The Iowa Quality Beef Supply Network (IQBSN) and American Foods Group (AFG) have signed a memo of understanding to form a joint venture at the Iowa Quality Beef Plant.
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The plant, located in Tama, Iowa, was recently acquired by IQBSN, a producer-owned group, as a location to harvest and process cattle from the Iowa region.
The memo identifies areas of potential business relationships between IQBSN and AFG, including: long-term strategic planning, day-to-day management and on-going operational issues at the Tama facility. AFG will also be included in the marketing strategies for product and byproduct sales.
“This is a good way to take advantage of the strengths of both organisations,” said Wythe Willey, project coordinator for the IQBSN plant. “AFG is a successful company with a [good] reputation. It is also a leader in employee work satisfaction and has made commitment to food safety its number one priority. These attributes are critical to the long-term success of this business.”
Carl Kuehne, AFG owner and CEO agreed: “IQBSN has extensive cattle business knowledge and can provide a long term supply of product.” Kuehne also sees other advantages to the venture. “This is an opportunity to prevent the adversarial relationship which, historically, has occurred between producers and meat packers. It will provide greater value to producers, as well as ensure consistent, quality products that meet growing consumer demand.”
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By GlobalDataIQBSN intends to maintain ownership of the plant property and will seek to capitalise on marketing opportunities for Iowa’s high quality beef supply. “In the short term, we intend to spend the necessary funds to bring the Tama plant up to the highest quality safety standards expected by consumers and work standards expected by employees,” said Willey.
IQBSN will be conducting an equity drive in June and July and, prior to that offering, it will announce its final business plan with full details available to producers interested in investing in the business.
