Osage Wood Shavings will lose 25% of its business due to Butterball decision

By Neal A. Johnson, UD Editor
Posted 5/6/20

Osage Wood Shavings owner Tim Muenks in Loose Creek said he will lose 25% of his business once Butterball contracts with local growers are terminated.

“Back then, when it was run by …

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Osage Wood Shavings will lose 25% of its business due to Butterball decision

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Osage Wood Shavings owner Tim Muenks in Loose Creek said he will lose 25% of his business once Butterball contracts with local growers are terminated.

“Back then, when it was run by Banquet, a lot of the turkey farmers weren’t really confident it would last, but I didn’t believe that,” said Muenks, who opened his business in 1983. “They’ve had almost a 40-year run, and a lot of families in Osage County have benefitted from growing turkeys. What’s happening now is just unreal.”

Muenks said turkey farmers use his cedar shavings as bedding.

“We cut the cedar and then air-dry it for a year,” said Muenks. “What I offer is not a by-product of some other production. This is the product, so I have a lot of skin in the game.”

For now, Muenks said he has suspended the purchase of additional cedar, since he already has 800 cords on hand. That, along with the sale of unused equipment and a downsizing, may allow him to continue production.

“I’m just hoping to squeeze out a living with those changes, but it’s hard to say how this is going to play out,” he said. “I’m 58, and I don’t want to borrow a lot of money to try to find something else to do.”

Osage Wood Shavings also provides bedding for horse stables and some dairy farmers for their loafing barns. “I’m going to try to hold onto as much as I can,” Muenks said.

When the contracts expire in a little less than three months, there will be some serious questions about what happens next.

Muenks feels for the turkey growers. “They have been tremendous customers over the years, but they’re also friends and neighbors,” he said. “I don’t know how the ones who will be left standing will get by, considering all the other changes going on.”

A few turkey growers sell independently to West Liberty Foods in Iowa, but Muenks said that outfit has already cut 15% of its growers, so those losing Butterball contracts may not find a viable outlet for continued operations.

A couple others grow turkeys for Cargill, but Muenks said if any turkey growers try to move to that company, there will be required upgrades, and contracts will likely not cover much more than the cost of those improvements.

“They’re in a hell of a spot,” Muenks said. “This may be the death knoll for poultry in Osage County.”

In many cases, to make ends meet, these turkey growers also farm other lines.

“Cattle prices are depressed, so they can’t even fall back on that,” said Muenks. “I know I probably won’t even break even on the 30 calves I have this year.”

That concern is shared by U.S. Sen. Roy Blunt.

During a commission meeting last week, field representative Hannah Larrick in a call to commissioners expressed Sen. Blunt's concern about the food supply line. There's no less demand for meat and other agricultural products. There is, though, trouble getting livestock slaughtered and shipped to retail outlets. Several slaughterhouses are shut down due to COVID-19 outbreaks. So they are not buying livestock from farmers at previous rates.

Muenks added he is extremely displeased with Butterball’s decision.

“Corporations don’t have a heart or a soul,” he said. “They don’t care about anyone, and the little guys get squashed. These local farmers were not part of the problem, but when it came time to cut, they are the ones being run out. Butterball doesn’t have much invested in this. All they’ve done is cut 17 damn fine growers. You’d think a company would address where money is being lost. The corporate way of thinking is warped in my opinion.”

So what happens when the last of the Butterball turkeys are gone?

Legends Bank CFO John A. Klebba in an interview published last week said it will be hard to repurpose the turkey buildings for another use, and these growers won’t recoup any of their investment from Butterball.

There may be at least a small measure of relief as Osage County Assessor Jerry Baker told commissioners last week that he's looking into tax breaks for turkey farmers affected by the Butterball, LLC, decision to cancel all contracts with Osage County producers.

"I will reduce the depreciation on those particular buildings ... while they are not in operation," he said. "We have a lot of farmers with turkey buildings. I cannot see that we should be charging them taxes while the buildings are not in operation. I will require a contract to show they're in cooperation with Butterball."

Commissioners fully support Baker's intentions.

Osage County Treasurer Tim Neuner told the UD last week that it is unclear what the financial impact will be to the county due to the loss of turkey operations, but noted that many other related businesses will be impacted, and that will also play a role in taxes collected.