Business is going so well at Kreamer Feed that the Middlecreek Township company will likely need to build a second mill elsewhere or it will not have the capacity to meet its customers’ needs by the end of the year, William D. Robinson, president and CEO said.
The increased demand is largely due to the number of business partnerships the company has entered into, along with the tremendous growth in the demand for antibiotic-free chicken and organic products, Mr. Robinson.
The organic business has been growing at a rate of about 40 percent a year. While the rate of growth on the organic side has been eye-popping, it’s still a very small segment of the total agricultural revenue. And even at Kreamer Feed, a company that’s been marketing organic products for 15 years, the organic side of the business only accounts for about 25 percent of sales.
As organic gains wider acceptance, more and more agribusinesses are trying to cash in, but thus far, the demands been increasing more rapidly than the supply.
Kreamer Feed is one of the biggest suppliers of organic feed in the country.
“We’re even seeing more competition, but there is still strong growth,” Mr. Robinson
said.
The growth in demand has prompted the business to seek farmers to supply the feed far-and-wide, he said.
While the Central Susquehanna Valley has seen a fair number of organic livestock farms begin operation in the past few years, local grain farmers have been much less willing to make that leap.
Part of the challenge stems from the long turnaround time required to convert cropland from conventional practices to comply with the requirements of organic certification. That process can take three years.
Though, on the flip side, it’s not as drastic a step as it sounds, Mr. Robinson said.
A farmer can plant hay during the conversion period and satisfy the requirements to make the leap to organic while still having a revenue source.
The other issue is that the price paid for conventional feed has improved, which makes farmers less likely to be motivated to switch to organic.
But even as conventional corn prices have soared, farmers growing organic corn still get close to double the price per bushel, he said.
Beyond the feed business, much of the company’s revenue comes from raising poultry and eggs, with the most popular variety being the antibiotic-free chicken.
The antibiotic-free chicken business has become Kreamer Feed’s biggest revenue source, accounting for 75 percent of sales, he said.
Last year, another fast-growing segment was the organic egg trade, he said. Kreamer Feed is also developing new revenue sources by marketing expensive varieties of gourmet-style meat birds. The latest example of this is an Italian chicken breed that the company is marketing as Pollo Romano (That’s Italian for Roman chicken). The original birds were imported from Italy, and the company plants to hatch new birds in Snyder County, then have them raised to market-sized at farms in Lycoming and upper Northumberland County. The birds will be slow-raised, taking about twice as long as conventional meat birds. And for the latter stages of their growth, they will be raised outside in pasture.
Company officials hope to sell the Pollo Romano to restaurants in New York City, he said.
Article was written by John Finnerty for The Daily Item.