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Don Hofstrand

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  1. Don Hofstrand

  2. Ag Ventures Alliance A Development Organization for Value-added Agricultural Ventures

  3. Ag Ventures Alliance Mission To facilitate the development of value-added agricultural business ventures

  4. Ag Ventures Alliance 1) Create new value-added business ventures. 2) Assist existing value-added businesses develop and expand.

  5. Ag Ventures Alliance MMembership ·$250 initial investment ·$0 to $50 per year thereafter ·Membership list is confidential

  6. Ag Ventures Alliance Current Membership 1,153 Accredited Investors 426

  7. 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

  8. Ag Ventures Alliance Type of Members Percent Farmers 91 Farm Mgmt. 1 Cooperatives 2 Lenders 1 Organization 1 Landowner 2 Other 3

  9. 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)

  10. 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

  11. 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

  12. Ag Ventures Alliance • Minnesota Soybean Processors • Soybean processing plant • 100,000 bu. per day • Brewster, Minnesota • 2000+ farmer members • Oil refinery

  13. Ag Ventures Alliance • Current Projects • Northern Iowa Dairy Development Committee • Aqua-Ventures • SoyEx • Brazil Ag Enterprises • Energy Committee • Other

  14. Ag Ventures Alliance New Markets Tax Credit Program (NMTC)

  15. 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”

  16. 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.

  17. 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

  18. Ag Ventures Alliance Has it been successful? www.agventuresalliance.com

  19. 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

  20. 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

  21. 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