True West Beef plans new beef packing plantTrue West Beef plans new beef packing plant
New Idaho beef plant increases capacity in Northwest.
August 13, 2020
For a region, an entire industry for that matter, desperately in need of more packing plant capacity, the announcement that a new 500-head-per-day beef plant will be built in Idaho is very good news.
True West Beef, a new partnership between Agri Beef Company, based in Boise, Idaho, and a group of cattle ranchers and feeders in the Northwest, announced plans to build a processing plant in Jerome, Idaho. This region has very few packing plants, and ranchers are excited about the new facility, hoping it will provide more competition for their cattle and better prices.
In the past, most cattle raised in Idaho have been shipped out of the state for processing. There are only a few small processors in south-central Idaho, such as Ida-Beef in Burley, which opened in 2018 and specializes in cull dairy cows.
Agri Beef has operated feedlots in Idaho since 1968 and is no stranger to the cattle harvest side of the business. The company owns a mid-sized processing plant near Moses Lake, Wash., and has operated the Washington Beef processing plant in Toppenish, Wash., since 2003.
But the new plant will be a larger venture. The company has focused on working with ranchers to produce high-quality beef products and the Jerome plant will continue that mission, according to Jay Theiler, Agri Beef executive vice president of strategy and public relations.
Much of Agri Beef’s business is producing high-end, branded foods. Branded beef programs the company owns are Snake River Farms, Double R Ranch, St. Helens Farms and Rancho El Oro. Snake River Farms Wagyu cattle are raised in eastern Idaho, while Double R Ranch beef is raised in Washington. When Agri Beef markets its Snake River Farms and Double R Ranch brands, the labels state that they come from Idaho and the Northwest.
Idaho ranchers who can sell their beef to niche markets might see bigger profits, with more hope of sustainability. True West Beef will have a unique ownership arrangement. Agri Beef will own 51% of the new plant, but ranchers who provide beef to the facility will own 49%.
The press conference to introduce the company was an exciting event. “We had to keep our crowd size down to about 70,” said Larry Hall, executive director of Jerome 20/20, a development organization that brings businesses into Jerome and one of the press conference organizers. “We had the governor, the president and CEO of Agri Beef, our county commissioner, and several other officials. Our last speaker was True West Beef Executive Vice President Jay Theiler.” Theiler said his company will know in the next month or two which producers will be partial owners of the plant.
True West Beef is an alternative model in beef processing; typically, large facilities dominate the industry, but this plant will be smaller and more flexible and unique, with livestock producers directly involved in equity ownership.
The plant will employ 370 to 400 people, with annual payroll of $21 million, and initially process 500 head per day. Arlen Crouch, a cattleman, business investor, and Jerome 20/20 Board Member who was involved with the press conference, said this is the best thing that has ever happened for Jerome.
At the press conference, Idaho Governor Brad Little said COVID-19 presented challenges in the meat packing sector as plants struggled with capacity constraints due to the pandemic. “The U.S. needs more meat processors of all sizes, and Idaho is thrilled to welcome expanded and first-class processing capacity to address this critical infrastructure need. This plant adds tremendous value to our high-quality Idaho beef and supports family ranches, dairies, and farms,” said Little.
When forage, grain and allied industries are calculated in, the livestock sector accounts for 75% of Idaho agriculture’s gross receipts, said Celia Gould, director of Idaho’s Department of Agriculture. “An investment made in the livestock sector ripples through Idaho’s entire agricultural industry and communities across the state,” she said.
Agri Beef’s Executive Vice President of Business Development, Wade Small, says they evaluated many sites for this venture. “With an educated and motivated workforce, access to plentiful agricultural resources, and a vibrant community with a can-do spirit, Jerome and Idaho are everything we were looking for. There’s lots of opportunity ahead; we just have to finalize the plans. We are excited about it, but a lot of work ahead of us,” he said.
Hall is very optimistic. Jerome County has about 80,000 beef cattle, and some producers want to expand their herds to be part of the new venture. “There’s a good supply of cattle in our county alone, and in the entire Magic Valley probably more than 200,000 head,” says Hall.
“For this company, location is key because it’s central to their other enterprises. They have a cattle ranch in American Falls, Idaho, and other ventures here in the Northwest.” The finished plant will be nearly 240,000 square feet.
“This facility will be a nice center for their business and they’ll have visitors from all over, including top-name chefs who will want to see their operation and the quality of their meat, including the Wagyu beef,” said Hall.
The plant will be state-of-the art and very efficient. “This is almost a $200 million investment. This is a very benevolent company that supports the cities where they are located; they help with whatever the community needs. If a community needs a football field, they’ll build a football field. They are already helping Jerome County with our County Fair this year,” he said.
“I first started with this project myself, then brought in a few more businesses that thought it was a great idea. Agri Beef knew what they wanted; they just needed to know that we wanted them. We put together incentives at the state and county level to sweeten the pot and make it work,” Hall added.
This will be a big help to cattle producers in Idaho to have a dependable market. “From an economic development perspective, this will bring more jobs and have a multiplier of about 7 [meaning that every new $1 will turn over in the local economy about seven times]. It could eventually bring in about 1,000 more jobs and help what we call ancillary businesses. It’s a great project, and great people, and we are lucky to have them,” said Hall.
Smith Thomas is a rancher and freelance writer based in Salmon, Idaho.
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