Walmart invests in Nebraska rancher-owned processing plant
Walmart announced that it is investing in a new Nebraska-based beef processing plant. Sustainable Beef LLC has agreed to give Walmart a minority stake in the company.
Founded in 2020 by eight Nebraska ranching families, Sustainable Beef came out of the supply chain challenges the beef industry, especially producers, faced during the pandemic in marketing their cattle. The company aims to make beef processing a better producer experience.
“To feed our country, we need all the plants running,” says David Briggs, CEO of Sustainable Beef LLC. “We found that Sustainable Beef and Walmart aligned on continuing to improve how we care for our animals and crops and provide consumers the positive experience of enjoying quality beef.”
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Walmart will have representation on Sustainable Beef's board as part of the investment. The partnership is a part of Walmart's plans to source high-quality Angus beef. It will also give the area’s beef producers an additional opportunity to market their cattle.
Currently, Sustainable Beef has about 30 feedlots on a contract that will receive a premium over the market price, Briggs says.
“We have created a cooperative hybrid model. It’s a way to add an opportunity and give beef producers the cooperative option,” he says.
"This investment provides greater visibility into the beef supply chain and complements Walmart's regeneration commitment to improve grazing management," says Tyler Lehr, senior vice president of merchandising for deli services, meat, and seafood, Walmart U.S. "We know Sustainable Beef LLC has a responsible approach to beef processing, one that includes creating long-term growth for cattle ranchers and family farmers."
Many retailers like Walmart are looking to tap into the trend of source-verified and traceability of food production.
Sustainable Beef plans to set itself apart from other processors by investing in technology to ensure traceability at every stage of beef processing, Briggs says.
Cattle coming to the plant will also meet Walmart’s views on animal welfare. The retailer asks its meat and poultry suppliers to honor its five freedoms: Freedom from hunger and thirst, discomfort, pain, injury, or disease. Animals should also be able to express normal behavior and not be in fear and distress.
According to Lee Schulz, an associate professor of agricultural economics at Iowa State University, Walmart has made alliances within the beef industry before, specifically with feedlots. Schulz sees the retail giant’s investment in the plant as a risk management method within the supply chain.
"We can anticipate future investments like this up and down the supply chain," he says.
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As for the big four packers, Cargill, Tyson, JBS, and National Beef, they may finally have some competition, says Rebecca Thistlethwaite, director of the Niche Meat Processor Assistance Network.
"They will have to innovate themselves and create their own strategic alliances with grocers too if they don't have them already," she says.
The partnership could also cause a ripple effect in creating more demand for cattle and increase market prices, Schulz says.
By having a marketing partner such as Walmart, Sustainable Beef has secured a home and buyer for their beef, Thistlethwaite says.
“A large packing plant with no core customer is doomed for failure,” she says.
This makes the company’s aspirations more financially feasible and attractive to beef producers looking for an additional outlet in selling their cattle.
Sustainable Beef plans to break ground on 80 acres in North Platte, Nebraska, and expects to open its doors by late 2024. The plant will process 1,500 cattle a day and employ around 875 people.