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March 2006 Issue
FarmConnect Annual Meeting
FarmConnect members:
The 6th annual FarmConnect voters meeting will be held on the following dates and locations:
Date: April 6, 2006
Time: 3:30pm
Location: Jackpot Junction, Morton, MN
Date: April 7, 2006
Time: 10:30 am
Location: Northland Inn, MN
Our continued effort to add value to agricultural products has resulted in following a path of further processing agricultural commodities for high-value
niche food markets. Our most recent project is producing and marketing gluten-free pasta, cereal, and baking ingredients through a joint venture with
Michigan Edible Bean Cooperative and individual investors under a company called Heartland Ingredients, LLC. The website for this project is www.heartlandingredients.com if you would like more detail on this project.
Heartland Ingredients services a very active market that is currently supplying over 130 stores after just 15 months in the market. The Heartland Ingredients
products were recently accepted into a large natural foods distributor in January, 2006 and will be on the shelves in a national natural foods grocery
chain beginning in April. The Heartland Ingredients products are currently being sold in stores in 39 different states and new stores are being added each week.
Heartland Ingredients
Heartland Ingredients has been funded using USDA matching grants, help
from many different organizations, and some additional funding from individual investors that include FarmConnect members, MEBC members and outside
investors. Heartland Ingredients has the products made by toll-processors, the products are packaged and shipped from leased facilities in Crookston,
MN. This strategy has allowed us to build the market while keeping our capital commitments as low as possible. The sales and business office is
located in Ubly, MI where Jim LeCureux from MEBC is located. Brent Sorenson and Jim LeCureux have worked together to leverage expertise and limited resources to allow the development of Heartland Ingredients. The
current ownership structure is: FarmConnect, 35%; MEBC, 35%; and individual investors, 30%. The individual investors are direct investors to
Heartland Ingredients, LLC. Heartland Ingredients is preparing another private placement offering to raise additional funds to help Heartland Ingredients
prepare for the anticipated growth. If you are interested in investing, please email bsorenson@farmconnect.com for a prospectus.
SoyLink
The other major FarmConnect project is SoyLink. Since we began the project in 2002, SoyLink has been a working with companies around the world to
develop products from the soy powder and introduce products to the consumer. The first major product launch using SoyLink powder came in
September 2004 when Organic Valley launched an organic soy drink. The new soy drink helped provide some volume to the plant but because the
product is new, the market must grow and it has not been enough to make significant progress to cash flow the SoyLink plant. Because of the slow
market development for SoyLink the company has operated at a loss each month. In 2003, all the members of the SoyLink, LLC were asked to raise
additional funds through a subordinated debt offering in 2003. However, since then additional subordinated debt has been needed on an on-going basis to
cash flow the business. Finally, when a single investor became the only member continuing to fund the company, and it was apparent that this would
continue for extended time, the board was faced with the fact of closing the plant or selling the company. When a buyer could not be located and there
were no imminent projects for the plant to suggest differently, one member proposed to take on the bank debt obligations and the personal guarantees on
the debt in exchange for sole ownership. One of the key factors to this decision for FarmConnect was to keep the plant operating to make sure it was
available to produce the powder for Heartland Ingredients. Therefore, a change in ownership occurred. FarmConnect still has access to the products and
technology in the plant. FarmConnect will continue to work to find ways to add value to the facility through projects like Heartland Ingredients on a toll-processing basis.
Future FarmConnect updates will be made through email and web posting.
Because of the limited staff and its commitment to manage and operate Heartland Ingredients, Connectors will be posted periodically on the website.
If you have questions on the status of the projects please look to the website at www.farmconnect.com under the Connector tab.
Election of Board Members:
Ballots for election of FarmConnect board members are posted under the Connector Tab. One member from each district has filed for election. Please
print off the ballot, vote for the candidate of your choice in your district, sign the ballot and mail it to FarmConnect. PO Box 396, Crookston, MN 56716 by
April 3 or return it at the annual meeting. You may also fax the ballot to FarmConnect at 218-281-1358 on or before April 3, 2006.
Annual Dues
Annual Dues are to allow FarmConnect to continue to develop projects. If you plan to participate in projects you are required to be an active member and
pay the annual dues. Dues of $100 per year can be sent to FarmConnect, PO Box 396, Crookston, MN 56716. Electronic invoices will be forwarded via email to each member.
The annual meeting will provide a review of the past year's activities and some
expectations for the coming year. The 2005 annual meetings were well attended and we look forward to another good turn out this year.
If your address or email has changed
please email the changes to us at farmconnect@farmconnect.com or you can call the FarmConnect office at 218-281-1752.
The FarmConnect office has moved.
Please note the new contact information given below.
Mailing address: Phone: 218-281-1752
PO Box 396 Fax: 218-281-1358
Crookston, MN 56716
Physical address:
1027 Fairfax Ave
Crookston, MN 56716
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