I’ve seen farmer owned grain elevators, soybean and corn processing plants that failed miserably. Maybe this will work, but a1500 head a day processing plant is one sixth or less than some of the big beef processing plants. Volume drives efficiency.
If they’re asking for investors, I’ll run from it.
Efficiency isn't everything. That's how you got mechanically separated chicken and pink slime.
I sold fat beef for 4.50. The small processor cut it up and the customer picked it up.
We all made a little money.
I hope this endeavor succeeds. But I'm pessimistic.
First job I had out of grad school was peddling catfish for a startup processor in Southern Texas. Now, Texas consumes 40% of the catfish in the country, has a longer growing season which makes each pond 20% more productive, so it stood to reason in my naive economist mind that I was getting in on the ground floor of a great opportunity.
The big boys in MS, AL and AR simply outbid us on every contract and customer we went after. I'll never forget the HEB buyer beating us up on price, size spread and delivery times, saying "but XXXX can do it..". Sure they could. HEB was more than 50% of our sales, and 2% of XXXX sales. They could afford to thump us in one market, never showed up on their bottom line.
Took three years for the thing to go dead nuts broke.
If these guys want to succeed, they better have a big user, like a Costco, or even a Whole Foods, in their pocket for a large majority of their sales, or the ADM's and Cargills will own them before the decade is half done.
