Meat in the free market

PALMER — After years of uncertainty as to its sustained viability, the Mt. McKinley Meat and Sausage Plant in Palmer is under private ownership.

The Alaska Board of Agriculture and Conservation voted unanimously last month to sell the state-owned plant to Greg Giannulis. That name may sound familiar to some Valley residents. Giannulis is the owner of Mike’s Quality Meats in Eagle River. The Giannulis family has owned the business for more than 25 years, starting out with a small shop and growing it into a much larger retail establishment complete with a wholesale division as well as game processing operation.

Given the state’s current financial uncertainty, combined with the fact that Southcentral Alaska’s only United States Department of Agriculture-certified slaughterhouse has struggled financially in recent years, the sale is a welcomed one.

The approximate 16,000-square-foot facility, which was appraised at $860,000 according to Board of Agriculture officials, sold for $300,000. In passing its motion to sell the facility for 25 percent less than its asking price, the board justified the sale due to the lack of viable offers and felt a quick sale would result in cost savings. Last fiscal year, a $2 million state appropriation kept the facility in business. With the current Alaska legislature still at odds over a fiscal 2018 budget, and no operating funds appropriated beyond June 30, plant sustainability was in question.

The state acquired the establishment in 1986 when then owners defaulted on a loan. Up until its sale, the facility was an asset of the Alaska Agricultural Revolving Loan Fund (ARLF) which was subsidized by farmers’ interest payments on low-interest, state-backed loans. Over the past three decades of state ownership, the plant saw more lean times than profitability. According to the state, losses during that time were covered by ARLF funds and not taken from Alaska’s general fund. State Division of Agriculture Director Arthur Keyes said sale proceeds will be reinvested in the ARLF, which in turn will help advance Alaska agriculture.

Valley farmers are on record stating the plant’s sustainability is essential, and its closure would be a severe blow to the region’s agriculture industry. Without federal USDA certification, producers would be unable sell their meat to grocery stores and restaurants. The facility also serves a role in the Alaska State Fair by processing much of the Future Farmers of America (FFA) and 4-H livestock—cows, sheep, hogs and goats — that are auctioned off annually in September.

Keyes said he wasn’t sure of an exact number, but he estimated that several dozen producers utilize the plant to process their herds.

“This sale is a great opportunity for the private sector to build our Alaska livestock industry and preserve access to a year-round, USDA-approved meat processing plant,” Keyes said.

Moving forward

“And so it begins.”

That’s the words that Giannulis, who also owns Rocket Ranch in Lazy Mountain gave when asked to comment on his new venture.

His spokesman Ray Nix said the most important immediate task has been met — to provide a smooth transition from state to private ownership while maintaining the all-important USDA certification. He said the current staff, which includes Department of Corrections workers, will remain in place for as long as possible. Nix said the acquisition fit well into Giannulis’s overall goals.

Nix said with the plant moving into private hands, the stigma of continuing instability is pretty much out of the picture. Both he and Keyes noted that in the approximate month since the sale, the number of animals processed shows a marked increase over the previous period.

“The door isn’t closed to anyone,” Nix said. “All the USDA, the (state) fair, 4-H…that service is continued. (The sale) provides opportunities for producers to grow their herds if they want to.”

According to the most recent state statistics, Alaskans import 80 million pounds of meat annually while only producing about 500,000 pounds. Long-term, Nix said, the ideal scenario would be to start seeing that lopsided tally come more into balance. He and Giannulis know that will take time but hope with the plant on more stable ground, it will happen. To help in that process, Giannulis is focused on more immediate plans.

Nix said the new owner’s short-term goals are focused on upgrading and repairing plant infrastructure, adding that plant operations can be made more efficient. Nix said another change will be in hours of operation. He said with the state out of the picture, the plant is not mandated to maintain three full-time managers.

Nix said those wanting animals processed will be able to drop them off Monday or Tuesday. He said if the demand is there, animals can be delivered on Sunday from 10 a.m.-2 p.m. for processing later in the week. Processing days are scheduled for Wednesday and Thursday. Fridays are earmarked for plant maintenance.

Nix said if the expected scenario plays out, things should be cyclical. The more animals funneled into the plant, the more money can be piped back into it for improvements and upgrades. That in turn will allow greater numbers through the door for processing. He and Giannulis are pleased with how things are going so far.

“We’re doing good. We’ve doubled the (processed animal) numbers over the previous 30 days. We hope it stays like that,” Nix said. “We’re hoping this will give agriculture a chance to grow, livestock specifically.”

Nix said overall, plant operations are the same as usual, except now it’s run like a private enterprise. Shawn Mobley will remain as facility manager, DOC workers will provide labor, and even the phone number will stay the same. Nix said anyone with questions can contact Mobley at 907-745-5232.

Contact reporter Chris Ford at 352-2270 or chris.ford@frontiersman.com.