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Meatpacking plants could reduce costs for Idaho ranchers

By: Sean Ellis
Published in Blog on  December 01, 2020

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – Two new meat processing plants are coming to Idaho and that could significantly reduce transportation costs for many ranchers who currently have to ship their cattle to other states.

Intermountain Packing announced in August it will build a 50,000-square-foot meatpacking plant in Idaho Falls. The $20 million facility should be operational in January 2022. 

That announcement came shortly after Idaho-based Agri Beef Co. announced in July it would build a regional beef processing facility in Jerome that will be able to process up to 500 head a day.

That project, known as True West Beef, is a partnership between Agri Beef and livestock producers and feeders in Idaho and throughout the West, who will be equity owners in the venture. It is slated to begin operating by late 2021 or early 2022.

Together, the facilities should mean lower transportation costs for Idaho’s cattle industry, said Idaho Cattle Association Executive Vice President Cameron Mulrony. 

“Having more ability to process cattle in Idaho will be a benefit to the state’s cattle industry,” he said. “Putting wheels under cattle is a huge expense. If you can eliminate that expense, it will provide some benefit to producers.”

Intermountain Packing General Manager Bob Stirling said the Idaho Falls facility will have the capacity to process up to 500 head of cattle per day. 

The U.S. meat industry is dominated by large packing plants in the Midwest that can process 2,000 to 5,000 head per day, he said. Then there a lot of very small meatpacking plants that can process between 20 and 40 head per day.

“There really isn’t much in-between,” Stirling said. “We want to build a mid-size meat processing facility.”

Early during the COVID-19 pandemic, some shutdowns of major meatpacking plants caused a huge problem in the industry and left ripple effects that were felt for many weeks and months, he said. 

Because of Intermountain Packing’ smaller size, it will be able to change directions and adapt quicker to disruptions in the industry than a much larger facility, Stirling said.

The company’s owners and investors were already working on the project before the coronavirus outbreak hit, “But seeing what happened during the pandemic helped us move forward a lot faster than we were expecting,” he said. 

Stirling said the facility would likely process more cattle than bison. 

Scott Steele, who owns a cattle feeding operation in Bonneville County, said ranchers in his area mainly send cattle to Hyrum, Utah, to be processed and the Idaho Falls plant should cut down on transportation costs. 

A moderate-size feedlot in the area with 20,000 cattle marketings a year will spend about $400,000 annually in transportation costs getting their cattle to Hyrum, he said. 

Steele stopped finishing cattle and sending them to Utah because of the transportation costs. 

“This is going to be a great thing for the cattle industry,” said Steele, a member of Idaho Farm Bureau Federation’s board of directors. “This will be great for providing some competition for producers in this area.”

Some members of the Roger Ball family, which owns Intermountain Bison, are involved in Intermountain Packing but the company is mainly owned by investors who have been in the meat industry for many years and the facility will custom process for different meat companies, Stirling said. 

The new Agri Beef facility will process cattle for itself, Stirling said, so he does not see the two plants as competitors.

“That Jerome facility is quite a ways from us and we concentrate on a different market,” he said. “I definitely don’t see any problem with competition from them and we wish them well.”

The Idaho Falls facility is expected to employ about 200 people.

Intermountain Packing chose Idaho Falls because it’s on the Interstate 15 corridor and “it’s right in the center of great ranching country and cattle feeding country,” Stirling said. “We are very excited to bring the plant to southeast Idaho. It will be a great benefit not only to ranchers in the region but also to the economy of Idaho Falls and the surrounding area.”

 

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