Pipeline Foods to focus on developing organic feed, grain supply

18-Oct-2017 - Last updated on 19-Oct-2017 at 07:39 GMT

Pipeline looks to establish an organic and non-GMO supply chain in North American, with related investments pegged in around $300-$500m over the next several years, says CEO.

Officially launched in September, Pipeline Foods’s goal is to be the first supply chain company focused on offering multiple solutions for non-GMO and organic feed and food industry members, the company said. It also is investing in the sector to support the expansion of organic or non-GMO acres.

The Minnesota-based company’s plan is to establish a supply chain and supports for producers of organic and non-biotech feed and food crops, Eric Jackson, Pipeline Foods CEO told FeedNavigator.

Setting up the supply lines to meet the needs of those who use organic grains and those who produce them is a messy and complicated operation, he said. But the system is different than the high-volume process already in place for conventional feed and grain.

“We’ve spent 30-40 years building a low-cost grain system and the game is volume and speed,” he said. “For the most part it runs smoothly because there have been billions invested – this is much smaller, these are no shuttle trains [of organic grains] – these are much smaller and it takes as much work.”

The companies that deal with high volume grain movement may not have the tools needed to address the details of the organic supply, said Jackson. “They carry 10 foot wrenches and we’re watchmakers – their tools don’t fit our trade and their visions [and] perspective doesn’t fit our trade,” he added.

However, the smaller producers and organic facilities have not had the capital needed to establish the supply chain system themselves, he said.

Supply chain investment

Pipeline is interested in establishing a series of grain elevators, oilseed processing or crush facilities, feed mills and oil refineries, said Jackson.

The company has already acquired several facilities including a grain elevator in North Dakota and two grain elevators in Canada, he said. Several other discussions also are ongoing.

But Pipeline doesn’t mean to be only an acquisition firm, he said. “We want to be partners,” he added.

“We’re having lots of conversations with small regional players,” Jackson said. Depending on interest, the discussion may be about working together, the possibility of buying facilities or of offering support for regulatory efforts like meeting Food Safety and Modernization Act (FSMA) requirements, he added.

Within the US there is less of a focus on work in a specific state or region and more on having facilities where they are needed, he said. “The overall market place is [a] demand-driven marketplace,” he added.

National, international feed and grains

There is a focus on work in Canada and the US because of the market, said Jackson. “The lion’s share of assets will be in North America but we have freedom to work in South America so we are moving cautiously,” he added.

The company also has opened two regional offices in Winnipeg, Canada and Buenos Aires, Argentina, he said. And there has been some exploration of the Black Sea region and India.

“Argentina and Canada are important producers of organic grains and oilseeds and the US is chronically short – we don’t have enough to meet demand,” said Jackson.

The regional offices are intended to help provide an understanding of the market in those areas and improve product traceability, he said. “If we import from a foreign country, we’re going to have boots on the ground.”

Future planning

The plan for the next several years includes about $300-500m in capital investments for the supply chain, said Jackson.

Additionally, Pipeline is working to grow the number of acres in the US currently growing organic feed crops or grains, he said.

“We need a lot more acres in the US – it’s ridiculous that we’re importing any kind of corn or soybean in to the US,” he said. “But in the absence of domestic production that’s where we are.”

In 2018 the company is set to pilot a program dedicated to supporting producers through the conversion process, said Jackson. “We’re working with farmers to understand what the opportunity is and converting some of their acres to organic.”

The program offers agronomic, economic or marketing support depending on what is needed, he said. Adding, “We’re dedicated to moving the needle.”