Sustainable Beef's Unique Business Model May Ensure Success: First Time Entire Supply Chain Involved in Beef Production

The fragile state of the nation’s beef processing industry was brought to light in 2020 during the height of the COVID-19 pandemic.  From there a new crop of beef processing plants have emerged.  One of those is Sustainable Beef LLC, a rancher-driven beef processing facility, that broke ground last fall.  This isn’t the first regional packing plant to be proposed or built in cattle country, but the unique business model may help it to succeed where others have failed. 

North Platte, Nebraska is ground zero for Sustainable Beef is a $400 million, 500,000 square-foot plant that will have the capacity to process 1,500 cattle per day.   Cattle producer and Co-founder Trey Wasserburger says the greenfield startup will fill a niche. "Never before have we had the entire supply chain at one table. And that's under one roof. It's at Sustainable Beef.” 

That supply chain starts with some of the highest quality cattle genetics in the business being delivered to a producer-owned packing plant.  "The three cattle families four kind of involved are going to feed the plant along with about 22 Other feedlots and that will complete the process going hooked up with large retailer as a partner to take the beef on."  

That retailer is Walmart, which completes the supply chain and adds to the difference in their business model. David Briggs, CEO, Sustainable Beef LLC says, "Having the offtake spoken for and a market already developed is very key in the success of this plant and this design."

Walmart is also a minority investor.  They liked Sustainable Beef’s leadership, their commitment to animal care and they shared a vision for sustainability.  Briggs says, "We areusing water control, are we using nutrient control, what are we doing with our manure management, we’re using cover crops. All those things, we actually spoon feed, most of the corn raised in Nebraska is fed nitrogen throughout the growing cycle."  Wasserburger adds, "And what's really cool is our carbon footprint is limited all without 15 miles of each other. These bulls, our feedlot and our packing plant and the Walmart distribution center are all within 15 miles of each other."

So that’s why they believe this venture will succeed, even though the plant is starting up during the tightest numbers in the cattle cycle.  Briggs says, "Our cattle are committed so we believe our cattle supply is very good and very strong and so we will have the cattle at the front end of the plant and so even though we’re in a low cattle cycle should be very good.”  Wasserburger, "We're in every aspect in the industry. Somewhere in the cycle there will be a profit margin. And so hopefully we're just hedging our bet. And we can do a little bit of both, but the cattlemen need this."  

With 400,000 head processed annually they're also confident that Sustainable Beef will avoid being cannibalized by the majors in the packing industry.   Briggs says, "We believe there was about a five to six percent shortage of shackle space in the industry, our plant will be at 1.5% of the nation’s capacity so we’re definitely not taking that whole gap."  And he says they'll add some badly needed competition to the packing sector that will benefit the entire cattle industry.  The plant is project to be operational some time in 2024.