Talking Turkey with Butterball

Butterball is synonymous with turkey; however, in the instance of its new feed mill, it’s happenstance that brought U.S.’s largest vertically integrated turkey producer to Turkey, NC.

The Turkey facility was originally intended to operate as a hog mash mill; however, a downturned economy forced Coharie Farms to put its new-yet-vacant mill up for sale. Meanwhile, in 2010, Seaboard Corporation acquired a 50% ownership of Butterball LLC from Smithfield Foods; Goldsboro Milling Company, a Goldsboro, NC-based turkey and hog producer, has held the other 50% since 2006. The new partnership prompted the decision to open a facility to feed the turkeys in Butterball’s Southern division. Though the company has feed mills and operations throughout the South, Butterball’s tom production is centralized in North Carolina, which, unfortunately for feed manufacturers, is an ingredient deficient area.

With the high costs associated with trucking in raw ingredients, a facility with rail access was a high priority. Thirty-five miles down the road from Goldsboro headquarters, the folks in the Goldsboro feed division were familiar with the site and its valuable location on the Carolina Southern Railway Company (CSX) rail line.

“In December 2010, Butterball purchased the mill and contracted WL Port-Land to add storage, steam and pelleting in addition to a rail expansion,” explains Lorenz Falls, Goldsboro’s feed division manager. “This was a fast-track project — our plan was to be up and running in August.”

Mill manager Terry Mercer, who joined Butterball the second week of June 2011, recalls his first week on the job: “When I came on board, we were still in the process of getting [the equipment] installed; construction was underway; and the permits were still pending.” In addition to finalizing the entire project, he says, the mill had to hire and train a group of green employees.

Though there were challenges along the way, the renovation was completed ahead of schedule, a feat Falls attributes to a “fantastic relationship” with WL Port-Land Systems, Inc.

“In the end, our operational ability outpaced our ability to have staff in place,” Mercer jokes. “We were ready to go, but we didn’t have anybody to work it. Our advice to companies trying to make a tight deadline: Don’t forget to get your staff hired so you have enough time to get everyone properly trained before it is go-time.”

Butterball operates five feed mills in three states: North Carolina, Kansas and Arkansas.

An ambitious rail expansion

From the beginning, the Butterball team knew the rail expansion was going to be a trying undertaking, but one that would provide the site with substantial savings on freight and railcar unloading costs. The site, built in 2006, was only meant to accommodate 65-car unit grain trains; today, CSX offers more advantageous rates on 90 car trains. In addition to space constraints, the accommodation of longer trains poses the challenge of a tightening radius, making it difficult to meet the CSX’s specifications for a curved ladder track. Eventually, the site was able to meet CSX’s specifications for a 12-degree curvature.

“CSX engineers helped to design the track to fit within our property boundaries,” Falls explains. “We had to lay out the track two or three times before we received approval. Overall, the track building took the most time and effort.”

Once the track was laid, Butterball had three railcar moving options: CSX offers a locomotive rental program, but it requires employees be sent to CSX school and there is a fee every time the locomotive is rented; Butterball could lease a switch engine and pay the fuel costs; or it could buy a Shuttlewagon mobile railcar mover.

Butterball chose to purchase an oversized Shuttlewagon. Falls explains: “Look at fuels cost vs. what the Shuttlewagon burns —and when you look at all three the Shuttlewagon was the best option. It’s a high capital investment initially, but the cost to operate is much better than the other two options.”