News of a proposed $1.1 billion beef processing facility broke last week, bringing optimism to many in the beef industry. Kingsbury & Associates and Sirius Realty have announced their plans for a large-scale processing facility in western South Dakota. The companies behind this facility are in the research and development phase of the project. Megan Kingsbury, who is spearheading the project, is managing partner and president of Kingsbury & Associates, as well as a fifth-generation rancher from western South Dakota.

James Halverson, executive director of the South Dakota Stockgrowers Association, says the announcement leaves the SDSGA full of optimism for the future.

“The stock growers have long been advocating for more competition in the packing industry,” he says. “This plant aims to introduce that competition, so we’re very excited about it.” Currently, the beef packing industry is mostly controlled by the “big four” processors, which are Cargill, Tyson Foods, JBS and National Beef Packing.

“This project will really help out the markets, and help local producers — especially in the cow-calf market — and maybe bolster the feeding sector in this part of the country,” Halverson says. “There are hurdles to go over, but coupled with the fact we’re getting some rain and some green grass, people are cautiously optimistic about it.”

He says that while growers and producers are excited for the opportunity within South Dakota, they are aware of the challenges the project still must overcome before it comes to fruition.

Possible expansion of feeder cattle

Right now, producers in western South Dakota either go to local processors or haul down to JBS in Grand Island, Neb.

“We just don’t have any sizable processing anywhere near here, and so there’s just not a lot of fed cattle here,” Halverson says. “I think that as we’ve seen the genetics of crops improve, we’ve seen corn and soybeans and other crops move farther west into the drier climates, but we haven’t seen that feeding sector follow.”

Halverson says this is largely due to the lack of processing availability. “It’s like the chicken and the egg for what will come first — the processing or the cattle.”

With the proposed plant planning to process 8,000 head a day, many cattle are expected to come from outside the region. “When we’re talking about a plant of this size, they won’t be able to flip a switch and hit that 7,000 or 8,000 overnight. We hope that there will be that buildup to that, and people here will start feeding more cattle,” he says. “With a plant that big, we’ll get into Iowa and Nebraska, and even down into Kansas, there’s a lot of cattle being sold.”

The SDSGA is supportive of any projects that will benefit the state’s and region’s cattle producers, Halverson says. “We’re going to do anything as an organization that helps bring competition into the cattle markets, and we think this will do just that,” he says.

The project is expected to be completed in three years, and will add over 2,000 jobs to the region.