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Agriculture groups buoyed by defeat of Sioux Falls slaughterhouse cap

Voters rejected a measure to ban any new animal processing plants in the city limits. The timeline for Wholestone Farms' planned facility is uncertain.

Brad Greenway.jpg
Brad Greenway, a Mount Vernon, South Dakota, farmer and member of the Wholestone Farms cooperative, at DakotaFest in Mitchell, South Dakota.
Patrick Lalley / Contributed
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SIOUX FALLS, S.D. — The coffee was maybe a bit tastier across the regional agriculture community on Wednesday morning, Nov. 9, when people woke to see that Sioux Falls residents opted not to cap new slaughterhouses in city limits.

The results of the local election — which ended on Tuesday, Nov. 8 — weren’t certain until well into the early morning. When the ballots were finalized, however, what emerged was a solid endorsement of either the value of agriculture in the broader metro economy or simply fair play.

Wholestone Farms plans for a $500 million pork processing plant can now move forward, though the timeline is less than certain. Larger economic forces have shifted in the past year, making decisions on next steps critical to the plants overall success.

“It’s a tough market condition for the pork industry,” said Luke Minion, chairman of the board for Wholestone.

Luke Minion.jpg
Luke Minion, chairman of the board of Wholestone Farms, a farmer-owned cooperative planning to build a pork processing plant in Sioux Falls.
Contributed

Voters defeated the proposed change to city ordinances by a margin of 52.4% to 47.6%, according to unofficial final results. While that’s not a landslide, it’s a solid victory in a contest that most observers believed would likely be the reverse and ultimately decided by the courts.

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The debate was sparked by Wholestone’s plans to build near the Benson Road exit on Interstate 229. The company is a cooperative owned by about 200 pork producers across the region.

Voters understood the value of having food grown and raised close to home, said Brad Greenway, a Wholestone member who farms near Mitchell.

“I think that connection with the local farmer being involved resonated with people in Sioux Falls,” Greenway said. “I want to give all the credit to the community and folks in the city limits who voted to support us. I think they did some homework and dug into the issue.”

The ballot question was initiated by Smart Growth Sioux Falls. The group said it didn’t oppose the idea of a new pork plant, just not in the city limits. The image of the city’s existing pork plant, Smithfield Foods, underpinned the group’s concerns about odor and water quality.

Robert Peterson
Robert Peterson, treasurer for Smart Growth Sioux Falls, which opposes new slaughterhouses in Sioux Falls.
Contributed

“We’re proud of our efforts to bring this issue to a vote and educate our neighbors with the facts,” Smart Growth spokesperson Robert Peterson said in a statement. “While we’re deeply disappointed with the close result and concerns about new slaughterhouses remain, we’ve always said the people of Sioux Falls should decide.”

On the other side of the debate was Sioux Falls Open for Business, a coalition of agriculture and business organizations including the state’s commodity groups which represent producers of pork, soybeans, corn, beef, poultry and dairy products.

The rolling subtext of the conversation, which came into public focus late in the campaign, was the conflict between the farm interests backing Wholestone and POET, the world’s largest producer of ethanol.

POET’s headquarters are a mile northwest of the site. The company’s founder and CEO Jeff Broin’s home in an exclusive gated community, is about a mile southeast.

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Greenway and others in agriculture said POET’s financial backing, which totaled more than $1 million, is a wound that won’t heal quickly.

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Jerry Schmitz, executive director of the South Dakota Soybean Association
Contributed

“I have had a number of producers call me to tell me they will not sell (corn) to POET again,” said Jerry Schmitz, executive director of the South Dakota Soybean Association.

The Soybean Association contributed $125,000 to the Open for Business campaign.

Those farmers saw the slaughterhouse ban as a threat to their future, Schmitz said. “Some of them are saying, I am a POET shareholder and they are working against the shareholders.”

In a statement on Wednesday morning, POET said it is dedicated to growing value-added agriculture, but was not conciliatory about the role it played in the Wholestone debate.

“We support all types of ag processing,” the statement read, “we simply believe that these sort of projects belong in rural areas. We said we wanted the people to decide and they have. The process worked. We’re proud of the work we did and we would do it again.”

Those long-term relationships notwithstanding, the vote represents something larger to the farmers and ag groups. That’s the idea that urban residents have a deeper appreciation for what they do and why they do it.

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Glenn Muller, executive director of the South Dakota Pork Producers Council
Contributed

“It’s huge for the pork producers in that it stops the initiative to override public and local zoning policies,” said Glenn Muller, executive director of S.D. Pork. “But even bigger in our industry is that allows for small packing plants to come into Sioux Falls and allows the flexibility for Smithfield to relocate. There are a lot of benefits because this initiative did not pass.”

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Hyperbole aside, if a major expansion of pork processing capacity is a big step forward for the regional agriculture community, it’s not going to happen quickly.

Even a new era is subject to economic headwinds.

Pork processing is a long game played on an international stage. The strong dollar abroad, trade policies with China, inflation and financial markets have made the situation more difficult in recent months, said Minion.

“We have to get the math right. The project has to be very carefully executed,” he said.

“We know we can make the business plan work. Nothing has changed as far as our ambition, but we did have the markets change a lot around us in the last 12 months.”

In the meantime, Minion said that Wholestone, the farmer members and the commodity groups who represent them are thankful that voters supported them.

“It’s a happy day,” he said. “You don’t get a lot of happy days on stuff like this.”

MORE FROM PATRICK LALLEY:

Patrick Lalley is the engagement editor and reporter for Sioux Falls Live. Reach him at plalley@siouxfallslive.com.
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