State-run slaughter house up for sale

April 23, 2006

By JOEL DAVIDSON

Frontiersman

MAT-SU - Point Mackenzie dairy farmer Wayne Brost is one of two remaining dairy farmers left in the Mat-Su. He's also one of several local agricultural producers whose fates hang in the balance as the state decides how to dispose of the government-run Mt. McKinley Meat and Sausage slaughterhouse.

Last month, the state Board of Agriculture and Conservation voted unanimously to authorize the Division of Agriculture to sell off the facility.

If no acceptable proposals come in, however, the facility would be sold &#8220as is, where is,” without any restriction on use. The state has committed to continue running the facility at least until Dec. 31.

Whoever buys MMM&S must agree to operate it for at least three years. After that, however, it is unclear where local livestock growers would take their animals to be slaughtered.

&#8220I'm real concerned about the three-year timeline,” Brost said.

&#8220What happens if the new owners don't make a profit and sell the property after three years?”

For Brost, that would spell the end of his career as a dairy farmer.

He said he sells 30 to 40 cull (or non-producing) dairy cows to the MMM&S slaughterhouse each year. MMM&S then butchers, processes, and sells the meat wholesale.

Brost makes about $25,000 annually from selling cull cows. He doesn't think he'd be able to stay afloat long if the slaughterhouse closed, whether that be in December or three years down the road.

&#8220Dairy farming is a brutal business,” he said. &#8220If you take away the ability to sell all my cull animals, then I'm done.”

The local 4-H program also is concerned it might no longer have a U.S. Department of Agriculture-certified slaughterhouse to butcher its animals.

Lee Hecimovich, an agent for the Mat-Su/ Copper River 4-H District, estimated that between 50 and 75 4-H animals are slaughtered at MMM&S each year after the Alaska State Fair.

A USDA-certified facility is crucial to the success of the 4-H livestock program, because most of the buyers are affiliated with restaurants or food banks, Hecimovich said.

The state, however, contends that the slaughterhouse is a money loser that would succeed best in the private sector, where business owners could cultivate an Alaska Grown retail market.

Division of Agriculture Director Larry DeVilbiss said this week that the most likely scenario would be for one or more livestock producers to purchase the slaughterhouse and split it into smaller regional facilities to serve the Kenny Lake, Mat-Su, and Kenai areas.

Ideally, the new owners would tap into the retail market for Alaska Grown beef, DeVilbiss said. That's something he said the state couldn't do.

&#8220The bread and butter is in retail,” DeVilbiss explained. &#8220That's what will get Alaska beef in the market.”

As it is, the number of animals slaughtered as MMM&S has steadily declined over the past 10 years. Last year, about 1,000 animals were slaughtered - 19,000 fewer than the facility is designed for.

DeVilbiss said the decline stems from the fact that no beef producer will go out on a limb to cultivate a large herd knowing that the state might not buy the animals, and might not even run a slaughterhouse in the future.

The state's request for bid proposals states, &#8220The continued operation of a livestock slaughter/ processing facility is paramount to the growth and development of the Alaska agricultural industry.”

DeVilbiss agreed that a local slaughterhouse is important, he just doesn't think the state should run an oversized facility at an annual loss.

If no acceptable bid came through for the facility, he said local producers still could resort to USDA-approved slaughterhouses in Delta and North Pole.

&#8220It would not be perfect,” he said, &#8220but it would be an alternative.”

Both Brost and Hecimovich said hauling animals that far north isn't an acceptable solution.

It's stressful on the animals, and those facilities only take a limited number of livestock each year.

&#8220I certainly hope somebody picks this (slaughterhouse) up and runs it responsibly,” Brost said.

In the long view, Hecimovich agreed it would be best if the state moved out of the slaughter business to let private enterprise take over.

In the meantime, however, she doesn't agree with the state's decision to sell the property with or without someone to take over the slaughter operation.

&#8220For the moment, I don't think it's right for the state to just pull this out from under us,” she said.

As of Thursday, DeVilbiss said there were two possible offers in the works, but he wouldn't elaborate.

&#8220Both parties have asked that we don't talk about their plans,” he said. &#8220They don't want to cause a stir.”

In order to be valid, all proposals must be received at the Division of Agriculture Palmer office no later than 3 p.m. June 9.

Contact Joel Davidson at 352-2266 or joel.davidson@ frontiersman.com.