Agri Star committed to buying quality cattle
By Jean Caspers-Simmet
Date Modified: 04/29/2010 10:44 AM
DES MOINES — The opening of Agri Star Meat and Poultry's beef line is good news for Iowa's cattle industry and the state's economy, said Bruce Berven, executive director of the Iowa Cattlemen's Association.
"Thank-you for investing in the future of Iowa's cattle industry," Berven told Agri Star CEO Hershey Friedman at a Statehouse news conference last week to announce the changes at the Postville plant.
Iowa is known for its high quality beef cattle, and Berven told Friedman these cattle will fit nicely with the demand he is hoping to re-establish in the kosher market.
When Agriprocessors, Agri Star's predecessor, closed in 2008 cattle prices in Iowa declined $2 to $4 per hundredweight, Berven said.
"Given that we had 1.2 million cattle on feed, we lost $24 million," Berven said. "Given the trickle-down effect, that had an impact on the entire state."
Berven said cattle in Iowa do at times sell for less than the national average. Last fall, Iowa cattle were selling for as much as $6 per hundredweight less than in the High Plains.
"Having a better competitive bid is going to help level the playing field," Berven said.
A recent USDA Cattle on Feed Report found that cattle on feed in Iowa were up 8 percent while major feeding states such as Texas and Kansas showed significant declines.
"If we have the processing capacity —and this is a step in the right direction — we can offset some of our freight and shrink disadvantages and economically it will allow us to take advantage of the hand we have been dealt," Berven said.
Friedman said his buyers are procuring high quality Angus from sale barns and cattle feeders in northeast Iowa.
Scott McGregor of Nashua sold his first load of cattle to Agri Star last week.
"The cattle yielded real well, and Agri Star was real happy with the way they koshered," McGregor said.
He plans to continue selling two to three loads per week in the coming months.
McGregor, who sold cattle to Agriprocessors, likes the shorter distance, just 60 miles compared to the 200-mile trip to Omaha.
"I think it's good for the northeast Iowa economy, more jobs and more stability to Postville," McGregor said.
"It's helping all the sale barns," said Ron Dean of the Waverly Sale Barn.
Agri Star buyers have purchased cattle at his barn three times since they started the beef line, Dean said.
Iowa Senate President Jack Kibbie of Emmetsburg said he and his sons sold cattle to Agriprocessors, and if the price is right, they'll sell to Agri Star.
"When the plant is ramped up, it will be a wonderful opportunity for Iowa farmers to get more competition in the packer business," Kibbie said. "Any time you lose a marketing opportunity, there is less competition, and it definitely hurts the market."
"I'm thrilled with the news," said Dan Cook, chair of the Iowa Beef Industry Council and a New Providence cattle producer. "It will be great for the beef industry in Iowa to have another competitive bidder."