(Radio Iowa) – The developer of a new beef processing plant near Council Bluffs says they are moving into the third round of selling units to the Co-op which will supply the cattle. Chad Tentinger says he hopes they will be able to start construction next year.

“We are waiting to see that heifers are being retained, so we know that our herd is being built back,” he says. “So right now it looks like we’re starting to see that heifer retention, and as we see more and more that we’ll be able to make a business decision come next spring to break ground or not.” The Co-op will supply the beef for the Cattlemen’s Heritage processing plant using a different model than what is used now by the major processors.

“And we sell them based on the board of trade. The C-M-E (Chicago Mercantile Exchange). The problem with it is, over the last decade, the C-M-E has gotten further and further away from the fundamentals, and today it doesn’t trade on fundamentals. It trades on computer algorithms. It trades with no people in the pits anymore,” Tentinger says. Cattlemen’s Heritage will pay for cattle based on what’s called the Boxed Beef Cutout pricing model, which he says will provide and opportunity for a share of profits to go back to the cattle producer.

Tentinger says he isn’t trying to put the big processing plants out of business, he just wants to provide cattle producers like himself more options. “That’s my belief system. I think we need more options, more regional with producer involvement, so that we can get a better deal and receive more value,” Tentinger says. “But the only way we can receive more value for our product, is take ownership in the plant.” Tentinger says it’s a new way to bring more of the profit to the producers.

“The Co-op will own 20 percent give or take, but 20 percent of Cattlemen’s Heritage true ownership. So when somebody buys, for example, somebody buys a thousand shares, they have to deliver a thousand cattle every year,” he explains. He expects to have three rounds where they sell units, and the cost rises for each round.

The processing plant will source cattle from Iowa, Kansas, Minnesota, Missouri, Nebraska and South Dakota and is designed to process two-thousand cattle daily for an annual total of 525-thousand. Tentinger says it not only supports family cattle producers, but will also stimulate the local economy by creating 800 direct jobs and 34-hundred indirect jobs.