Beef Cooperative Now Plans
To Build Two Packing Plants

MANDAN, N.D. —(AP)— A beef cooperative plans to build two smaller packing plants instead of one larger one, its organizers disclosed late last week, saying the idea makes cattle hauling easier for the venture's far-flung membership.

Northern Plains Premium Beef intends to start building its first slaughterhouse next summer, said Dean Meyer, a Watford City rancher who is chairman of the cooperative's interim board of directors. It should be completed by mid-1998.

Its location has not been chosen, but will depend in part on the results of the cooperative's planned January drive to sell stock, Meyer said Friday. Northern Plains has members in North and South Dakota, Minnesota, Montana, Iowa, and Nebraska.

"What we really need from the producers, when they buy that equity share, is to tell us where they really plan on finishing their cattle. That will determine where the plants are going to be built," he said.

Company officials are touring six states and two Canadian provinces in January to solicit rancher investors for the cooperative. They would be obliged to supply fed cattle for slaughter, said Steve Noack, the cooperative's general counsel.

Northern Plains expects to process about 475,000 cattle annually. Ranchers in North and South Dakota, Iowa, Minnesota, Montana, Nebraska and Wyoming, as well as the Canadian provinces of Manitoba and Saskatchewan, have expressed interest in the venture.

Building the two plants will cost an estimated $72.5 million, said Roland Leavens, a consultant for Food Plant Engineering of Yakima, Wash. The cooperative originally had considered building one $40 million packing plant.

Both plant sites should be announced by May, Meyer said, but construction on the second factory is not expected to begin for at least two years. It will probably be at least 200 miles from the first site, company officials said. Leavens said each would employ about 350 people.

Meyer said there would be operational savings, and greater production flexibility, from running two smaller packing plants. It is better for cooperative members who might otherwise have to haul cattle longer distances for slaughter, he added.

The strategy will also be less stressful for a plant's host community, which will have to meet demands for water supply and waste disposal, and the workers at the factory itself, Meyer said.

"We're going to put a lot more emphasis on the safety of the facilities, on working conditions. If you've been through an existing packing plant, it's not a very nice place to work," he said.

The rancher-owned cooperative, which is being launched during a time of depressed cattle prices, is betting it can produce beef of higher quality and greater consistency than its rivals.

Part of the impetus for the cooperative comes from rancher concerns over increased concentration in the meatpacking industry.

Separately, Northern Plains Premium Beef said it is recruiting a permanent chief executive officer to succeed interim CEO Bill Patrie, a former state economic development director. Meyer said the executive should be hired within a month.

Friday's announcements followed a meeting of the cooperative's interim board of directors, which endorsed building two plants rather than one.

"If we're going to be in the beef business, we have to be better than anyone else, and we think this helps us get there," Meyer said. "When everyone else is getting bigger and larger, maybe we can just take a look at doing something a little bit different."