Press "Enter" to skip to content

Closure of Tyson Beef Plant in Denison, IA, Bodes Ill for New Angus/NBP Resurrection in Aberdeen

Aberdeen boosters continue to wait for New Angus to reopen the EB-5 visa investment money pit known as Northern Beef Packers on the south side of the city. Last we heard, New Angus bosses Doug Cooper and Keith DeHaan were planning to have the barely used plant running again by the end of 2015.

Meanwhile, 360 miles away, Tyson Fresh Meats sends a signal that New Angus faces a bad market. Yesterday Tyson shut down its 54-year-old beef slaughter plant in Denison, Iowa, putting 400 people out of work in a town of 9,800. Tyson says the market can’t support the Denison plant:

Tyson, the largest U.S. producer of beef, blamed the shutdown on too few cattle and too much slaughter capacity in the region [Greg Forbes, “Tyson Shuts Down Denison, Iowa, Displacing 400 Workers,” Sioux City Journal, 2015.08.14].

Tyson’s closure of the Denison plant comes after the national cattle herd increased by 1% over 2014, reversing a seven-year decline that coincided with the drawn-out construction, brief operation, and swift demise of Northern Beef Packers. Beef cows were up 3% at the beginning of July from one year ago.

USDA Cattle report, released 2015.07.24
USDA Cattle report, released 2015.07.24

However, those extra hooves still leave us well below the historical peak beef supply of 1995. This year’s beef bounce also isn’t outpacing the excess slaughter capacity, a portion of which Tyson created by expanding its beef plant in Dakota City, Nebraska, just 292 miles from Aberdeen:

In 2012, Tyson warned the aging Denison slaughter plant could close following completion of a $90 million expansion and modernization at Dakota City. That work included a new kill floor, which significantly increased the slaughter capacity at the Northeast Nebraska plant.

Two years later, Tyson officials reversed course and said they had no current plans to close Denison, which is the company’s lone slaughter-only beef plant. Most beef carcasses from there are sent to the 4,000-employee-plus Dakota City plant, where they are converted into boxed beef and related products.

A majority of the cattle slaughtered at Denison are purchased from independent cattle producers who actually live closer to Dakota City, according to the company. The cities are about 80 miles apart [link added; Forbes, 2015.08.14].

Even if New Angus can fix everything the previous management did wrong, existing regional slaughter capacity and beef supply may hamper New Angus from reopening. The New Angus business plan may not make much more sense now than Northern Beef Packers’ business plan did a few years ago.

p.s.: Tyson is treating its laid-off Denison workers better than Northern Beef Packers treated its employees. The Denison crew will receive 60 days of pay under the Worker Adjustment and Retraining Notification Act, as well as opportunities to transfer to other Tyson operations. Northern Beef Packers bailed into bankruptcy, leaving its laid-off workers high and dry and having to fight in court for the money they were due.

21 Comments

  1. leslie 2015-08-15

    just a vague musing: didn’t lisa furlong’s north sioux city deceased husband, lawyer for one of the beef packers?

  2. Mark 2015-08-15

    Leslie: You might be thinking of Lisa’s late father-in-law.

  3. Paul Seamans 2015-08-15

    Why couldn’t Mike Rounds have seen that the Aberdeen plant was excess capacity that would have to compete with the Big Four. Sorry, dumb question.

  4. jerry 2015-08-15

    Medical cannabis to the rescue! The place would ideal for a We Grow facility for cannabis. There is ample room, seemingly good water drainage, shipping and handling would not be a problem and neither would the energy requirements to make it all come together. Aberdeen also has the college that could utilize itself as a research facility.

  5. Nick Nemec 2015-08-15

    A mature industry dominated by four players in a near monopoly is not my idea of a good place to enter business with a start up.

  6. John 2015-08-15

    Yep, Paul & Nick: that little mistake belongs in Round’s “stupid file”.

    The changing American diet probably also has something to do with the closure.

  7. Paul Seamans 2015-08-15

    John, the American diet has not changed that rapidly. As Nick has said, when you think that you are going to go head to head with the Big Four packers, who control 84% of the market, they will crush you. In this case the Aberdeen packing plant imploded on it’s own, there was no need for outside forces to stop them.

  8. Lynn 2015-08-15

    Meanwhile that big white elephant sits idle south of Aberdeen. It’s too bad they don’t repurpose it to one of the latest tech solar panel that’s thin, flexible or imbedded in a glass window factories that does not compete against China or some type of similar tech. It could compliment the fiberglass wind turbine factory NE of Aberdeen.

  9. larry kurtz 2015-08-15

    Meanwhile that big white elephant sits idle south of Aberdeen. It’s too bad they don’t repurpose it to one of the latest tech solar panel that’s thin, flexible or embedded in a glass window factories that does not compete against China or some type of similar tech. It could compliment the fiberglass wind turbine factory NE of Aberdeen and raise the best cannabis in the US!

  10. Lynn 2015-08-15

    Good grief! Must every thread include a plug for an obsession with an intoxicant? lol

  11. larry kurtz 2015-08-15

    Spirituality in the defense of liberty is no vice.

  12. Michael M. 2015-08-15

    It’s good to read people making a link between declining beef herd and the ill-timed beef plant in Aberdeen. Farmers selling off their herds is a long-term trend, beef plant planners both private and public should have seen that. The sell-off has been especially strong in eastern SD, leaving the Aberdeen area with few nearby herds to supply the beef plant. What were planners thinking? Certainly some of them have also celebrated the rise of corn ethanol, and fields for that have replaced pasture and hayland for cattle–didn’t they make that connection? Rapid City would have been a better choice for the plant, at least in terms of local cattle numbers.
    I heard that one of the problems with the plant as built was that there was no facility for handing the stomach contents of the cattle killed. They need special handling, you can’t just dump them down the drain like sewage….

  13. caheidelberger Post author | 2015-08-15

    Interesting mention of ethanol, Michael. We’ve got ethanol plants in the neighborhood. Local folks were savvy enough to capitalize there. Northern Beef Packers had to get EB-5 money from foreign investors who were less attentive to regional beef trends as well as local management practices during construction.

  14. jerry 2015-08-15

    Corn Ethanol is one of the biggest tragedies that has ever happened to humanity. How can we raise corn to feed cattle that feed the few at the expense of so many? People are starving to death and we raise food to feed livestock that is exported and then clean up the mess that flows into our waterways. Makes no sense.

    Face it, the EB 5 was the biggest money maker the state has ever seen that produced nothing but blue sky. EB Rounds and all of his henchmen should be applauded for getting away with it much like John Dillinger did in his day. EB rounds fleeced the Chinese along with the South Koreans out of millions, that takes some doing. Corruption pays big dividends for politicians and if you do it correctly, you can go to Washington. Kind of like going from juvenile detention to the big house where you can finally get to learn the real ways of your trade.

  15. Deb Geelsdottir 2015-08-15

    Larry [Goldwater], your comment, “Spirituality in the defense of liberty is no vice.”, is one of the funniest things I’ve read lately. I almost did an iced tea spit take! Thanks.

  16. larry kurtz 2015-08-15

    just warming up, deb: our lady of the arroyo went to town and left me with the controls. hang on.

  17. leslie 2015-08-16

    oh good lord (my new favorite saying from the past) :)

    Mark-thank you. googling her some time ago produced a younger lawyer, her age, a husband who passed away, and according to the recent obituary which indicated his beef plant employment. He may have earlier worked in the FIL’s firm. May have been a Sx City firm. Would have to pull it back up. I was hoping someone more knowledgable could help us get to the bottom of the local fronts for these 500+% payday/title lenders, like our dear Erin Ageton.

  18. caheidelberger Post author | 2015-08-17

    Leslie, you note an interesting coincidence. Yes, according to this January 5, 2015, obituary in the Sioux City Journal:

    Kent married Lisa Martin on June 5, 1992, in Sioux City. He worked with his father at the Furlong Law Office for many years. Kent then worked for Tyson Meats (IBP), BPI, URS Corp and XL Foods.

    Now, can you find me information that links the Furlongs to payday lenders?

  19. leslie 2015-08-18

    NBP and BPI may have subsidiary ties. BPI is owned by Eldon Roth and famiy, Dakota Dunes.

    Nebulous payday internet lender, Geneva-Roth Ventures ect., kansas city/puerto rico (now out of business), has been barred from multiple states for up to 1300 % practices. in a 2013 montana class action the lender sought protection from SCOTUS, with support from the US Chamber of Commerce as amicus. the FTC appears to be all over the unscrupulous industry.

    perhaps republicans will complain about over-regulation. most states used to have anti-usury constitutional provisions.

  20. leslie 2015-08-18

    backstory-

    “the sides of beef were black from excessive ammonia exposure….” *** “Surly they are not worth anything,” says Eldon Roth. The response: “Oh, we’ll cut off a bunch of the meat and send it up to Stockton and they’ll treat it with acid to neutralize it.” foodqualityandsafety.com (2004)

    Stockton, CA dog food factories mixed it with other animal parts and “cooked it”. take one breath and there is an immediate urge to vomit. never again brag of having sampled dog food. thethirdcity.org (10.13.12)

    Roth “invented” the roller press freezer which processes finely textured beef and flash freezes thousands of lbs. of “pink slime” (which he did invent).

  21. leslie 2015-08-18

    BPI’s $1.2bil SD defamation lawsuit against ABC may still be pending. wiki

Comments are closed.