Governor Addresses Hundreds
At Lamb Plant Grand Opening

By Colleen Schreiber

SAN ANGELO — For well over a year now, West Texas sheep and goat producers have anxiously watched and waited as the nation’s newest, most modern lamb killing facility gradually took shape.

Though it’s been slow in coming, and though there isn’t any blood on the floor — yet — Ranchers’ Lamb of Texas is all but a reality. Several hundred people and several state and local dignitaries were on hand for the grand opening here Tuesday.

Governor George W. Bush arrived early and was given a special tour of the facility. Later he addressed the crowd.

"Thank you for reconfirming what I’ve always said:
‘What Texans dream, Texans can do.’ All I have to do is point to this plant," Bush said.

"I distinctly remember getting a phone call soon after Monfort shut down, asking if the government would build a plant. I’ll be honest; I said, ‘no.’ To me that’s not the proper role of government. The reason this plant has been built is because of you all. Government stood out of the way. We encouraged you, but it’s the entrepreneurial spirit and drive and people dreaming dreams, that’s the reason this plant got built," he said.

"I’m here to take no credit, but to say thank you very much for being Texans, for realizing a problem and solving it. The credit belongs right here with hearty, aggressive Texans."

Bush said he’s constantly reminded that even with all the high-tech modern industries developing within the state, Texas can’t and won’t abandon its economic roots.

"Texas was founded because of ranchers and farmers," he said. "That’s a Texas staple that will be here for a long time to come. This plant reconfirms how important farming and ranching is to the future of this great state."

In some introductory remarks, lamb feeder and chairman of the board A.H. "Chico" Denis gave an overview of how the plant came into being.

"In May of 1995, when Monfort shut its doors, sheep and goat producers realized right quick that something had to be done or there no longer would be a sheep and goat industry in Texas."

The Texas Sheep and Goat Raisers Association took the lead and put together an ad hoc committee to look first into buying the old Monfort facility. When that plan didn’t come to fruition, they began to investigate the possibility of building a new state-of-the-art facility. The committee looked at various economic alternatives, Denis said, but in the end decided that a standard corporation was the best way to go.

The corporation is structured so that no one single entity can have more than 30 percent ownership in stock. The intent was to keep more than half of the ownership of the plant in the hands of producers.

"We went out and sold stock to producers and anyone who was interested, and we raised $4.3 million in stock," Denis told the crowd. "We’ve got stockholders who are sheep and goat raisers, but we also have stockholders who have nothing to do with the sheep and goat industry, and we’re proud to have them. We have people in the meat business all the way up in the Northeast as well as the pelt business, so we have a diversity of stockholders and we’re very thankful for that."

Denis said no other plant in the U.S. is quite like Ranchers’ Lamb. The plant was designed by a New Zealand firm with inverted dressing, where the animals hang head-down through some points in the chain and head up at other points in the chain.

"It’s a much more efficient and hygienic way of skinning and dressing lambs," Denis said.

A group of 17 local banks in Southwest Texas provided a line of credit which was used for operating capital.

Construction began in September 1996, and "we’re very close to completing it and we should be ready to kill lambs about the first of October."

A set of raised pens, the only one in the U.S., Denis said, will keep the sheep cleaner going into the plant and in turn will make for a cleaner product coming out of the plant.

"We’re proud to have a plant that we think is the best in the nation," Denis said. "And we’re glad it’s here in Texas."

Texas Agriculture Commissioner Rick Perry, Denis said, was one of the first people TSGRA went to see after the Monfort plant closed. Introducing him as a common sense commissioner of agriculture and a supporter of value-added products and retained ownership of Texas products, Denis thanked Perry for his support.

"Being here today reminds me of something Jonathan Swift once said, that the art of seeing things invisible is what vision is all about," Perry told the crowd.

"One of the great things about Texas is that when we run into problems, we don’t quit. We find answers," Perry said. "Starting in about 1993 when the federal government began changing the way they deal with this industry, sheep and goat producers started swimming upstream.

"When Monfort closed in 1995, we had a pretty good sack of rocks hanging around our necks, and we had to sink or swim," he added. "I bet on folks out in this part of the country being able to swim, and that’s exactly what we’ve done."

Perry applauded Ranchers’ Lamb for making one of his dreams come true.

"For eight years I’ve been talking about focusing on value-added products. We need to take what we grow so prolifically, process it and add value to it and create jobs and new wealth," Perry told listeners. "This plant is exactly what that dream is all about."

He assured listeners that the Texas Department of Agriculture will continue to work closely with the new plant on the marketing side.

"Ranchers’ Lamb is a wonderful way of people turning lemons into lemonade, people helping themselves through pure determination and solving problems in their own way," he said. "We didn’t have to have government to come out here and fix it for us. Independence is agriculture’s way."

Those attending the open house had an opportunity to take a guided tour of the facilities. President and general manager, Ray Ellis was one of the tour guides.

The New Zealand-style elevated alleys, which make into holding pens and can hold approximately 4000 lambs, are the only ones of their kind in the U.S. Most of the New Zealand facilities, Ellis says, are only 18 inches or less off the ground rather than several feet. He admits that he has some concern about lambs moving up the elevated chutes and down the alleyways, but in a test trial a few weeks back, he says, the lambs worked better than he initially expected.

Ranchers’ Lamb hopes to clean the facility by scraping the dry manure and only flushing every couple of weeks or when necessary.

Considerable expense went into the holding facility, but Ellis believes in the end the extra cleanliness of the lambs going in and the product coming out will pay for itself.

In addition to a livestock superintendent, Ellis figures it will take two other personnel to work the pens and keep lambs moving into the plant smoothly.

The New Zealand-style killing facility includes such modern technological advances as inverted dressing, an automatic stunner and a pelt pulling system like no other in the U.S.

The kill floor equipment was made by Bitterling, a company from England. This same machinery is used in New Zealand slaughter facilities. Because New Zealand farm flock sheep produce a smaller carcass than the Rambouillet and other U.S. breeds of sheep, there was some concern that the equipment would not be strong enough to handle the larger carcasses. For that reason, the equipment installed is a heavy duty version.

Ellis says he’s impressed with the machinery but still he admits that his biggest worry for the first kill day will be how the machinery performs and how long it takes to get everything adjusted. An Australian trainer will be on hand for the first six weeks to train employees on the machinery.

Ranchers’ Lamb hopes the modern facility will allow them to process 1600 animals a day, about four every minute, or 8000 a week. That figure includes lambs, goats, and on occasion, packer ewes. The plant plans to kill Tuesday through Saturday with approximately 23 people on the kill floor.

Ranchers’ Lamb has an arrangement with a pelt company, HSG Ranches out of Denver. HSG signed a five year lease which calls for them to pay a lease on the pelt building in return for exclusive marketing rights of the pelts. After five years, Ranchers’ Lamb will own the pelt building. At that time they will reevaluate the relationship with HSG.

The pelts will be dumped off a conveyor into a combo and a forklift will haul the pelts to the pelt building.

Ranchers’ Lamb has also struck a deal with Deweid International, based in San Antonio, to handle the casing business.

Though budget constraints has prevented construction of a breaking facility thus far, Ellis says a fabrication room is still on the books for the future. For the time being, Superior Farms, a stockholder in Ranchers’ Lamb, will be the primary outlet for the lamb carcasses. They’ve been guaranteed up to 4000 lambs a week, or 50 percent of the production.

Opinions differ about that relationship, but Ellis is optimistic that it will be good for everyone involved.

"The lamb industry is so small right now and we’ve got to have a good reliable customer as an outlet for our product."

Ellis has said time and time again that Ranchers’ Lamb won’t kill lambs if they don’t have orders for carcasses going out the back door, and he continues to stress genetic improvement.

"Texas producers have some work to do in terms of putting out the right product," Ellis says. "I am concerned about having too many YG 4’s. Initially, to take care of that problem in the short-term, we may have to let these lambs come in at a lighter weight, but over the long term we have to make genetic improvement in terms of producing a larger, leaner lamb."

The plant manager says Ranchers’ Lamb will be run as a business, and no one, not even the largest stockholder, will have favored status in terms of getting lambs on the kill list first.

"If I need peaches, but all my larger feeders only have grapefruits, I’m going to go with the guy who has the peaches," he insists. "I’ll try hard to move everyone’s lambs, but if a particular feeder doesn’t offer them at the proper weight, but instead chooses to hold them and the lambs got too heavy and wasty, I’m not going to feel responsible."

No doubt competition will be fierce, but Ellis says he can’t spend time worrying about it.

"Competition is part of the American way. There will be competition, and they might have an impact for a couple of weeks, but they don’t have money to waste. They’re out to make a profit as well."

There will be plenty of lambs to kill, Ellis insists, when Ranchers’ Lamb officially opens its doors in October. The number of people feeding lambs in Texas has increased tremendously in the last six months.

"A lot of these guys have been inactive the last couple of years, but they’ve obviously made money feeding lambs in the past or they wouldn’t be so eager to jump in."

Ranchers’ Lamb will not be feeding lambs directly, but they do own one percent interest in Santa Rita Feeders, a newly initiated feeding club. Glen Hutto buys for the feeding club but is also on Ranchers’ Lamb payroll.

There are those in the industry who believe Ranchers’ Lamb paid too much for the advanced technology, but Ellis is of the opinion that the plant should pay for itself in labor savings.

"We have to offset the overhead with efficiency," he remarks, "and I’m betting that we have the most efficient plant in terms of labor in the U.S."

He’s proud of the people already on board, and says filling the remaining jobs won’t be hard.

"There’s lots of skilled labor in the community that will easily and readily fill the jobs on the kill floor."

Some 50 to 60 people will be on the payroll at Ranchers’ Lamb. In addition to the livestock foreman, there will be a kill floor foreman and a shipping foreman.

Security will be tight, and once Ranchers’ Lamb officially opens for business no visitors will be allowed in the plant.