Investors are hoping to develop a beef slaughterhouse in the Marion Junction area starting early this year. Brad Smith of Dothan, one of the three initial investors in the proposed facility, met with farmers and with members of the community on Saturday, Dec. 10 at the Black Belt Experiment Station in Marion Junction to answer questions about the project. The site of the proposed facility is approximately 1000 acres in Marion Junction that has been owned for many years by the Randall family. Smith said investors hope to close on the land in March of this year. At least initially, Smith said investors plan to purchase 70 acres and lease the balance of the land.
Smith, who said he was from Dothan, operates a chicken processing facility in Dothan and a peanut processing facility in Atmore. He identified Lee Fitch of Gordon and Allen Wise of Samson as the other two founders of the project. Smith said Fitch owns Fitch Family Farms and Wise owns SunSouth.
Smith fielded a number of questions about the project’s potential impact on neighbors and on the environment, particularly on Chaney Creek, which runs through the Randall property.
He also addressed questions about potential economic impacts, employment potential, and how the project is being funded and structured.
Smith said he and his partners had chosen the Marion Junction site primarily to its location. He acknowledged that its location in the Black Belt made it favorable for “new market” tax credits and other incentives toward economic development, and that the project was “still in play” for a federal grant. He said he and the other investors planned to go forward with development even if they were not awarded the grant, however.
Smith said the location’s proximity to Highway 80 was one geographic advantage it offered.
“It’s just a central hub for a lot of cattle,” he said, and accessible from all directions.
He said the facility “will have a buyer in the markets” locally and that he had met with local stockyards about procuring cattle for the facility. Nevertheless, he acknowledged, the slaughterhouse’s business plan, at least initially, is to process cull cattle and bulls from markets farther afield, potentially from other states: largely low-grade cattle termed “leans,” “breakers” and “boners” in the industry.
The cattle would be killed and minimally processed there before being shipped on as carcasses to other plants that would further process the meat, largely for ground beef and other utilitarian purposes: no ribeyes, porterhouses, or filet mignon. There are, Smith said, no immediate plans to butcher or otherwise produce a finished product at the proposed Marion Junction facility at this time, though he said the plant’s design does contemplate that as an addition going forward.
Smith said the team’s facility design was patterned after facilities “up north and in the Dakotas,” but that a grass-fed beef focused facility, which he acknowledged as “much smaller,” in Bluffton, Ga. was also an inspiration. That facility, White Oak Pastures, is part of a successful grass-fed beef marketing outfit whose finished product reaches higher-end markets.
“We would love to work toward that—grass-fed— but that’s not our plan right now,” Smith said, saying investors hoped to eventually offer “locally-sourced, high-end meat. But we have to work with what we can source, and that’s cull cows.” At maximum capacity, Smith said, he and the other founders project this 75,000 square foot facility would be able to process some 60,000 animals a year. The facility’s customers would be companies like Tyson, Sysco, and U.S. Foods, Smith said. He said he expected Tyson to be one of the facility’s first customers.
Smith said construction and startup costs for the venture would be around $60 million. Some $40 million of that, he said, would come from USDA-secured traditional bank financing. The rest will come from a variety of sources, he said, but mostly from federal tax credits and other potential federal funds, and from private investors. He said he and the other founders have been hoping to bring in local investors.
As of that meeting, though, he said, there were no local investors signed up with the project. Smith said he hoped to change that soon.
They had already held meetings at local stockyards and other locations to discuss the project with local cattle farmers, Smith said. Kirtley Brown, who lives near the proposed facility site and asked a number of questions during the meeting asked Smith if any minority farmers had been invited to come to those meetings.
“As a matter of fact, we would love to have some minority ownership in the plant,” said Smith.
“But they weren’t invited to the meeting,” said Brown.
“I don’t know of any minority cattle farmers in this region at all,” said Smith.
Smith said he and the other initial investors were confident that the venture could be profitable for them and others. Smith said they projected a 4-8 percent net return on investment for the operation in the beginning. “Right now the slaughter business is very profitable,” he said.
Smith said the facility would be enclosed, and that nearby homeowners should not expect to notice a smell or any other impacts on their environment.
“There will be a door where the cattle come in and a door where the trucks go out,” he said.
Brown asked if there would be a rendering plant associated with the facility.
“No. Nobody’s mentioned a rendering plant,” Smith said.
“Yet.” said Brown. “That’s right. Yet,” Smith said.
He said water treatment would happen inside the facility, and that no waste of any kind would be discharged into Chaney Creek. Solid byproducts would be allowed to settle out of cleaning water and then sold, for example, he said, to fertilizer producers as an additive. The treated water would then be used, Smith said, to irrigate pasture on the property. There would also be two eight-inch wells on the property to accommodate water demands.
When asked about pesticides or other chemicals, he said the plant would use nothing “outside of the same things as you would use to clean your house,” because this would be a food-producing facility, it would have to be clean and safe to food-grade standards, he said. That would mean limitations on what kinds of chemicals can be used.
Smith said the leased pasture land around the facility, the balance of the Randall property, would be pasture for “inventory” cattle, which would graze while waiting to be processed.
He said investors had considered feedlots around the facility but, “It’s not in the immediate plans.”
If they were to add such an operation, Smith said, “They’d be enclosed feedlot barns. They’d have to be ventilated to keep cattle [in them] here. It’s too hot otherwise,” he said. There would be two feedlot barns, each built to accommodate 2500 head of cattle, he said. These would have concrete or slatted floors.
“I’m not going to tell you we’re not going to” add feedlot facilities, he said, but it was not part of the initial plans.
Smith spent some time discussing the question of labor to run the facility. Most of the positions required to run the plant will be manual labor, Smith said. Because of the federal funding and support for the project, he said, the facility will be required by law to attempt to do its hiring, first and foremost, from the local area. He said the average wage in a comparable facility would be around $17.50 an hour, and the minimum they could pay, by law, would be $12.50 an hour.
Brown said he had heard the plant’s investors planned to staff it primarily with temporary migrant labor.
“I’ve heard that you’re going to bring in people from Guatemala,” he said.
Smith said that the investors would seek migrant labor “if there’s not a sufficient labor supply here. We have to use local labor first, but if I have to run the facility, yes, I will bring in migrant labor.”
He said investors would “probably” build housing on site for migrant labor “if we can’t get adequate labor…they will be on the property we own. They will be within walking distance to the plant.”
Smith said he used laborers from other countries, working under H2A visas, at his other facilities.
“They cause a third or a fifth of the trouble as my local employees,” he said. “If there’s somebody willing to work, I will hire them…we will probably have to use some migrant labor.” He said that immigrant laborers were easier to manage because, “If they don’t work properly I can fire them and they can never come back to the U.S. as a worker and get another [visa].”
In addition, he said, “There are several skilled jobs: accountant, shift manager, floor manager, buyer, sellers…it will be good on the economic impact on the area.”
Smith said that the facility would not require permits from the EPA or Alabama Dept. of Environmental Management, though both agencies would have oversight over its wastewater treatment activities. They have engaged Goodwyn, Mills, and Cawood, a large consulting and engineering firm based in Alabama, to do the engineering and permitting work for the project. That firm’s experience, he said, meant that “We haven’t had an issue receiving permits.” The plant itself would be inspected and permitted by the USDA.
“When you receive these Beef Facility . . . from page one [federal] funds, they have hoop after hoop that you have to jump through. Everything has to be done correctly to get these funds,” he said.
“We’re not going to build something that’s detrimental to this area,” he said.
“It is more profitable to take care of the animals and to take care of the environment than it is otherwise,” Smith said. “We want to be able to take buyers out,” and show them a responsibly managed, clean facility. “That’s the way it’s going. That’s what [buyers] want and they pay up for it.”
