Cargill to pay back tax credit for Diamond V facility

Verahandojo | Bigstock.com Company did not meet goal of hiring 16 more employees at an…

Cargill to pay back tax credit for Diamond V facility

Verahandojo | Bigstock.com

Company did not meet goal of hiring 16 more employees at an expanded feed manufacturing plant as agreed to in the tax credit deal

Cargill will pay back a tax credit to the state of Iowa for failing to hire the number of employees at a Diamond V facility that was required as part of a US$2 million tax credit deal, according to the Des Moines Register.

The Iowa Economic Development Authority board approved the tax credits in 2016 for Diamond V to expand an animal feed facility in Cedar Rapids by 100,000 square feet. The company completed the project and held a ribbon-cutting ceremony in January 2020, with plans to begin production there in March 2020.

A separate report from the time of ribbon-cutting ceremony said Diamond V would manufacture natural immune support products for animal health, animal performance and food safety at the expanded facility.

The Des Moines register reported the contract for the tax credits required Diamond V to hire 16 more employees at the plant by the end of this month. But Diamond V Global Managing Director Mike Johnson told the board in a letter on May 12 that it would not meet that goal due to “ongoing global impacts to our market from a variety of sources.”

Cargill has not responded to Feed Strategy’s request for comment.

Cargill closed the deal to acquire Cedar Rapids-based Diamond V in 2018 for an undisclosed amount. At the time of the acquisition, Cargill said the deal would enable its animal nutrition business to better serve customers who are increasingly turning to unique natural technologies to unlock the potential in feed to promote healthier animals, improve performance and to help them produce safer more wholesome food.

Cargill is the largest animal feed manufacturer in the U.S. and the world’s third largest, according to Feed Strategy’s Top Feed Companies database. It produced 19.6 million metric tons of feed in 2020 at its 39 feed mills worldwide.