Cloverdale Growers Alliance
Cloverdale Growers Alliance, in Dunn Center, North Dakota, is a producer oriented firm raising and selling hogs to Cloverdale Foods. Cloverdale Growers Alliance has had many valuable members throughout the past fourteen years.
Recently Cloverdale Growers Alliance and Cloverdale Foods announced a partnership to enhance the profitability for both of the companies. This partnership will help to reduce hog procurement costs, increase supply reliability and expand the market share. The pork producers of Cloverdale Growers Alliance will have a controlling interest in the Cloverdale Packing facility in Minot, ND, and Cloverdale Foods, Inc. will be the minority partner.
In 1994 seven producers started Cloverdale Growers Alliance with an idea to supply hogs. Five years later Cloverdale became a formal alliance and expanded to include other farmers. Cloverdale Growers raised capital for this expansion through a farmer equity drive and a share commitment of hogs. To launch the Alliance, Cloverdale Growers had targeted the commitment of 100,000 head a hogs. However, after the equity drive and the difficult times in the hog sector in the late 90s, they revamped their strategy and decided to start the Alliance with a commitment of 50,000 live hogs per year.
“Keeping producer members involved in the company is our biggest challenge,” says Daryl Dukart. In order retain membership in the alliance; members have to provide so many hogs per year, which can be hard. Another challenge Cloverdale Growers Alliance has is trying to stay profitable with current markets. This has been an even larger challenge within the slot or niche markets. These have become very competitive marketplaces, with firms entering this once vacant market niche.
Daryl Dukart defines success as, “Growth in the company.” Cloverdale Growers Alliance has grown slowly in the past fifteen years. They are continuing to add members on a daily basis. Cloverdale Growers Alliance’s biggest success is their new partnership with Cloverdale Foods. This partnership will help both companies in reduced costs and expanded markets. Daryl Dukart expressed that the consulting firms have played an important role in reaching the agreement. Having these consultants has played a huge success in the company.
Future goals for Cloverdale Growers Alliance are in the making. “There is a great deal of hard work ahead of us to complete our new partnership,” said Daryl Dukart, “but this really is a historic moment for the pork industry in North Dakota, Montana, Minnesota and the Prairie Provinces. Producers owning their own packing plant with a trustworthy marketing partner has been the dream of a lot of people for many years. It could become reality with this project.”
Along with this new partnership starting another goal for Cloverdale Growers Alliance is to someday own 100% of the slaughter and 51% of the processing facilities.
Cloverdale Growers Alliance received their VAPG grant in 2004. Cloverdale Growers Alliance used their VAPG grant to do various marketing research on Cloverdale food products versus other pork products on the market.
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in the coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agricultural producer groups, and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)