Thursday, September 15, 2011

In My Backyard: Longmont, Colorado Turkey Processing Plant is Closing Citing Ethanol Subsidies and High Fuel Costs

Rod Brenneman, president and chief executive officer of Butterball, is blaming ethanol and high fuel costs in its decision to close the Longmont, Colorado plant which employs 350 people and has been in operation as a turkey processing plant since 1950. It is one of six Butterball plants in the U.S.

"... government ethanol subsidies and record-high fuel prices for much of 2010 and 2011 contributed to a major increase in our operating costs," Brenneman said.

According to Joe Nalley of Butterball LLC, “Corn is a primary ingredient of our feed costs, so are soybeans. Grain represents approximately 70 percent of the costs for us to produce a live turkey, ready to be processed. Grain has essentially doubled just since 2010.”

Nalley also said that this year alone the company's fuel costs — primarily diesel — will have increased $15 million to $20 million over 2010. This is a major factor because, since 2008, raw meat has been shipped to this Longmont plant to process the meat into value added products such as turkey hot dogs, and other pre-packaged turkey products.

The company reports that costs for things such as corn, soybean meal and fat have gone up an average of nearly $65 million per year for the past five years, or $325 million total.

There was a time when the turkey plant was the single largest private-sector primary employer in Longmont.

sources: boulder county business report, Times Call, denver post.