Cargill sign and parked cars Spencer Tirey/Stringer/GettyImages

Cargill to take over Southern States feed biz

After an unsuccessful sale to Land O’Lakes, Southern States inks deal to sell its animal feed business to Cargill.

Less than a year ago, the Southern States Cooperative inked a letter of intent to sell its animal feed business to Land O’Lakes, Inc. That’s all that happened.

In March, Beth Ford, Group Executive Vice President and Chief Operating Officer for Land O’Lakes, announced a change of plans and revealed it would build its own new feed manufacturing facility at Roanoke, Va., scheduled to open in December 2018. The company indicated that discussions with Southern States over the strategic Mid-Atlantic and Southeast market weren’t moving fast enough.

Then came the early August announcement from Cargill – an agreement to purchase Southern State’s feed business, including seven feed mills and its portfolio of products and brands serving the Southeast market. This deal is to close within 90 days. Price and terms weren’t disclosed.

Cargill Feed and Nutrition already has a major market presence in the Northeast and Mid-Atlantic. Adding the Southeast “will allow us to better meet needs in this key geography," explains Adriano Marcon, Cargill Animal Nutrition vice president.

A partner supplier role?

Southern States executives intimated its stores will still be a feed provider. “While Southern States will no longer be making feed, we’re committed as ever to provide feed to our members and customers,” says Jeff Stroburg, president and CEO of Southern States Cooperative. “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.”

Southern States’ other business segments – retail stores, farm supply, energy and agronomy – aren’t part of this transaction. One reason may be that in April 2016, Southern States had entered into a supply agreement with Land O’Lakes’ Winfield United Supplier group. The letter of intent called for Winfield US to exclusively a majority of crop input products and services to the Southern States network of 1,200 retail locations across 23 states serving 200,000 farmers. However, Farm Progress has not confirmed completion of that agreement.

 

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