CFE feed mill going strong

$26 million investment has reaped dividends for elevator

-Submitted photo
Brandon Berg, summer feed intern at Cooperative Farmer’s Elevator, adds bagged ingredients to the ingredient bins at the cooperative’s feed mill. Berg came to CFE from South Dakota State University.

OCHEYEDAN — Cooperative Farmer’s Elevator (CFE) took a $26 million chance a few years ago to start construction on what would be one of the largest concrete feed mills in the state.

Company officials said that investment in the mill, their patrons and their trade area was a good move.

Coming online in February of 2019 with a need to better serve their swine customers especially, the mill has performed as well as company officials had hoped.

Steve Petersen, CFE’s vice president of feed, said the goal for 2020 was to produce one million tons of feed as a company. The number at year-end in September was 988,000 tons.

“With that, the tonnage from the feed mill we built here was about 582,314 ton,” he said. “It was a really good year despite the challenges we had with COVID.”

-Submitted photo
Keshveer “Kesh” Singh works here at CFE’s feed mill control room, which oversees batching, pelleting and load-out. Singh, a feed intern, came to CFE from South Africa.

Petersen said their primary COVID challenge came throughout the summer months, as the packing industry was unable to take livestock in a timely manner. He said CFE’s team created special rations that would allow their swine customers to keep their animals longer than anticipated and worked with packers to try to help them take the livestock when they could.

“We came up with a diet that would more-or-less hold their weight,” he said. “There was about a good month of especially challenging times when we didn’t have places to go with the new flow (of pigs) coming in. When the market pigs go out there are usually new pigs coming in, so we had to find homes for them as well.”

Petersen said all employees worked together to help get through that crisis, finding and utilizing buildings that hadn’t been used in some time, and double stocking other buildings — with fat hogs on one side and growing pigs on the other — something he said producers would not do today unless they had to.

CFE’s lumber division constructed 47 swine barns in 2017, and 32 additional barns in 2018. Many were built to help support and supply the growing pork processing industry that came upon the completion of the new Sioux City-based Seaboard Triumph Foods, which had implemented a second shift in the fall of 2018.

How is the feed mill doing?

-Submitted photo
The new feed mill at Cooperative Farmer’s Elevator in Ocheyedan has been up and running for two years and is performing as well as company officials had planned.

Petersen said their original feed processing goal was 3,000 tons per day. Today they are producing between 2,500 and 3,000 tons per day through the new mill on 18 hours (two shifts, basically), and delivering most of it during the day shift. Petersen said much of that success is due to the hard-working employees and lead feed mill manager, Paul Ahrenstorff, who keeps things going.

Petersen said the new mill features one line for pelleting, (there is three-line capability at the mill) and that customers are taking advantage of it.

“As we get closer to $5 corn and $450 (soybean) meal it has pushed a few of the customers towards pelleting, so I think we’ll see even more pelleting moving forward,” he said.

Petersen said they took their time to build the new feed mill, which was about five years in the making from the time they started considering the plan. That extra time paid off, he said.

“We found out that it really was worth the time because we are able to be more efficient in our operations,” Petersen said, adding that the mill itself is larger and the footprint of the main head house is larger, allowing workers more space to do things that could not normally be done in smaller areas. That might include bringing in additional ingredients and having more micro-ingredient room, he said.

Petersen said the feed mill processed 14,940,000 bushels of corn in 2020, and utilizes about 70,000 bushels of corn each day.

He said with the new construction, a new entry to the mill was completed last fall to increase efficiency of traffic in and out of the facility.

“The county built an addition to the roadway on the east side of the mill and it’s been helpful for our entry and exit time with our feed trucks,” said Petersen, adding that drivers don’t have to wait for other trucks entering or exiting the premises, and that they can come and go readily.

He said roughly 120 loads of feed go out on an average day, and 26 loads of ingredients come in.

Petersen said efficiency and safety have improved many times over with the construction of the new mill.

“Overall I would say the mill has improved our safety and efficiency as a whole, meeting the safety expectations of OSHA,” he said. “The old mill wasn’t built to handle the tonnages as far as efficiency goes, and the people who work there have newer, higher-quality safety equipment within the system.”

Swine numbers have been holding steady for CFE, with their customers weathering the storm that COVID-19 brought to the industry. The new Ocheyedan-based mill processes primarily swine feed for an area within 60 miles in any direction of the mill, and the company feels confident about their quick-delivery status.

“With (Iowa) Highway 60 and (Iowa) Highway 9 right there it gives us good road access and gets us out there pretty quickly and efficiently,” Petersen said, adding that (Iowa) Highway 60 being a four-lane road helps them going north and south especially.

What’s ahead?

Petersen said as the company looks to further increase efficiency, he sees some of their other outdated feed mills coming into the Ocheyedan mill, producing those feed orders from there.

“We’ve done some of that already to help make our process more efficient and cost-effective,” Petersen said. “You hate to see the old feed mills go, but at the same time they are tired and worn out.”

Petersen said the livestock industry has seen some integration as various independent producers couldn’t withstand the storm, and he sees that continuing. He did say that 35 to 40 percent of their swine feed customers are independent growers.

When the mill came online, it was to create 19 new jobs — including truck drivers, mill operators and warehouse people — and Petersen said that has happened. There are eight workers on the day shift and five night-shift workers, with 20 trucks coming out of the mill during the day and seven at night.

Overall, Petersen said the feed mill operations are going as expected.

“It was a great addition to CFE and shows the company’s dedication to the local producer, and it continues to grow and help the area prosper, as well as (helping) CFE and its patrons (prosper),” said Petersen.

Actual construction began on the new feed mill in 2017, while planning for it began in 2015.

All six of CFE’s feed mills are inspected and follow protocols put in place by Hazard Analysis of Critical Control Points, a federal regulation requiring elevators to meet higher expectations for quality and manufacturing practices.


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