Farmland Industries (FI) will divest its interest in Farmland National Beef (FNB) this month. In early June, financially troubled FI announced it intended to sell its beef business and had reached an agreement to sell its 71% share to the producer-owned beef marketing cooperative U.S. Premium Beef (USPB). USPB, which currently owns 29% of FNB, has offered $232 million.
The deal established USPB as the “lead bidder” or as having “a stalking horse bid” in the auction set for July 9. The position also entitles USPB to a $7.5-million breakup fee if the sale falls through. It also means competing offers will have to be at least $7.5 million higher than USPB's bid. It's believed that USPB not only holds a right of first refusal but also some say regarding who the new majority owner can be.
As a result, it appears USPB is in the driver's seat, but USPB's opening bid is well below the consensus valuation of FI's share of FNB. Previously, 25 different firms have expressed interest in buying the beef processing business, with Smithfield Foods being the most prominent.
FNB is the fourth largest packer in the nation, processing 3.2 million head of cattle at its two plants in Liberal and Dodge City, KS. The firm also owns processing plants in Pennsylvania, Georgia and Kansas City, altogether employing about 6,200 people. Its holdings also include National Carriers, a 700-unit refrigerated trucking operation.
Meanwhile, USPB is a producer-owned, beef marketing company with more than 1,850 producer members in 37 states representing all segments of the U.S. beef industry. USPB member cattle are marketed under the U.S. Premium Beef™ brand and numerous FNB product lines, including Farmland Black Angus Beef®, Farmland Certified Premium Beef® and Black Canyon Angus Beef®, in addition to Certified Angus Beef®. USPB member cattle are also marketed direct to consumers through Kansas City Steak Company, a high-quality, portion control and mail order company owned by FNB.
Need comprehensive info on controlling internal and external parasites and flies? Go to www.beefcowcalf.com and click on “Pest Management” on the opening page. You'll find more than 75 research papers and fact sheets from the top animal science institutions in the U.S. and Canada.
For whatever cow-calf production and management topic you need background or insight on, bookmark www.beefcowcalf.com on your computer and make it your first stop for research. It offers links to more than 1,200 research papers and fact sheets on just about any cow-calf production and management topic.
In addition, you'll find links to all the important industry organizations and the top animal science departments in the U.S. and Canada. The site also features a Ranch Horse section.
A “conception to cutout” venture. That's what newly launched Cooperative Beef $olutions™ says it's offering cow-calf producers, regardless of their size of operation. The venture's four partners say it offers producers the chance to plug into a seamless conception-to-harvest program aimed at increasing beef producer profitability by combining superior genetics and advanced management technologies to capture the most net dollars per animal.
The program partners include:
Genex Cooperative Inc., Shawano, WI, will offer program genetics through AI or Genex-sired natural service herd bulls available from Genex seedstock customers.
Central Livestock Auctions will work with Genex in placement and sales of cattle in the upper Midwest.
Midwest MicroSystems' Cow Sense™ software will provide on-ranch analysis and profit-driven decision tools based on individual animal management. Additional off-ranch cattle measurement, management, marketing and animal performance feedback functions will be provided by the ACCU-TRAC® Electronic Cattle Management (ECM®) System from Micro Beef Technologies, Ltd., Amarillo, TX.
Decatur County Feed Yard, Oberlin, KS, will feed and finish the program cattle. The facility offers individual measurement and sorting of cattle in its state-of-the-art ACCU-TRAC® ECM® facility.
For more information, contact:
Willie Altenburg, Genex, 970/568-7881, www.crinet.com.
Tim Davis, Midwest Micro Systems, 800/584-0040, www.midwestmicro.com
Dan Dorn, Decatur County Feed Yard, 888/675-2212, www.decaturfeedyard.com
Joe Young, Micro Beef Technologies, 800/858-4330, www.microbeef.com
The Nature Conservancy (TNC) is under fire about its land acquisition practices. A May series of articles in the Washington Post detailed some tactics and deals run by TNC, which has about $3 billion in assets. The stories have prompted federal legislators to consider investigating TNC's land acquisition tactics and management activities.
The paper's investigation found:
Deals on land donated or acquired by TNC to board members or people who had made “large charitable donations” to TNC.
Oil drilling on the breeding grounds of an endangered species of prairie chicken in Texas; land they acquired for preserving the species.
Using a third party as a front in an attempt to purchase mineral rights.
The articles have stirred up such a hornet's nest that a pair of U.S. senators — Charles Grassley (R-IA) and Max Baucus (D-MT) — are considering opening a congressional investigation into TNC's land acquisition activities, conservation easements and land sales issues. The contention is that TNC, at the minimum, is abusing its tax-exempt status. TNC has hired a public relations firm and law firm to head off a Congressional investigation. To view the articles, go to: www.washingtonpost.com/wp-dyn/articles/A10232-2003May3.html