The deal between Land O’Lakes and Southern States Cooperative, which included the signing of a letter of intent to for the Minnesota-based cooperative to acquire Southern States’ animal feed business, was announced late last week. It is anticipated that the purchase will be completed by January.
Southern States is excited about the deal which should be a way to increase distribution, said Steve Patterson, senior vice president of sales, marketing and communication at the Virginia-based farm supply and service cooperative. “We just really look forward to the partnership, and think it will be good for both,” he added.
“They do a lot of things well, but they do a really good job with their marketing,” he told FeedNavigator. “It’s a strategic move to position Southern States to be stronger for the long run.”
Signing the letter of intent “opens the door” to a conversation about the planned acquisition, but the details of what will be involved have yet to be determined, he said. “Both companies believe it’s a good thing to do, particularly in the age of consolidation that we’re in,” he added.
“That’s one of our hopes and goals, that we would expand awareness and increase distribution farther west and farther south,” he said.
The deal is a way for Land O’Lakes to expand both its relationship with Southern States and its footprint for animal feed in the eastern US, said Chris Policinski, Land O’Lakes president and CEO.
Acquisition details
The planned sale would include the manufacturing side of the feed business currently owned and operated by Southern State Cooperative, said Patterson. “It’s a good fit because we see increased distribution for Southern States’ brand and our ability to sell Purina [Animal Nutrition] brands in our [stores] – they don’t all have that,” he added.
The cooperative has a series of seven feed mills in the southeastern US than produce feeds for poultry, cattle and other species – but not pet foods, he said. Their geographic range includes Pennsylvania, Virginia, North Carolina, Georgia and Kentucky.
The cooperative produces about 900,000 tons of feed a year, he said. “We’re proud of that and we built it up over the years,” he added.
The goal will be to continue selling the Southern States feed products, although they will be manufactured by someone else, said Patterson. “We struggled with [brand] awareness and believe this will help us,” he added.
“When people order Southern States feed that should not change at all,” he said.
Land O’Lakes said it is looking forward to working with members and customers of Southern States.
“We plan to provide uninterrupted access to the Southern States branded products customers trust for their animals,” said Beth Food, group executive vice president and COO with Land O’Lakes.
“There’s a lot of ways to look at it – you don’t have to make the feed to be good at selling feed,” said Patterson. “Many of the products we sell, we don’t manufacture, like ag chemicals, those comes from different manufacturers.”
Previous interaction
The new agreement regarding animal feed is the latest in an ongoing relationship between the two cooperatives, they reported.
In April, Land O’Lakes and Southern States had established a supply agreement for crop inputs through Land O’Lakes’ Winfield United crop inputs and information division, they said. In that arrangement, Winfield committed to providing crop inputs needed by the Southern States network, which includes 1,200 retail locations in 23 states serving about 200,000 farmers.
That agreement also allowed Winfield to expand access to a new geographic region, they said.