ContiGroup Companies and Smithfield Foods have finalized an agreement to form a 50/50 joint venture between their respective cattle-feeding businesses, ContiBeef LLC and MF Cattle Feeding.

Known as Five Rivers Ranch Cattle Feeding LLC, its a company that's independent from both ContiGroup Companies and Smithfield Foods. It's headquartered in Boulder, Colo., and has a total of10 feedyards in Colorado, Idaho, Kansas, Oklahoma and Texas, with a one-time total feeding capacity of 811,000 head. Five Rivers expects to sell cattle to multiple U.S. beef packing firms, using a variety of marketing methods that ContiBeef already uses.

Five Rivers includes six feedyards originally owned by ContiBeef and four Smithfield Beef Group feedyards. The decision to form the joint venture was a result of both companies’ long-term commitment to the beef industry and desire to better service their customers.

“We have a long history with the management team of Smithfield Foods...It should be an exciting period for the entire beef industry,” says Paul Fribourg, ContiGroup's chairman and chief executive officer.

“We will take our cattle feeding business to a new level...I am confident that this combination will enhance the value of our original investment," says Joseph Luter, III, Smithfield Foods' chairman and chief executive officer.

Five Rivers will be managed by a joint team from both companies.

ContiBeef, formerly a wholly-owned subsidiary of ContiGroup, markets more than one million head of cattle annually, most of which were company owned, with six feedlots located in Colorado, Kansas, Oklahoma, and Texas.

Smithfield Beef Group's, a subsidary of Smithfield Foods, four cattle feedlots have a one-time feeding capacity of 357,000 head and are located in Colorado and Idaho. Smithfield Foods has annualized sales of $10 billion. It is the largest U.S. producer, processor and marketer of fresh pork. The Smithfield Beef Group is the fifth largest U.S. beef processor.

Source: ContiGroup Companies