IMPERIAL VALLEY NEGOTIATES TO SAVE NATIONAL BEEF PLANT
February 13, 2014
Source: The Desert Review (thedesertreview.com)
At the adjourned regular meeting yesterday, the Brawley City Council was updated on the ongoing negotiations with National Beef in Kansas City, Mo. to avert their plant closure scheduled for April 4, reported The Desert Review. This intended plan closure has had an immediate ripple effect as feeder cattle have begun to be shipped out of the Valley to other feedlots.
Mayor Don Campbell appointed Mayor Pro-Tempore George Nava and Councilman Don Wharton to the Imperial Valley Ad Hoc Committee to create and present an incentive package to National Beef.
Other members of the committee include: Imperial County Supervisors Ryan Kelley, Ray Castillo, and CEO Ralph Cordova;
Imperial Irrigation District Director President James Hanks, Director Matt Dessert, and General Manager Kevin Kelley; Cattlemen Paul Cameron and Bill Plourd; and Brawley City Manager Rosanna Bayon Moore.
The City of Brawley proposed a $700,000 reduction in utility wastewater charges annually as part of the package.
“City Manager Rosanna Bayon Moore was quick to gather some impact data for the committee concerning the closure,” said Wharton. “We are in a compressed time line and, putting our best foot forward, we had to achieve a figure in order to get the proposal together. It will be worked through by city staff if it is accepted. This figure was felt achievable through the data received and a reduction of our water rate from IID.”
Imperial County has offered $3 million from their Agriculture Benefits Fund to help National Beef come into compliance with the Regional Water Quality Control Board. An estimated $13.8 million investment would be required to upgrade their wastewater pretreatment system.
Imperial Irrigation District has offered a $2.1 million in annual energy rate reductions for ten years.
The Gas Company has also offered a rate reduction.
The California Governor’s Office has reached out to National Beef management.
Local feedlots are looking for ways to increase their cattle numbers. Imperial County is working with the cattle vendors to expand feedlots. National Beef has stated this is the main reason for the closure—low cattle supply.
The cattle vendors have said that they will supply National Beef with 481,523 head of cattle for 2014, 500,000 head for 2015, and a 10% increase for 2016. These figures include cattle from the Imperial Valley and approximately 150,000 cattle from other feedlots outside the Valley.
National Beef said that to operate the Brawley plant at optimum capacity they would need 650,000 head of cattle per year.
“We felt the offer of lower utility costs and some help with the wastewater issues would offset the shortfall of cattle supply and make the cost per head of cattle lower, resulting in National Beef reconsidering the closure,” said Nava.
National Beef has stuck closely to their January 31 notice of the closure to Brawley and Imperial County, citing the lack of cattle as the main justification. The closure announcement set into motion many legal requirements such as notification to labor unions.
“National Beef has asked for nothing,” said Nava. “The Ad Hoc Committee tried to capture their attention, and we put together a package that we thought would do that—doing what we could do as city and county entities. We just wanted to get them to the table.”
A smaller group within the Ad Hoc Committee presented the package to National Beef on Saturday morning. Ryan Kelley, George Nava, Paul Cameron, and Bill Plourd met with National Beef General Manager Brian Webb at National Beef and with National Beef COO Terry Wilkerson via conference call.
“National Beef said they would give us some type of response Wednesday,” said Nava. “They called back 2 hours later with some questions. It was a good sign. We have to remember that this is just a proposal and nothing is set in stone. They listened and made a commitment to get back to us. We are trying to answer all of their questions.”
The cattle industry is a billion dollar industry for Imperial Valley.
“If the plant closes on April 4th, it would mean an immediate 18% addition to the unemployment rolls,” said Wharton. “This is on top of the 27% unemployment we have now. That figure is staggering.”
The cattle vendors are still negotiating with National Beef. “We are doing what we can to fight for our employees and fight to save the cattle industry here in the Imperial Valley,” said Mesquite Feedlot President Paul Cameron.