041123 Mississippi Meat Processor Asks for More Money

Oakland, MS - The owner of a $43.5 million cattle processing facility backed primarily with state funds, is having money woes and wants another $5 million, a state lawmaker said.

Mississippi Beef Processors in Oakland has experienced financial problems that led Richard Hall to call a meeting with state officials to seek the additional money until his operation becomes profitable, said state Rep. Bo Eaton, D-Taylorsville.

Hall's plant opened in August, and is scheduled to employ 429 at its peak and process 1,000 head of cattle per day. The plant is 154,000 square feet.

However, mechanical problems have hampered the operation, leading to the Nov.3 meeting, at which the figure of "$5 million," came up when Hall asked for further assistance, Eaton said.

"(Hall's) working capital got low and he made a request that we help him with working capital," Eaton said. "We explained to him, without the authority, we don't have the funds."

State officials have said the $43.5 million plant was financed primarily with a $35 million state guaranteed loan to Hall, of Tillatobia.

However, a report on the Web site of state Auditor Phil Bryant, lists the actual amount of guaranteed state funding at $43.39 million, almost $8.4 million more than officials have said.

Bryant is also conducting performance audits on the Land Water and Timber Resources Board, which funded the facility, and is auditing Mississippi Beef Processors.

"We're looking at it as a performance standpoint as well as the monitoring of bonds that have been issued to Mississippi Beef Processors," said Mick Bullock, spokesman for Bryant. Bullock would not comment further.

Hall did not return a call to his office seeking information on whether there have been layoffs or further delays in production. The plant is supposed to have an $8 million payroll.

Anthony Woods, owner of Oakland One Stop in Tallahatchie County, minutes away from Oakland and just across the Yalobusha County line, had hoped to profit from employees of the processor. He said, as of late, fewer have stopped by.

"I don't see them like we did at first... I don't see any of the office workers," Woods said. "I think it has been a little of a turnover up there."

Hall has not said how much money he put into the project. He has to repay the state over 15 years.

Eaton said Hall was told "he's the one who's got to pay the money back."

Patrick Sullivan, spokesman for Agriculture Commissioner Lester Spell, said he would not speculate on the operation, and read a prepared statement. "The state has made a significant investment in this project and is dedicated to it," Sullivan said.

However, the state doesn't have a program to provide additional funding. "The state is going to do what it can to provide other assistance or other expertise that it can offer," Sullivan read from the statement.

The statement described Mississippi Beef Processors as "a state-of-the-art facility that will provide great economic benefits throughout the state of Mississippi."

Among those present at the meeting last week were Hall and his accountant, plus Sullivan, Spell, Eaton, state Sen. Cindy Hyde-Smith, D-Brookhaven, and a representative of the Mississippi Development Authority, Eaton said. Hyde-Smith could not be reached for comment.

Since the plant is so modern, Eaton said options such as acquiring a partner exist for Hall. Eaton said Mississippi Beef Processors is believed to be the most modern facility built in the United States since the 1970s.

"Anyone who is in that business is always looking for a new facility," Eaton said. "I feel strong that somebody would scoop it up and make it work. I haven't given up on them. I'm very optimistic they can make it work even though they did have a rocky start."

A study by Mississippi State University Extension Service estimated the total impact on annual industry sales at $139.8 million, which includes $91.3 million of processed beef sold to wholesalers. Total employment impact, considering spin-off jobs in supporting industry, will be 1,168 jobs, the study said.

MDA officials have said plant employees could generate an estimated $450,000 in state sales tax revenue. The plant has a 10-year property tax exemption but will pay school district taxes.

Employee wages range from $6.50 to $16 per hour, with the average being $9.15. Employees will receive health insurance and paid vacation.

Hall's family has been involved in the cattle slaughter business since 1964. Most recently it owned Pioneer Beef in Grenada. The plant shut down in 1998 because of outdated equipment. The family also operated Tennessee Dressed Beef in Nashville.

Hall operated Hernando Boneless Beef Co. from 1991 to 1994. For about 20 years the family also operated Hall's Trucking, which has been dormant since 2001, when Hall, 44, began planning Mississippi Beef Processors.

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