ST. ONGE, S.D – A planned beef processing cooperative is holding a meeting this evening (Oct. 26) at St. Onge Livestock to introduce its business plan to both cattle producers and non-producers with the end-goal to attract members.
United Ranchers Co-op, Hot Springs, SD was organized in 2020, during a decline in live and fed cattle prices and increasing gross margins between live cattle prices and wholesale beef prices that peaked near $1,600 per 1,000 pounds of animal at the time.
Amid industry and congressional calls for increased processing capacity across the country and a more equitable and secure cattle and beef marketing chain, United Ranchers Co-op, Hot Springs, SD was organized to build what is now a $1.5 million dollar, 19,000 square foot plant that will process 25 head daily with approximately 10 employees. Earlier plans were for a larger kill and more employees.
Located near Fall River Feedyard where most co-op member cattle will be finished, plans are to open for business in 2023, according to coop vice president Neil Sanders who is an Oral, SD native and a partner and marketing director at Parry Angus in Sterling, CO.
Other cooperative board members include Kirk Hall, co-op vice-president, formerly of Edgemont now of Torrington, WY., secretary Dustin Luper of Hot Springs, and Bob Shannon of Edgemont.
“We’re needing to sell memberships to further the co-op and get it built,” explains Sanders. “Folks can learn more about where we’re at in the process, what we’re going to do and how we’re going to do it at thismeeting.”
The concept of the packing plant to be owned and operated by local ranchers with the end-product labeled Dakota Territory Beef, was first proposed at a public meeting in Hot Springs in July 2020.
South Dakota had recently joined eight other states in the Cooperative Interstate Shipping (CIS) program, making it a good time to explore opening a localized packing plant. Under CIS, state-inspected plants can operate as federally-inspected facilities, under specific conditions, and ship their product in interstate commerce and internationally. Other participating states include Indiana, Iowa, Maine, Missouri, North Dakota, Ohio, Vermont, and Wisconsin.
Sanders said a total of 50 shares in the cooperative are offered. According to the cooperative’s prospectus, an investment of one share in United Ranchers Co-op is valued at $25,000 and allows the cooperator to sell 25 head a year to the co-op and/or lease his or her share to a local producer in the coop at fair market value to be determined by the two parties involved.
“For example,” explains Sanders, “If you were to buy a share as a nonproducer, you have the obligation to fulfill those hooks. You can purchase the cattle private treaty for yourself or you can lease your hooks to a member producer who may need additional hooks to fulfill his/her obligation to provide 25 animals annually.” Coop membership stays in place for both the leasee and the leasor.
For ranchers, the benefits are multi-faceted, according to Sanders. “The cooperative business model gives you another market entry point to add to your overall marketing options; one that you’re going to be making money on with a 12 cent per pound premium over the board for the following week.”
He adds, “Every animal is tracked as to feed efficiency and carcass data – all information that goes back to the producer.”
Sanders is just as excited about what the co-op stands to add to the region in ag education and agritourism opportunities as he is about the estimated millions of dollars in economic windfall to ranchers, Hot Springs and the surrounding area.
“Our co-op is also serving an agritourism aspect. The facility, that includes retail frontage, sits at the entrance of one of the best recreational areas in western South Dakota – Angustora State Recreation Area. Consumer will be stopping by to purchase quality, locally-raised beef on their way to the lake.
“In addition, the plant will be built to serve ag, business and consumer education with enlarged windows into cutting room floor areas and coolers to better see and experience how beef is processed. There will also be nutrition placards displayed prominently in order for visitors to better understand the nutritional value of beef.”
Beef for local retail sales will also be offered through e-commerce and through other retail partnerships under the Dakota Territory Beef label. The co-op plans to establish customers with outlets in Los Angeles, New York, Miami, and other coastal cities.
Since organizing the rancher-owned co-op, land has been acquired to build the processing plant that will include a bio-digester to mitigate waste and re-manufacture into fertilizer that will be sold, as well as the retail store front.
“The co-op is financially able to pour the cement right now. But to go further and to not get ahead of ourselves, more shares need to be invested in,” said Sanders. “We’re hoping for a good turnout of people at the meeting who are interested in the co-op concept – who want to capture more of a share in the beef dollar.”
Tonight’s informational meeting, that includes co-op board members from Hot Springs, begins at 6:00pm at St. Onge Livestock. See more information and contacts on Facebook at Dakota Territory Beef.
