Pacific Ag raises $7 million from ACAP

By Pacific Ag | August 06, 2015

Pacific Ag, the nation’s largest crop residue supply company, has announced $7 million investment from Advantage Capital Agribusiness Partners LP. The growth capital will enable Pacific Ag to accelerate the expansion of its operations across the country through acquisitions, technology, equipment, sales and marketing to meet the increasing demand for agricultural biomass in the bio-refining, animal protein, composting and other markets.  

“The Rural Business Investment Company is a new and innovative way to encourage more private sector investment in rural America,” said Tom Vilsack, Secretary of the USDA. “These efforts will help strengthen growing industries like bio-manufacturing, advanced energy production, local and regional food systems, 21st Century farming technologies and other emerging fields. We are excited to see this fund continue to support businesses like Pacific Ag and look forward to seeing more partnerships like this come to fruition in the coming months.”

Alongside the investment, Pacific Ag also announced two industry acquisitions that will result in growth of 40,000 acres harvested in the Pacific Northwest with corresponding growth in volume under sales contracts.  The growth represents a 40 percent increase for Pacific Ag in the Pacific Northwest and 25 percent overall.

“Pacific Ag is already the single largest harvester and marketer of crop residue and hay in the United States. This investment and our acquisitions will enable us to grow national market share and serve more customers in more regions,” said Pacific Ag Founder and CEO Bill Levy. “The market for agricultural residue is exploding, and with our long and successful heritage in partnering with growers and supplying global and domestic markets, we are positioned well to meet this new demand.”

Advantage Capital Agribusiness Partners is a $154.5-million fund, licensed as a Rural Business Investment Co. by the USDA, focusing on businesses involved in the production, processing and supply of agricultural products. It is a partnership between Advantage Capital Partners and nine Farm Credit organizations. The Farm Credit System is a nationwide network of banks and lending institutions federally chartered to serve agriculture and the U.S. rural economy.

“Pacific Ag is a perfect fit for our model, given their positive economic impact on the communities in which they operate,” said Tim Hassler, principal at Advantage Capital Partners. “They’ve built a solid foundation of trust with their grower partners, a record of operational excellence and innovation which in turn enables them to grow and scale quickly. Given the growth in the industry, they are really the only company out there who can meet the demand.”

Founded in 1998, Pacific Ag is the nation’s largest biomass supply chain management provider. The company develops and operates commercial-scale supply chains for crop residue and hay products and offers a set of supply chain services for developers and market participants that need a dedicated feedstock supply chain.

Pacific Ag’s customers include the largest cellulosic biorefineries in the U.S., the largest forage importers in Asia and the Middle East, numerous cattle and dairy operations in the U.S., and a growing number of companies in the mushroom composting and erosion control product technologies. Pacific Ag is on track to increase tons harvested by at least 25 percent in 2015.