Iowa and AgFeed Industries reach an agreement

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The United States District Court Judge Robert W. Pratt approved a consent decree jointly submitted by the State of Iowa and AgFeed Industries, Inc., headquartered in Grand Junction, Colo. AgFeed owns and operates hog production facilities, feed mills and processing facilities in several states, including Iowa.

The consent decree outlines the terms of a settlement reached between Iowa and AgFeed, to address a dispute over the constitutionality of the state’s prohibitions against processors vertically integrating into pork production in Iowa, according to Iowa Attorney General Tom Miller’s office.

AgFeed’s U.S. hog operations are based on its “wholly owned subsidiary M2P2,” making it the country’s 23rd largest pork producer. The company’s website reports that it has 10 sow farms in Colorado, Oklahoma and North Carolina. There are more than 200 contract finishing farms in Iowa, and the total annual production is estimated at more than 1.3 million market hogs.

The harvesting business unit was established in 2010 and represents “that next step in AgFeed’s efforts to deploy a fully integrated hog production system,” the company says. “Our system will range from the manufacture of safe, high-quality nutrition products for the hog industry to the most modern and efficient breeding operations to state-of-the art processing facilities.”

In Iowa, AgFeed Industries planned to increase its pork processing business by acquiring Pine Ridge, as well as expand its hog contracting business. However, Iowa law prohibits a processor from directly or indirectly operating, financing or controlling a swine operation within the state or contracting with Iowa producers for the care and feeding of swine in Iowa.  The formal agreement, which also institutes contract grower rights, addresses the state’s legal concerns, according to Miller’s office.

In return for AgFeed’s compliance under the settlement, Iowa will not pursue enforcement of the ban on packer involvement in swine production, Miller notes. The agreement expires on Sept. 16, 2015.

“This agreement allows the company to continue doing business here in Iowa and to expand its operations, while still protecting the rights and interests of Iowa’s contract growers,” Miller says.

AgFeed Industries was founded in 1995, with a focus on animal nutrition. Today the company encompasses animal nutrition, hog production and harvesting or pork processing systems.

In recent years, AgFeed has expanded efforts into China. “Our operating strategy is to: modernize, consolidate and grow while becoming one of China’s leading fully integrated pork producers,” according to the company’s website. AgFeed has 31 farms with 25,000 sows and capacity for 30,000 sows. The production farms have the capacity to produce 600,000 to 700,000 market hogs annually.



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