Amarillo brings in another high-profile employer with Producer Owned Beef
With the recent announcement of the Producer Owned Beef LLC's decision to build its $670 million dollar facility in East Amarillo between US Hwy 287 and I-40 on 1,108 acres of land, the city of Amarillo has brought in another high-profile employer that will add 1,600 jobs to the area.
The city incentivized the placement of the facility by passing measures to make Amarillo more attractive to Producer Owned Beef by unanimously passing three measures at the May 24 city council meeting. The following items were passed:
Location Incentive Agreement between the Amarillo EDC and Producer Owned Beef, LLC: Under the agreement, the Amarillo EDC would provide Producer Owned Beef $8 million for the creation of jobs to be paid out over five years as they are created. The Amarillo EDC would also convey 610 acres, valued at more than $3.1 million, to Producer Owned Beef.
Tax Abatement Agreement between the city of Amarillo, the Amarillo EDC and Producer Owned Beef, LLC: The agreement would provide for an abatement of future taxes on the construction and equipment costs at 100% abatement for 10 years on $650 million estimated costs of improvements.
Chapter 380 Economic Development Program Agreement between the city of Amarillo and Producer Owned Beef, LLC: The city agrees to design and construct a water main extension and associated meter at an approximate cost of $3.45 million. The city also agrees to participate in an amount not to exceed $120,000 toward a sanitary sewer extension. There will be a one-time permit fee amount of $1,290,000 for plan reviews and building permits. There will be a water rate structure agreement for the same rate as the fed cattle beef production facility, located northeast of the Rick Husband International Airport. Producer Owned Beef, LLC consents to future annexation of the property.
In addition to those incentives, the state of Texas, with the support of Gov. Greg Abbott, awarded $12.2 million from the Texas Enterprise Fund as a deal closer to companies considering cities that compete with out-of-state sites. To qualify for this incentive, a company must contribute a significant capital investment and must create more than 75 full-time jobs in urban areas. Jobs added must meet or exceed the average salary for the county in which the facility is located.
More:Producer Owned Beef announces $670 million facility in Amarillo during event Wednesday
The new facility, which is expected to be operational by 2025 by company estimates, will produce $528 million in the gross product in its first year and $1.27 billion in gross product per year by year 2027 with 1,600 employees.
What Producer Owned Beef markets itself as setting it apart from other facilities is that producers of the cattle will get a percentage of the prices of their beef supplies and a share of profit from the plant that is geared toward keeping local cattle ranchers from having to travel out of state to get their beef processed. The increased capacity of beef processing in Amarillo will benefit the Texas Panhandle, which has the highest density of feedlots in the state.
Texas ranks No. 1 in cattle feeding but No. 3 in fed cattle processing, behind Nebraska and Kansas. Currently, Cargill, Tyson Foods, JBS and National Beef Packing harvest about 70% of the beef produced in the United States, with some of these major companies having facilities in the Amarillo or Texas Panhandle area.
Producer Owned Beef states that its model with its competition will generate more money for local producers than the corporate model, with 25 % of the nation’s beef coming within a 100-mile radius of the area.
Casey Cameron, CEO of Producer Owned Beef, spoke about the benefits of the company’s model and the need for more beef harvesting capability in the region.
“There is a deficit in our beef harvesting capability in our state compared to the number of beef cattle we have," Cameron said. “For the health of our industry, this processing facility is very important. Amarillo was the logical place as far as logistically for this facility.”
He said that producers of cattle for beef production are limited in their ability to work their way up the chain in being able to get a better share of their beef cattle under the current system. Cameron said estimates on 700,000 cattle a year harvested that this facility would keep about $140 million in revenue in the region to producers.
“That is a substantial amount of money to keep in the area,” Cameron said.
Cassie Fish, executive vice president of Producer Owned Beef, said that only producers would be shareholders in the facility. She said that the company currently has about 125 producer investors from Texas, Oklahoma and New Mexico that are already being fed in those regions.
“Producers will be able to tap into this value chain that we are producing; they will be able to access the actual wholesale beef values and bring that money back into their operations to benefit their communities,” Fish said. “All that money is going to flow back into those local communities, keeping that money local."
Fish said that the facility would set itself apart from some of the older plants with its use of state-of-the-art, highly lit areas with an emphasis on safety and ergonomics in the plant.
"It will be good for the region to have a modern beef processing plant that maximizes profit for producers," Fish said.
Emphasizing that even with the number of processing facilities in the region, Fish said there are still cattle being shipped to Kansas and Colorado to be processed, so there is a real need to add this facility to the region.
“This is about connecting the producer to the consumer; this is about bringing the cattle, beef and dollars here for producers,” Fish said. “I do not think this will affect Texas much because obviously, we have too many cattle to be processed for the region. This is about what is doing what is best for the region.”
This article originally appeared on Amarillo Globe-News: Amarillo brings in next high-profile employer with Producer Owned Beef
