Chicken plant

It’s not Tyson. Not Perdue. Not Sanderson or Pilgrim’s.

Each of the country’s big-four chicken processors told The World-Herald that, nope, they’re not the company involved in a huge chicken-processing plant in the works for Fremont, Nebraska.

And Hormel, which processes pork in Fremont, said it’s not involved, either.

Fremont officials still are keeping a tight lid on the name of the company that’s weighing a $180 million investment in a plant, which would process nearly 350,000 birds a day. That could be nearly 128 million a year — or about 1.5 percent of the nation’s annual chicken slaughter.

There are a few clues:

The firm identifies itself as a multibillion-dollar company in documents shared with area farmers and seen by The World-Herald.

State and Fremont officials said it’s an American firm.

And Cecilia Harry, the Fremont official working to attract the chicken plant, said it is a “well-known company,” known for being a good corporate citizen. But “I would not assume that you would hear the name of the company and immediately associate it with poultry.”

Who could it be? She declined to entertain guesses.

Maybe it’s a beef packer looking to get into the chicken business, said Tom Vukina, professor of agricultural economics at North Carolina State University. Like Tyson, he said, packers like to be involved in multiple protein sectors — beef, pork and chicken. That gives the company more sway with retailers, he said. The diversity also helps keep revenue and profits stable when one sector is up as another is down.

Cargill said it’s not involved.

Pilgrim’s owner JBS is Brazilian-owned, and said it’s not involved.

Smithfield is owned by a Chinese firm.

Greater Omaha Packing said it had no information about the project.

OSI — not a household name but a large, Chicago-based meat supplier to restaurants — said it’s not involved.

Neither is restaurant supplier Sysco.

Not responding to questions from The World-Herald were Keystone Foods, a Pennsylvania company that supplies fresh and fully cooked chicken to restaurants and supermarket deli counters; National Beef, the Kansas City, Missouri, beef packer; California chicken processor Foster Farms; and Illinois chicken processor Koch Foods.

But there’s a chance the mystery firm might not be a typical meat processor at all; it might be a retailer.

Grocery industry analyst Paul Weitzel of Willard Bishop said it would have to be a large retailer, such as Walmart or Kroger, to support such a large project.

Walmart surprised the food industry last month with plans to build its own dairy in Indiana, to supply milk for its own private brands, which news service Reuters reported is Walmart’s only planned foray into food processing. Walmart said it wasn’t involved in the Fremont project.

Kroger, which owns Baker’s stores in Omaha, also is expanding its private-label lineup and operates dozens of its own food plants; spokespeople did not respond to questions from The World-Herald.

Owning its own source of fresh chicken would make sense for a large retailer, as these stores are expanding their deli and prepared-foods cases to compete with restaurants for customers in a dinner-hour time crunch, Weitzel said. The stores may want to bring in more pre-prepared food — not have workers operating hot fryers.

“They’re trying to take the labor out of the store,” Weitzel said.

Other pressures are changing retailers’ chicken supply chains: Costco, which sells more than 80 million rotisserie chickens a year, said last year it is working to source meat raised without antibiotics that are also used to treat humans. Costco said it wouldn’t comment.

A major packaged-food company could be another contender, though most, like ConAgra Foods, are no longer in the fresh meat business and are on missions to slash costs in factories, not build more.

One clue about the prospective Fremont plant is in the business model the company is pitching to Nebraska farmers, said Vukina at N.C. State.

Most chicken companies use a “tournament style” system, often criticized by farmers, in which the amount farmers are paid per pound of chicken depends on how efficient they are compared with other farmers delivering chickens at the same time. Efficiency is measured by how much chicken they produce per unit of feed. For farmers, it’s like having a professor who grades on a curve.

A frequently-asked-questions document provided to Nebraska farmers by the Greater Fremont Development Council tackles the question, “Does the company use a tournament style grower payment system?” with the answer, “NO! This company will introduce a unique model with a set pay for a set product.”

“Wow,” Vukina said. “If that happens, that’s absolutely earth-shattering.”

It makes him think the company is not a traditional chicken processor. If it were, that company would have to contend with a bunch of its chicken growers elsewhere crying foul, he said.

Don’t expect officials to share the name until the company is ready. Harry said keeping a lid on things is important to keeping Fremont competitive on the project.

And, Weitzel said, when a company says it’s not involved, take that with a grain of salt.

“That doesn’t mean it’s true.”

Contact the writer: 402-444-1336, barbara.soderlin@owh.com

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