There’s big news coming out of Omaha and Minneapolis today: ConAgra Mills and Horizon Milling (CHS and Cargill’s flour milling group) have joined flour mill operations. The combined operations, called Ardent Mills, will: “…take advantage of the combines assets, capabilities and experience of the three corporations to bring innovative flour and grain products, services and solutions to the marketplace,” according to a press release distributed by the companies on March 5.
In short, Ardent Mills was created as a way to integrate two already very large milling companies into one even larger company. In each company’s respective 2012 fiscal years, ConAgra Mills, currently a part of ConAgra Foods’ Commercial Foods segment, had $1.8 billion in sales; Horizon Milling, $2.5 billion.
More from the Press Release:
“Ardent Mills’ vision will be to help customers increase their growth and profitability in an ever-changing marketplace. Its products will be backed by an extensive network of wheat sourcing capabilities and flour milling and bakery mix facilities across North America. The company will offer a unique set of services, including product development resources, technical and application support, supply chain management and commodity price risk management. Ardent Mills also will tap the market knowledge, transportation logistics, consumer insights, food ingredients and culinary expertise currently available through ConAgra Foods, Cargill and CHS.
“Suppliers, including the many farmers and cooperatives that currently provide wheat to the milling operations of ConAgra Mills and Horizon Milling, are expected to benefit from the additional sourcing opportunities provided by Ardent Mills’ asset base, as well as from more opportunities to make value-adding connections to consumers.”
One industry insider with knowledge of all three companies told us that on the outset, the deal doesn’t look to be favorable to farmers.
“My initial view is that the price of wheat just went down, and the price of flour just went up,” he told Kansas Wheat.
The company’s operations and services will be supported by 44 flour mills (two mills in Kansas), three bakery mix facilities and a specialty bakery, all located in the U.S., Canada and Puerto Rico. The location of its headquarters will be determined at a later date. ConAgra Foods and Cargill will each own a 44 percent stake in Ardent Mills, with CHS owning a 12 percent interest. All three companies will have representatives on Ardent Mills’ board of directors.
The formation of Ardent Mills is expected to be completed in late calendar year 2013, following regulatory clearances, financing and the satisfaction of customary closing conditions.