Feenstra calls for energy independence, but opposes Eminent Domain for pipelines
Need for affordable housing highlighted
Eagle Grove, IA – Congressman Randy Feenstra and state Senator Dennis Guth, both Republicans representing Iowa’s 4th District, visited the Prestage Foods plant in Eagle Grove on Thursday for a ’round-table discussion with Prestage Farms Sr. Vice President John Prestage, and subsidiary Prestage Foods CEO Jere Null about the challenges facing the major local employer. The group also heard from Dr. Jesse Ulrich, President of Iowa Central Community College.
For Feenstra, the stop in Eagle Grove was the final stop in a tour of area locations, where at his previous stop he was joined by Republican Senator Tom Cotton of Arkansas at McLaughlin Family Companies in Scranton. Guth was also in town for the Wright County Fair.
The meeting had begun a little early as I arrived, and although it was open to the media, I was the only journalist to show up. As I was ushered into the second floor meeting room, one wall lined with glass and facing the open atrium, I was struck with a sense of transparency that seemed almost ironic. It seemed odd to me that here were some of the most influential decision makers affecting the local community, talking to each other in a conference room that could easily be locked to me. But instead they had no problem with a journalist coming in to join them, and sitting in the room for their discussion. Normally in such a setting, that doesn’t seem to be the case.
As I joined the meeting in progress, the discussion I came into began with Representative Feenstra asking John Prestage, Sr. Vice President of Prestage Foods parent company Prestage Farms, what Iowa’s advantage was over North Carolina, where he’d come from, was. Why, Feenstra essentially wanted to know, did Prestage set up such a large operation here in Iowa? The answers, essentially, were corn, climate, and acreage.
North Carolina doesn’t have nearly as much feedstock as Iowa produces, and doesn’t have the kind of acreage needed to dispose of the animal wastes safely and effectively. In Iowa, Prestage explained, you can have a waste lagoon and then apply the waste to the fields, and improve the yields, while keeping the nitrogen levels in the water system under control. In North Carolina, it’s much hotter, so the lagoons are more volatile, more expensive, and with less planted acreage disposing of the waste is much more expensive, and less useful.
Feenstra asked where the company saw their market going in the future. “I think it’s only going to grow, with exports,” Prestage responded. “Places where it’s too expensive to do this will go away,” Null added, pointing out that the one time centers of slaughterhouses in the big coastal cities on the east and west coast like New York and Los Angeles are already shutting down. “So, the most efficient place for this business to exist is in this upper midwest here,” Null continued, “and that’s where it’s going to exist.” Null pointed to where plants had been constructed in the past five years, noting that a plant had been built in Michigan, a plant built in Sioux City Iowa, “and you saw this one built” here in Eagle Grove, Iowa.
Feenstra asked what obstacles the company faced, and what Congress might be able to do to help them employ more people. “I promise you, our housing is a major deficit here,” Prestage responded, “very, very major. It would be great if you had affordable housing,” adding that he thought the area could use affordable housing for another five thousand people.
“Our country was set up on, we have private land, and this is what I bought, and I should have the right to do what I want with it.” ~ Representative Randy Feenstra
But the issue with making that happen, as Null explained, is “you just can’t build in these rural areas for less than $225 to $250 a square foot.” And people can’t afford that, Feenstra observed. “Exactly,” Null replied, “It’s a catch 22.” Null went on to explain that the cost of childcare and rent in Eagle Grove are also issues that need to be overcome. “It’s a problem because nobody comes into these rural areas and builds,” Null went on to say. “Renovations happen. But lack of new construction is what limits growth.”
Of the people Prestage has brought to the area, Null said, “they come here and they like it. They like Fort Dodge. They like Eagle Grove. They like Webster City. And I believe we could attract more people here if there were housing alternatives. Our people, honestly, make pretty good money.” The problem is the lack of housing for them, Null concluded.
Dr. Ulrich asked if there was any sort of government program, such as through the USDA, which Congress could potentially modify to help bring down the cost of buying a house and incentivise workers to buy rather than rent. Feenstra gave examples of some programs that had been done but raised the concern that the cost of building is still prohibitive, and that would make such programs ineffective. And Prestage pointed out that renting won’t work either. Noting that the guideline experts recommend spending on housing is 30% of one’s income, he calculated that “a guy with no experience, he can make 50 grand a year here. So 15 grand a year on rent, and utilities, that’s like 12 hundred a month just on rent. That’s not gonna work,” because rent is too high.
“I do think on the federal level we’ve got to rein in the inflation,” Dr. Ulrich chimed in, noting that in Webster County for example housing costs had gone up by 19% in one year. “So, the city and the county hate it when I say it at meetings, but we’re missing the ‘and’. We need quality AND affordable housing. And the other thing that our communities don’t like is that the only way we can do quality and affordable housing is when we do multi-family type of housing. So condos, apartments, duplexes. And then communities don’t necessarily value that as much as a single family home.”
The business leaders spent a good deal more time talking about how positively people who come to the area respond to the area. One highlight that was discussed was the positive impact of the Iowa Central system, including Eagle Grove’s Career Academy, with Prestage and Null both praising the quality of the workers they’ve hired out of the college. Prestage also praised the state government for being business friendly, and for making the filings and bureaucracy easy to work with.
After the meeting, being the only journalist who’d shown up, I had the opportunity to interview Feenstra, and then to interview Prestage and Null, at length.
Asked what he felt was the number one thing he took away from the meeting’s discussion that could help companies like Prestage, Feenstra responded, “well, the big thing is that right now we have inflation that’s out of control. So how do you start controlling inflation? First of all it’s your energy costs. Energy cost is hitting everybody. So we have to make sure we have our energy coming from the United States. In order to be energy independent. And that’s what we need to work on. We have biofuels that can do that.”
“Number two,” Feenstra continued, “we’re spending. And we put 4.8 trillion dollars into the system, which has really caused this inflation. So there’s so much cash in the system. So we can’t spend any more. And that’s the next step, is that we’ve gotta start getting into strict budgeting practices, that we don’t spend more than we take in. That will slow down the inflation very quickly. Instead of always waiting for the Fed I think there’s some things in government that we can do.”
Asked how we shake off OPEC to get energy prices under control, Feenstra reiterated that the answer is becoming energy independent. Making energy in America, including biofuels, means “you’re less reliant on OPEC,” Feenstra said. “That’s how you start going down that path.”
Next I asked Feenstra about his views about the carbon pipelines. Which are one of the side effects of one such biofuel industry, ethanol. And I had a complex question to ask. “Now here in Eagle Grove we have Corn LP just down there,” I began, referring to Goldfield, “and so there’s a very strong likelihood that a carbon pipeline is coming through our area. And there is, I will just tell you, outright fear among some of the people who live here. Some people understand the science of it, and are concerned about the dangers. Others are worried about losing their land to eminent domain. But if we’re going to move to biofuels, larger, and help the farmers with that, then how are we going to deal with the problem of climate, and carbon? And these pipelines which, I mean, it’s not an issue of if it fails, but a when issue, with any kind of a machine, or anything that human beings make. And so what I think a lot of people are wondering is, what’s the maintenance schedule? How do we get out ahead of those things before they happen?”
“So you have an industry that wants to look at putting a pipeline in,” Feenstra replied, “but you also have private landowners. And to me, in any business, they have to work together. They have to work it out. So if this company over here wants to go across somebody’s land, it’s like ‘what is it worth’ or if I don’t want you to go through my land then you’re going to have to go around my land. So those are the discussions that I believe have to happen. That it’s a collaborative effort between the land owner and the business itself.”
“And so you’re not in favor of eminent domain, then, is what I’m gathering from that answer,” I asked next.
“Well, no. I think, again, our country was set up on, we have private land, and this is what I bought, and I should have the right to do what I want with it.”
After speaking with Congressman Feenstra, I moved across the lobby to talk to Prestage executives John Prestage and Jere Null. We discussed the issues of housing and transportation. Prestage pointed out that the plant utilizes what local public transportation exists, while Null noted that a lot of employees carpool. We also discussed the possibility of finding affordable housing for Prestage employees in overlooked small towns in a roughly 50 mile radius.
But the elephant in the room was what was to be done with housing in Eagle Grove, the city closest to the plant. Pointing out in my question that there are business and community leaders in Eagle Grove who are open to the idea of developing housing in Eagle Grove, but that the perception that the community prefers single family homes over multi-family developments appears to be an accurate one – because the residents of the city want to protect the quality of life here and keep the area safe – I asked how they hoped to address these concerns.
“We’re not land developers, apartment developers, that’s just not us,” Null responded, “we’re in the pig business. But obviously we would like to see development because we think it’s holding back all the businesses’ ability to grow. Now whether that’s multi-family or whether it’s single, I think it ends up being mixed. Because there’s a whole range, even within our business, of professional, and staff, and mechanical, and entry level. And you need housing to match a lot of those levels.”
“I think though that in the case, say, of here in Eagle Grove, you can’t escape entry level housing. And here’s why. You get somebody that does relocate to the area, very often with their children… If they land in Fort Dodge or they land in Webster City, or they land somewhere else and those kids start school they may never end up in Eagle Grove. Which might’ve been the community for them, but for lack of that kind of housing. So I think you need entry level housing. And then you hope that people grow into the next level, and then the next level after that.”
Asked if they felt the legislators had really heard their concerns, Prestage responded, “You hope so. You hope they’re pro-business for the state. Because obviously if this business folds then all of these voters and these taxpayers will be gone. But you know, you have to do it on your own. You can’t think of them that they’re going to do it for us, but we expect them to help us when they can with doing business. All we want to do is stay in business. Keep the jobs coming.”
