As of the June 1, 1997, deadline, well-known Northern Plains Premium Beef (NPPB) alliance fell short of garnering the 250,000-share minimum ($100/share) required by it's equity offering.
The enthusiastic Mandan, ND, cooperative started with plans to build a packing plant somewhere in the Northern Great Plains to process 300,000 head of members' finished cattle annually. Beef from the venture would be sold to upscale retailers, including grocery chains and restaurants.
Even though the cooperative received $11 million in commitments from nearly 1,100 producers for 113,000 equity shares, it wasn't enough to meet the minimums of the security offering. So, plans have been on hold until recently.
They're now jump-starting the process and are again pursuing a new equity drive and looking to build a plant with a 140,000 head/year capacity.
So, what went wrong with the NPPB venture?
Dean Meyer, first chairman of the board, says three things caused NPPB to come up short:
1. Last winter's severe weather. "It caused producers, especially in March and April, to spend money on feed rather than commit to NPPB shares," Meyer says.
2. Making the commitment to support a value-added systems approach through a fully integrated, producer-owned cooperative was too big a step for producers to take at that time, he says.
3. Producers wanted to know where they were going to finish cattle and where the cattle would be processed. "Until we knew where the packing plant was going to be built, we didn't know where cattle were going to be fed," Meyer explains.
In the new equity drive, cost per share will be reduced from $100 to approximately $60, Meyer points out. That, along with specifics on where a new plant will be located, is pumping new life into the NPPB plan.
"There's still a lot of interest and we plan to move forward," Meyer says.
For more information on NPPB, call John Lee Njos, new CEO, at 701/663-1116. 1