MITCHELL, S.D. — Since June, 42 people have requested information on starting meat processing businesses in South Dakota, said Dustin Oedekoven, South Dakota state veterinarian and executive secretary of the South Dakota Animal Industry Board.

“Out of 42 requests, we got three applications back,” he said.

People learned that processing meat commercially — whether as a custom-exempt facility or one that processes under state inspection — is “a little bit different than cutting up a deer in the garage,” Oedekoven pointed out.

The need for changes in meat processing in South Dakota and nationally was the main conversation during a Tuesday, Aug. 18, forum featuring Oedkoven and Larry Rhoden, who is doing double duty as South Dakota’s lieutenant governor and secretary of agriculture.

The forum was part of Dakotafest’s virtual offerings, which began on Tuesday. Originally, Gov. Kristi Noem was billed as a speaker during the Tuesday afternoon session.

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The forum featuring Oedekoven and Rhoden covered a lot of ground in an hour, touching on things like vaccine banks and the future of ag in South Dakota. But the impact of the coronavirus pandemic on the meat and livestock industries took up much of the time.

Dustin Oedekoven, South Dakota state veterinarian and executive secretary of the South Dakota Animal Industry Board, spoke during a Dakotafest virtual forum on Aug. 18, 2020.
Dustin Oedekoven, South Dakota state veterinarian and executive secretary of the South Dakota Animal Industry Board, spoke during a Dakotafest virtual forum on Aug. 18, 2020.
Rhoden said he and Oedekoven worked with Noem to get an executive order to temporarily allow livestock producers to go over capacity on animals to buy time until processing capacity increased following the closure of the Sioux Falls Smithfield Foods pork processing plant. The plant closed for a time following an outbreak of COVID-19 among employees.

Since most of the pigs in the state are privately owned — rather than owned by meat companies — Rhoden said it allowed producers to be more nimble and find solutions that worked for them. Oedekoven said numerous Hutterite colonies in the state were able to become custom-exempt processors and sell and process their own pigs to work through excess inventory.

The pandemic has highlighted the processing bottleneck that exists in meat production, Rhoden said, pointing out that it extends from the large processors down to local butcher shops.

“I think you go to any processing facility in South Dakota, and most of them are booked out for over a year now. I think if there’s a silver lining it’s that … it’s kind of a wake up call for consumers,” Rhoden said.

He and Oedekoven expressed optimism that federal law could change to allow state-inspected meat to be sold across state lines. South Dakota is among a majority of states that have meat inspection programs that are considered equal to federal inspection, and allowing wider sales of meat would help processors and livestock producers, they said. Sen. Mike Rounds, R-S.D., has sponsored legislation that would make that change.

Rhoden said processors in the state are working on expanding or remodeling to increase capacity, and new projects are in the works. The state Department of Labor also is working on a meat cutting apprenticeship program to provide workforce for the facilities.

“We have identified that as a need, and we’re attempting to address that with the Department of Labor,” Oedekoven said.

Ag economy

Tuesday’s Dakotafest forums also featured a look at the ag economy in South Dakota, featuring Michael Nepveux, an economist with American Farm Bureau Federation, Arlan Suderman, chief commodities economist at StoneX, and Kathryn Birkeland, chair of economics and decisions sciences at the Beacom School of Business at the University of South Dakota.

Michael Nepveux, an economist with American Farm Bureau Federation, talked about the ag impacts of the coronavirus pandemic during a Dakotafest virtual forum on Aug. 18, 2020.
Michael Nepveux, an economist with American Farm Bureau Federation, talked about the ag impacts of the coronavirus pandemic during a Dakotafest virtual forum on Aug. 18, 2020.
Nepveux focused on the supply chain changes during the pandemic and the resulting impact on agriculture. During the past five years, people have spent more money eating out of their homes than they have on food to eat in their homes, so that meant big changes to the supply chain when the pandemic kept people in their homes beginning in the spring.

“You essentially had that entire side of the economy shut down,” he said.

Nepveux said packing plant capacity has largely recovered, though plants still are processing larger-than-normal animals.

“It’s actually pretty surprising that we recovered as fast as we did,” he said.

He also pointed out that producers were helped, to varying degrees, by the Coronavirus Food Assistance Program, but through early August, less than half of the allocated money in the program had gone out to producers. He urged farmers and ranchers who are eligible but have not yet applied to the program to do so by the Sept. 11 deadline.

Arlan Suderman, chief commodities economist at StoneX, talked about the affects of the Aug. 10, 2020, derecho in Iowa, as well as international trade and crop inventories, during an Aug. 18, 2020, Dakotafest virtual forum.
Arlan Suderman, chief commodities economist at StoneX, talked about the affects of the Aug. 10, 2020, derecho in Iowa, as well as international trade and crop inventories, during an Aug. 18, 2020, Dakotafest virtual forum.
Suderman focused largely on the outlook for crop markets. The Aug. 10 derecho that ripped through much of Iowa and parts of South Dakota, Nebraska, Illinois and Indiana caused a sharp reduction in the “greenness” of crops, but it’ll be some time until the actual losses are determined, he said. Some estimates have placed bushel losses at 200 million to 400 million, but Suderman suggested that if farmers are allowed to not harvest the worst of their fields with near-total losses the damage might come in closer to 600 million bushels.

“At this time, we don’t have the data to support that,” he said.

How high that number ends up being could mean a big boost to the corn market. How much corn China ends up buying also will play into that price, Sunderman said. And he said that so far, South Dakota’s corn crop looks to be in good condition, with far less damage from the derecho than in Iowa.

Birkeland talked about the general economy in South Dakota. She said that while gross domestic product has dropped more sharply in this recession than in any past recession, questions remain about how fast it will recover. Employment and mobility are recovering, and people overall seem to be saving more and borrowing less.

Birkeland said now seems to be a good time for small businesses to consider “bold” changes and expansions due to low interest rates and consumer openness to change.