May 6, 2004

 

 

US Pork Producer Files For Bankruptcy Protection
 

Columbus-based Furnas County Farms filed for Chapter 11 bankruptcy protection on Monday, listing debts and liabilities of nearly $200 million to more than 200 creditors.

 

"The real effect that we're concerned about is the local impact around the state where they operate," said Rod Johnson of the Nebraska Pork Producers Association.

 

Furnas employs 375 people, mostly in Nebraska, at 70 sites.

 

According to court records, it has an average annual payroll totaling more than $8 million.

 

At any one time, Furnas is responsible for feeding and marketing 430,000 hogs -- about 15 percent of all hogs in Nebraska.

 

Furnas has annual sales of $80 million.

 

It buys about $600,000 worth of grain a month, and pays nearly $6 million a month for other expenses.

 

"They turn around and put a lot into the rural communities -- commodities, utilities, equipment, taxes," Johnson said.

 

The company filed for Chapter 11 protection, so that it can reorganize and continue to operate until a buyer can be found.

 

Affiliates of Furnas, 7-11 Pork Foods Inc., Arapahoe Feed Mill LLC, Furnas County Farms Marketing Co. LLC, and Furnas County Trucking also filed for bankruptcy.

 

Company spokesman Scott Burroughs said the company hopes to have a sale announcement soon.

 

"We have a prospective buyer currently, and I'm optimistic that will come to fruition," he said.

 

Furnas County Farms and related entities began in the mid-1970s. This is when several farm partnerships were established to build and operate pig production facilities. The partnerships had a common management, which was led by Chuck Sand Jr. of Columbus.

 

Two other companies that Sand helped form, Sand Livestock and Sand Systems, are not part of the Chapter 11 filing.

 

Not everyone was saddened by the bankruptcy.

 

John Hansen of the Nebraska Farmers Union has been a frequent critic of Sand, other large livestock operators as well as large corporate entities dominating the agriculture industry.

 

But he admitted losing Furnas would hurt, because Sands and the company have been major players in the industry for a long time.

 

"If the whole deal goes down, it has a huge impact. It's kind of hard to feel bad for him personally, but it's not good for the industry," Hansen said. "Any time you concentrate massive amounts of production into very few hands, you create a situation where you take more risks."

 

Critics of such livestock operations argue that the smells and environmental threats from a large number of livestock can potentially destroy the quality of life for neighbors.

 

Supporters maintain the large operations are doing a better job of controlling waste in addition to providing a major economic boost to communities.

 

Furnas has been involved in several zoning disputes over its facilities in recent years.

 

Last year in a case involving Furnas, the Nebraska Supreme Court said that cities have the power to enact laws to regulate large livestock operations being built nearby.

 

The high court ruled in a case that stemmed from attempts by Furnas County Farms to build a facility of up to 36,000 hogs near the city of Alma.

 

Alma officials said the facility would result in 145 million gallons of hog manure sitting in the adjoining waste lagoons, thereby threatening the local water supply.

 

Johnson said the Furnas woes are serious.

 

"There are probably some people celebrating on street corners," he said. "But if they are truly concerned about the future of Nebraska, the rural agriculture and our rural communities, anything like this is not a good situation."