Sector News

Cargill expands animal feed business with new acquisition

August 4, 2017
Food & Drink

MINNEAPOLIS, MINNESOTA, U.S. – Cargill has reached an agreement to acquire the animal feed business of Richmond, Virginia, U.S.-based Southern States Cooperative, Inc. Cargill expects the move will help it better serve its customers in the eastern United States. The transaction is expected to close within 90 days, subject to customary approvals. Terms of the deal were not disclosed.

Cargill Feed and Nutrition said the acquisition is an important part of its growth strategy and its commitment to the U.S. animal feed industry, strengthening its distribution, and go-to-market capabilities in the important Southeast, Mid-Atlantic and Northeast regions of the United States.  

“Customers are at the heart of everything we do, and this agreement will allow us to better meet their needs in this key geography,” said Adriano Marcon, vice-president and group director, Cargill Animal Nutrition. “I’m especially enthused about this partnership because it is clear that we share common core values, including a positive work environment and a commitment to delivering for our customers.”

Under the agreement, Cargill will purchase the assets of Southern States Cooperative’s animal feed business, including seven feed mills and an important portfolio of products, brands and customer and supplier relationships. The other segments of Southern States Cooperative’s business — retail, farm supply, energy, and agronomy — are not part of the transaction.

“Southern States is excited to partner our feed manufacturing business with Cargill,” said Jeff Stroburg, president and chief executive officer (CEO) of Southern States Cooperative. “It’s important to note that while Southern States will no longer be making feed, we are committed as ever to provide feed to our members and customers. We’re excited about the opportunities this partnership will bring to all stakeholders as we work together to grow the feed business in our marketplace.”

Upon closing this transaction, Cargill will integrate complementary capabilities, expand access to innovation platforms, align nutrition capabilities and incorporate a broad trading and risk management competency.

“Like Cargill, Southern States Cooperative has a rich history, important heritage and strong reputation,” said Mark Lueking, U.S. managing director, Cargill Feed and Nutrition. “We are committed to working together to continue to meet the needs of the local business and communities it serves. We will honor that legacy, and further build upon Southern States Cooperative’s reputation in the market, commitment to quality, and relationship with longstanding retail and customer networks.”

Southern States, established in 1923, has more than 200,000 farmer-members. The cooperative provides a range of farm inputs, including fertilizer, seed, livestock feed, pet food, animal health supplies and petroleum products, as well as other items for the farm and home. It serves its members and non-member customers through 1,200 retail outlets in 23 states.

Previously, Land O’Lakes had entered into an agreement to purchase Southern States Cooperative feed business but the company opted to build its own feed facility instead to allow them to move more quickly in the market.

In September 2016, Southern States and Perdue AgriBusiness closed a transaction that will ensure the continued operation of over a dozen Mid-Atlantic grain elevators. Perdue AgriBusiness will purchase 10 of the 12 elevators that the company has leased from Southern States, Richmond, Virginia, U.S.-based farm supply and service cooperative, since 2002 and will continue to lease two other elevators that are immediately adjacent to Southern States feed mills.

By Holly Demaree

Source: WORLD-GRAIN.com

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