Cargill looks to acquire feed business from Southern States Cooperative

By Aerin Einstein-Curtis contact

- Last updated on GMT

© iStock/verdateo
© iStock/verdateo
Cargill looks to expand to the eastern US with its plan to purchase Southern State Cooperative’s feed business, says managing director.

The proposed acquisition was announced Thursday, and the transaction is expected to be completed in 90 days after going through routine approvals, the company said. Additional terms of the deal were not disclosed.

The move is part of the agri-giant’s growth strategy and focus on the eastern US said Mark Lueking, US managing director for Cargill Feed and Nutrition. “The acquisition of the Southern States Cooperative, Inc., animal feed business expands Cargill’s presence in the Southeast, Mid-Atlantic and Northeast regions of the United States, providing better reach to our current and future customer network in this key geography,”​ he added.

“This acquisition is an important part of Cargill Feed and Nutrition’s overall growth strategy and commitment to the US animal feed industry, strengthening its distribution and go-to-market capabilities,”​ he told FeedNavigator. “Southern States Cooperative’s animal feed business has a rich history and strong reputation for serving its customers and meeting the needs of the local business and co-op communities it serves.”

“Our combined business will honor that legacy, and further build upon Southern States Cooperative’s animal feed business’ reputation in the market, commitment to quality and relationship with longstanding retail distribution networks,”​ he added.

Regional focus and purchase details

The proposed deal would cover assets related to the cooperative’s animal feed business, said Cargill. They would include seven feed mills, a portfolio of products along with related brands, customers and existing supplier relationships.

However, it does not include Southern State Cooperative’s retail, farm supply, energy or agronomy businesses, Cargill said.

The seven feed mills stretch from Pennsylvania south to North Carolina and Georgia, said Lueking. Southern States had developed a strong reputation is states along the Atlantic coast.

 “Our combined business will honor that legacy, and further build upon Southern States Cooperative’s animal feed business’s reputation in the market, commitment to quality, and relationship with longstanding retail distribution networks,”​ he said.

The agreement would expand Cargill’s production capacity in the region and improve support for “key retail distribution networks,” ​he said.

Transition efforts are expected to start once the deal is closed, he said. “We believe it is important to have a smooth and seamless transition,”​ he added.

“Southern States Cooperative’s animal feed business has some distinct and valuable brands that are filling important customer needs,” ​he said. “Customers are at the heart of everything we do, and we’re confident this partnership will allow us to better meet their ever-changing needs.”

Past buyers

This is not the first time Southern States Cooperative has considered selling its feed business. Previously, it signed a letter of intent for that portion of the company to be acquired by Minnesota-based Land O’Lakes.

The letter was a starting point to the discussion on a planned acquisition, Southern States said at the time.

That potential agreement​ was announced in November, but appeared to be done by March when Land O’Lakes said that it was planning​ to build a new feed manufacturing facility in Roanoke, Virginia instead of acquiring the cooperative’s feed business.

Land O’Lakes told us at that time that the company was looking to “move more quickly in this strategic market than the discussions with Southern States allowed.”

Related topics: North America, Cargill, Manufacturers, Grains

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