A few years ago, a community in southern Manitoba set out to save its local elevator.
The number of businesses on Mather’s main street already had thinned out, the local school was closed, and residents were anxious to keep what remained of their town.
In desperation, a committee was formed to explore possible uses for the elevator.
One of the ideas was to convert it to a feed mill, but that would mean finding a market for the feed.
Further brainstorming suggested that a feedlot or hog barns could be built, creating a local market for the feed.
Read Also
Canola oil transloading facility opens
DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.
The brainstorming eventually paid off, but in an unexpected way.
With the help of a feasibility study, residents learned that it wouldn’t be practical to convert their elevator into a feed mill.
Milled livestock feed could be hauled in cheaper than it could be produced locally.
The elevator was demolished a couple of years ago. But the effort to save that prairie sentinel triggered a sequence of events that led to the pursuit of another venture – one that may soon see annual sales of $3 million.
Crocus Country Pork was started by local investors who realized they could make more money producing hogs than they could by retrofitting an elevator to mill grain.
In 1997, they built a 44,000 sq. foot facility and started an early wean production unit.
They are now working on a 65,000 sq.-foot expansion to produce breeding stock for commercial herds. They will begin stocking the building in April.
“If rural development and diversification can take place in an environment like this, I’m confident it can take place anywhere,” said David Melvin, vice-president of Crocus.
Melvin was one of several speakers at a Brandon conference last week aimed at promoting value-added processing and farm diversification.
During his presentation, he described how the fear of losing an elevator became the starting point for an entirely different venture.
Opening the wallets
One of the challenges, he said, was getting enough money to do a feasibility study,which would indicate whether hog production was the best way to go.
To raise money for the study, a community hall meeting was held where people were invited to chip in $1,000 each. But the exit door quickly became a popular attraction.
“As soon as we mentioned money, everyone ran for the door,” Melvin told his audience last week.
“We were left with seven people sitting at the tables.”
Those seven people persevered, the feasibility study was completed, and it was decided to build the early wean barn.
The next step was finding $1 million to do that. The minimum investment was set at $50,000.
Although the venture was competing with other investment options such as guaranteed investment certificates, the stock exchange and Registered Retirement Savings Plans, 18 people invested the money needed to raise $1 million.
“In fact, it’s worthy of note that we turned investors away,” said Melvin.
Since the early wean unit was built, Crocus Country Pork has been approached by feed companies interested in partnering with the venture. According to Melvin, there have been offers of feed, genetics and even money from the feed companies.
The offers have all been declined.
“We felt that if we took their money and got into bed with them, we’d give up our independence and we wanted to keep that,” he said.
“We could realize a better return on our investment if we managed it ourselves.”
Crocus was approached last year to produce breeding stock for a genetics company, a proposal the farmer-owned venture accepted.
Melvin believes the opportunity arose because it was not already aligned with a feed or swine management company.
Today, Crocus remains owned and controlled by its shareholders.
Melvin believes part of their success is based on the willingness to get outside help when needed.
That included finding a consultant to do the feasibility study, hiring an engineering firm to oversee the design and construction of the buildings, getting legal advice before selling shares and forming a business structure, and paying for expertise in hog production when needed.
Although the elevator was demolished, the town of about 50 people had found what it needed – a way to create jobs and diversify the economy.
Once the expansion is complete, Crocus will have at least seven full-time employees as well as part-time staff. It will use up to 5,000 tonnes of feed grain a year.
