Six generations have farmed the now almost 4,000 acres in Clinton, Iowa, that is Naeve Livestock. Fifth generation Ray Naeve, president of Naeve Livestock and vice president of the processing plant and beef brand, Naeve Family Beef, and his wife Marcia Naeve, still live in the original farmhouse built in 1904.
The farm grows crops to feed the cattle purchased at auction and backgrounded in the Tennessee and Kentucky area, as well as other livestock here and there throughout the generations, but the Naeve family has always focused on producing beef.
“We had a few chickens when I was little, a few hogs and one milk cow so we didn’t have to buy milk, but it was no different than any other farm around,” Ray said. “It was just what you did to survive mostly. But there was always cattle here, always.”
In the 1970s, Ray and his father, Allen Naeve, owner of Naeve Livestock, began to concentrate on feeding cattle and developing the farm’s system for producing high-quality beef. In 1994, the Naeve family began another enterprise and got into the trucking business in support of the farm operation. That business, Naeve Inc., still supports the farm, but also hauls dry goods for local manufacturers.
“We’ve grown to a pretty good size in that, and it will actually support the packing plant with refrigerated trailers as well,” said Andrew Naeve, president, Naeve Family Beef.
The Naeve family has always known their farm produced high-quality beef and they’ve always dreamt of selling their own branded beef locally. Two main things prevented them from pursuing the goal of Naeve branded beef. The first was a fear of what it might cost, and the second was availability of third-party packers able to process Naeve’s scale at an affordable price.
Ultimately, Naeve Livestock took into consideration things like the Holcomb, Kan., beef plant fire in 2019 and the affects of COVID and decided to take a closer look at building its own processing plant and what it would take to make the Naeve branded beef dream a reality. Ray added the fact that during COVID, when feedlots were backed up and couldn’t sell their cattle, a processor Naeve had never done business with paid to truck Naeve cattle to Georgia out of nowhere.
“I thought, why are they coming to Iowa, of all the cattle that are out there?” Ray said. “There’s got to be something that’s drawing them, and to truck them 800 miles, there has to be something and it has to be the cattle. That’s when we knew for sure, when nobody else could get rid of cattle. The price wasn’t any better, but at least our animals weren’t getting too big or getting away on us.”
Ray also believes their branded beef, grown and processed right there in Clinton, Iowa, will provide the small town, and other small towns, with a product not always available to cities of 20,000 or less, for whatever reason. Consumers in those situations often need to settle for what they can get at a local butcher shop or retail store.
“They’re going to get a quality product that we think is better than what they are used to,” Ray added. “That’s one reason we think it will be a hit.”
With those things in mind and no doubt about the quality and value of its cattle, the Naeve family decided to really dig into, and seriously consider, building its own processing plant.
“To our surprise, it was more realistic than we thought it would have been on the price side,” Andrew said. “So, we started digging into it further and here we are a month away from opening [official ribbon cutting ceremony was March 5] a plant.”
While the Naeves possess six generations of experience and expertise in raising and feeding cattle, they freely admit to a lack of knowledge when it comes to building and operating a beef processing plant, so they did what savvy businesspeople do, they researched it and found people with the knowledge.
“That was a big part of this project before starting it was finding a consultant to write a feasibility study and give us good guidance,” Andrew said. “Then once we decided to do it, finding the people with the knowledge that can make it successful.”
Naeve Family Beef enlisted Keith DeHaan, PhD, and Kansas City, Mo.-based Food & Livestock Planning Inc., to consult on the project. DeHaan helped with the background research and introduced the family to Rhonda Wulf, now plant manager at Naeve Family Beef and integral piece to getting the plant operational and building a team of experienced people.
Wulf’s background in beef production and processing fit almost seamlessly into what the Naeves are trying to accomplish with their new venture. After receiving her degree in animal science from South Dakota State University, she went back to her family farm to help raise registered breeding bulls to sell and purchase back breeding calves.
“So, I worked on the feedlot side, similar to what Andrew’s [Naeve] family does, for the first 12 years of my career,” Wulf said.
After finishing a Master’s in Ag Business from Texas A&M-Kingsville, Wulf worked on the procurement team of Aberdeen, SD, startup DemKota Ranch Beef. She went on to work on the sales and marketing team with brand development and as director of food safety and quality assurance.
“I learned all aspects of that plant working through those three different roles,” Wulf said. “I left that plant at the end of 2019 and worked with a couple of other smaller startups. One was a plant expansion taken to the next level and one was a startup that had been shuttered for four years and we cleaned it up and reopened it.”
With the feasibility study complete and yielding positive results, key people and financing starting to fall in place, construction and equipment purchase began.
Like any business venture, especially a new startup that entails greenfield construction and heavy equipment, there are challenges to face. Naeve made a specific calculated risk early on that put them in a great position relative to the supply chain issues facing the country. The family put down payments on equipment over a year ago and hasn’t had to deal with construction delays due to shipping delays.
“It was a tough sell to the bank and tough to swallow putting that much money down that far in advance, but since then I’d say a lot of the stuff has increased 50% or more in price, and you can’t get it in some cases, so it’s really paid off for us,” Andrew said.
The plant covers 22,000 square feet including administrative offices and wastewater treatment facility with the processing operations at 15,000 square feet. Approximately 55 to 65 employees will work one shift Monday through Friday depending on the efficiencies found once operations have begun.
“The exact hours and how they’ll flow we’re still working out,” Andrew said. “The fab floor will start a little earlier in the day than the kill floor.”
Operating capacity on the plant is currently set at 50 to 60 head a day. The Naeves had a few reasons for choosing that model. While it’s not ideal in terms of economies of scale, it allowed them to keep the project within the family with no outside investors.
“No. 2 is we wanted to be very flexible,” Andrew said. “This plant can kill and package our cattle, and it can custom process cattle with harvest and packaging. Or we could sell just portion cutting and further processing services like grind, etc., and package. That’s what we really like about the concept. It’s very flexible.”
Currently, all of Naeve Livestock’s cattle would use 60% of the plant’s capacity, which would be ideal, but it might take time to build up the brand enough to do that. The remaining 40% will be for businesses with branded products that cannot find availability for processing. A service that originally kept the Naeve family from offering its own branded beef.
“So, we can supply that service to the industry,” Andrew said.
Naeve Family Beef also built in the ability to expand the plant up to 120 head a day. The kill floor, fab floor and sewage treatment plant can handle 120 head a day as they are now. The only necessary additions would be hot box and carcass cooler space.
“The way it’s laid out it would just be an extension of the building, which would be pretty easy to accommodate,” Andrew said.
Partners of Food & Livestock Planning, Central Confinement Services and Protein Processing Services built the facility and the wastewater system. The facility includes a retail shop to sell the Naeve Family Beef branded meat, as well as other local favorites including fresh vegetables and baked goods from area producers.
Although the size of the plant is relatively smaller, it offers many of the same attributes of larger operations. The plant will be federally inspected, work for BRC certification within a year of opening and have USDA grading for the beef. Naeve will provide employees open kiosk vending with card scanning, and a partnership with Cintas will allow employees to simply scan their card for a vending machine to provide clothing and PPE for the proper department in the right size.
Naeve is covering all the bases by including a hide room just off the kill floor to prepare hides for sale, except for the hide of the first animal run through which will be kept and displayed. The facility also intends to utilize the close proximity of a Darling Ingredients rendering plant to handle its offal.
Naeve Family Beef hired Tom Ryan as its sales and marketing director and tasked him with executing a strategy that will give the brand the best chance for success. Ryan’s education includes an associate of science degree in culinary arts from Johnson & Wales Culinary school in Miami and a Bachelor’s degree in hospitality management from Florida International University.
His work history includes, but is not limited to, managing hotels, working as a chef in the Hamptons, working as a cook in the US Coast Guard and selling meat for various companies such as Niman Ranch, among others.
“Mission critical from the sales and marketing perspective is to launch a branded program and get value for it,” Ryan said.
Ryan will use the six generations of success that come with Naeve Livestock, the minimal footprint created by the overall operation of feeding, production and the feed itself all coming from the same farm, and the processing facility being located a short 15 miles away, to sell. Add that the feeding operation already supplies some of the major packers throughout the country, and he believes success is inevitable.
“I’ve been in the business awhile and there’s a tangible difference between cattle that have been trucked a really long way a couple of times versus cattle that don’t get trucked and aren’t exposed to that stress,” Ryan said. “It makes a huge difference in finished product.”
With a solid knowledge of operating expenses, Ryan has set pricing for custom slaughter customers. Confident in the modeling and belief in the smart people in the company, Ryan said it is still a little scary.
“You just don’t know if it’s exactly correct until we get running,” Ryan said. “It’s just one of those situations where you just try to make the best decision you can and go walk the plank. You can’t get a purchase order until you’ve quoted a price.”
He added that customers have been receptive to pricing as a “work in progress.”
Markets for the branded product include foodservice, retail and direct-to-consumer (DTC). The foodservice channel includes regional metropolitan geographies within a day’s drive from the facility, such as Minneapolis, Chicago, Kansas City and St. Louis, with the ideal target being a distributor.
Ryan will target retailers that fall into a couple of different categories. Independent stores with the need for really good meat, and independent chains where Naeve can go direct. Bigger chains of 40 to 50 stores would be a legitimate call for Ryan too, as long as he could narrow it down to the right dozen or so stores and not bite off more than they can chew.
“The next one is DTC,” he said. “And if we play our cards right, we’ll be able to generate some buzz in the foodservice world with notable and popular chefs that hopefully fall in love with the brand, which I’m expecting they will once they get to taste it.”