Former Butterball turkey farms being bought for dairy expansion, other ag uses, oil and gas
March 14, 2012
So long, turkeys. Hello, cows.
Weld County ground that has stood idle since the Butterball plant in Longmont gradually shut down is now finding new purpose.
According to an agriculture development consultant, portions of the 5,000 acres of turkey farms that went out of production are being purchased by dairymen looking to expand their herds.
Those producers are expanding their efforts to meet the expected milk demand that comes with the new Leprino Foods cheese plant in Greeley. The Leprino plant in Greeley, which began operations ahead of schedule in October, will be running at full capacity in a couple of years, at which time it will take in about 7 million pounds of milk per day – its current intake is about 1.5 million pounds per day – and it will eventually need about 60,000 additional dairy cows in the region to support those operations.
New dairies are expected to arrive, and existing local dairies are expected to expand.
Tom Haren – owner of Ag Professionals, LLC based out of Longmont – has been at the forefront of those efforts.
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In addition to talking with local dairies about expanding their operations and with out-of-state dairies looking at coming to the area, Haren’s company was hired by Butterball to liquidate its assets – including its turkey farms that are scattered from the Firestone/Frederick area in western Weld County to the east near Hudson and up north to Kersey.
It’s been a success so far, he said, with about one-third of the former production sites having been sold to a half-dozen local dairy operators seeking to expand their herds.
“Our number one priority is to achieve the goal of our client, which is to sell the property,” Haren said. “However, from a personal standpoint, I’d like to see as much of the land stay in agricultural production.”
Out of confidentiality, Haren did not provide the names of the dairymen who bought the turkey farms.
All together, Haren said about 75 to 80 percent of Butterball’s 18 former production sites have been sold or are under contract.
Haren said the access to water on many of the properties – from large water taps or commercial wells – made the properties attractive.
“We’ve received plenty of interest,” he said.
Some of the land not going into dairy production has been bought for grazing purposes or oil and gas development.
Production facilities and other structures were left on some of the sites, some of which are being recycled, reused or scrapped for other purposes, Haren said.
The turkey farms have been out of production for more than three years – dating back to 2008, a year in which Butterball announced a couple rounds of layoffs that affected nearly 500 people.
This past fall, officials with the company announced they would close the plant, putting 350 people out of work.
In explaining the downfall of the Longmont Butterball plant, Stephen Koontz, an agricultural economist and professor at Colorado State University, said the turkey industry a few years back became too aggressive in fighting for its share of the market, producing too much product and selling it too cheap. Demand from abroad that grew exports for beef and other meats wasn’t there for turkey, Koontz added.
At the same time, ethanol demand was driving up the cost of corn, soybean meal and other feed ingredients for turkey producers.
Koontz said turkey producers have become “more disciplined” recently, charging more for their product and tightening up their production – which led to the recent shutdowns at various sites, like the one in Longmont.
And that closure has now opened up an avenue for growth in another sector of agriculture.
“This is just one piece of the puzzle,” Haren said.
So far, the expansion efforts of existing dairies, along with out-of-state operations that have bought land in northeastern Colorado or looking to do so, has led experts to believe the region’s dairy industry is on pace to meet Leprino’s needs. Some estimate that by fall 2012, 10,000 to 12,000 cows will be added to the region – not just in Weld County.