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Don Hofstrand. Ag Ventures Alliance. A Development Organization for Value-added Agricultural Ventures. Ag Ventures Alliance. Mission To facilitate the development of value-added agricultural business ventures. Ag Ventures Alliance. 1) Create new value-added business ventures.
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Ag Ventures Alliance A Development Organization for Value-added Agricultural Ventures
Ag Ventures Alliance Mission To facilitate the development of value-added agricultural business ventures
Ag Ventures Alliance 1) Create new value-added business ventures. 2) Assist existing value-added businesses develop and expand.
Ag Ventures Alliance MMembership ·$250 initial investment ·$0 to $50 per year thereafter ·Membership list is confidential
Ag Ventures Alliance Current Membership 1,153 Accredited Investors 426
Ag Ventures Alliance Membership Distribution 1 5 1 22 82 91 76 14 5 1 197 5 9 81 133 56 22 5 2 1 2 4 11 8 22 27 10 6 4 12 9 6 7 5 1 2 5 1 6 4 1 1 6 4 7 1 3 1 1 1 1 3 1 1 1 1 1
Ag Ventures Alliance Type of Members Percent Farmers 91 Farm Mgmt. 1 Cooperatives 2 Lenders 1 Organization 1 Landowner 2 Other 3
Ag Ventures Alliance • Past Projects • Golden Oval Eggs (1998-1999) • Midwest Grain Processors (2000-2001) • Golden Oval Eggs (2000-2001) • Minnesota Soybean Processors (2001-2002)
Ag Ventures Alliance • Golden Oval Eggs • 2.7 million bird facility • Integrated layer and breaker • Thompson, Iowa • Permitted for 5.5 million birds • 700+ farmer members
Ag Ventures Alliance • Midwest Grain Processors • Agricultural Industrial Park • Ethanol production facility • 45 million gallons • 16 million bushels of corn • 900+ farmer investors • Investigating additional corn processing • Lakota, Iowa
Ag Ventures Alliance • Minnesota Soybean Processors • Soybean processing plant • 100,000 bu. per day • Brewster, Minnesota • 2000+ farmer members • Oil refinery
Ag Ventures Alliance • Current Projects • Northern Iowa Dairy Development Committee • Aqua-Ventures • SoyEx • Brazil Ag Enterprises • Energy Committee • Other
Ag Ventures Alliance New Markets Tax Credit Program (NMTC)
Ag Ventures Alliance • New Markets Tax Credit Program • 39 percent Federal Tax Credit • Over seven years • 5% in each of years 1-3 • 6% in each of years 4-7 • Located in “low income communities”
Ag Ventures Alliance • Benefits of the Tax Credit • Easier to attract equity capital • Lenders can provide loans with lower interest rates or more favorable terms.
Ag Ventures Alliance • Rural Development Partners LLC • Subsidiary of Ag Ventures Alliance • Community Development Entity (CDE) • Applied for NMTC allocation • Received allocation of $44.7 million • Value-added businesses located in rural areas • National service area
Ag Ventures Alliance Has it been successful? www.agventuresalliance.com
Value of Business Development Producer Alliances(leaders) • Interact with others with similar interests • Idea synergies • Build leadership (champion) skills • Build business creation skills • Building relationships with other organizations, businesses
Value of Business Development Producer Alliances(leaders continued) • Funds to investigate business ideas • Equity capital • Bull-pen business ideas until market and/or technology timing is right
Value of Business Development Producer Alliances(Members) • Access to value-added information/education • Direct notification of value-added business opportunities. • Potentially better quality business ventures • Array of business opportunities • Build business evaluation skills