Organic Broadcaster

Young farmer creates livestock feed business with ‘waste’ produced by grain mills

By Jody Padgham

Eight thousand tons. That’s 16,000,000 pounds, the estimated amount of agricultural by-product diverted from landfills this year by Riverside Feeds of Riceville, Iowa.

Based on the idiom, “one man’s trash is another man’s treasure,” Riverside Feeds takes food and feed-grade byproducts, primarily soy and oat products, from multiple processing plants throughout the central U.S. and remanufactures them into usable livestock protein. The resulting organic/non-GMO product goes into feed used by dairy, beef, pork and
poultry farmers.

Pellets fall into this cooler through a chute from the mill above, which uses high temperatures to pelletize “left-overs” from processing food-grade grains. Riverside Feeds sells the pellets as organic/non-GMO livestock feed. Photo submitted

Owner James Frantzen was partnering with his dad, Iowa organic pastured hog farmer Tom Frantzen, to operate Frantzen Farm Feeds in 2013 when a supplier called with an excess of non-GMO soy protein. While Frantzen Farm Feeds regularly handled organic soy products, they were not set up to manage non-GMO. The younger Frantzen saw an opportunity, and within 48 hours had a business set up.

Since then, Riverside Feeds, LLC has expanded into a dynamic business with six full-time employees, distributing product in 30 states.

“The grain processors we work with, producing ingredients for the organic food industry, have no interest in the feed industry,” claimed Frantzen, now 29 years old. “They need someone like me to handle the byproducts they create, which otherwise were primarily going into landfills.”

Frantzen’s visionary response has created a unique, fast moving and successful business. Responding to the 2013 opportunity, he purchased a warehouse for non-GMO and organic products in Riceville, 20 minutes from the Frantzen home farm. By mid-2014, he began construction of a feed mill, allowing him to grind and mix ingredients. Continuing demand led him to add a grain cleaning and bagging facility in late 2015. March 2017 marked the completion of a large addition, housing a CPM 3020 Pellet Mill operation. The facility also includes a truck scale, bins, and new loading dock, as well as a fleet of trucks and trailers.

Riverside Feeds today works with large organic and non-GMO food producers with byproducts to dispose of. Typical byproducts are soy or oat cleanouts, screenings, hulls, flours, flakes and fines. The byproducts are reprocessed using Riverside’s hammer mill and mixer, and often pelleted. Pellets are either sold to feed mills as a feed ingredient, or mixed into a finished feed ration. Because of the fluff and dust that come with byproducts, such as the oat screenings produced by nearby Grain Millers, farmers would have a hard time feeding byproducts directly, Frantzen said. “But, the oat screening pellets we produce from the byproduct offer high-quality, easy to handle protein and fiber,” he explained.

While the business success is easy to see, the amount of work and careful decision making cannot be overlooked. Beginning as an expansion of Frantzen Farm Feeds, Frantzen and his dad ran the combined business together until 2016, when he bought out his dad. Frantzen is now the sole owner, although his father is still available to discuss business decisions.

“We are not a standard feed mill,” Frantzen emphasized. “We’ve taken a very different approach.” He points out that since their model is unique, there have been no recipes to follow to develop the business. With his dad’s assistance, Frantzen engineered the complex plant design himself. “There’s been a lot of trial and error and money invested to figure everything out,” he added.

For many years, the original Frantzen mill was doing about 1,000 tons of business annually. This year, the mill will be at 8,000 tons, with most of that growth in the last five years. Growth is already running ahead of projections made for the March 2017 expansion, Frantzen said. While he acknowledged the excitement of success, he also noted the hard work such rapid growth demands. He is quick to point out that People’s Savings Bank of Elma, Iowa, has been instrumental in his success.

“Working with a small, local bank has made all the difference,” he said. “What we’re doing is so unique, they had no model to fall back on. We worked together to figure things out.”

The Northeast Iowa bankers didn’t have a lot of experience with organic products or markets, either. “They’ve committed to learning a lot,” Frantzen noted. He recently took the bank president and vice president on a tour to the Organic Valley Distribution Center in Cashton, Wis. “They’ve been surprised by the volume and growth of the organic industry, and are excited to learn more.”

He also credits his bankers as being strong partners, helping him make business decisions and projections, and monitor impacts. He also sees his long association as a meat pool member and executive committee member at Organic Valley as a factor, contributing to his knowledge base and support.

One of the keys to Frantzen’s success has been focusing on exactly what he wanted to do and not getting distracted by other potential opportunities, he said. Focusing on recycling byproducts for the organic and non-GMO feed industry has kept him successfully on task.

He sees growing demand from both the source companies and feed customers (livestock operations looking for quality organic and non-GMO feed rations). Riverside Feeds currently receives byproduct from a half dozen suppliers, and ships product to about 100 feed mills, brokers and farmers. While the majority of the product is shipped by the semi-load, Riverside Feeds does some direct sales to farmers, producing a few mixed rations in totes and 50-pound bags.

Seventy-five percent of their product is certified organic, the rest is non-GMO, with the entire processing facility GMO-free. The new pellet mill allows the company to make custom pellets for specific needs, including returning byproducts to the source companies in more
usable forms.

With fall harvests going strong, Frantzen has been fielding a lot of phone calls from farmers looking to sell grain. He must explain that Riverside Feeds does not buy raw materials from farmers, has no storage facilities, and is not a potential end market for farm grain.

The organization’s newly crafted mission statement summarizes the business niche well: “Revitalizing industry byproducts for livestock feed by recycling organic and non-GMO grain materials for family farmers.“

Read more about Riverside Feeds, LLC at www.riversidefeeds.net.

Jody Padgham writes from her 60-acre grass-based farm in North Central Wisconsin.

 

From the November | December 2017 Issue

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