Salisbury, Md.-based Perdue Farms acquired Sioux Preme Packing Co. in 2015. Originally, Sioux Preme operated its harvest facility in Sioux Center, Iowa, and its fabrication down the road in Sioux City. The two facilities did and still operate as a single business under the name Perdue Premium Meat Co. (PPMC). However, the Sioux Center harvest plant finished an expansion of roughly 55,000 square feet at a cost of approximately $29 million.
“Prior to the expansion, we had a facility of 125,000 square feet, that included all buildings, wastewater and the maintenance shop. Now we have over 180,000 square feet and plenty of room to grow,” said Rick Getman, director of operations, a position responsible for both facilities.
The Sioux Center addition added about 50 employees to bring the total for both facilities to about 430, including sales, non-harvest and fabrication positions. With the new square footage, the Sioux Center location carries about 60% of the employees while the remainder work in Sioux City.
“We didn’t increase production. We increased capabilities,” said Gary Malenke, senior vice president of pork operations, regarding the capacity of the facility to continue to harvest the same number of hogs – 4,500 head per day (475 an hour). “We’re going to further manufacture, package and customize our products beyond what we’ve been able to do in the past with our state of the art equipment and innovative new case-ready offerings,” Malenke added.
Production includes pork for the Niman Ranch and Coleman Natural Foods brands, as well as production under the Sioux Preme name for its commodity-based business.
The Niman Ranch and Coleman Natural Foods brands possess certain, popular attributes that today’s consumers look for. Attributes such as organic, antibiotic free and humanely raised, among others, are label claims the Sioux Center and Sioux City, Iowa, facilities source and produce with an understanding of the quality necessary and the extra time and effort it demands. The plants are Certified Organic, Certified Humane, Animal Welfare Approved, American Humane Certified, Global Food Safety Initiative Certified (GFSI) and Sioux Center is 100% wind powered.
The facility now breaks carcasses down to sub-primals, packing some case-ready products including ground and chops rather than sending all carcasses to Sioux City for fabrication post-harvest. Also, the Sioux Center facility can send ham and bacon directly to customers. The expansion increased efficiency and productivity, Malenke said.
“Yields on bellies, for example, was a meaningful part of looking at how to make this thing work economically, other than just spending $29 million,” Malenke said. “So, it was the case-ready operation and then product yields that were really a couple of the key triggers.”
Frontmatec equipment and machines dominate the landscape of the new addition to the facility. PPMC and Frontmatec made worker safety a priority in the design of the plant. Cages hold the saws and other dangerous equipment within what Getman called a “fortress” system. The cages require several keys for entry in an intricate lock-out-tag-out system. The entire addition is interlocked. If any one part of the line is not running, no part of the line is running. The relationship between PPMC and Frontmatec transcends the common business of a supplier selling and a customer purchasing.
Getman and Malenke used Frontmatec’s water jet belly cutter to showcase one way the expansion has multiplied efficiency, as well as customer satisfaction. The machine uses imaging coupled with pre-programmable specifications according to customer needs, then trims the belly with a stream of high-pressure water. Traditionally workers trimmed bellies by hand using personal judgment and some heavy lifting. Now, the water trimmer stays accurate to customer spec and creates less giveaway. The technology also sorts bellies according to weight as well as width.
Automation in the expansion gave Perdue Premium a different kind of advantage in terms of labor. There still needs to be people manning the new automation, but they don’t need as much in-depth training to complete the assigned tasks.
“In the past, loin pulling would take a highly skilled person to separate the loin from the belly, but with this new equipment, people with minimal training can align meat going through the machine. The machine takes over and does the pulling and cutting. It is much safer and certainly less physical than the manual process we used to use. It is a very user-friendly job,” Getman said. “The water jet belly cutter is really the same on the front and back end so within a few minutes employees can understand how to run the machine.”
“We are offering more diversified jobs as well, focused on technology and computers,” Malenke said. “If you thought about an all-around maintenance guy that could do multiple tasks, this is different. It’s not a big tool pouch on the side to do the job. It’s about maintaining automation.”
“To see the mechanics work is actually pretty impressive,” Getman added. “They know what they’re doing. There’s no doubt they’re fully trained. That’s what I notice.”
Perdue Premium’s expansion involved more than just making production and fabrication more efficient and generating higher yields, it considered the company’s and its employees’ futures and well-being.
A new cafeteria, new locker room and open restroom design with a no-touch, no- waste process facilitates better hygiene and rounds out the additional square footage of the expansion. A basement underneath the cafeteria provides dry storage for supplies, as well as water support for cleaning and machinery such as the belly cutter. A vast tract of company-owned land adjacent to the addition is also there for future expansion.
Safety and well-being
While production efficiencies, yields, automation and modernity show brightly from PPMC’s new building expansion, the company rooted the design and execution in worker safety from the beginning.
“I think that was as important as anything we needed,” Getman said. “The room design was definitely safety driven. If you look around the whole perimeter of the room, there is no forklift traffic. Instead, you have controlled areas of forklift traffic by design. I’d say safety was probably number one and productivity was number two.”
Also, the automation and new machines allow for improved ergonomics.
Malenke added worker safety has seen an evolution similar to many aspects of the industry and the industry as a whole.
“What we allowed people to do 20 years ago is not acceptable today,” Malenke said. “This really raised our game in providing a safe environment for all our associates.”
Malenke and Getman hold monthly meetings with small groups from the various departments within the company. Every meeting addresses personal safety first. The pressure to maintain a safe work environment for everyone involved starts at the top and works its way down.
“We tell them, ‘if your supervisor is getting on you because you don’t have your mesh glove, your personal protective equipment on, it’s my fault, because I’m the one getting on them. I want you to go home to your families safe every night,’” Malenke said. “I might send them home tired, but I absolutely do not want to send them home injured. These are hard jobs and we do everything we can, to be as proactive as we can be to reduce risk as much as possible. This is something that is always top of mind for me and the management team. Protecting our people is priority number one.”
Animal well-being at PPMC runs parallel to worker safety. Over the years, Perdue has led the way for animal handling and well-being, specifically in its chicken production. Now, the company’s Niman Ranch and Coleman brands, along with Sioux Preme’s dedication, work well under the Perdue banner of brands.
“Perdue led the way on antibiotic-free poultry production and has grown to be the largest organic poultry producer in the country,” Malenke said. “So really what they were doing on the bird side we were doing on the pig side. So that really made us a good fit.”
Sioux Preme, before the Perdue acquisition, built its live hog barn in 2004 and used Temple Grandin’s design parameters, including specific angles and human walk areas to keep animals calm. From there animals move to the controlled atmosphere stunning (CAS) system. Added in 2006, the CAS system began operating in 2007. But Malenke said the “most valuable, priceless,” aspect of the facility’s animal handling on the live side is a long-term supervisory team consisting of members with 15-plus years of experience each in humane handling.
The facility also features video monitoring, regularly reviewed by a third-party. “This is unique in pork processing and adds an important step to ensure all pigs at the plant are treated with care,” Malenke said.
Attributing to success
PPMC’s unique ability to segregate carcasses and products throughout the process from harvest to shipping multiple times on a daily basis separates it from others within the pork processing industry.
“That’s our niche,” Getman said. “That’s what we do different.”
Changeovers to different products or brands take about 10 minutes and are done according to a specific piece count. They occur four times a day counting the first run at the beginning of the day. Workers pull the product once its run is finished and place a new empty container for the new run, make sure the correct labels are ready then start the next brand or product.
Carcasses in the cooler waiting for fabrication might look the same to the untrained eye, but they enter the cooler segregated based on the brand or type. Each has a unique series of numbers stamped on the side to identify the product and brand it’s meant to be used for and the farm that it came from.
“It’s not traditional because traditional, large-scale, modern production is going to say that 10 minutes is too costly,” Malenke said. “In our business, customers that appreciate the specialty items we provide ultimately say the niche is important enough that they’ll pay a little more. Whether it’s because of animal welfare, animal tracing, attributes of Niman Ranch, or attributes of Coleman, it makes a difference to our customers.”
Those Niman Ranch and Coleman brands represent roughly 50% of the business Perdue Premium does out of the Sioux Center and Sioux City facilities. The other half is a combination of custom processing and commodity business.
“Just to gain some understanding, as we’ve grown our internal brands, Niman Ranch and Coleman and our custom processing customers have grown, we’ve shrunk the Sioux Preme business over time because there are only so many shackles. We’ve just gone to more of the niche and become less dependent on the commodity business.”
Attributes and anticipation
With the growth of the niche business comes a growth in the radius PPMC will travel to get the specific pigs it requires. The majority of producers doing the necessary things to comply with the program(s) needed to fabricate PPMC’s products operate throughout the Midwest.
“We’re bringing in specialty pigs from Northern Missouri, we’re bringing in specialty pigs from South Dakota that we might not have 20 and 30 years ago when it didn’t make sense to go that far from home to get a pig,” Malenke said. “But when you start looking at these niches, they’re not for everybody, and not every producer is going to want to do the things they have to do to comply with the program. So, the net has widened and we’re circling a wider radius than we were 25 and 30 years ago.”
Processors must anticipate the market to make a successful niche business. Decisions on whether to commit to producers must take place months prior to exchange of goods and be based on probable demand.
“Take non-GMO for example, the piglet is born then somewhere around five to six months later, it’s going to be a market animal and walk in this door,” Malenke said. “Well, you can’t just create more of those because someone wants to buy more non-GMO product today. You have to anticipate and have some structure and thought going into how much you’re going to grow that business. So, you’re kind of trying to out guess what the customers do to some degree.”
The front end of the niche business involves the relationships between PPMC and its producers, the farmers that provide the specialty pigs, and how the processor meets their wants and needs. When Niman Ranch or Coleman Natural asks a producer to make the commitment to produce pigs a certain way, the producer needs to know it can count on the processor to buy them.
“They are not going to sign up and say, ‘Yes, I’ll do all these extra things and have all these extra costs and then I’ll cross my fingers and hope you purchase something,’” Malenke said. “It doesn’t work that way.”