CALGARY – With a philosophy that has no patience for inefficiency, Iowa Beef Processors has grown from a small company operating on a $300,000 loan to the largest meat packer in the world.
Established 35 years ago, IBP expanded to Canada in 1994 through purchase of Lakeside Industries in Brooks, Alta. It also has plans to increase its hog processing capability and develop meat plants through joint ventures in Mexico and China.
IBP president Bob Peterson delivered a frank message at the Alberta Cattle Feeders annual convention Jan. 12.
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“We are a company that believes in growth,” he said.
Part of the company plan includes exporting one third of its meat production within 10 years.
Peterson, who worked his way up from cattle buyer to company president, reported IBP had $13 billion in sales last year. Its 33,000 employees kill and process 200,000 cattle and 375,000 hogs every week, providing Americans with a third of their meat supply. In comparison, all of Canada processes about 55,000 cattle per week.
Among IBP assets are 12 beef slaughter plants, seven hog facilities, four tanneries, three cow plants, one cooked beef plant, one prepared food outlet and one processed meat facility.
The move to Canada with the purchase of Lakeside was an easy decision, Peterson said.
Its location in southern Alberta, where about 65 percent of Canada’s cattle are finished for slaughter, gave ample supplies of some of the best cattle in the world. IBP liked the advantages of feed grain, easy access to Pacific Rim ports and most importantly, a good work force led by a superb management team, Peterson said.
IBP won’t buy a company unless a good management team is in place.
Same goals
“As we looked at the management team at Lakeside, we were convinced that they came to do the same things that we did, which is produce a better product for less cost and capture all the value that is in that animal,” said Peterson.
Besides finding value in every piece of an animal that moves through an IBP plant, management wants to lower production costs to better compete against other meats like poultry.
Beef is a high priced food item compared to chicken. Using U.S. figures, Peterson said the price of chicken has risen 47 cents a pound since 1970 while beef went up $1.93.
“If we don’t do something about the spread, we’ll go the way of veal and lamb,” he said.
