Cooper Farms diversifies from turkey to pork, eggs

Cooper Farms has grown from a turkey processor to a private labelvalue-added meat processor by expanding into pork and eggs through strategicacquisitions.

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Cooper Farms’ two hatcheries in Oakwood, Ohio, are supported by 10 breeder farms with 11,000 hens each, which supply approximately 15 million turkey poults per year.
Cooper Farms’ two hatcheries in Oakwood, Ohio, are supported by 10
breeder farms with 11,000 hens each, which supply approximately 15 million turkey poults per year.

Cooper Farms thrives in a poultry market crowded with larger, branded competitors by being efficient in live production and staying close to customers as a private-label, value-added meat processor.
A lot has changed since Virgil and Virginia Cooper founded Cooper Farms in 1938 through growing around 500 meat turkeys, mainly for the holidays. Virgil retired in 1980 and handed over day-to-day management of the company to his sons, Jim and Gary, and daughter, Dianne. They have continued to focus on quality and innovation raising turkeys in a low-stress environment and growing Cooper Farms into one of the largest family-owned turkey processing companies in the country. The company is now also involved in the egg and pork production businesses.

Cooper Farms: Base in turkey production and processing

The Oakwood, Ohio-based company has operations in turkeys, chicken eggs and the production of market hogs. 

Cooper Farms ranks 12th largest among U.S. turkey producers in WATT PoultryUSA‘s rankings of U.S. poultry producers. It processed 208 million pounds of live turkeys in 2014.

The company ranks as the 23rd largest U.S. shell egg producer, with approximately 3.4 million laying chickens, according to Egg Industry.

From poultry live-production to diversification in pork

The 77-year-old company’s integration of its poultry businesses and diversification into the pork segment are relatively recent. Cooper Farms built its turkey slaughter and deboning plant in St. Henry, Ohio, in 1987 and opened it in the spring of 1988. The startup of the cooked meats plant in Van Wert, Ohio, followed in 1991, as Cooper Farms focused on private-label, value-added meats. It entered the pork business raising commercial market hogs in 1994 and wean-to-finish pigs in 1997.

Major moves in pork and eggs businesses in 2014

The year 2014 saw an explosion of deal making by Cooper Farms that has clinched its transition from poultry and egg producer to integrated, diversified producer of meat proteins.

Cooper Farms built on its strength in value-added turkey production in 2014 with joint ventures in pork processing and egg further processing, along with an acquisition in the egg business that added specialty egg products and significant volume to the company’s existing shell egg business:

  • In December 2014, Cooper Farms announced it would partner with 11 hog farms and Clemens Food Group (family-owned integrated pork operation based in Pennsylvania) to build a fresh pork processing plant in Coldwater, Michigan. The plant, which is to be operational by late 2017 or early 2018, would be the state’s only pork processing plant.
  • Also in December 2014, Cooper Farms formed CW Egg Products, a liquid eggs business, as a joint venture with Weaver Brothers, with the 50/50 purchase of Perham Egg's facility (from North Central Equity LLC) in Fort Recovery, Ohio.
  • In August 2014, Cooper Farms acquired the Fort Recovery Equity egg layer and pullet cooperative, and gained a 2-million-chicken egg layer and inline egg processing operation and feed mill, along with 42 contract growers. The operation includes a variety of specialty egg laying flocks for niche markets. The newly acquired feed mill provides ability to create specialty feeds and accept specialty grains.

Juggling deals in pork and egg businesses

With the three business agreements being completed in close succession, it’s only natural to inquire as to the strategy involved.

Cooper Farms Chief Operating Officer Gary Cooper said: “The motivation for each of the agreements was opportunistic; there wasn’t a grand strategy behind pursuing them at that particular time. It was truly coincidence that the three major projects all came to fruition in the same year. Each one was on its own path, but we brought them all to a positive ending at about the same time.”

Handling simultaneous negotiations for the agreements over a number of months was an interesting challenge, Cooper admitted. “My son, Luke, and I were on a hunting trip in South Africa during the negotiations, and due to the time differences involved some Cooper Farms team members were a little surprised to be receiving texts and emails at 3 a.m....

“Our management style at Cooper Farms is not to over-analyze business decisions,” he continued. “In these agreements, we simply were responding to the opportunities that had been presented."

Strategic goals focus on corporate strengths

The recent acquisitions and the planned venture in the pork business will allow Cooper Farms to diversify its business into three core segments – turkey, pork and eggs, according to Cooper. The deals fit with the strategic goals he outlined:

  • Building on the company’s strength in growing animals
  • Focusing on value addition in private-label meat proteins (staying out of the commodity business when possible and avoiding head-to-head competition with larger, branded producer-marketers

“We have a group of people at Cooper Farms who love working with animals and are good at it, so it was easy for us to diversify into the hog production business in the first place and to get more deeply involved in the egg business at this time,” he said.

Egg business poised for value addition

Cooper Farms entered the egg business after it acquired half interest in St. Clair Mills in 1978 and later bought out its partner, Staugler Brothers. Cooper Farms' layer flock had increased to 1.6 million hens by 2010.
Today, with Cooper Farms' recent acquisitions in the egg business, the layer flock numbers 3.4 million hens, but the position in the egg products business is significant in Cooper’s business plan.

“We have been working towards developing our egg division into a more core business for us in recent years,” Cooper said. “We have pursued a few different opportunities for our egg division, and we’re very happy with our Ft. Recovery Equity co-op acquisition. It gives us a much needed fourth feed mill, an egg grading-processing inline farm, as well as more pullet and layer production. This acquisition fits our company model well and includes many growers who are already growing hogs or turkeys for us.

“The Perham Egg breaking facility gives us and Weaver Brothers another option to sell some of our egg production through. Plus, we have plans to enhance those operations into the next level for value-added liquid egg sales.”

Cooper indicated the company is also looking at the feasibility of producing cooked egg products in the future.

Coldwater pork processing deal

The 550,000-square-foot Clemens Food Group pork processing facility to be located in Coldwater, Michigan, is expected to cost $255.7 million.

Cooper Farms along with 11 other independent hog producers bought preferred shares in Clemens Food Group in the deal that gives them, along with Clemens Food Group, use of the pork processing facility.

The plant in southern Michigan is strategically located in an area near the state’s borders with Ohio and Indiana, and is close to the partnering farms like Cooper Farms that are raising hogs. The plant also is accessible to what is anticipated to be an available, strong workforce in Coldwater and the surrounding communities.

The plant initially will be a fresh pork plant but in time may also produce bacon and cooked pork products.

“Closing the Clemens Coldwater Pork Processing deal enables us to take our hog division to the next value-added step or in other words, 'farm to fork.' This addition to our core hog business will somewhat mimic our fully integrated turkey division,” Cooper said.

Value-added turkey sales growing

Cooper Farms focuses on the production of private-label, value-added cooked meats in its turkey division. The bulk of the dark meat eviscerated and deboned at the St. Henry plant is sold on the commodity market, while all of the white meat goes to the Van Wert plant for cooking and slicing or the production of turkey burgers. The 15 million pounds of turkey burgers produced go to 13 different customers.

“The decision to focus on the private-label business was quite timely,” Cooper said. “At the time we started in the processing business, numerous companies were looking for private-label turkey products. We have continued to expand the cooking operation to keep up with the demand.”

Production of cooked product is about 1.6 million pounds weekly during the summer months and 1.2 million pounds in the winter months.

Director of food processing, Tom Wisvari, said, “Volume in value-added meats in 2015 is up between 7 percent and 10 percent. We are seeing a shift in demand from bulk deli-type products to more specialized, smaller pieces and value-added sliced products.”

The company is expanding the browning capabilities of the Van Wert plant due to the strong increase in demand for browned-in-oil turkey meat products.

Cooper Farms offers value-added chicken, too

Cooper Farms’ product line also includes value-added chicken, with the chicken meat being sourced on the commodity market.

“It’s a little-known fact that when Cooper Farms purchased St. Clair mills, they were raising about 1.5 million broilers [annually] for two local chicken processing companies, and Cooper Farms continued this through the 1980s and partially into the 1990s. We were a very small producer in the broiler industry, and thus the reason we got out of that part of the poultry business,” Cooper said.

Deal-making opens way for integration, diversification

Cooper Farms' recent acquisitions and joint ventures open the way for further integration and diversification in the company’s egg and pork divisions. They are a continuation of dramatic changes at the company.

Gary Cooper explains, “Cooper Farms was only a turkey hatchery supplying poults to the industry through the 1950s. In the 1960s, we started growing more of our own turkey flocks and expanding from then forward. The main difference between us and some other turkey farming families is that we did not start up a processing plant early on. Ours didn’t come into existence until April 1988.

“These recent acquisitions allow us to diversify our business model into three core businesses – turkey, pork and eggs. We look forward to further enhancements in the years to come for Cooper Farms.”

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