Abundant Ag Uses a REED Fund Loan to Make Regional Pig Farms More Sustainable

Abundant Ag Uses a REED Fund Loan to Make Regional Pig Farms More Sustainable Main Photo

18 Jun 2024

Abundant Ag takes a unique approach to pig farming. The company buys food waste from processing companies and repurposes it into a pig feed ingredient, commonly referred to as bakery meal. The process reduces the amount of food that is sent to the landfill while providing nutritious and affordable feed options for local farmers.

Jason Schaefer from Abundant Ag recently secured a $420,000 loan through the Rural Electric Economic Development, Inc (REED) Fund to grow the company’s operations in Benson, Minnesota. The loan will be used to expand the company’s processing facility from 4,000 square feet to 52,250 square feet so it can sell its bakery meal to more farmers in the region.

“We finish about 15,000 pigs a year, which is small compared to some operations,” says Schaefer. “However, because we are farmers, we understand firsthand the needs of other pig farmers around us. This allows us to adjust our business model to better meet their needs.  Our goal is to help other producers improve their bottom line while running a profitable business ourselves.  We feel we have the ability to do this.”

Learn how Abundant Ag can better serve the pig farming community and other local businesses through the REED Fund loan.     

How Abundant Ag Produces a Better Feed Ingredient with Economic Value

Between 30 to 40 percent of food grown in the United States is thrown away. While this occurs on a micro level (like the banana turning brown on your countertop) it also happens during processing. Companies often throw away perfectly good fruits and vegetables because they are bruised or oddly shaped. Processing companies also create scraps when they are producing food like bread, pasta, and cheese. Abundant Ag contacts processing companies and buys their waste, saving food items from landfills.

Saving food is just the first step in Abundant Ag’s process. The next step is to turn it into bakery meal. Schaefer’s team sorts the waste by nutritional value and creates a product that has higher levels of sugar and fat content than the average feed options sold to farmers.

Farmers can then purchase a higher quality feed ingredient which helps them grow the same-size pigs while feeding them less. This is commonly referred to as feed conversion. Pigs being fed bakery meal typically have improved feed conversion as the main benefit.  Schaefer estimates that this feed conversion improvement provides an extra $2 per pig cost savings each year.

“Two dollars per pig might not seem like a lot,” says Schaefer. “But it adds up when you raise thousands of pigs each year. Two dollars for each of our 15,000 pigs means an extra $30,000 in profit annually.”    

Abundant Ag Uses REED Funds for Remodeling and Equipment

The $420,000 loan by the REED Fund accounts for only part of the $1.5 Million needed to complete this project. Schaefer and his family also used their own money to make this warehouse expansion a reality and applied for private loans to reach their financing goal.

“Agralite Electric Cooperative’s support for Abundant Ag through the REED fund is a great example of the cooperative assisting and stimulating local business growth while positively impacting the communities that we serve,” says Jenny Stryhn, CEO and General Manager of Agralite Electric Cooperative.  

The money for this project was used to purchase and remodel an existing building, invest in equipment, and provide working capital to get the new operations off the ground.

“The people at the REED Fund were easy to work with and the whole process was painless,” says Schaefer. “You typically have to jump through lots of hoops to secure business financing, but the REED staff guided us through each step.”

Representatives from the REED Fund carefully review each loan application and consider the economic impact the project will have on the region. Not only will Abundant Ag protect the environment with its efforts, but the project will benefit business owners across almost all of the REED Fund’s member coops

Abundant Ag Has a Multi-State Economic Impact

Abundant Ag has the potential to expand significantly in the coming years. The company rescues food from processors in Minnesota, Wisconsin, Iowa, and North and South Dakota, creating a positive environmental impact across the Midwest. Because the bakery meal Abundant Ag creates is more nutrient-dense, thousands of pounds of pig feed is saved annually through reduced demand from farmers while producing the same amount of pork without sacrificing quality for the end user.  

It is gratifying to contribute to a community-rooted business with future growth opportunities that provides affordable feed options to our local farmers,” says Stryhn.  

There are also secondary benefits of feeding bakery meal. Farmers won’t wear out their feeding equipment and trucks as quickly because they will use them less. This saves money while reducing mechanical waste. Reduced demand for feed lowers the number of trucks on the road, cutting back on fuel usage and emissions.

Abundant Ag also directly benefits Benson businesses. Schaefer makes a point to take potential customers to lunch in town whenever they visit his facilities. This supports local restaurant owners and their employees.  Abundant Ag has also spent more time at area Benson businesses purchasing parts, tools, services, etc.

The REED Fund Supports Several AgriBusiness Projects

The REED Fund has funded more than 60 AgriBusiness projects and 186 business and industry development projects in its history. The loan for Abundant Ag is a great example of the REED Fund helping a company grow so it can support the community at large. Learn about the different loan types available to see if your project is a good fit.