National Beef purchase with local ties underway

A member of Brawley’s Brandt family is in the early stages of attempting to reopen the shuttered National Beef plant to operate a niche-market processing facility that would return jobs to the Valley and restore local ownership to the former Brawley Beef.

Eric Brandt, whose One World Beef LLC is in negotiations to buy the facility, made the announcement Tuesday in a joint statement with National Beef.

“We are very excited about this. There is a long way to go,” Brandt said. “A lot of stars have aligned to get us to this point and it’s certainly going to take a lot more to make this come to fruition. We’re going to be asking for a lot of community support.”

National Beef announced the closure of its Brawley plant in February 2014, ceasing operations last spring and laying off around 1,300 workers directly and indirectly employed by the plant.

If One World Beef is able to acquire the facility, Brandt said it will be “good for the community, good for the cattle feeders.”

Brandt stressed that the negotiations are far from over, and One World Beef and National Beef are in the initial stages of their deal.

“We’ve got some work to do,” he said.

The city of Brawley was hit hard by the closure of National Beef, removing a major source of sales tax revenue through the purchasing power of employees, as well as a significant reduction in revenue tied to water and wastewater service.

“It is still in the inception phase, but it’s great to see a company with local ties come down and potentially provide this opportunity not only to Brawley, but to the entire Imperial Valley,” Brawley Mayor George Nava said Tuesday.

Last year’s closure announcement was met with shock by the community as local government agencies, area cattle feeders and ranchers rallied together as an ad hoc committee to build an incentives package to entice National Beef to stay. National Beef had said in its initial announcement that the closure was due to a decreasing number of heads of cattle to process.

Tuesday morning’s announcement came with similar surprise in some circles, with a few Brawley and county officials seemingly caught off guard.

That was likely the point, though.

Brandt said he had not yet spoken with many of the local city, county and other governmental figures, but that he is announcing the purchase negotiations as a way to bring all the parties to the table.

Brandt is hoping to obtain the same if not more of the incentives local government officials offered to National Beef.

“We have to go public because we need those government agencies to come together and bring these jobs back,” he said.

Proposed measures in February 2014 included a commitment from the local cattle industry to increase the heads of cattle per year over the next couple of years. It was expected that cattlemen would be able to expand their heads of cattle to 481,523 for 2014 and 500,000 for 2015, according to a proposal made public by the Imperial County Board of Supervisors.

Ranchers also expected to be able to increase the supply by another 10 percent in 2016, according to the proposal documents.

To address utility costs, according to the incentives package, Imperial Irrigation District and the city of Brawley proposed rate reductions. The IID planned to provide $2.1 million in savings per year. The city of Brawley proposed to reduce National Beef’s water rate and utility tax, which would have saved the beef plant about $700,000 a year, according to the documents.

“We hope that those incentives and those packages that were put together, and some that didn’t quite make it in the deal, will come to fruition,” Brandt said.

It’s not yet known whether those packages would be the same today.

Imperial County Supervisor and board Chairman Ryan Kelley, whose district includes the beef plant, was excited as he made the announcement to the board Tuesday morning.

“I hope it succeeds and brings back beef processing to Imperial County,” he said. “It can bring a lot of positive for the city and for the entire county.”

When contacted Tuesday morning, Brawley City Manager Rosanna Bayon Moore had not seen the joint press release issued by One World Beef and National Beef. Yet Nava, a member of the unsuccessful ad hoc committee, did get the chance to speak to One World Beef officials.

“We’re not sure what they’re asking for from the city, county or IID. I think this would be a good time to reorganize the ad hoc committee so we can rehash some of those items,” Nava said.

Although One World Beef does do business out of Buena Park, Eric Brandt was raised in Brawley and is still managing partner in Brandt Beef. Brandt Beef is a product line from Brandt Co., a cattle ranching operation in the Northend. He owns One World Beef with his wife, wholly independent of the family business, he said.

It’s as if the plant’s ownership would be coming full circle with One World Beef’s entrance on the scene. Eric’s Brandt’s father, Bill Brandt, was among a consortium of local and regional cattle interests that opened what was known as Brawley Beef in 2001. The facility was sold to National Beef in 2006.

The Imperial Valley Economic Development Corp. has been working with both National Beef and Brandt for some months, according to IVEDC’s Tim Kelley.

Like the many projects IVEDC works with, Kelley said, he is helping One World Beef investigate and secure funding options.

Brandt would not talk about the purchase price of the plant.

The cattle industry, and as a result the beef-processing industry, has been hit hard in California in recent years as drought conditions continue.

Most recently, experts are predicting beef prices could escalate over the summer as less feed results in ranchers rushing to slaughter and process their younger heads of cattle. That means fewer cows in California.

As Brandt shoots for a late 2015 opening, he acknowledges the number of cattle to process will be limited as the supplies just aren’t there and as ranchers, or potential customers, continue to work with other processors.

Still, Brandt is looking at a business model that includes slow, steady growth and likely fewer employees to start.

“We’re looking at more sustainable long-term growth,” he said.

“We don’t want to be here five or 10 years and have the same situation,” he said, referring to the closure of the facility and its effect on the community.

Brandt added this is a model looking 30 to 50 years down the road.

He said One World Beef’s business model is unique in that it focuses on niche markets of which Brandt Beef is part, with its hormone-free beef.

Under One World Beef, the Brawley facility would focus on custom beef processing requiring special techniques and independent processes specific to the various companies it would contract with.

One World Beef now serves as a sales and marketing agency for specialized beef producers in the U.S. that also export to world markets. The company also has marketing contracts with international meat producers for import into the U.S., including a Dutch veal producer expecting to enter the market in the near future and a Japanese company importing prized Wagyu beef.

Although the cattle industry as a whole is still struggling, some hope this will signal resurgence locally and are offering assistance.

“As the chairperson of the Assembly Committee on Jobs, Economic Development and Economy, I stand ready to help,” said Assemblyman Eduardo Garcia, D-Coachella, in a statement.

Kelley added: “The cattle industry has continued on in the last year, even with National Beef closed, but it would be much better to see them grow.”

This story originally appeared in the Imperial Valley Press, April 15, 2015.