The meat packing plant in Postville has begun beef production again and an executive with the Iowa Cattlemen’s Association predicts it could prove to be a $24 million turn-around for Iowa’s cattle industry.
There had been just one beef processing plant operating in Iowa — in Denison — but within the past two weeks the Agri Star plant in Postville has been buying about 90 head of cattle a day for its beef line. Agri Star C.E.O. Hershey Friedman has overseen a $7.4 million upgrade to the Postville plant.
“It has been a journey, but we have made real progress,” Friedman says.
Friedman predicts that within a year the facility will become the world’s leading producer of kosher beef and poultry. That’s a huge turn-around after an immigration raid and the indictments of top Agriprocessors managers left the future of the plant in doubt. Friedman spoke this morning during a statehouse news conference to discuss the plant’s revival. (Listen to 37-minute event by clicking on this link: Postville mp3.)
“I’m not from Iowa and I did not grow up on a farm, but I know the importance of hard work and treating people with respect and integrity. Today is all about honoring commitments,” Friedman said. “Eight months ago I came to Iowa and started Agri Star Meat & Poultry. At that time I made a commitment to create a quality workplace where we could improve quality jobs and fair wages while producing quality chickens, turkeys, beef and deli products for the kosher consumers.”
About 560 people are now employed at Agri Star and Friedman expects to add staff as beef production increases from about 90 head of cattle per day to 500 per day. Bruce Berven, executive vice president of the Iowa Cattlemen’s Association, says many cattle producers in northeast Iowa have been trucking their livestock to a plant in Illinois after the Agriprocessors plant shut down.
“When (Agriprocessors) closed, cattle prices in the state of Iowa declined, at least in the short-term, by $2 to $4 per hundred weight,” Berven says. “Given that we had about 1.2 million head of cattle on feed…that caused us to lose $24 million and given the trickle-down effect you can see that had an impact not only on cattle producers, but on the entire state of Iowa.”
Berven predicts there’ll be a gain of at least $24 million dollars because Agri Star is processing beef in northeast Iowa again. Iowa Agriculture Secretary Bill Northey says Iowa corn-fed beef is in high demand world-wide and the Postville plant, which produces kosher meat, will push demand higher.
“This is an important plant to have operating,” Northey says. “And it’s important to have it operating right.”
The State of Iowa provided a $400,000 grant and a $200,000 loan to Agri Star in November to help finance the upgrade in the Postville facility. Teresa Hay-McMahon, deputy director of the Iowa Department of Economic Development, says Agri Star made a “significant investment” in northeast Iowa.
“I did grow up in Iowa and I did grow up on a farm and I also used to live in that area,” she says, “so I’m very happy to see this facility come back.”
Friedman’s company acquired the facility eight months ago. He is focused on marketing Agri Star chicken, turkey and beef products as American raised and American produced. Postville Mayor Leigh Rekow meets with Friedman regularly. “Our goals are the same: worker safety, fair wages, legal workers and thriving plant providing jobs and a better living in our community,” Rekow says.
In May of 2008, nearly 400 workers at the former Agriprocessors plant were arrested or detained in an immigration raid. The plant’s former manager, Sholom Rubashkin has been convicted of bank fraud, money-laundering and other fraud charges. He’s to be sentenced at the end of April. He faces a separate set of charges related to immigration violations at the plant.
