McKinley Meat discussions continue

PALMER — Local farmers have given the Alaska Board of Agriculture and Conservation mixed reviews on a plan to privatize the Mount McKinley Meat and Sausage plant.

The meat plant has suffered operating losses in the years since it opened, and legislators have set a June 30 deadline for the plant to close. Alaska Gov. Bill Walker has asked for enough funding to keep the plant open for an additional year in his proposed fiscal year 2017 budget. In the meantime, the board has considered a request from a consortium of farmers and meat cutters to put plant management in private hands. The last attempt to privatize the plant, in 2000, ended without a bid.

Farmers who commented at the board’s March 31 meeting largely praised past operations and current employees, even as they suggested the plant could accomplish more without inmate labor.

“In all, I would say that slaughterhouse run by corrections is an awesome operation” said Bob Shumaker of the Alaska Farmer’s Union. “There’s some excellent people there.”

Shumaker blamed state legislators for failing to support what several farmers at the meeting said was a vital component of the state’s meat market industry.

“We oughta be ashamed of ourselves,” he said. “This plant takes about $150,000 to run it. We keep talking about millions of dollars. We got a governor that did pay an attorney over $100,000 a month to do contracts.”

Original plant manager Jon Olsen suggested that to hand over management of the plant to a private group without requiring them to put up their own money. The plant has accrued more millions in public capital investment since it re-opened in 1986 under state management.

“In my opinion, it would be really unwise to throw away money invested to someone else without them investing their money into the plant,” he said.

Todd Pettit of Denali Meat Company said his company is made up of local processors who said they were willing to step up when the plant’s closure became apparent. Denali officials have said they’ll submit a bid to run the plant if the state published a request for proposal. Change will happen whether the local agriculture industry wants it or not, Pettit said.

“It’s gonna close if it’s under government hands,” he said. “A lot of lobbying efforts happened from the Farm Bureau, a lot of lobbying efforts from us, to ensure the fact that we get another year of one-time funding to transfer the plant into privatization.”

Even if the plant is successful, big changes will need to be made before Alaska agriculture is able to keep up with demand, said farmer Greg Giannulis. The state needs to take better steps to protect farmland in the Mat-Su Valley, he said.

“We’ve got $3 billion (worth of) meat coming into the state,” he said. “We don’t want to attack this farmer, with 200 pigs, 100 pigs, 50 pigs, two beef, five beef, 10 beef. We need to attack the $3 billion.”

Others shared Olsen’s skepticism. Current plant manager Frank Huffman said he felt the situation was akin to the privatization of the Matanuska Maid plant. The successor to the Mat Maid, Matanuska Creamery, collapsed in 2012, leaving unpaid federal loans and fraud indictments. Huffman said he’s faced down nasty rumors on social media about his salary and the plant’s operation.

“The way I see it is: when they take the meat plant over and they fail, I have the last laugh,” he said. “I’m not gonna help them one damn bit, because they’ve cut my throat too many times. They’re cutting my throat in there in that room right now.”

Privatization could essentially end up coming back to request more money from the state, Huffman said. The plant is too important to Alaska agriculture be allowed to fail, which means there will always be political pressure to keep it open, Huffman said.

“They’re gonna ask for state money they don’t have to pay back,” he said. “They’re going to take state money and put it in their pocket. That’s wrong. That’s wrong. Do they have to pay the money back? No. Is there anything in their proposal about paying it back? No. It’s going to be another Point MacKenzie, it’s going to be another Mat Maid. All these people are going to line their pockets and they’re gonna walk away. If that meat pant closes, what happens to the people that have animals when they can’t make it run? That’s what I want to know. What is the state’s plan? The state has no plan.”

Pettit says his group is focused on the positive.

“As a self-employed entrepreneur, you can’t look at ‘What if I fail?’ because you can’t be a business person in that respect. It’s ‘How am I going to succeed?’” he said.

Contact reporter Brian O’Connor at 352-2270, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.