Not Your Daddy's Feed Mill

Driven by the growing needs of its producer partners, Iowa’s NEW Cooperative created its feed division in the early ‘90s. As technology, regulations and automation shaped the feed manufacturing industry, Elwyn Bruhl, feed division manager and 39-year NEW Cooperative employee, has witnessed every stage of this evolution. Standing within the cooperative’s new state-of-the-art Lidderdale, IA, feed mill, Bruhl smiles and confidently reports: “This isn’t your daddy’s feed mill.”

“With the support of the board and upper management, the feed division has grown from producing 20,000 tons a year to an operation delivering 750,000 tons of feed annually,” Bruhl notes.

In the late 2000s, Iowa saw a major expansion of its hog population. According to the Iowa State University Extension’s Iowa Farm Outlook (July 2011), this trend continues as Iowa’s inventory of market hogs increased nearly 5% in 2011; the state’s total swine inventory is now approaching 19 million head.

“Our customer base has shifted from traditional customers to commercial businesses,” Bruhl explains. “Large companies have fueled the growth of the livestock and feed industry by building economies of scale [in Iowa].”

As the need for feed milling capacity grew, NEW Cooperative was prepared to capitalize on the boom with its feed mills in Bode, Palmer and Duncombe, IA, with the creation of NEW Feeds, LLC. In 1998, the co-op entered a joint venture with Land O’ Lakes, which now claims a minority ownership of the feed division’s assets.

“We were at capacity at the other mills,” Bruhl says. “If we were to continue our growth, we needed to expand our territory. The organization chose Lidderdale because we already had grain and agronomy locations in the area — not to mention the size of the local livestock population.”

New marketing opportunity

NEW Cooperative, Inc., a member-owned, agriculture cooperative servicing 21 locations throughout the northwest region of Iowa, operates grain elevators in Glidden, Lidderdale and Lanesboro. The three sites handle 7 million bushels of corn, and 2 million bushels of beans, annually. Rail service left the area in the ‘70s, leaving trucking as the only method for transporting grain to a rail site or ethanol plant. The halfway point between the other grain facilities, Lidderdale, was the obvious location to build a new feed mill — but also a strategic decision driven by the desire to introduce an additional market for the co-op’s corn.

For the 750,000 tons of feed NEW Cooperative produces, it puts in 18 to 25 bushels of co-op’s corn into every ton — averaging out to 14 million bushels of corn annually and accounting for over 20% of its annual corn receipts.

“By choosing to use our grain at the mill, we are experiencing significant savings by eliminating transportation and the extra handling costs we would incur if we were delivering it to alternative markets,” Bruhl says.

After eight months of research and planning on the co-op’s part, Younglove, LLC, began construction of the $5 million concrete slip-form feed mill in late 2009. The mill became operational in mid-July 2010, starting small, operating 12 hours a day.

Efficiently making feed

The process begins as truck drivers enter the office before they dump to ensure the operators are matching the correct truck with the corresponding load number. Drivers dropping off purchased major ingredients — soymeal, bakery byproducts, DDGS, wheat midds — gain approval from the mill, and are directed to the receiving pit. The unloaded ingredients are stored in a bin until the ration calls for it; the mill keeps a running inventory of product and reorders only when necessary. Most inventory is turned once a day; 1,000 tons of ingredients move among 900 tons of overhead ingredient bin storage space. Corn, however, is delivered directly from the steel storage bins via an Intersystems’ conveyor, through a Hayes & Stolz Rotary Screen corn scalper, and into a custom hopper before being fed to one of two roller mills.