Total Project Investment: $40 million USD
EB-5 Loan Amount: $15 million USD
EB-5 Investor Quota: 30
Annual Interest Return: 2%
Loan Collateral: 1,500 acres of premium dairy farm land and all farm assets, with joint and several liability assumed by the parent company.
Project Background:
Dairy Farmers of America (DFA), the largest liquid milk marketing cooperative in the United States, possesses an extensive sales network across 48 states and independently owns 21 large-scale dairy production and processing bases within the U.S. Major American food producers, represented by the Kraft Group and Dean Foods, as well as world-renowned fast-food giants such as Pizza Hut, McDonald's, and Starbucks, rely entirely on the liquid milk marketed by DFA to support their dairy production lines. In 2010 alone, DFA's total liquid milk distribution reached 7 billion gallons. DFA has truly fulfilled its founding mission: to unite individual dairy farmers, centralize production capacity, provide full marketing coverage, unify sales, and maximize the interests of dairy farmers through large-scale buyers.
To ensure the gold-standard quality of its milk supply, DFA only accepts the most stable and experienced farm owners from various U.S. states. The Sistine Dairy Farm, which is currently recruiting 30 EB-5 investors, is a member of DFA and has signed an indefinite liquid milk purchase and sales contract with the association. This means that the project can generate cash flow as soon as the first cow begins producing milk. Sistine Dairy Farm only needs to focus on the production stage; every drop of milk produced on the farm will be fully transported and marketed by DFA, with the resulting cash flow returned to Sistine Dairy Farm.
Located in the plains of California, known as the world's breadbasket, Sistine Dairy Farm has become a large-scale operation within California and the entire DFA network, with the capacity to house 5,000 to 12,000 adult dairy cows and produce 45,000 to 108,000 gallons of fresh milk daily. Sistine Dairy Farm owns 1,500 acres of fertile pasture, absorbing California's golden sunshine throughout the year. The three rounds of different crops harvested not only meet the feed requirements for the cattle but also generate additional income for the farm through the sale of surplus cash crops. The farm is currently in the mid-stage of construction; three major barns and feed storage areas have been built and put into use, harvested feed has been stored, and over 3,000 calves have already been moved into the new barns. It is expected that by the project completion in December 2011, the calves will have matured and begun producing milk.
Project Advantages:
As a traditional agricultural project, the farm project's major advantage compared to other U.S. investment immigration projects lies in its simple investment structure, strong labor demand, and constant daily production profits. Due to its 55-year history of family dairy entrepreneurship and stewardship, the Sistine Dairy Farm project offers three additional advantages over ordinary farm projects: the constraint of reputation, replicable success experience, and the significant investment of a family business.
A. Constraint of Family Reputation
Sistine Dairy Farm is a wholly-owned subsidiary of the Sistine family. The 55-year development history of the parent company, Sistine Dairy, is a microcosm of a new immigrant family striving on American soil to achieve the 'American Dream.' In 1944, escaping the ravages of war in Europe, Peter Sr. of the Sistine family arrived in the United States from the Netherlands, a country with a tradition of dairy farming. After 10 years of hard labor on various farms, he finally accumulated the necessary startup capital to establish the parent company, Sistine Dairy, in California. Through the careful management of three generations over 55 years, Sistine Dairy grew from its humble beginnings of 200 cows into a large-scale farm with 4,000 adult cows, 4,000 calves, and a daily production of 36,000 gallons of fresh milk.
The newly built Sistine Dairy Farm project not only surpasses the parent company in scale and modernization but, as a wholly-owned family subsidiary, also bears the historical responsibility of continuing the family legacy and will be operated rigorously under the constraint of the family's reputation.
B. Replicable Success Experience
The family dairy business has dispatched a management team to the new farm to fully replicate the family's years of successful management experience and business philosophy, including:
1. Signing a marketing contract with the national Dairy Farmers of America to focus on producing high-quality milk, thereby avoiding operating expenses for marketing and sales departments and maximizing profits.
2. Utilizing the farm's own land to plant pasture, feed corn, and cash crop oats in three batches to achieve maximum self-sufficiency in feed, increasing profits by at least 25% through cost reduction.
3. To ensure milk quality, each cow is bred once every two years. The number of calves and adult cows on the farm is configured at a 1:1 ratio to achieve the optimal investment return mix. Cows past their peak production period, as well as surplus calves and bulls, are sold at prices ranging from $500 to $2,000 each, generating additional profit.
C. Significant Investment from the Family Dairy Business
The family dairy business not only provides the most comprehensive technical guidance and the most experienced management team to the new farm but has also invested $25 million to purchase the farm, construct buildings, acquire large-scale operating equipment and livestock, and pay worker salaries. Furthermore, as premium agricultural real estate, Sistine Dairy Farm's superior geographical location, convenient transportation network, abundant water resources, and modern irrigation system provide it with significant appreciation potential as agricultural product prices rise.
Job Creation:
The livestock industry is labor-intensive. Based on the existing scale of the parent company, one can identify the employment capacity of Sistine Dairy Farm after it goes into operation under the same business model. Taking the first-hand data obtained by the Worldway delegation during their field visit to the parent company as an example: the farm's milking parlor operates 24 hours a day, with two milking rounds per day, each lasting 10 hours, followed by 1 hour of parlor cleaning. Although the farm has automated milking equipment, it still requires a large amount of diligent labor to meticulously complete every specific requirement of the milking process to ensure the milk is not contaminated and meets the strict requirements of the Dairy Farmers of America. Specific steps include cleaning and disinfecting each cow before milking, as well as cleaning and disinfecting after milking; the milking equipment must also be cleaned and disinfected before each cow is milked. These steps can only be repeated continuously by farm workers in three shifts to meet the daily twice-a-day milking needs of all 4,000 cows on the farm.
The farm also subdivides milking barns, calf barns, and maternity barns, all of which require a large number of skilled workers, with dedicated personnel responsible for everything from feeding to cleaning barns and even assisting with calving. Coupled with the jobs required for planting and harvesting farm crops, the Sistine Dairy Farm project conservatively estimates a direct employment need of 103 jobs. Including indirect and induced jobs generated in the industry chain, the total will reach 680. The 300 jobs required for investment immigration are easily met by the project's requirements. The employment indicators achieved by this project are 2.27 times the requirements set by the immigration authorities.
Repayment Guarantee:
Dual Repayment Guarantee: Farm land title and all farm assets + Joint profits of the family dairy and Sistine Dairy Farm, with joint guarantee from the parent company.
The investment immigration funds will be invested in the later-stage construction and operation of Sistine Dairy Farm. At that time, the $15 million loan from the 30 investment immigrants will not only enjoy the land ownership of the 1,500-acre premium farm, but also the mortgage rights on tangible assets such as buildings and all livestock. Furthermore, it will have the annual profits generated by the joint operation of the family dairy and the new farm as a source of repayment. In addition to paying investors 2% interest annually as an investment return, all remaining surplus will flow toward the total repayment amount after 5 years. The family dairy business also promises to assume joint and several repayment liability and will provide sufficient additional funds to ensure the project proceeds according to the original plan before the investors' funds are in place, with official completion and production commencement in December 2011.
