A dozen years after Dakota Provisions began operations in a state-of-the-art processing plant east of Huron, the company is now running at full speed at its newest facility in the West Industrial Park.
Called Dakota Provisions West, it is easing the need for double time, overtime and 10-hour shifts seven days a week that employees were working at the original plant.
“Our (first) plant was built to really handle about 1 to 1.2 million pounds of product and we have been running 1.4 to 1.5 million a week in our present facility,” said Ken Rutledge, president and chief executive officer.
Dakota Provisions West, which is initially employing 85 to 90 workers, is not a slaughter facility. It produces fully cooked, ready-to-eat product.
“This is raw material that is coming from our present facility. It gets there in tubs and gets processed at that (new) facility,” he said.
“We want to get to a point where we take about 80 percent of our raw material and turn it into fully cooked product,” Rutledge said.
When Dakota Provisions first started production in 2005, all of the de-boned meat was sold raw to other companies to make products out of them, he said.
In the past 12 years, the company has slowly moved more raw material into fully cooked material.
“We don’t want to sell raw material. We want to be selling ready to eat, fully cooked product,” he said.
Dakota Provisions, owned by 43 Hutterite colonies in the Dakotas and Minnesota, initially considered building its newest plant next to the adjacent facility east of Huron.
But customers recommended that the new plant be construct elsewhere from the original campus in the event of an emergency, like a fire, that could mean the loss of everything.
A 50,000-square-foot speculative building constructed by Greater Huron Development Corporation was purchased, and a 20,000-square-foot addition was added.
“The addition was for employee welfare, for lunch rooms, locker rooms, restrooms,” Rutledge said.
After the project was completed, weeks of testing and an inspection by the U.S. Department of Agriculture came next. As the tests were conducted, all of the turkey products that went through the process had to be tossed out.
“Last week (of February) was our first official week of full processing at the plant,” Rutledge said.
“Now we’ve been putting product through there over the last three months and testing, but until USDA inspected the facility, we could not sell any products,” he said.
“You’ve got to test to make sure the equipment’s been thoroughly tested, because you have to work out the bugs in any new system,” he said.
The number of employees will reach about 250 within two years as more lines and products are added.
There is one shift for now, with about three million pounds processed per week.
The capacity at the original plant was 1 million pounds, but it was doing 1.4 to 1.5 million pounds. Total capacity will now triple to four million pounds.
Rutledge said the colonies have continued to expand their operations over the last 12 years. At the beginning, they produced 3.4 million head a year. That’s now up to 4.9 million. Dakota Provisions slaughters and processes about 20,000 birds a day.
The lion’s share of the customers for the raw product are in Mexico, the company’s largest export partner. Other customers are in Haiti and Hong Kong and, to a lesser degree, in Canada.
Ready-to-eat products are sold to customers in the United States.
“We have some very large, well-known customers that we make product for,” Rutledge said. “Unfortunately, contractually we don’t talk about any of those folks.
“But I guarantee you if you’re out eating deli product at some of the major deli locations, you’re eating our product,” he said.
Dakota Provisions has competitors in Michigan and Ohio. A small company in Marshall, Minn., produces whole birds for Thanksgiving.
Rutledge said as a rule Dakota Provisions doesn’t offer whole birds for sale, although it does do some fully cooked, deep fried turkeys for Thanksgiving for specific customers as a specialty item.
“You wouldn’t find whole birds from Dakota Provisions out in the marketplace for Thanksgiving,” he said.
Dakota Provisions is unique in terms of its ownership.
“There’s no company in the U.S. that is owned by a group of colonies like we are,” Rutledge said. “That doesn’t exist anywhere else in the U.S.”
Six colonies to the south do produce and market birds for Tyson, he said.
Occasionally, Rutledge fields inquiries from people who ask about the company’s business model, most likely with the intention of copying it.
“More often, we’ll have a grower inquire if they can come market their turkeys with us,” he said.
But the colonies own the delivery rights, and are not interested in taking in more producers, Rutledge said. Also, as the colonies themselves expand, their turkey tonnage will increase.
In any new business, he said it’s imperative that the owners understand that it’s not an overnight process to profitability.
It takes a year or two to build the facility, and then about five more years to get established and develop trust relationships with customers, he said.
“In our case, the fifth year we turned the corner,” he said. “And we’ve been looking up ever since.”
Rutledge and Jeff Sveen of Aberdeen, chairman of the Dakota Provisions board, recently attended the National Turkey Federation Convention in San Diego.
Sveen is the incoming federation chairman and in November will present President Trump with the turkey to be pardoned in a tradition that dates to the presidency of George H.W. Bush in the late 1980s.
It will be a turkey raised on one of the colonies owning Dakota Provisions.
There’s no question that in the last dozen years the company has risen to be a major force in the turkey industry, Rutledge said.
“We’re a dominate player,” he said. “We’re well known.”
Sveen’s national chairmanship, Rutledge said, “shows that we’ve come a long, long way since we started.”
Employees at Dakota Provisions West package fully-cooked turkey bundles in the new facility in the West Industrial Park.