Bartlett Exits Cattle Feeding; Green Plains Expands to 355,000 Head

A pen rider checks cattle Green Plains Cattle Company's feedlot in Kismet, Kansas. Green Plains Cattle started feeding cattle in 2014 after buying the yard in Kismet and has grown to the fourth largest cattle feeder nationally buying feedlots from Cargill and Bartlett & Co.
( Green Plains Inc. )

Green Plains Inc. is continuing to grow its cattle feeding segment with the purchase of Bartlett Cattle Co.

Bartlett & Co. agreed to sell its two feedlots to Green Plains Cattle Company for $16 million, plus working capital. Included in the transaction are Bartlett Cattle’s feedlots in Sublette, Kansas, and Tulia, Texas, with a combined capacity of approximately 97,000 head.

The move effectively ends more than 30 years of cattle feeding for Bartlett & Co. which will continue to focus on its grain merchandising, flour milling and feed manufacturing.

The purchase results in Green Plains Cattle feeding operations reaching a onetime capacity of 355,000 head.

“Our success in cattle feeding over the last four years gives us confidence to continue growing in this area, and adding the Bartlett cattle-feeding operations fits seamlessly into our protein growth strategy,” says Todd Becker, president and chief executive officer of Green Plains.

Included in the purchase is approximately 2,100 acres of land with additional grain storage and access to the Ogallala Aquifer. The working capital in the acquisition includes cattle, grain and other inventories totaling approximately $109 million.

“Expanding our feeding operations by 38% strengthens our ability to further supply our internal demand for the distillers grains and corn oil we produce. This acquisition will be immediately accretive to our earnings in the third quarter and enhances our ability to deliver more stable and consistent earnings to our shareholders,” Becker says.

Through an amendment, Green Plains Cattle increased its maximum commitment from $425 million to $500 million to fund the additional working capital requirements related to the Bartlett acquisition. An “accordion feature” allows the credit facility to be increased by up to $100 million with agent approval in conjunction with the close of the transaction.

The transaction with Green Plains and Bartlett is expected to close Aug. 1, 2018.

This is the second major feedlot acquisition by Green Plains in the past 15 months after the company bought Cargill’s remaining feedlots in Kansas and Colorado. The $36.7 million purchase of Cargill’s feedlots in April 2017 resulted in a 155,000 head capacity increase for Green Plains Cattle.

Prior to these past two moves Green Plains had a total capacity of 100,000 head with feedlots in Kismet, Kansas, and Hereford, Texas. Green Plains, primarily known for its ethanol plants, now has six feedlots in Kansas, Texas and Colorado. With the addition of both Cargill and Bartlett’s feedlots the estimated 355,000 head capacity makes Green Plains Cattle the fourth largest cattle feeder in the U.S. according to data compiled by CattleFax.

Cattle feeding has seen a number of shakeups in the past two years with three major cattle feeders exiting the business including Bartlett, Cargill and JBS. Earlier this month Cattle Empire moved its focus to custom feeding after selling a majority of its capacity to Friona Industries, L.P. Friona has grown to the second largest cattle feeder with the purchase of Cattle Empire and two other Cargill feedlots.

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