South Dakota Farmers Union applauded the opening of the EB-5-funded Northern Beef Packers back in 2012, when the project was churning out more mystery money than munchable meat. Eight years later, after the plant’s gross mismanagement and 2013 bankruptcy, the EB-5 scandal that landed its kingpin in court and the state’s former EB-5 point man in a shelterbelt with a shotgun hole in his abdomen, and the plant’s pennies-on-the-dollar purchase and reopening as Demkota Ranch Beef, Farmers Union wants to buy the Aberdeen slaughterhouse from San Francisco-based White Oak Global Advisors:
The South Dakota Farmers Union is in conversations with its counterparts in Minnesota, North Dakota and Montana and is looking to join with beef and dairy cattle groups in the region to make an offer on the plant, the organization’s President Doug Sombke said Friday.
…“The whole point would be to have things that we control right here in South Dakota,” Sombke said. “It helps farmers and ranchers be owners.”
…Acquiring the DemKota plant wouldn’t be the Farmers Union’s first involvement in the meat packing industry. The South Dakota group is also a partner owner of Redwood Farms Meat Processors, a small pork processing plant in Estherville, Iowa.
The organization is still looking for capital to buy the Aberdeen plant, but if successful, it would only be the start of longer-term effort to create more packing options for farmers, Sombke said [Patrick Anderson, “Farmers Union Looking for Partners to Help Buy Demokota Beef Plant in Aberdeen,” Farm Forum, 2020.05.12].
White Oak is mum so far, but you can bet they’ll look to turn a hefty profit on their investment. They spent $4.8 million to cash on top of several more million in lifeline loans to NBP to acquire the facility, which our EB-5 friends spent $152 million to build. They’ve surely invested millions to renovate the poorly constructed plant and bring production up to speed. White Oak will likely expect Farmers Union to give them a double or triple return on their original investment to acquire a potentially vital piece of American food production infrastructure.