The Great Lakes Pork Cooperative (GLPC) is moving towards a potential investment opportunity for pork producers in the three states of Ohio, Michigan and Indiana. The group, organized three years ago, is looking at purchasing a processing facility in South Bend, Ind.
Any pork producer can learn more about GLPC at a series of meetings to be held in Ohio during January. Informational meetings will be held on January 15, 2003 at the Knights of Columbus in Kalida at 3:00 p.m. and January 16 at Ag. Credit in Marion at 1:00 p.m. according to GLPC Board member and pork producer Brian Watkins of Kenton, Ohio.
GLPC emerged from a three-year pork industry effort to look for alternative markets and new opportunities in the pork industry. Among the groups involved in the initiative were the pork producer associations from Ohio, Michigan and Indiana, land grant institutions from each state, state Farm Bureau representatives, Department of Agriculture representatives and pork producers.
Watkins says after examining the existing pork industry, GLPC began to pursue the vision of: "Creating a cooperative business alternative to ensure the viability of pork production and producers in the Eastern Corn Belt." The group identified four specific needs: ensure market access for independent producers, stabilize production margins, diversify or mitigate production risk and improve the opportunity to add value.
GLPC has looked at two processing facilities in Northern Indiana and the Board has focused its efforts on a facility located south of South Bend, Indiana. The decision to pursue this facility was based on the board's feeling that it allowed GLPC the best opportunity to meet the goals of the membership, says Lemmon.
The proposed business is being developed based on a Marketing Study and Economic Analysis completed by the Sparks Companies, Memphis, Tennessee. The Sparks Companies, a well-known agribusiness-consulting firm, concluded the study by identifying several potential customers, the specifications on the primal cuts they desired, and an example of a grid that could be used for paying the members for hogs and projections on pork prices. The study further illustrated the economic opportunity based on a specific set of hogs processed per day.
The study was based on the harvesting of 2,400 hogs per day or a total of 600,000 hogs per year. The study further estimated that the cost for purchasing the facility, renovating the facility and the needed working capital would total about $14 million.
The Board anticipates raising the needed equity through a stock offering once all of the legal issues have been resolved. Producers that are not currently members of the GLPC, will have an opportunity to join after the current members exercise their right to participate in any proposed offering.
GLPC has proceeded with a number of activities including interviewing potential general manager candidates, completing a Phase I Environmental review and completing other legal issues. It is anticipated that the processing plant would employ a total of 130 employees in management, maintenance, processing and quality control.
In addition, GLPC is meeting with representatives of key financial institutions in the three-state area seeking their support and input. Two key institutions have expressed interest in providing individual loan packages to support this opportunity, if an offering is presented.
Watkins encourages producers interested in learning more about GLPC to attend one of the two informational meetings held on January 15 and 16.
Producers with questions or need information on the meetings should contact the temporary office of the Great Lakes Pork Cooperative at 989-658-8909 or Indiana pork producer and GLPC board member Brian Watkins at 419 673 9424.
Contacts:
Brian Watkins, pork producer and GLPC board mamber, 419-673-9424.
GLPC office, 989-658-8909.
Jim LeCureux, GLPC Project Coordinator, Michigan State University Extension Service, Tuscola County, 989-672-3870.