Agri-Business: A $1 Trillion Smorgasbord

U.S. agri-business accounts for nearly six percent of America’s GDP, with $137 billion of that coming directly from U.S. farms.


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U.S. agri-business accounts for nearly six percent of America’s GDP, with $137 billion of that coming directly from U.S. farms.
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Agri-Business: A $1 Trillion Smorgasbord

U.S. agri-business accounts for nearly six percent of America’s GDP, with $137 billion of that coming directly from U.S. farms.

Agri-Business: A $1 Trillion Smorgasbord

By the BF Staff
From the July/August 2018 Issue

Globally, food and agriculture is a $7.8 trillion industry, global investments in the food and agriculture sector have grown three-fold since 2004 and, according to a McKinsey report, on average have demonstrated higher returns to shareholders than other sectors. In the U.S., agriculture, food and related industries generated 5.5 percent of the country’s GDP at $992 billion, $137 billion of that coming directly from U.S. farms.

agri-business
(Photo: 123rf.com)

Despite this activity, there are several unmet challenges facing stakeholders across the supply chain in food & agriculture. In the current market, producers are increasingly pushed to produce more with less, data is being captured by disparate players in different parts of the value chain, and consumers are becoming increasingly focused on the lifecycle of their food.

These challenges are highly interconnected and that real solutions will require collaboration and systems-level thinking. Building a better food and agriculture system requires innovation at every level of our supply chain. This includes, but is not limited to, innovations around:

  • Precision agriculture and technologies and services that encourage more sustainable growing practices
  • Driving better market access and appropriate technology for local food systems and/or sustainable agriculture
  • Efficiencies in supply chain management, traceability and food safety
  • Increasing access to and availability of healthy, sustainable food.

AG: LARGEST INDUSTRY IN ARKANSAS

Agriculture is Arkansas’ largest industry, bringing in $16 billion annually to the state’s economy.

Arkansas ranks first in the nation in rice production, producing nearly half of U.S. rice, and third in cotton production, growing about seven percent of the U.S. crop.

The Natural State’s diverse landscape and climate produce a wide variety of Arkansas agricultural products. Arkansas is a major exporter of rice, soybeans, cotton, poultry and feed grains. There are 49,346 farms statewide and 97 percent of Arkansas’ farms are family-owned. A mere 16 percent of Arkansas’ farms account for a whopping 92 percent of production. Arkansas is one of the few states where average per capita farm income exceeds non-farm per capita income.

Arkansas’ top retailers, producers and processors of food include Wal-Mart, the largest food retailer in the world; Tyson Foods, the largest poultry and meat processor in the U.S.; and Riceland Foods, the largest rice exporter in the U.S.

Arkansas’ cattle inventory exceeds 1.7 million head, with 28,292 farms in Arkansas producing cattle (Arkansas ranks 12th nationally in beef cows on farms). Arkansas produces more than 17 million gallons of milk annually, and has a thriving aquaculture sector: about 11,000 acres are devoted to catfish production in AR, a $78-million industry with 166 fish farms.

The total value of Arkansas pork production exceeds $80 million per year, with more than 1.8 million pigs produced annually in the state. About 2,500 farms in Arkansas produce chickens; AR is second in the nation in broiler production.

In December, Randy Veach and Rich Hillman were re-elected as president and vice president, respectively, of the Arkansas Farm Bureau. Delegates also elected seven other board members and filled a vacant board seat during the final day of the organization’s 83rd annual convention at the Statehouse Convention Center in Little Rock.

Veach, of Manila, AR is now in his 10th term as president. He is Arkansas Farm Bureau’s 10th president since its creation in 1935. Veach is a third-generation farmer. Hillman is from Carlisle and will begin his 10th term as vice president. He is a sixth-generation farmer. His main crops are rice, soybeans and wheat.

“It is a great honor to have this organization’s trust and continue serving our state’s diverse agricultural interests,” Veach said. “Farm Bureau’s role, during the past 83 years and well into the future, is to ensure that agriculture is relevant, to advocate on behalf of agriculture and remain a key component of our state’s economic and political landscape. We must continue to have the best interest of our farmers and ranchers in mind.”

VINELAND, NJ: GROWING GOOD THINGS

Agriculture and related business operations have been an integral part of life and commerce in Vineland, New Jersey, since its founding in 1861. Today, “Agribusiness” and related sectors like food processing and cold storage remain an important part of the Vineland economy.

agri-business
F&S Produce in Vineland is a vertically integrated company which utilizes services provided by their trucking division, Pipco Transportation, and their freezer facility, Mideastern Cold Storage.

Located in the heart of the northeast corridor, Vineland offers both an affordable business location and an excellent quality of life. Per acre land prices and labor costs are lower than most other northeast locations, and the city offers competitive electric and water rates through the Vineland Municipal Utilities. Companies will also find a variety of state and local financial incentives, customized workforce education and training programs, and a designated Urban Enterprise Zone.

At over 69 square miles, Vineland is the largest city in New Jersey with a mix of both urban and rural settings. There are two thriving industrial parks, with a third being developed, which are located along a state highway on the western edge of the city, providing easy access to over 100 million customers from the Eastern Seaboard to the Mississippi River. The eastern and southeastern parts of the city are home to dozens of family farms with thousands of acres actively producing a wide variety of fruits, vegetables, and herbs.

The city also hosts the Vineland Produce Auction, which is the premier farmer’s cooperative on the East Coast. The Auction includes 130,000 square-feet of cross-dock loading space and state-of-the-art cooling facilities capable of handling hundreds of thousands of packages in a 24-hour period. In addition to serving the needs of 550 New Jersey growers, the Auction provides a network of broker, buyer, and wholesale activities to domestic and international markets including Canada, Mexico, the Caribbean Basin, and South America.

“New Jersey agriculture has deep roots in Vineland with innovative family farms that have been working the land for generations,” said Vineland Mayor Anthony Fanucci. “It represents a way of life that we are very proud of, and an industry that is critical to the local economy, and to the state’s economy.”

One operation that has stood the test of time is Flaim Farms, which has been growing and shipping quality produce for over 80 years from their 400-acre Vineland farm. Now operated by the third and fourth generations of the family, Flaim Farms typically grows over 35 different seasonal commodities each year which are sold to retail and wholesale customers in the northeast and southeast through the family’s shipping arm, Next Generation Produce.

According to Co-Owner Kevin Flaim, “Produce is a business that is constantly changing, and you must be proactive to build your customer base. For example, we started our own line of ‘Panther Brand’ frozen and breaded eggplant cutlets that have a shelf life of 18-24 months which was very well received, and as a result, we added frozen and breaded zucchini fries. These products are available to our customers year-round in retail and institutional/food service packs.”

This farming infrastructure helps support a growing number of companies which are either expanding or relocating to Vineland. One such company is Florida-based Infinite Herbs, which is in the process of opening a new 30,000 square-foot production facility in the Vineland Industrial Park North which will employ 125 people. “Infinite Herbs produces some of the finest culinary herbs and micro-greens in the world, shipping about 4,000,000 pounds annually to domestic and international markets. “The company sells to major retailers like Walmart, Trader Joe’s, and Whole Foods.

“Infinite Herbs had been looking to expand operations to the Mid-Atlantic region and Vineland was the perfect choice because of the company’s long-standing relationship with area farmers,” said Managing Director Camilo Penalosa. “We could have moved to another big city, but the idea is to be next to the growers. “I’ve been in Vineland many times, so this area and the advantages it has to offer are well known.”

“We are excited that Infinite Herbs is expanding their operations to Vineland, they are truly a perfect fit for the city,” said Economic Development Director Sandy Forosisky. “In addition to the new capital investment and jobs that will be created, the expansion offers additional partnership opportunities for local farmers who can provide the fresh, high-quality products Infinite’s customers are looking for.”

Existing food processing operations and new arrivals to Vineland like F&S Produce, which recently purchased a 585,000 square-foot manufacturing plant to keep up with the growing demand for their products, are part of the food cycle from “farm to fork.” “F&S processes over 100 million pounds of agricultural raw materials each year to supply their retail, food service, and industrial customers. “They partner with affiliated companies to utilize innovative sustainability initiatives like vegetative waste composting and water conservation, and they source local raw material needs whenever possible through the Vineland Produce Auction and farms across New Jersey.

“Our growers are an extension of our company and a key driver behind our continued success,” said President and CEO Sam Pipitone, Jr. “We take great pride in the strong relationships we’ve built with our growers and supply partners who share our goal of sustainably grown, quality produce. We are proud to support our local farmers right here in southern New Jersey.”

“Vineland presents unlimited opportunities for companies related to agriculture and the food industry. “Our low energy costs, high-quality potable water and available capacity for industrial waste water treatment, logistics and distribution advantages, and the availability of quality, locally grown produce are the perfect ingredients for your success. Give us a call and find out why it’s ‘Always Growing Season’ in Vineland,” Mayor Fanucci concluded.

For more information, please contact the Vineland Department of Economic Development at (856) 794-4100, or by email at [email protected]

AG COOP EXPANDS IN INDIANA

Superior Ag, headquartered in Huntingburg, IN, began production at its new $20 million feed mill in Dale in mid-June. The new facility can produce 3,000 tons of livestock feed weekly and significantly increases the efficiency and output for the cooperative.

Formed in 2007, Superior Ag is owned by its 3,300 members and is controlled by a local board of member/ owners. As a cooperative, Superior Ag provides a full range of coverage and services in southwestern Indiana, northern Kentucky and the bordering regions of Illinois. Superior Ag’s existing services include 13 agronomy locations, six-grain elevators, two feed mills, three retail fuel stations, two hardware stores and a convenience store.

Located along Interstate 64 at the intersection of US Highway 231, the new site merges the cooperative’s other operations in St. Meinrad and Jasper into one facility, and is perfectly positioned to serve its members. The recent opening of the new Interstate 69 corridor bolsters the strong connectivity for the area.

Superior Ag decided to build the new facility to meet the latest federal compliance standards, also factoring in that new investment was more cost-effective and proactive than retrofitting its existing mills. New bagging systems and pelleting productions will enhance its Livestock Nutrition Division, which provides a wide range of bulk and bagged animal nutrition, including co-products, concentrates and complete feeds to its customers.

“We are thrilled to have production underway at the new feed mill and are already seeing more efficiency in our operations,” said Barry Day, Superior Ag President and CEO. “By combining three mills into one we now for the capacity to take on larger accounts and expand our geography.

Day added that the location is an indication of growth in all aspects of the business and it not only expands the cooperative’s capabilities but is a platform for growth—the organization currently employs 175 full-time and 20 part-time employees across its divisions.

The growth at Superior Ag is a testament to Indiana’s thriving agriculture industry, which contributes roughly $31.2 billion to the Hoosier GDP annually, with approximately 107,000 Hoosier jobs supported by agricultural production, processing and related activities.

“Our decision to expand here was an easy one for us, this is home for us, and home for our members and southern Indiana has a great business environment,” said Day. “We are in a good spot for expansion with the great logistics that allow us to reach our customers easily, and the community and local partners have gone above and beyond. They have been incredibly accommodating to help us get up and running.”

One of those community partners is another cooperative in the area, Southern Indiana Power, which serves 10,000 meters or 8,000 households through 1,600 miles of line in the area and is one 18-member/owners of Hoosier Energy, a generation and transmission cooperative. From inception to completion of the Superior Ag expansion, engineers from Southern Indiana Power and Superior Ag collaborated to ensure the project had the power it needed.

“We’ve had a great relationship with Southern Indiana Power, and they made sure we had the needed upgrades to the site. Reliable power is incredibly important for our operations. Our farmers are relying on us every day to produce and deliver feed for their livestock—animals can’t change their eating habits because the power is out,” added Day.

Steve Seibert, president and CEO of Southern Indiana Power, said that the relationship with Superior Ag has been a perfect fit, noting that as cooperatives they speak the same language, “Many of our members are their members as well and we have the same commitment to service to the community. We are proud to be able to provide the energy to their new facility.”

Southern Indiana Power provided construction service power and eventually switched to high-load capacity, permanent power as more equipment and machines came online. The cooperative installed a new transformer with three-phase service off the main line, with all lines underground to ensure the highest levels of reliability. With Superior Ag’s success and the likelihood of more expansions, Southern Indiana Power also installed facilities appropriately sized to handle future growth.

“Superior Ag is a great fit for the area and good for the local economy, we congratulate them on their success,” concluded Seibert.

Day sees the demand for Superior Ag’s services growing and the nutrition division is well positioned to handle more production for more members in the coming years, “We are looking forward to bright future, and with the new facility we can deliver our products with better innovation and reduced costs—ultimately benefiting our members, which is our number one priority.”

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