"Processing is the bottleneck!" How many times have we heard this and wanted to understand this better to be able to support small to mid-sized meat producers and the middle of the supply chain infrastructure? But how many of us really know what it takes to make a meat processing operation financially successful?
Join Esther Park in an open conversation with Mike Lorentz, an experienced and successful meat processing plant owner/operator, to hear what conditions make for an economically viable and maybe even investable plant, and what the supply challenges are from his viewpoint.Be prepared to have some of your ideas and views challenged, and discover unique ways in which we can leverage different types of capital to support the supply chain.
This webinar is geared toward investors and funders in regenerative ag, but is also open to our wider community.
— Watch the Recording —
Scroll to the bottom for resources and notes from the live webinar.
— Speakers: —
Mike Lorentz is the CEO of Lorentz Meats and the managing member of Vermont Packinghouse. The combined facilities employ over 200 people and ship over 15 million pounds of high attribute niche meats annually. Mike has been an advocate for farm direct sales and alternative markets since 1997 when he and his brother Rob took over the family meat processing business.
Facilitation by:
Esther Park is the CEO of Cienega Capital, an investment company utilizing an integrated capital approach to systemic change in the areas of soil health, regenerative agriculture, and local food systems. She has 20 years of experience in mission-based financial services ranging from microfinance to risk capital investments.
— Resoures & Notes —
A few additional thoughts from Mike on financing:
Every business is unique, so the exact form or financial opportunity is specific to each business, but in general, very small meat plants can be assisted with alternative financing. Some examples include:
- Leasing equipment instead of purchasing it. Private leases with individuals and customers are possible, not just from a leasing company. In the case of a customer, they may purchase specialized equipment and take lease payments in the form of reduced processing fees.
- Customers can help finance working capital cycles by making prepayments for processing.
- Contracted production with payment guarantees can sometimes be used as collateral with lenders.
- Specialized lenders like Walden Mutual are entering into the regenerative space.
- Subordinated debt - often acts like equity and is non-threatening to the senior lender. In some cases, lenders can be direct stakeholders like customers or peer-to-peer loans like Go Steward.
- A third party can purchase the building and lease it to the processor.
- At the municipal level, tax increment financing (TIF) or property tax relief may be a source of financing.
- Mid-sized companies ($5 million of capital or greater) can entertain more conventional equity placements as long as management has capacity to manage them responsibly.
- All these financing tools can be helpful to mid-sized companies as well. Larger established companies can require customers to participate in capital expenditures for expanded products or capacities. It shows the commitment from both parties to make a successful partnership. It’s not just for small companies that have limited finance. These transactions can be structured as leases, loans or prepayment of services.
- At Lorentz Meats and Vermont Packinghouse we have benefited from customer leases and prepared services.
Here's a few additional organizations and companies mentioned:
— Questions? —
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