The employee gate at the Premium Protein Products meatpacking plant remained locked in Lincoln's Air Park Thursday, even though it was supposed to be the first day back at work for about 60 people after a two-week furlough.

A similar situation prevailed in Hastings for about 250 hourly wage earners who were idled from Premium Protein's beef slaughter plant there on June 11.

By midafternoon Thursday, a recorded message on the company's Hastings phone said the furlough was being extended there. "Please check back on June 30," the message said, "when we will provide an update on the status of employees."

There is some doubt in the meat industry about the company's future.

A woman who answered the phone in Lincoln said there would be no update Thursday on the local operation, which processes beef from Hastings.

Board Chairman Steve Sands announced the furlough June 10.

Sands cited weak beef demand and other financial pressures and said Premium Protein was exploring "all of our options."

Sands was unavailable for comment Thursday. There was no immediate reply to an e-mailed request for information from Matlin Patterson in New York City.

That private equity provider, known for coming to the aid of distressed companies, provided an infusion of financing to Premium Protein in 2007 and became its majority owner.

In the absence of more solid information, Hastings officials were worried about the possibility of another big employment setback, on top of Smithfield's February announcement that it was closing its Armour-Eckrich packaged meat plant in July and wiping out a local payroll of about 370 people.

John Harrington, a member of the Hastings city council and also a livestock market analyst, said he'd heard suggestions earlier that the two-week furlough might be extended by Premium Protein.

Harrington is hoping that the extended furlough won't turn into something more permanent. "It's one more hit that nobody wants to see happen."

Also watching closely is Steve Kay of the California-based publication Cattle Buyers Weekly.

"They're still officially on furlough," Kay said, "although there are many people who doubt that the operation will restart in its current form."

He was alluding to Premium Protein's efforts to capture market share with an identity-preserved format in which consumers buy packaged meat with labels that show its origins all the way back to the producer.

"I think meatpacking economics have made it very difficult for a plant like that to operate efficiently," Kay said. "It has high operating cost because of its (small) size. And that requires a company like Premium Protein to get a very sizable premium for its products.

"And," he added, "the depressed nature of beef demand, domestically and globally, makes it very difficult to achieve those types of premiums right now."

Kay said Premium Protein appeared to be on a promising track earlier. "They really were in the forefront of having the best technology in terms of trace forward and trace back."

Reach Art Hovey at 473-7223 or at ahovey@journalstar.com.