Boomtown: Study says beef plant will have $10 billion impact

 The plant will generate a $10.1 billion economic boon to the region in the next five years and have an annual $2.5 billion effect by its fifth year, Rod Bowling of AgriFood Solutions International said at a news conference.

 The benefits will be far-reaching and include those to beef producers, grain farmers, ethanol plants, trucking industries, agribusinesses and service industries.

 Aberdeen will be a boomtown, he said. It will multiply Brown County's $250 million in gross domestic product annually to $1 billion, he said.

 Bowling, a Texas-based consultant, wrote a 51-page study, costing $52,159, paid for by the South Dakota Governor's office of Economic Development.

  "The plant is going to be the biggest engine in the state, and you will reap the benefits," he said. "This is an exciting time. This will be the resurgence of growth in an agricultural community."

 In addition to the 660 jobs created at the plant, another 7,632 will be created in South Dakota, North Dakota and Minnesota for a total of 8,292 jobs, according to his study projections. Many of these jobs will be agriculture-related.

 "Growth in the agricultural arena creates 42 percent of the growth. Coupled with the supply chain growth in agricultural businesses, these two sectors account for 85 percent of the $10.1 billion cumulative growth," according to the report.

 The other growth will occur in retail, service, education and other sectors, according to the study.

 The economics of the plant all start with transportation costs, he said.

 Now, producers in the region must transport their slaughter cattle to Cargill in Schuyler, Neb., (358 miles) or to a Tyson Foods site in Dakota City, Neb. (292 miles), Bowling said.

 Producers would save an average of about $48 a head by transporting them to Aberdeen, he said. Producers will also benefit by getting a premium price for beef that qualifies for the Certified South Dakota Beef program, he said.

 Having a local plant encourages more local cattle production, more use of pastureland, more grain consumption and more development of agricultural industries, he said.

 "In essence, Aberdeen is building a giant regional business with (Northern Beef) as the anchor," the report said. "Without the anchor business to draw suppliers, producers would pay to truck cattle, corn and other agricultural raw materials to Dakota City or Schuyler, Neb., to well-established markets, burning fuel and dollars that could have stayed in the Aberdeen area."

 Gary Taylor, an agricultural economist at South Dakota State University, who also read the study, said Bowling's economic impact dollar amounts are reasonable.

 "His $10 billion figure for five years is in the ballpark, but perhaps a little high," he said.

 Taylor, who has studied cattle production economics and who unsuccessfully bid to conduct the study, said his estimate is $8.5 billion for five years.

 "My biggest disagreement is with the job estimates," he said. "I think that 8,292 number of jobs created is quite high. I would calculate a gain of about 3,000 jobs. I think Bowling is anticipating more startup industries. It depends on what modeling is used."

 Taylor also thinks that the study is too Aberdeen-focused.

 "The assumption is that all of this will happen in Aberdeen," he said. "It may happen there, and it may happen in the contiguous counties."