« Continue Browsing

e-mail article Print     e-mail article E-mail

Mikkel Pates, Forum Communications, Published December 17 2012

Lenders foreclose on ND Natural Beef facility

FARGO – Lenders have notified North Dakota Natural Beef LLC of their intent to foreclose on a meat-processing plant here, officials say.

Dieter Pape, president and chief executive for the defunct company, says N.D. Natural Beef vacated its plant in late November.

“All we were really doing was utilizing some space in the plant, keeping it in operating conditions for potential sale,” Pape said. The facility served as collateral for loans for lenders, including the North Dakota Bond Authority.

George B. Sinner, with American Federal Bank in Fargo, whom Pape identified as one of the lenders in the project, declined comment on its status. Sinner, who recently was elected to the state Senate, cited confidentiality rules and said other lenders also likely would be unable to comment. Neither the Cass County recorder’s office nor sheriff’s department had the plant on a list of foreclosures as of Dec. 12.

N.D. Natural Beef was created as a companion company to North American Bison Cooperative, and the two companies shared management.

The bison co-op is based in New Rockford, where its kill plant was established as a farmer-owned cooperative in 1993. Pape served as president and chief executive for both companies.

N.D. Natural Beef never made an annual profit, Pape said. It was affected by a one-year construction delay and dispute with a contractor, in which it lost “a number of clients right off the bat, because they couldn’t wait.”

In 2008, the beef market changed dramatically because of the recession, and the company faced higher cattle prices and the lowest number of cattle being raised for slaughter since 1976, the first year the cattle industry began keeping track.

“With the recession, people stopped consuming so much premium product, and that’s what our product was – a premium product,” Pape said. He dismissed criticisms that the plant was developed despite feasibility studies that indicated it would not work.

When N.D. Natural Beef fell behind in paying farmers for their animals, it voluntarily stopped buying animals and became a custom processor of conventional beef. The company did some custom kill and processing work for a beef processing company in Buffalo Lake, Minn. Early last fall, the Buffalo Lake company completed an upgrade on its own plant and moved its operations there.

Pape said N.D. Natural Beef looked for a new customer for its beef processing operation, but no replacement was found.

Pape said the facility and the bulk of equipment remains in the plant and now is under the control of lenders.

“There’s nobody that took a big hit, other than, obviously, the primary lenders,” he said.

While the beef company has failed, the North American Bison Cooperative is struggling to find suppliers to keep up with demand, Pape said.