Peco Foods expands its Newark, Ark., feed mill, poised for growth

Anticipating major growth in the coming years, Tuscaloosa-based poultry producer, Peco Foods, invests $14 million in the expansion of its Newark, AR, feed mill. The facility upgrades during this renovation include a new pellet line, improved grain receiving and an additional 2 million bushels of storage.

Jackie Roembke | The final stage of Peco Foods’ Newark feed mill expansion included the installation of a new CPM pellet line, which features a 67-foot horizontal cooler housed on an upper deck of the mill’s warehouse. Management at Peco Foods’ Newark, AR, feed mill, from left to right: Tracy Jones, assistant feed mill manager; David Durham, feed mill manager; Duane Weems, director of live operations – Arkansas.
Jackie Roembke | The final stage of Peco Foods’ Newark feed mill expansion included the installation of a new CPM pellet line, which features a 67-foot horizontal cooler housed on an upper deck of the mill’s warehouse. Management at Peco Foods’ Newark, AR, feed mill, from left to right: Tracy Jones, assistant feed mill manager; David Durham, feed mill manager; Duane Weems, director of live operations – Arkansas.

Peco Foods expanded its reach into Arkansas with the assets it acquired from Townsends, Inc. in 2011. This move made Peco the 8th largest U.S. poultry producer. The Tuscaloosa-based company currently operates five kill plants, five hatcheries, five feed mills and two further processing facilities in Mississippi, Alabama and Arkansas.

In Arkansas, Peco currently contracts 144 farms and 566 broiler houses; however, to meet the growing demands of the retail sector, the company plans to add another 211 houses by 2015. Peco Foods' Arkansas growing operation, which currently processes about 890,000 birds/week, will move to 1.3 million birds/week.

Top this with its ambitious goal to raise its target weight for broilers from 9 pounds to 9.5 pounds by pushing processing out from 61 days to a 64-day average, it was apparent the existing 15-year-old Newark, Ark., feed mill needed modifications.

Additionally, in hopes of saving on raw material costs for feeding birds of this volume, the company sought to maximize its ability to buy and store grain from local producers in the commodity-rich northeastern corner of the state.

"We knew we needed to find a better way to tap into the grain produced by our local farmers in order to increase our production here in Arkansas," says Duane Weems, director of Peco Foods' Arkansas live operations.

The desire to source grain locally -- and to keep up with the demands of production -- prompted Peco Foods to invest in a $14 million expansion of its Newark feed mill. The company hired Younglove Construction, LLC to handle the expansion, which encompassed upgrades to three portions of the operation: added grain storage, a new pellet line and improved grain receiving.

Major upgrades to grain receiving

Peco Foods sources grain, which includes corn, milo and wheat, from a 100-mile radius from the mill. All grains are delivered by truck; however, it does receive soybean meal shipments by rail from out-of-state processing plants.

"We have a cost advantage on basis in grain delivery because the majority of our ingredients are produced close to us and competition in the area is limited," explains David Durham, Newark's feed mill manager.

While corn is the primary ingredient in Peco's formulations, the mill began diversifying its diet requirements to include more milo and wheat in order to capitalize on the availability in the area. This "win-win" helps the mill better manage its costs, as well as allows the local farmers to rotate their crops.

Given the opportunities provided by the local grain supply, the expansion of the Newark mill aimed to make grain receiving as appealing -- and as fast -- as possible.

In 2012, Peco Foods added a new inbound and outbound Cardinal scale system and cut its unloading time in half, which allowed it take in more grain that it ever had before. The company quickly realized it needed to add more storage and a high-speed receiving system.

Peco Foods installed a new 20,000-bushel/hour Essmueller leg and pit. After this addition, the mill began receiving more than 200 trucks a day with unloading times averaging three to four minutes.

Once the mill's unloading time decreased, the bins filled up faster than Weems and Durham had anticipated. Today, the new bins at the Newark mill are full.

"We've heard a lot of pretty positive comments about the work we've done," Weems says. "They really like selling the grain to us and delivering it here because the flow is much faster."

Durham adds: "I think the excitement began when the local farmers actually saw Peco try to take the initiative to cater to them. So far this enthusiasm hasn't quit. It keeps rolling right along."

Additional storage jumps grain intake

To cater to the increased amounts of grain delivered by the mill's improved receiving system, Peco Foods needed to provide more storage than its existing one million bushels of storage capacity. In December 2012, contractors began the groundwork for the erection of its two new 985,000-bushel slipform silos.

The construction of these concrete bins was complicated by the fact that the feed mill is located in the New Madrid fault zone. To account for a potential seismic event, Younglove adjusted the structural support under the bins to include 376 18-inch-by-42-feet deep pilings under each silo.

The silos were completed in time for the 2013 harvest. This increased capacity matched with the efficiencies of its upgraded grain receiving system resulted in an impressive commodity intake. In all of 2012, the Newark mill handled 7.9 million bushels of corn, 1.2 million bushels of milo and 874,000 bushels of wheat. In contrast, in September of 2013 alone, the mill received 3.1 million bushels of corn, 437,000 bushels of milo and 686,000 bushels of wheat.
"We've definitely become the place to sell grain," Weems says.

New pellet line requires warehouse makeove

Meanwhile, in February 2013, the mill's expansion began with the addition of a new CPM horizontal pellet line.

Originally, it had been equipped with two CPM 7932 pellet lines capable of producing 55 tons/hour a piece. The facility upgraded its No. 1 pellet line with the addition of a 90 ton/hour CPM 9042 pellet mill.

"This addition gives us an approximate total production of 130 tons/hour," Durham explains. The equipment transition also included a new CPM horizontal cooler, APEC coater cabinet, CPM crumbler, leg and a double-stack CPM conditioner.

"We installed the new crumbler on line No. 1 and moved No. 1's existing crumbler to pellet line No. 2," he explains, noting that the changes have increase production by 30 percent.

During construction, the actual footprint of the mill did not change, it just moved upward.

Weems explains: "I think the biggest challenge was how to physically expand the inside of the mill. We had a vertical cooler, a counter flow cooler -- which was inside the mill itself -- and a metal warehouse connected to part of the concrete mill. The engineers decided to pull the roof off of the warehouse, pull the equipment out and then add the new 67-foot horizontal cooler, which actually extends out into the warehouse and is housed on an upper deck."

The warehouse remained exposed for three months and, at this point, the main challenge was keeping water out of the mill. Luckily, the weather cooperated and they only had to shut the mill down once during a bad storm.

The revamped mill became operation by the middle of March 2013.

"We're currently making about 9,000 tons/week," Weems says. "Once the expansion of broiler production is complete, we'll be making 13,500 tons/week."

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