Ag Policy Blog

A cattle producer who is planning to build a packing plant in southwest Iowa was a guest for his congressman Tuesday at the State of the Union speech.

Chad Tentinger is the principal developer for Cattlemen's Heritage Beef Co., a $520 million project that would process as many as 2,000 cattle a day and employ as many as 800 people. Last month, Tentinger announced a $150 million investment from a Florida cold-storage company that helped secure financing for the project.

Rep. Randy Feenstra, R-Iowa, invited Tentinger to watch President Joe Biden's annual speech before Congress on Tuesday. Tentinger talked briefly Wednesday with DTN about participating in the event.

"I thought it was fascinating, to be honest," Tentinger said "I mean, I think it's a once in a lifetime opportunity to sit in that room. At the State of the Union, so it was very interesting to see how everybody in the room works together, talks together and very cordial to each other. So, you know, sometimes I think what we see on TV and in the news, it creates an image that everybody's always arguing and fighting with each other. That is certainly not what I took away yesterday watching everybody."

Tentinger said he spent most of Tuesday meeting with senators and congressmen talking about the packing plant project and its potential.

"Everybody was very interesting in the project," he said. "Very supportive. All great comments, great backing. So they were very excited about it. I think it's very clear, everybody recognizes the problem in our system. It's just it's a capacity issue. And price transparency is an issue also. And I'm big believer, the best way to fix that problem is more capacity, more independent packing plants. I think these are vital to the industry long term. And they're not vital, the industry's vital to the family farm, they're vital to the producer."

USDA also is still in the midst of providing grants and loans under the Meat and Poultry Processing Expansion Program. Tentinger told DTN the company has submitted an application under the program.

"Our expectation is that what we know is we've received letters that we have that scored very highly on our grant, we are doing our final due diligence, and after the due diligence, we will be awarded," Tentinger said.

The Cattlemen's Heritage project is one of four separate cattle packing-plant projects under construction or development stretching from Nebraska to Texas that add up to nearly $2.4 billion in investment. If all are built, they would add as much as 8,900 head per-day of additional packing capacity to the cattle industry.

At the moment, however, USDA reported at the end of January the smallest cattle herd in eight years, down 3% from a year ago. Asked if he is concerned about those tight supplies, Tentinger said he expects the herd will rebound in size over the next two-plus years as Cattlemen's Heritage starts construction and ramps up to full capacity.

"So I think it's the perfect time to actually build a plant in the low cycle when we still don't need it exactly," he said. "Today, to be honest, the pressures off the system because the decline in the herd but the herd will be back in three to four years, like it already does. We're in the 10-year cycle. And what's really important is when we hit the top of the cycle, we need more capacity, plain and simple. You know, a few years back, we're at the top of the cycle with all the cattle on feed huge numbers. And you know, we had one fire in one plant in the entire system, and it destroyed the market. Yeah, that's what we have to avoid. And that's why we need to build now. If we wait for the height of the market, we'll miss it."

See, "Cattle Packing Plant Projects Update,"

https://www.dtnpf.com/…

Also see, "Senators Reintroduce Cattle Markets Bill," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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