Summit Ag to Acquire Assets from Prairie Horizon, Plans Largest Wheat Protein Plant in North America
Prairie Horizon Agri-Energy has agreed to sell its assets to Iowa-based agribusiness and private equity investor Summit Agriculture Group for an as-of-yet undisclosed amount.
Located in Phillipsburg, Kansas, Prairie Horizon is a producer of ethanol, distillers grains, and corn oil with output of more than 40 million gallons of ethanol per year.
Connected with the deal, Summit Ag plans to invest $150 million to transform the Prairie Horizon facility into a state-of-the-art food ingredients site, which, when the two-phase project is completed, will be the largest wheat protein producer in North America.
Founded in 1990 by agribusinessman Bruce Rastetter as a 300-acre farm, Summit has built out a diverse portfolio of ag operations across three business units: Summit Farms, Summit Ag Investors, and Summit Ag Management, that include row crop, beef cattle, and pork farms in the U.S., and a significant presence in Brazilian farmland and biofuels.
Since 2009 the group has been raising capital to fund select projects, such as the launch of the first large-scale corn ethanol production plant in Brazil in 2016.
In 2018 the group launched its $300 million Summit Ag Opportunities I Fund to acquire controlling interest equity positions in as many as eight mid-sized, Midwest ag operations throughout the entire supply chain from production, to protein processing, to renewable oils, and feed ingredients.
Upon the launch of the fund, Summit stated it would be targeting ag operations with revenues of between $25 million and $200 million facing succession challenges, and was looking to leverage its investor relationships in New York with established farming operations in the U.S. corn belt with the goal of keeping existing teams and the operation’s connection to its community in place.
Much more recently, in mid-February of this year, Summit Ag announced the launch of Summit Carbon Solutions - a new platform to address decarbonization through the development of the largest carbon capture and storage project in the world.
Once fully developed, Summit Carbon Solutions will have the ability to capture and permanently store more than 10 million tons of carbon dioxide per year - greatly accelerating the transition toward sustainable, renewable energy by lowering the carbon footprint of biorefineries throughout the U.S. Midwest.
“This is a giant leap forward for the biofuels industry,” said Bruce Rastetter, CEO, Summit Agricultural Group. “Carbon capture and storage is a future-focused solution that allows the biorefiners to lower their already attractive carbon footprint by up to 50 percent.”
“Simply put, this will be the most impactful development for the biofuels industry and Midwestern agriculture in decades,” Rastetter added. “We are grateful for our partnership with a significant group of forward-thinking biorefiners who have agreed to partner with us on this exciting new venture.”
And now with ownership of Prairie Horizon’s plant in Phillipsburg, Summit Ag can move forward with its $150 million project which will give the group a greater presence in the food ingredient and rapidly-growing plant-based protein space.
“We have a long history in biofuels, and we have been interested in looking at ways that we can diversify the operation of various ethanol production facilities in the United States,” said Justin Kirchhoff, president, Summit AG Investors. “And through that process, we’ve identified an opportunity to convert the plant located in Phillipsburg to process wheat, which will lower the carbon profile of the plant.”
Summit states that it will be necessary to temporarily close the plant during the conversion project, but adds that it will be taking measures to lessen the impact of the shutdown on the employees and local economy, adding that once completed, the plant will need a team of more than 100 employees.
"As investors and operators of businesses in small communities, we understand the importance of Prairie Horizon to the local economy,” said Bruce Rastetter, CEO, Summit Ag. “With our investment we plan to take the plant offline for some period to complete the conversion, however upon completion of the project we expect to add over 60 new jobs in addition to the 35 existing employees.”
“While there may be a gap in operations, we are evaluating plans to retain key employees and assessing potential programs to reduce the impact of the interim shutdown for current employees,” continued Rastetter. "We believe our investment will be economically beneficial to the local community and will allow the plant to prosper for generations to come."
- Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, and HighQuest Group's Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at firstname.lastname@example.org.