Wednesday, January 29, 2014

From The Culture Of Complacency To The Culture Of Denial: Governor Daugaard Still Supports Slaughterhouse EB-Five.

     I posted yesterday about our Governor Daugaard's indifference to the question of whether South Dakota's troubles in hiring and retaining teachers is having an effect on the state's economic development ambitions.  I called him complacent.  This morning I'm wondering if "complacent" was the right word to characterize Daugaard's mindset.  I'm thinking "denial" might be a more apt description.  Why the change?  I just looked at a two-day old story in Prairie Business and see that our governor "does not believe the state's financial support for the now-defunct Northern Beef Packers plant in Aberdeen, SD, was a mistake."  Daugaard is further quoted as saying "I think that was the right decision."  Before slapping your forehead in incredulity, you might want to check out the entire story here.  You can also find a deeper discussion of it at Cory Heidelberger's top-notch political blog The Madville Times here
     It's plain old-fashioned human nature to stubbornly cling to decisions that have gone awry, a flaw that just about any business-type will tell you is fatal.  And if Daugaard had said something along the lines of the decision seeming like the right one at the time I could at least give him a pass.  But no, the Governor is standing by the decision from the get-go, blaming the plant's troubles on a bevy of inexperienced investors who didn't have the knowledge and resources to keep the plant running.  That doesn't wash. As I noted here a month ago in my post titled "Slaughterhouse EB-Five", the plant's prospects were dismal from the start.  In that post I called attention to a column I wrote for the Rapid City Journal in 2006 (which you can find here ) where I examined former Governor Mike Rounds' South Dakota Certified Beef program--the driving force behind the Aberdeen plant that was supposed to slaughter SDCB cattle--and found it to be a loser.  This wasn't about inexperienced investors, this was about South Dakota's infatuation with a program that led to millions of dollars of good taxpayer money chasing after the bad money created by a flawed program that wasn't working years before the Aberdeen plant was built.  Given the economic signals that were in plain sight, how Daugaard can characterize the state's financial support as "the right decision" calls his judgement into question.
     In the Prairie Business piece, Governor Daugaard leaves the door open for further state involvement, noting that "state assistance isn't out of the question."  As a business-type myself I'm always in favor of keeping all options open, but on the basis of Daugaard's denial that poor business judgement  went into the plant's development in the first place, along with his lack of understanding of the livestock fundamentals that caused its subsequent failure, I can only hope that Daugaard consults with some actual cattle people before moving more taxpayer's money into this ill-fated venture.  Given the historically low numbers of cattle in the United States these days, I'd be amazed if people in the industry would be confident that 1500 slaughter-ready cattle a day could be found for a facility that needs to kill that many animals to stay solvent.  Fact is, it just can't happen.  Daugaard needs some private sector advisors to clarify the relationship between risks and rewards before committing another dime to this fiasco. 
     
    
    
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf
does not believe the state’s financial support for the now-defunct Northern Beef Packers plant in Aberdeen, S.D., was a mistake. - See more at: http://www.prairiebizmag.com/event/article/id/17584/group/Agriculture/#sthash.zaB4aW3V.dpuf

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