A closed Iowa chicken processing plant gets new life with nearly $46 million in federal aid

A shuttered northeast Iowa chicken processing plant will get new life, creating about 400 jobs, thanks in part to nearly $46 million in federal assistance designed to create competition in the meatpacking industry.

U.S. Agriculture Secretary Tom Vilsack said Pure Prairie Farms, the new owners of a Charles City processing plant that's been idle for three years, will get a $38.7 million loan and a nearly $7 million grant to reopen and expand an operation partly owned by independent chicken producers.

"As we talk about restoring jobs in rural places, Pure Prairie Farms' effort in Charles City, Iowa, is a good example, of where we'll be returning hundreds of jobs to a small rural community," Vilsack said in a call with reporters Tuesday.

The project is one of about 30 companies and groups across the country to receive $223 million in USDA loans and grants meant to lower prices for consumers by creating added meat processing capacity, creating jobs and increasing competition for the nation's pigs, cattle, chickens and other livestock in an industry dominated by four giant processors.

Vilsack formally announced the projects Wednesday at the Greater Omaha Packing Co., a family-owned Nebraska beef processing plant that plans to expand with the help of a nearly $20 million USDA grant. The assistance comes after President Joe Biden announced in January the administration would allocate $1 billion to expand independent beef, pork and chicken processing in an effort to increase competition and reduce costs for consumers.

The USDA estimates the investments announced Wednesday will add capacity to process 500,000 more cattle and pigs and 34 million birds per year at small- and mid-sized plants. The aid will create about 1,100 jobs, not including construction positions to expand and build new facilities, said Vilsack, a former Iowa governor.

"We're looking forward to these projects taking hold and creating new opportunity, new choice for both producers and consumers," Vilsack said.

More:Iowa egg facility reports bird flu outbreak that will require killing 1.1 million hens

Cattle processing plant receiving a $9 million grant

About 50 miles northeast of Charles City, Upper Iowa Beef, a cattle processing plant in Lime Springs, snagged a nearly $9 million USDA grant to help with a $40 million expansion over four years that will double the operation's capacity to 800 cattle a day and push employment to 350 people.

The plant already employs about 200 people, said Ed Greiman, Upper Iowa's CEO. Lime Springs, in Howard County, has nearly 500 residents.

Some of the biggest benefits of the plant expansion will go to about 400 cattle producers who sell animals to the plant, Greiman said.

"They're family farmers, who grow corn and raise cattle," he said, adding that the plant gives producers more than one buyer for their cattle. "We're paying them a premium for good northeast Iowa cattle."

Greiman said the the expansion will help the company sell more beef overseas as well as further process the meat so it's ready for U.S. grocery meat cases.

More:North central Iowa grain business loses state licenses, files for bankruptcy

State-of-the-art chicken plant will no longer sit idle

About 40 chicken producers in Iowa, Minnesota and Wisconsin are initially committed to supplying birds to the Charles City plant, said Brian Roelofs, Pure Prairie Farms' CEO. He expects that number will grow to 100 with the operation's expansion.

Pure Prairie Farms plans to ramp up production at the former Simply Essentials chicken processing plant in downtown Charles City, beginning next month, Roelofs said. He expects the plant to be fully operational the second quarter of 2023.

The company didn't immediately provide the full investment in the project.

Charles City Administrator Steve Diers said he's encouraged the state-of-the-art plant will no longer sit idle. It closed in 2019, when the former owners filed for bankruptcy. Pure Prairie Farms bought the facility out of bankruptcy court for $9.5 million.

"The company is made up of producers, who have a vested interest in the plant succeeding," Diers said.

The Charles City Council is expected to consider leasing, and then eventually selling, a city road to the company and rerouting part of its main street to make way for Pure Prairie Farms' expansion. Diers said the company has agreed to good neighbor practices that include efforts to reduce odor from the plant and keep trucks on designated routes.

Roelofs said the project will enable farmers to refill chicken houses that have been empty since the plant closed. "It's very important that we get those farms to be productive again," he said.

The federal assistance was critical to the plant's revival, Roelofs said.

"It was a big contributor to making sure that we can bring these jobs to Charles City, " the CEO said.

The other USDA awards to Iowa operations: $15 million to the Region 12 Council of Governments in Carroll that will provide loans for new and expanding meat processors in Iowa, and $542,425 to help the Cherokee Locker Investment upgrade and expand the types of livestock it can process.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.

This article originally appeared on Des Moines Register: Shuttered Iowa chicken processing plant gets new life with USDA aid