowa Farm Bureau says cattle producers in that state have moved one step closer to owning a packing plant.

The Iowa Quality Beef Supply Cooperative has raised $7.2 million from an equity drive to open the Tama beef packing plant, project leaders announced last week. Cattle producers needed a minimum of $7 million to begin plant renovations.

The co-op has extended its equity drive through Nov. 30 to allow more producers to buy shares in the plant's ownership.

The Tama beef plant could begin processing cattle in February 2003, organizers say.

More than 755 cattle producers have purchased common stock in the Iowa Quality Beef Cooperative, says Joel Brinkmeyer, Iowa Cattlemen's Association executive vice president. These producers come from 95 of Iowa's 99 counties and 11 other states.

The co-op has also raised $700,000 from non-producer investors, Brinkmeyer adds.

"We were catching cattlemen at a time when money was tight," he notes. "But despite that, cattlemen have willingly stepped up."

The Iowa Quality Beef Supply Cooperative has partnered with the American Foods Group, a meat processing company based in Green Bay, Wis. The American Foods Group will oversee the plant renovations and manage the plant's day-to-day operations.

So far, the renovations have been limited to tearing out old equipment to make room for the new, says Carl Kuehne, chief executive officer of the American Foods Group. The plant is currently seeking construction bids.

Renovations will include a redesign of the fabrication room and a new slaughtering system designed by Temple Grandin, an expert in humane livestock handling from Colorado State University.

The plant will also feature the latest in food safety technology, including steam pasteurization to remove potentially harmful bacteria from beef carcasses.

The Tama beef packing plant will process approximately 1200 head of cattle daily, Kuehne says. The plant's workforce will include 600 full-time employees. The annual payroll will total approximately $18 million.

Kuehne says the co-op has reached the limit on the number of fed cattle delivery rights it can sell.

Producers can still purchase Class A shares to secure delivery rights for Holstein cattle and cows, Kuehne explains.

But from now on, producers will need approval from the Iowa Quality Beef Supply Cooperative board to purchase Class A shares giving them the right to deliver fed cattle to the Tama plant.

The co-op offers four types of stock shares:

Class A stock sells for $50 per share and gives producers the right and obligation to deliver one head of cattle annually to Tama.

Class B stock, at $7 per share, entitles the producer to delivery rights for one head of cattle to Excel's Schuyler, Neb., packing plant and to other markets as negotiated by the co-op.

Common stock, at $1000 per share, allows a producer with 40 shares of Class A or B stock to be a voting member in the co-op.

Class C shares of preferred stock, at $50 each, are for both producer and non-producer investors who are entitled to receive a cumulative eight percent dividend.