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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Meat Industry Comments On Proposed Kingsbury Beef Plant in South Dakota

06/10/2022

Kingsbury and Associates, in conjunction with Sirius Realty have announced their intention to establish a new beef plant in South Dakota.  The proposed facility would slaughter approximately eight thousand head per day, will employ 2,500 even with advanced mechanization and will cost over $1.1 billion.

 

Critics have noted that the company would be at a disadvantage in competing with the Big Four comprising Cargill, Tyson Foods, JBS USA and National Beef Packing that collectively supply 85 percent of the U.S. market.  Analysts note that the plant may have difficulty in finding sufficient labor, despite the intention to use automation and mechanization.  Agricultural economists believe that the new plant would be of benefit to cattle producers providing more competition for live animals.  Due to ongoing drought and low prices, the national herd has declined.  This may not be a problem, given that if the promoters break ground in 2023, production will only commence in early 2026, allowing time for contracts to be developed in order to establish a supply of live cattle.  According to Megan Kingsbury, the plant will be financially feasible, given that the promoters represent a fourth-generation of cattle production.

 

Investment of $1.1 billion illustrates the commitment required to make any meaningful impact on beef supply.  Recent USDA announcements of grants to establish small, local packing plants pale in comparison with the projected capacity of eight thousand head per day.  Economies of scale are necessary to be competitive and to show an acceptable return on investment.  It is inadvisable for the current Administration to attempt to run counter to establish free market principles and support enterprises that would otherwise be non-viable.


 
Copyright © 2022 Simon M. Shane