Special Edition: Organic Feed
US: Feed mill expands on organic market growth
The Iowa-based feed mill is looking to expand the reach of its products nationally, said James Frantzen, company owner. The renovation work included a a new warehouse, pelleting mill, overhead bins and a truck scale.
“The organic industry has been very strong in the states,” he told FeedNavigator. “It’s growing every single year and we’ve seen the same thing on our end – in the last four or five years, we’ve been increasing by double digits each year, and now we’re doubling in size.”
The company has been producing pelleted feed products, primarily for cattle, he said.
However, it is now looking to develop pellets for use in organic swine and poultry diets, he said.
Organic market numbers
The US is one of the largest organic markets in the world, and the global organic market is worth about $80bn a year, according to information from the Organic Trade Association.
In 2015, total US sales in the organic market were about $43.3bn - an improvement of 11% from the previous year, the association reported. The dairy sector accounted for $6bn in sales, an improvement of 10% from the previous year and about 15% of organic sales overall.
The total amount of organic agricultural products in 2015 was $6.2bn, up from 5.5bn in 2014, said the US Department of Agriculture. In 2015, $3.5bn of that was for the sale of organic crops.
Sales of organic crops produced for feed in 2015 include $129m in sales for corn a, $117m in hay and $63m in soybeans, said the USDA.
Organic milk and eggs are the to performers.
Organic niche
Riverside Feeds has focused on making feed with recycled ingredients like oat hulls, soybean hulls or textured proteins that it sourced from food-grade organic processing plants, said Frantzen. “We’d bring it in and mix different fiber or protein blends and pelletize that,” he added.
“We don’t buy grain from farmers, we don’t buy soybean meal, we do commodity ingredients,” he said. “We focus on recycling industry by-products.”
Some of the feed ingredients can be challenging to process, he said.
“Most of our products need to be pelleted because of the state they that they are in,” he said. “They’re hard to handle.”
The company has worked to establish a series of organic by-product suppliers from around the Midwest, said Frantzen. “We try to diversify our business as much as possible, for supply or demand, so we have a number of different processing plants and the supply is usually not a problem,” he added.
“We found a niche,” he said.
Pelleting plans
Planning for the mill extension project started about a year ago, said Frantzen, and construction started in July 2016.
Before the expansion, Riverside Feed had been working with an external pelleting facility, but now will do that work in house, he said.
“We’re going to double in size with the tonnage of products that we offer pelleted and that does not include the customer pelleting,” he said. “We’re going to include a lot more custom pelleted as long as it’s organic or at least non-gmo, so we’ll probably going to triple, if not more, the tonnage of overall materials running through the plant.”
Initially much of the company’s customer base was in the Midwest, he said. However, it has been producing some feed for the national market, and the growth in production will allow it to better serve the larger market.
“There are some areas of the country which have a higher feed need,” said Frantzen. “We do see an increased need outside of the Midwest [the expansion will allow for covering] more of the market and taking more customers overall.”
