Meat + Poultry - September 2010 - 6

Commentary

Meat Proultry

BY JOEL CREWS
jcrews@sosland.com

Building perspective
"Breaking new ground" was the
headline introducing Meat&Poultry's
construction and renovation report
in 2002, the fi rst of what would
become an annual compilation of
projects published each September.
As the author of that construction
trends story and in compiling the
accompanying lists every year since
then, it is easy to see why the number of new, large ($30 million-plus)
processing plants built each year are
fewer and further between than ever
(see the 2010 report and list on Page
34). Careful and calculated discretion are exercised before a project
like Hormel Food's Progressive Processing plant, with an $89 million
price tag, cuts its ribbon as it did
this past January. As the fi rst new
processing facility Hormel has built
from the ground up in more than
25 years, such investments are not
committed to without stakeholders
having overwhelming evidence of
their necessity for moving the company forward.
In the report we published eight
years ago, we chronicled Future
Beef Operations' fi nancial failure
that led to it fi ling for bankruptcy
and closing its doors just one year
after opening the $94 million plant
in Arkansas City, Kan. Future Beef
represented the fi rst beef-processing plant to be built in more than
a decade and designers pulled out
all the stops when it came to hightech bells and whistles. Future Beef
served as the poster child for the
strategic and careful investment
in new-plant projects, especially
in the post-9/11 era.
Many processors rolled the dice
during the early 2000s by building
new plants and investing in expansions. In early 2002, for example,
Mississippi Beef Processors announced plans to build a $32 million (which ultimately cost $43 million) new plant in Oakland, Miss.

Months later, Meadowbrook Farms,
a co-operative owned by hog producers, began construction on a $28
million new plant in Rantoul, Ill.
Shockingly, just four months after
opening its doors in 2004, Mississippi Beef was forced to close the
154,000-sq.-ft. plant due to cost
overruns and equipment failures.
Likewise, Meadowbrook Farms
closed in 2009 after fi ling for bankruptcy protection after several years
of operation. Hints of slightly better economic times in the middle of
the decade were evident in our 2005
annual construction listings, which
included Triumph Foods' $135 million hog plant in St. Joseph, Mo.
Fortunately, the Triumph plant has
thrived in Missouri after its opening in 2006.
Each year's list is, in many ways,
indicative of the state of the industry, which is usually directly correlated to the economy and market
conditions.
Becoming more efficient and
getting the most out of processing
plants is a trend identified by Joe
Bove, vice president of design services with Jacksonville, Fla.-based
The Stellar Group. "Most [meat and
poultry industry] construction work
has involved plant remodeling or expansions due to consolidation," he
said. Bove affi rmed that more dollars are being spent by processors
on making their plants and products safer, more efficient and utilizing the most up-to-date facilities.
"Our clients are increasingly looking
to us for consulting services about
which plants to refurbish, production and logistics effects of consolidating plants, analysis of their supply chains and layout of production
lines," Bove said.
With a cautious sense of optimism, there is plenty to be learned
from the past as the industry moves
boldly into the future. ■

6 * Meat&Poultry * September 2010 * www.MeatPoultry.com

EDITORIAL STAFF
Editor

Joel Crews
Executive Editor

Keith Nunes
Senior Editor

Bryan Salvage
Managing Editor

Kimberlie Clyma
Contributing Editors

Richard Alaniz
Steve Bjerklie
Dr. Temple Grandin
Steve Krut
Bernard Shire

Larry Aylward
Dr. David Theno
Steve Kay
Leo Quigley
Dr. Glen Miller

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Erica Shaffer
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Mike Gunther

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Publisher

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,r-,BPA
BPA

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a division of Sosland Companies, Inc.

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Meat + Poultry - September 2010

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