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Slaughterhouses and Packing Plants

IBP and Tyson Fresh Meats: How an Iowa Upstart Rebuilt American Beef Packing

Founded on an SBA loan beside Iowa feedlots, IBP moved meat cutting into the packing plant and reshaped who bought, sold and processed American cattle.

How did IBP start?

At the start of the 1950s, the old Big Four packers, Armour, Swift, Cudahy and Wilson, controlled about 40 percent of the fresh beef trade. Cudahy was the first to move away from Chicago, locating plants near feedlots. Iowa Beef Packers followed the same logic more boldly.

The Living History Farm account says the company was founded in 1960 by Currier Holman and A. D. Anderson, with $300,000 from the Small Business Administration rather than a traditional bank. Its plant at Denison, Iowa, sat near large feedlots and cheap energy. Encyclopedia.com dates the first plant to 1961, so sources differ by a year.

What is boxed beef and why did it matter?

IBP's plants used single-floor layouts with conveyors to move carcasses, and the beef was refrigerated immediately after slaughter, which reduced shrinkage from dehydration. The biggest change was boxed beef: shipping cut meat in boxes instead of whole carcass sides.

Executive Dale Tinstman said it made sense because chilled sides wasted space in trucks and rail cars. The change also matched what supermarkets wanted, as women entered the workforce in larger numbers, home freezers spread and see-through plastic packaging appeared in the 1960s.

The Key to IBP's Success

IBP's success came from moving the work to where the cattle were and doing more of it at the plant. Rural plants lowered costs, automation sped the line and boxed beef saved freight while giving supermarkets what they wanted.

The same model had costs. The record includes strikes, fines and pressure on small cattle operators.

  • Location: plants stood near large feedlots, so cattle were bought directly and not through terminal stockyards.
  • Plant design: single-floor, conveyor-based plants refrigerated carcasses immediately after slaughter.
  • Boxed beef: shipping cuts rather than sides saved space in trucks and rail cars and suited supermarkets.
  • By-products: IBP turned former waste products into saleable goods, according to Living History Farm.
  • Financing: the original plant was funded by a $300,000 SBA loan rather than a traditional bank.
  • Costs to note: a violent 1969 to 1970 strike at Dakota City, a record $2.6 million OSHA fine over unreported injuries, and small cattle operators squeezed out of business.

Growth, Occidental and the world's largest packer

By 1969 IBP ran eight Midwestern beef plants. It renamed itself Iowa Beef Processors in 1970 and by 1974 was the world's largest beef packer, according to the Encyclopedia.com company profile. It entered Texas in 1975, the Pacific Northwest in 1976 and opened a major plant in Finney County, Kansas, in 1980.

Occidental Petroleum bought IBP in 1981 and sold 49 percent of the stock in 1987. The name was shortened to IBP after the company moved into pork in 1982. At the time of that profile it operated 16 beef and pork plants with sales of $9.1 billion and about 23,000 employees, figures reported there.

Antitrust, strikes and fines

The company's rise drew legal and labor conflict. A 1969 antitrust suit blocked its acquisition of Blue Ribbon Beef Pack, and a 1970 consent decree barred new slaughter plant purchases in four states for ten years.

The profile also lists a violent strike at Dakota City in 1969 and 1970, a New York bribery scheme that led to a 1973 indictment and a $7,000 company fine, Robinson-Patman Act violations and the record OSHA fine. Living History Farm adds that new packers like IBP drew labor strife and environmental fines.

How did IBP become Tyson Fresh Meats?

Tyson Foods acquired IBP for about $4.4 billion in 2001, according to a Tyson company history. Living History Farm dates the purchase to 2002, so sources differ. Either way, Tyson became the largest of the new Big Four beef packers, and the beef business now operates as Tyson Fresh Meats, which Wikipedia covers on its Tyson Fresh Meats page.

For the cattle side of the story, farm.FM covers ranching and cattle feeding, and a farm.FM story about Iowa feedlot country follows the same region.

Timeline

  1. 1960Iowa Beef Packers founded by Currier Holman and A. D. Anderson (one source says 1961)
  2. 1969Runs eight Midwestern beef plants; antitrust suit blocks Blue Ribbon deal
  3. 1970Renamed Iowa Beef Processors; consent decree issued
  4. 1974Becomes the world's largest beef packer
  5. 1980Opens a major Finney County, Kansas, plant
  6. 1981Occidental Petroleum buys IBP
  7. 1982Moves into pork; name shortened to IBP
  8. 1987Occidental sells 49 percent of IBP stock
  9. 2001Tyson Foods acquires IBP for about $4.4 billion (one source says 2002)

Frequently asked questions

Who founded IBP?

Currier Holman and A. D. Anderson founded Iowa Beef Packers in 1960, according to Living History Farm, with a $300,000 Small Business Administration loan. Encyclopedia.com dates the first Denison plant to 1961.

What is IBP known for?

IBP is known for popularizing boxed beef, shipping cut meat rather than carcass sides, and for building large single-floor plants near feedlots. It became the world's largest beef packer by 1974.

Did Tyson buy IBP?

Yes. Tyson Foods acquired IBP for about $4.4 billion in 2001, according to a Tyson company history. Another source dates the purchase to 2002.

Where was the first IBP plant?

The first plant was at Denison, Iowa, spelled Dennison in one source, near large feedlots and cheap energy.

Sources and further reading

Profiles are compiled from public sources and reviewed against them. See our editorial policy to suggest a correction.

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