Corn To Pork
Situation
Corn Producers know what it takes to raise corn efficiently - but making a profit on corn is often challenging. Pork producers know how to raise hogs - but building equity and growing the business while remaining independent are difficult at best!
Solution
Generate More Margins in Marketing. Turn Your Corn-To-Pork with Sioux Nation Ag.
Innovative Marketing
Corn-To-Pork offers producers an innovative marketing solution - where the efficiencies of a team produce Competitive Profit.Sioux Nation's new Corn-To-Pork marketing program aligns independent producers and enables them to add muscle to their marketing options.
Corn producers can generate added value to their grain through a cooperative relationship with pork producers. Likewise, Corn-To-Pork offers the pork producers the opportunity to gain efficiencies of scale through the growth of their business. By joining together in this program, each group can spread risk and market their products more competitively.
Spread the Risk, Build Efficiencies of Scale, Market More Profitably
Corn-To-Pork links farmers, suppliers, and marketers together in a highly efficient chain. Pooling capital from multiple corn producing investors, the Corn-To-Pork system allows producers to form and finance larger and more efficient independent hog production units. These larger units can more readily afford professional management, technical expertise, and marketing services allowing them to be more competitive in today's market.
Innovative Solutions from Corn-To-Pork
Both the corn farmer and the pork producers share in the benefits of marketing added value grain through a more efficient livestock operation and you don't have to be a big operation to participate. The system allows even small corn producers to compete on equal footing with much larger operations.
Pork producer Curt Johnson found that participation in Corn-To-Pork he was able to build his operation while maintaining independence. Corn producers are seeing exceptional opportunity in adding value to each bushel of corn they commit to the program. Several producers cite significant per bushel advantage when marketing corn through Corn-To-Pork.
Corn-To-Pork - A Long Term Winning Strategy
Corn-To-Pork participants cooperate to help reduce risk, build efficiencies of scales, and allow for more marketing profit potential for all partners engaged in the program. It creates a win-win situation and unique benefits for all participants:
- Corn Producer Partners, who grow corn and own the hogs add value to each bushel of corn in a diversified corn marketing portfolio.
- Swine Producer Partners, who raise the livestock, have access to a steady supply of pigs and corn, allowing them to build their operations profitably and efficiently.
- Lenders/Investors, who find a long-term, sound investment involving diversified ownership, shared risk, and efficiencies of scale.
Sioux Nation Ag brings more than four decades of experience to the table, having worked with some of the best independent pork producers in the upper Midwest. Sioux Nation's experience in working with producers combined with their in-house legal expertise allows them to assist and support participants creating each Corn-To-Pork LLC.
Bringing Value to Corn Producers
Corn-To-Pork brings corn producers an innovative corn marketing solution - providing them the opportunity to market their corn through pork, adding value tot her per bushel sale price. Through Sioux Nation Ag's Corn-To-Pork program, corn producers have the opportunity to enhance the value of each bushel of corn they commit. Because of the program and its ability to align corn an pork producers, participants share risk and share ownership operations, resulting in exceptional return on investment.
The Value of the Team
Corn-To-Pork is a straight forward alliance of corn growers, pork producers and lenders. Sioux Nation Ag aligns producers to form an LLC that allows the group to add value to each bushel of corn contributed to Corn-To-Pork program.
In a few steps, Sioux Nations Ag's Corn-To-Pork program aligns corn and pork producers participants allowing them the opportunity to:
- Pool resources with other producers for more profit potential.
- Add value to each bushel of corn committed to the program.
- Sell corn though pigs.
- Share risk through an LLC.
Corn-To-Pork offers corn growers the opportunity to market their corn more creatively, more effectively and more profitability.
How It Works
Creating the Corn-To-Pork LLC
- Sioux Nation identifies (for example) five corn growers interested in investing in 1,500 head of hogs per year. Another grower want to invest in 10,000 head a year. Total need for pigs is 17,500
- On behalf of these corn growers, Sioux Nation then identifies a farrowing unit that can supply 1,500 iso-wean pigs a week on nine-week rotations. Assuming standard production form the unit, it will supply 3,000 pigs nearly six times per year or just more than 17,000 head.
- Sioux Nation arranges a meeting of the corn producer investors, the farrowing unit ownership or management and grow-out facilities. Legal and business experts with Sioux Nation walk through details, answer questions, and if everyone agrees, an LLC is formed.
Bringing Together Corn, Pork and Lender Partners
The Sioux Nation veterinary staff performs a disease assessment and establishes a protocol for health. Once that is complete, investors agree to invest $15 cash per pig and supply eight bushels of corn delivered to the feed mill on a scheduled timetable.
This generates $262,500 in cash and 140,000 bushels of corn. Assuming corn is worth $2 per bushel, total assets are $542,500. Each investor has about $31 equity for each pig unit in the LLC.
Sioux Nation works with the LLC and a lender to arrange operating capital to feed and house the pigs. They track inventory, pay bills and monitor feeding and care. When the first group of pigs sells, Sioux Nation pays the operating loan. After that's settled, there is $23 per head left, $15 of which is retained as equity for the next group of pigs.
Corn-To-Pork Partners Realize the Benefits
This leaves $8 to be paid to LLC shareholders. Assuming each pig consumed 8 bushels of corn, this means a net added value of $1 per bushel of corn is realized. With a new group of pigs started every nine weeks, growers get an annual rate of nearly 26 percent return on their investment with Corn-To-Pork.
CAUTIONARY STATEMENT: Sioux Nation Ag is acting as an intermediary only in arranging for producers to participate in the Corn-To-Pork Program. In the event a producers decides to participate with other producers in the Corn-To-Pork Program, their relationship will be governed by the terms and conditions of the legal documents(s) they enter into. Unless otherwise specified to the contrary therein, Sioux Nation Ag will have no duties or obligations nor take any risk or liability therunder. Sioux Nation Ag is not making nay specific warranties or representations in these materials concerning whether participation in the Corn-To-Pork Program is suitable for a particular producers. Each producer considering participating in the Corn-To-Pork Program is advised and encouraged to seek independent advice concerning the legal and financial aspects of participating in the Corn-To-Pork Program.
Corn-To-Pork is an exclusive program offered by Sioux Nation Ag, Sioux Falls, South Dakota.
TESTIMONIALS
"Sioux Nation has done an excellent job of putting this group together. They handled all the legal work and arranged getting the partners together. Through my Corn-To-Pork arrangement, I'll market 20-thousand head of pigs in a year. That's on top of 16,000 I market myself. Corn-To-Pork allowed me to grow my operation without more labor. It's a good way to market corn."
- Curt Johnson, Pork Producer Partner, Rush Pork, Pipestone, MN
"Corn-To-Pork is an important alternative for both corn and hog producers to be financially successful while maintaining their independence. By creating these unique partnerships, these larger unites are able to capture economies of scale and gain the benefits from having access to professional production managers, nutritionalists, veterinarians, accountants specializing in swine, marketers, and legal counsel that is so necessary to compete in today's world."
- Scott Swenson, President, Sioux Nation
For More Information on Corn-To-Pork Contact:
Clay Gee
Sioux Nation Ag Center
1812 N. Cliff Avenue
PO Box 754
Sioux Falls, South Dakota 57101
Phone: (800) 658-3629
claygee@siouxnationag.com
Marketing Profit Manager Swenson Commodities