Western South Dakota's Only Ranch Station

Thanks but no thanks: Governor’s GOED withdraws request for meat-packing analysis

Fast forward a decade later and the GOED was holding out a $100,000 carrot for someone to tell them how to make a meat-packing plant work in South Dakota - before discovering there wasn't much interest.

PIERRE, S.D.  — After an earlier request for proposals on ways to analyze loan and grant applications from meat-packing facilities, the Governor’s Office of Economic Development has decided against accepting the only response it received, citing an overall lack of interest.

GOED finance director Travis Dovre explained the situation Wednesday during a teleconference meeting by the South Dakota Board of Economic Development. He recommended withdrawal of the request for proposals, known as an RFP, and said the staff would re-evaluate its needs. He said there was a possibility that another RFP could be issued in the future.

The State of South Dakota has a long and costly history of efforts to develop meat-packing facilities in the state. In an effort to attract a major factory to South Dakota, officials, beginning in 2006, offered large sums of EB-5 investments (foreign investments in return for U.S. citizenship) for what became the state’s largest, and now most notorious EB-5 project, the Northern Beef Packers (NBP) meatpacking plant.Northern Beef received over $100 million from Chinese and Korean immigrant investors. . In July 2013, the $115 million meat-processing project, Northern Beef Packers,  filed for Chapter 11 bankruptcy. The project’s failure left many immigrant investors without a green card as promised and with little or no return of their investment.  It also cost South Dakota taxpayers millions of dollars as the state was forced into multiple litigations and settlements.

In 2015, citing corruption and administrative blunders, the federal government shut down South Dakota’s EB-5 investor visa program for wealthy people who want to become U.S. residents.

Then Governor Mike Rounds said he had nothing to do with alleged embezzlement and fraud that occurred in part of the program before Northern Beef Packers went bankrupt.

Fast forward a decade later and the GOED was holding out a $100,000 carrot for someone to tell them how to make a meat-packing plant work in South Dakota – before discovering there wasn’t much interest.

The most recent request from the GOED outlined the scope of the work that called for information they wanted an outside consultant to gather and analyze.

Available cattle supply;

Sales and marketing, both on the procurement and finished product side;

Processing economics, both direct and overhead costs ;

A reasonable capital stack such as debt to equity ratio at startup;

Costs associated with rural construction and rural residual values of MPP facilities;

The small packing industry as it exists today in South Dakota; and

True workforce availability.

In a KELO News report, the board’s chair, Jeff Erickson of Sioux Falls, reviewed the single response. “We thought it would be very similar to what our staff was already getting from clients,” Erickson said. Looking ahead, he said, “We may see something like this come back.”

“It’s a shame,” Jones said about the relative lack of interest.

“I agree,” said Erickson.

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Margaret Sumption was recognized by SDFU for her service to rural youth as a volunteer, with the esteemed Minnie Lovinger Award. Sumption is pictured here with Aeriel Eitreim (left) Senior Advisory Council member from Sioux Falls and Cadence Konechne, (right) Jr. Junior Advisory Council member from Kimball.


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