Co-Alliance and The Equity finalized a Joint Collaboration Agreement combining their feed and livestock business units effective May 1, 2017 following an extensive third party study confirming potential synergies.
This collaboration, named the Co-Alliance and Equity team (CEteam), allows the two companies to share and exchange resources, relationships, expertise, and experience for the development and implementation of an enhanced approach to swine feed distribution, swine marketing and ingredient marketing strategies.
Driving this initiative is the significant expansion of packer capacity underway in the Midwest adding 11 million packing spaces. The formation of the CEteam allows Co-Alliance, The Equity, and their customers to be in the best position to take advantage of this increase. Kevin Still, CEO of Co-Alliance stated, “The changing dynamics of the swine industry is providing us with a unique opportunity to align these two great organizations across the state line to enhance value to both our memberships.” Bruce Vernon, CEO of The Equity said, “Cooperation between cooperatives seeks to eliminate redundancies and capture synergies that are then returned to the members who own and utilize our assets.”
Each company will maintain its own staff, feed mills and transportation assets, financial arrangements, accounting systems, and market risk management. Co-Alliance Vice President of Swine and Animal Nutrition Dewey Bucher will lead the collaboration and report to both CEOs.
The two organizations enter the collaboration with successful operations in feed & livestock services. Co-Alliance has the capacity to manufacture over 400,000 tons of livestock feed, and it owns and provides livestock management consulting services for over 600,000 head of hogs. The Equity will have milling capacity of 640,000 tons of livestock feed upon completion of its new Horace, Illinois feed mill in addition to livestock management for over 400,000 head of hogs. Together, CEteam will have the milling capacity to feed 2.5 million hogs.
