Meat Matters
Iowa Set To Debut New Generation Of Beef Plants

Iowa Set To Debut New Generation Of Beef Plants

Imagine being able to access carcass data on your smartphone the same day your fed cattle are processed. It seems obvious in this high-tech age. But until now, obtaining carcass data from most packers has been difficult.

That’s soon to change, though, for Iowa cattle feeders who this fall will start delivering cattle to a brand-new beef processor, Iowa Premium Beef’s (IPB), IPB’s Tama, IA, plant is projected to open Oct. 1, news that the state’s cattle feeders have greeted enthusiastically. The plant last operated in 2004, after Iowa producers invested millions of dollars in a failed venture called Iowa Quality Beef. Tyson Foods had earlier owned the plant.

The Iowa market has become more competitive in recent years, as major and regional packers have vied for the high-quality cattle produced in the state. That competition will intensify as IPB will initially process 1,100 head/day, then ramp up to 2,200 head/day.

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This will likely spur more finishing of cattle in Iowa, which had 670,000 head on feed on April 1 in feedlots of 1,000 head and larger. This was 6.3% more cattle than a year earlier. Altogether, these feedlots marketed 952,000 head in 2013.

But Iowa also has thousands of feedlots under 1,000 head of capacity that market a sizable number of cattle. USDA data show that 73,000 small feedlots nationally marketed 3.010 million head in 2013, up 5.5% from 2012. This indicates that a lot more cattle are being fed in small feedlots in the Corn Belt.

The new company hopes to tap into those growing numbers, with a focus on the highest-quality cattle. The IPB plant sits in the best place in the world in terms of high-end cattle, company officials say. They’ve been working for the past year with area cattle feeders, who are excited about supplying the plant. IPB especially wants to work with family farmer-feeders, and the plant will be able to obtain all its cattle from within a 150-mile radius, the officials say.

Process Black Angus cattle

IPB will process only Black Angus cattle, so will be licensed to produce Certified Angus Beef®. It expects 70% of its sales to be domestic and 30% to be export. Slaughter will be 100% halal to take advantage of the growing demand for U.S. beef in the Middle East, IPB says, and the company will have the ability to export to 43 countries, including the European Union (as it will also process non-implanted cattle).

The plant will be a game-changer in how it operates and the premium beef it will produce, officials say. The plant is only 130,000 sq. ft., so it can operate very efficiently. IPB is spending $20 million to build a new wastewater treatment facility, a new hot-carcass cooler, a new harvest welfare area and a new distribution center. When completed, the plant will be in like-new condition inside and out, officials say.

None of this guarantees that the venture will succeed, of course. But it already has on board four top managers with a combined 140 years of industry experience. Even more significantly, food-service giant Sysco Corp. will invest $36.2 million in the business, its first-ever investment in a U.S. beef processing plant.

Sysco will initially be a minority owner, and then gradually increase its ownership percentage over time. It’s apparently making the investment to guarantee itself a supply of premium-quality Angus beef.

Meanwhile, a new plant in northeast Iowa plans to allow consumers to trace its beef right back to the cattle’s farm of origin. LimeSprings Beef is building a small plant in a $7 million project and hopes to start operations Nov. 1. The plant will process 80 head/day, produce only “natural” beef (no implants or antibiotics), and will feature several special environmental and energy features.

Who would have believed that Iowa would be the birthplace of the new generation of beef plants?

Steve Kay is editor and publisher of Cattle Buyers Weekly (www.cattlebuyersweekly.com). See his weekly cattle market roundup each Friday afternoon at beefmagazine.com.

 

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