CHS Forms New Venture, Enters Pet and Livestock Food Biz

CHS and South Dakota-based Consumers Supply Distributing Company will together form a new entity that will offer livestock and pet food products.

CHS, Inc., an Inver Grove Heights-based agricultural and energy co-op, announced Monday that it and a South Dakota-based company will together form a new entity that will manufacture and distribute food for livestock and pets.

Along with Consumers Supply Distributing Company-a wholesale distributor of agricultural and animal nutrition products-CHS will form a new entity called Consumers Supply Distributing, LLC, which will be based in Sioux City, Iowa.

The new entity will offer the CHS Payback livestock and Equis horse feed brands, along with other livestock and companion animal products now carried by Consumers Supply Distributing Company, including its Running Horse equine feed and its Ranchers Choice and Country Vet brand pet foods and treats.

CHS said that it will pay cash for a 50 percent stake in the new entity, the financial terms of which were not disclosed.

Consumers Supply Distributing Company operates out of more than 310,000 square feet of space at locations in Sioux City and Cedar Rapids, Iowa. Additionally, it operates a fleet of 53 semi tractors and 100 vans that provide weekly delivery service to 1,000 customers, including local cooperatives, feed manufacturers, farm store chains and large integrators.

Consumers Supply Distributing Company will contribute the assets at its two Iowa locations to the new entity.

“This is an outstanding opportunity to combine two strong, high-quality feed organizations to meet the livestock and companion animal nutrition needs of our current customers, as well as position this business for growth,” CHS Nutrition General Manager Rod Paulson said in a statement.

David Patee, owner and operator of Consumers Supply Distributing Company, will serve as the new limited liability company's manager.

Paulson said that not only does the new entity allow CHS to enter the pet food sector, but it also enables the co-op to gain distribution efficiencies. CHS Nutrition now operates 11 feed manufacturing plants, plus a premix plant in Iowa and a liquid-feed plant in Marshall.

Last week, CHS made headlines when it distributed $421 million from its most recent fiscal year to its members, including $93.3 million to more than 12,000 Minnesota farmers, ranchers, and cooperatives. CHS claimed that the distribution was the largest cash return ever by a U.S. cooperative