May 11, 2011
Dear Meat Producers and Community Members:
Representing the North Cascade Meat Producers Steering Committee, I am sending this notice to update you on the status of the possible purchase of Keizer Meats - our local USDA Processing Facility. After the Keizer's declined our counter offers last fall, we investigated various options and opportunities, but none appear to be as turn-key as the Keizer option. The Committee is confident that Whatcom County needs increased capacity for USDA meat processing in order to keep up with demand for local meat. We need to ensure that a processing facility remains available and that it will be able to expand capacity, or we need to find a viable alternative solution.
Recently, the Keizer’s real estate broker contacted our agent with a new sales price that is very close to what we offered last fall. The Committee met last week to review and discuss recent market data for Whatcom County, different scenarios on processing costs for beef, and the details of the business and acquisition plan we worked with last fall. The Steering Committee determined that we should move forward to negotiate with the Keizers and their broker based on this new asking price. The Committee also determined that NABC should conduct a brief analysis of two alternative meat processing business structures. Both of these would involve the potential for leasing a mobile USDA-inspected slaughter unit from the Puget Sound Meat Producers Cooperative, which is based in Pierce County. This 45’ mobile unit has the capacity to slaughter up to 10 cows per day, 20 hogs per day or 30 sheep per day. One scenario would be to lease the mobile unit, and lease a building to operate a cooperatively owned processing business. The other scenario would be to lease the unit, and contract with an existing processing business.
NABC is currently working with a local attorney and the Committee’s real estate broker to draft a new purchase agreement and contingency addendum that will clearly outline the requirements for final completion of the purchase. To close the deal, we must have the following:
- Assurances that the plant and facility have adequate water and sewer resources for future operations, as well as the verified ability to attain permits for expansion of the plant.
- Secured investment funds of at least $250,000 provided by producer and community members of a newly formed cooperative incorporated with Washington State.
- Adequate and secured financing and/or line-of-credit to purchase the business and real estate assets, and adequately manage cash flow for the first two years of start-up.
One of the above conditions that will need to be met will be attaining sufficient producer and community investment and ownership. The necessary funds will need to be in place in order for us to attain bank financing for the remainder. Should all other conditions of the purchase be met, we will have approximately 60 days to gather investor funding. As it has been some time since we inquired of your interest, we would like to find out if you are still interested in investing and becoming an owner of this business? Please let us know whether you are still interested or no longer interested by emailing chandra@scknaus.com. It is anticipated that the minimum investment will continue to be $2,500. If you have any questions please feel free to contact myself or a member of the Steering Committee (their information can be found on www.whatcommeats.com). Your continued interest and patience is much appreciated. We will keep you apprised as the plans firm up and anticipate that we’ll call a meeting by late June or early July.
Yours sincerely,
Jeff Voltz
Steering Committee Representative and NABC Project Manager
