ContiGroup Companies Inc and Smithfield Foods Inc have announced the successful completion of an agreement to form a 50/50 joint venture between their respective cattle feeding businesses ContiBeef and MF Cattle Feeding.
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The joint venture, called Five Rivers Ranch Cattle Feeding, is a stand-alone operating company, independent from both ContiGroup Companies and Smithfield Foods. Five Rivers is currently headquartered in Boulder, Colorado and has a combined total of 10 feedyards in Colorado, Idaho, Kansas, Oklahoma, and Texas with a one-time total feeding capacity of 811,000 head. Five Rivers expects to sell cattle to multiple US beef packing firms throughout the US using a variety of marketing methods that were already in place at ContiBeef.
Five Rivers includes the six feedyards originally owned by ContiBeef, formerly a subsidiary of ContiGroup Companies, and the four feedyards owned by Smithfield Beef Group, a subsidiary of Smithfield Foods, since October 2004. The decision to form the joint venture was a result of both companies’ long-term commitment to the beef industry and desire to better service their customers, as well as their expertise in feeding cattle.
“We have a long history with the management team of Smithfield Foods, whom we hold in high esteem, and are delighted to be associated with them in building a premier cattle feeding company. It should be an exciting period for the entire beef industry,” said Paul J. Fribourg, chairman and chief executive officer of ContiGroup Companies.
“We will take our cattle feeding business to a new level by joining with ContiBeef, whom we believe are the best managers in the industry,” said Joseph W Luter, III, chairman and chief executive officer of Smithfield Foods. “I am confident that this combination will enhance the value of our original investment.”
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By GlobalDataMike Thoren, formerly president and chief executive officer of ContiBeef, is president and chief executive officer of Five Rivers. He has been involved in the cattle feeding business since 1991. Thoren and a core team from both ContiBeef and affiliates of Smithfield Foods will manage Five Rivers. “We believe that this partnership will be highly successful and rewarding for all parties in the future – the two businesses, our employees, consumers, and the cattle industry as a whole,” Thoren said.
