Already heavily invested in poultry production in southern Alabama, U.S., Wayne Farms LLC recently increased its commitment to feed production in the region with the completion of a $55 million feed mill near Newton, Alabama.

The 50,000-square-foot facility, which has production capacity of 25,000 tons per week, is the largest startup feed mill in the United States, Wayne Farms spokesman Wayne Singleton told World Grain.

“Some have a bigger footprint because they’ve been added to over the years, but this is the largest startup feed mill in terms of the size of the facility and also the tonnage,” Singleton said.

Brad Williams, area complex manager for Wayne Farms, said about four years ago the company decided to expand poultry production at its Dothan, Alabama, plant that it acquired in 2012, doubling the size of that facility, which meant it needed to ramp up feed production to serve that plant. Williams said company officials debated whether to expand production in its three existing mills in that area — Troy, Alabama, DeFuniak Springs, Florida, and Enterprise, Alabama – or to build a new mill.

“Those three mills will be impacted by this and will eventually be on the market to be sold as the result of building this mill,” he said. “This mill will take on the production of all three of those mills.”

Elton Maddox, chairman and chief executive officer of Wayne Farms LLC, said he was confident the investment in the new mill would pay off for the company in the region for years to come.

“It will serve the farmers and our company well,” he said. “We couldn’t be more proud and we couldn’t be more grateful for the support we received in completing this facility — from our own team, our CSX partners, local, regional and state agencies, the cooperation has been outstanding.”

It took about 20 months from groundbreaking to startup of the new mill, which began operations in January. But before that, Wayne Farms had to purchase 165 acres of land from four different land owners. Once the transaction was completed, the company was confronted with an unforeseen problem.

“This piece of property appeared to be pretty level to the naked eye, but the main rail line that runs through here was significantly higher than this property so we had to move a lot of dirt around,” he said. “It presented challenges we didn’t foresee in the beginning.”

The 232-foot-tall slipform concrete structure features a rail-based receiving area with three receiving systems and a 4.4-mile, 90-car rail grain loop and 80-car ladder track soft stock storage loop.

“It’s a pretty unique receiving building,” said Kris Torbert, operations manager, South Alabama. “There are three pits — one is simply designed for trucks and can take a whole truckload of corn in six minutes. There’s also a combo pit that takes both rail and truck, and the other pit is exclusive to rail corn, and in that pit we can unload a rail corn 90-car unit in about 10 hours.”

Williams said about 80% of its corn and other feed ingredients are shipped in by rail, with the rest coming in by truck. The facility has 1 million bushels of corn storage, about 4,200 tons of soybean storage and a small silo for DDGS storage. All storage units are slipform concrete silos. Inside the mill there are 26 bins, each with a capacity of about 240 tons, for ingredient storage.

“We use up to 27 million bushels of corn, and 3 to 4 million bushels of that will be local corn grown in Alabama, south Georgia and south Mississippi,” he said.

A dedicated scale house with a robotic sampling arm allows for precise measurement of incoming and outgoing ingredients and products, Torbert said.

He said the mill can mix about 15 feed formulations, using corn, soybean meal and various minerals and vitamins to produce multiple dietary preparations, ranging from baby chick feed to broiler, pullet and hen formulas.

The mill features primarily CPM milling equipment. It includes: a dual batching system with 162-tph capacity, dual 10-ton mixers, and two 20-bin microingredient systems; three pelleting lines each rated at 90 tph, three pellet mills, each with dual conditioners, horizontal coolers and crumblers.

“The really neat thing about this feed mill is that it’s basically two mills in one,” Torbert said. “There are two batching lines; two lines where product is being mixed. After that there are three pelleting lines. That’s a very unique thing about the mill.”

Wayne Farms used Todd & Sargent, Ames, Iowa, U.S., as general contractor for the project.

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Surviving the commodities bubble

Wayne Farms, like other U.S. poultry producers, endured a difficult business climate beginning with the global economic downturn in the late 2000s that saw commodity prices soar and remain volatile for a four- to five-year period. During that time, Wayne Farms closed its poultry processing plants in College Park, Douglas and Oakwood, Georgia, U.S.

“We went through a situation several years ago where the price of corn really skyrocketed,” Williams said. “It impacted our industry pretty significantly with losses across pretty much all companies. There were companies that went out of business, there were several bankruptcies and most had to streamline things to some degree.

“But since then things have leveled out a bit. The price of corn being stable the last couple of years has been a part of that leveling out. The price of chicken has been up and down, but the price of corn has been stable and that certainly has helped our profitability.”

Williams said the weakening demand for ethanol made from corn in recent years has helped stop the bleeding.

“The diversion of corn to ethanol wasn’t anticipated to boom like it did,” he said. “But eventually they found the return on investment just wasn’t there. The global climate impact aside, from an economic standpoint ethanol just doesn’t make sense. It doesn’t work at all without subsidies.”

Continental Grain’s impact

Although a formidable force in the U.S. poultry industry today, Wayne Farms’ historical roots are in feed milling. It all began in 1895, when Marsden Company of Philadelphia, Pennsylvania, U.S., organized Allied Mills Inc. Several years later, Marsden consolidated its manufacturing of commercial feeds and changed its name to American Milling Company.

The eventual company name, Wayne Farms, stems from D.W. McMillen’s 1916 purchase of a small elevator in Fort Wayne, Indiana, U.S., which began manufacturing a feed called Wayne. In 1929, Allied Mills acquired the business, which had been operated by D.W. McMillen and the American Milling Company.

Nearly 30 years later, in 1957, Allied Mills entered the poultry business with the construction of a plant in Laurel, Mississippi, U.S. The company purchased another poultry plant in 1961 in Union Springs, Alabama, U.S., and named it Wayne Farms.

That led to a game-changing moment for the company in 1965, when New York-based Continental Grain Co. acquired 51% of the common capital stock of Allied Mills through a tender offer made to the shareholders of Allied. At that point, the decision was made to spin off the poultry division and focus on the manufacturing and sale of fresh poultry under the Wayne Farms name.

“That’s what transformed the company,” Singleton said. “At that point vertical integration from a feed business and poultry production standpoint made a lot of sense, and so those synergies were brought together. With the resources and assets of Continental, the company now had access to markets that it wouldn’t otherwise have access to, and also access to capital and investment that it didn’t have before.

“The company was able to do some things during that period of time that really got us to the position we are now, ranking in the top 10 poultry producers in the U.S. for a number of years.”

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Business strategy

Singleton said Wayne Farms also made a strategic decision around that time to focus on being “a manufacturer and a partner of choice rather than being a retail brand.

“As poultry production became part of that business model, Wayne Farms’ relationships have been with big retail, food service, branded companies as the manufacturer of choice,” he said, noting that one of the company’s biggest clients is the well-known fast-food restaurant Chick-fil-A as well as Zaxby’s. “Most of the retail restaurants you’ve heard of we do business with from time to time. We consider ourselves a business-to-business company so you don’t see our products in the grocery store.”

As part of that business-to-business model, Wayne Farms does a lot of research and development on specific products for its customers.

“So many companies have products that they produce and say, ‘This is what we sell,’” Williams said. “But Wayne Farms does specialty work with customers and asks them, ‘What do you need us to do for you?’”

To strengthen their ability in this area, Wayne Farms is expanding its research and development plant in Decatur, Alabama, U.S., with the expansion scheduled to be completed in 2018. Williams said the plant features automation with the ability to make products on a particular scale and replicate them.

Global footprint

While the majority of Wayne Farms’ products are sold in the United States, the company has seen growth in its export business. Approximately 6% of its production is exported, mostly products such as leg quarters, drumsticks, wing tips and paws, to countries such as Armenia, Bahrain, China, Iraq, South Korea, Mexico, Russia, Singapore and United Arab Emirates.

“We sell leg quarters all over the world,” Williams said. “We sell paws in the Far East. We don’t really go into the European Union, but basically we do business everywhere else.”

A trend that poultry producers have been addressing worldwide in recent years, but particularly in the United States, is the growing demand for antibiotic-free chicken. Williams said Wayne Farms is trying to stay ahead of the curve in that area.

“We are adjusting for growth in that area,” he said. “It’s the future; that’s why we are raising chickens in that location that have never been administered antibiotics and are fed a vegetarian diet. We are trying to stay out in front and see where the market is going.”