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A Corporate Comeback Story

A Retrospective And Current Look At Iowa Premium In Tama

October 7, 2019
By Tom Carney - The Wixted Company , Toledo Chronicle, Tama News-Herald

In many ways, Tama, Iowa, population 2,775, is like many other similar-sized towns around the Midwest. For example, it has its fair share of challenges, from attracting and maintaining retail businesses downtown, to keeping up with an aging housing stock as values decrease and its population ages.

However, unlike some of its neighbors, Tama also has a lot going for it. It has the Meskwaki Casino, a large employer in the area, and Tama Paperboard, which has around 100 employees.

But the town's biggest success story is probably the Iowa Premium plant, which employs about 900 people and processes 1,100 Black Angus beef cattle per day.

Article Photos

Iowa Premium- Tama, Iowa

-News-Herald file photo

Packing plants have been controversial, so there are some people in the area and beyond that may disagree with this being characterized as Tama's top achievement. But this plant is different, mostly because of an Iowa-based investment group that persisted in its attempt to resurrect a struggling business one that had failed many times in the past.

Summit Agricultural Group, the firm that engineered the packing plant's turnaround, was founded in 1990 by farmer and entrepreneur Bruce Rastetter. It is a farming and agricultural investment company headquartered in Alden, Iowa. Its operations include row crops, beef cattle and pork production facilities, land investment funds, Brazilian renewable energy and a range of other private projects, and Rastetter is the CEO.

The Tama plant's history is strewn with failures. Built in 1971, with 260,000 square feet of space, it has since had many owners, suffered severe flood damage and sat vacant for almost eight years. A unique business plan and group of industry experts combined with patient capital was required to resurrect this building and see it become successful.

So, this is a comeback story one that features a vast, empty, aging plant being turned into what Justin Kirchhoff, Summit's managing director, calls "a company producing some of the highest grading beef in the United States."

From the start, Summit's goal was to produce some of the highest quality beef in the country, sourced from local family farmers. The challenges were formidable, but their plans to address them were better.

"Some of the largest beef processing companies in the country had tried and failed to make this plant work," said Kirchhoff. "We knew what kind of a challenge it would be to re-open it, so we figured we needed a unique approach to succeed."

According to Kirchhoff, changes were already occurring in the beef processing industry by the time they had decided to purchase the plant, so they knew their planning had to fit the industry's moves and preferences at the time. "the combination of the ethanol industry creating a new source of high-quality livestock feed combined with the drought in the Southern U.S. was driving high quality cattle production North," said Kirchhoff.

There were so many other factors to consider. Among them was making sure Tama was the right place at the right time. Critical to that decision was the fact that Tama County is the center of one of the most productive cattle-raising areas in the state, if not the Midwest. And most of the cattle were Black Angus, a breed that has had great marketing success.

In the beginning, one of the most consequential decisions was the hiring of John Stewart as CEO of the new company, Iowa Premium. He had extensive experience in the cattle industry and in running a beef-processing operation.

"John helped us focus our business model on beef quality," said Kirchhoff. "The planning group decided that, with all the high-quality beef available in the area, we could produce a greater percentage of prime and choice products relative to almost all other competitors."

But back to the challenges. Chief among them was money. Specifically, where to get enough investors, with enough financial clout, to achieve such lofty goals.

Bob Evans, another veteran of the beef industry, had joined the effort and suggested approaching Sysco, one of the world's biggest food distributors. A Fortune 500 company, it has annual revenues exceeding $40 billion and it might be interested in being a part of a quality beef sourcing facility.

But how do you get to the right person in such a huge company to pitch the idea? Evans' experience with Sysco was the key and, as it turned out, they were the company that brought the rest of the pieces together.

Sysco joined the investment in early 2014 and by late 2014 renovations to the facility were completed, the new workforce was trained, and processing operations had begun.

As predicted, the plant has no trouble finding the high-quality, Black Angus cattle it needs. Kirchhoff admitted getting and maintaining employees has been an ongoing challenge, though it is one they have been able to meet through consistency and hard work.

In March of this year, the plant was sold to National Beef Packing Company. Headquartered in Kansas City, Missouri, it is the fourth largest beef packer in the U.S. and owns another eight or so plants in several states. It is also known for its focus on quality.

Does this story have a happy ending? Definitely.

"It was very brave of them [Summit] to make that kind of investment in Tama County," says Katherine Ollendieck, executive director of Tama County Economic Development Commission.

Without the plant, the town and the county would be job-poor. As it is, Ollendieck says city and county planners need to find more housing for current and potential employees, many of whom come from different cultures, primarily Latin American and African. Likewise, Tama Mayor Mike Carnahan estimates that 80 percent of the plant's current employees live out-of-town.

One Tama advantage is that for a long time it has had a diverse population. The Meskwaki Settlement is nearby and Carnahan says many Latinos who worked at earlier versions of the plant are still around. And, in this case, the new occupants are providing the jobs that keep a small town and its surrounding area vibrant, producing not only a higher quality product but a higher quality life for residents.

"We are committed to investing in projects where we can make a good return for our investors, while improving lives and communities at the same time," said Rastetter. "The Iowa Premium Beef processing plant is a great example of that. When it's all said and done, we can look back and see that the investment was profitable, and we helped others along the way."

About the Des Moines-based Wixted Company which provided this story:

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