July 14, 2011

NBP's South Dakota plant could bring billions into local economy

The Northern Beef Packers (NBP) meat processing plant in Aberdeen, South Dakota, US, will soon be in service, and could potentially bring US$10 billion into the local economy in its first five years of operation.

"With this plant here all the arrows turn around and they all come back to this area, so this becomes the hub," said AgriFood Solutions International economist Dr Rod Bowling, who was hired by the Aberdeen Development Corporation and the Governor's Office of Economic Development to do a study into the impact of the NBP plant. "So the agricultural impact to the state and the area is huge."

According to Dr Bowling, the plant could bring US$2.5 billion into the economy annually and over US$10 billion in the next five years. The plant is also projected to create US$14 million in tax revenue and US$895 million in revenue by the end of the fifth year.

"It's not just cattle. It's the corn, it's the soy, it's the people that it takes to make all that," said Dr Bowling. "This is the biggest agricultural engine in the state, and you're going to reap the benefit right here."

The NBP plant is under construction on the southwest side of Aberdeen, and is expected to open by late September or October, said David Palmer, CEO and president of NBP.

The US$70 million plant had been delayed on several occasions due to unpaid taxes and other obligations, as well as construction delays caused by flooding.

When opened, the plant will slaughter more than 1,500 cattle a day, or about 450 thousand a year.

More than 8,000 jobs are expected to be created around the tri-state region due to the plant's activities, in areas such as transportation, feedlots and infrastructure, Dr Bowling said. That could, in turn, give South Dakota's young people more reason to stay in the state.

"When you do this economic analysis of Brown County today, all the arrows are leaving the state," he said. "The corn leaves, the cattle leaves. Where do your kids go? Do they have enough jobs to stay here? I don't think so. Today they will."