Silver Bait LLC - Agribusiness Three-Phase Power Improvements

Grundy County, Tennessee
Grundy County pic

Grundy County is located along 1-24 atop the Cumberland Plateau in Southeast Tennessee. The county’s location provides ready access to southeastern markets, population and distribution centers connected by the I-24 interstate corridor. Many call Grundy County the Crown Jewel of the Cumberland Plateau, offering natural beauty in its variety of majestic vistas, breath-taking bluffs and forests, state parks and natural areas. Today, Grundy County is home to many second homeowners and new comers from nearby Chattanooga and Georgia, who come to the natural features desiring a respite.

In 2004 in keeping with this trend, the founder of Silver Bait LLC relocated his family and business from the Atlanta region for the rural setting and amenities that matched his business and lifestyle needs. In spite of these assets and trends, Grundy County is not only one of the poorest counties in Tennessee, but one of the poorest in the nation with 23% of its residents living in poverty.

An important strategy which resulted from the work of the Governor’s Rural Task Force led by TNECD with the Tennessee Departments of Agriculture and Tourist Development, was to help agribusiness grow primarily in rural, distressed counties where these enterprises comprise a significant portion of the local economy. In 2016, an Asset-Based Planning Initiative led by TNECD and the University of Tennessee Institute for Public Service identified “Supporting and Growing Entrepreneurs and Agribusiness” as an economic development priority for Grundy County. This strategy to work with small entrepreneurs and farmers throughout the county became a top action in the Grundy County Asset-Based Plan and was included in the region’s SETD Comprehensive Economic Development Strategy as a way to improve economic conditions and create employment opportunities.

Agribusiness Economic Development

Silver Bait is a worm farm that practices sustainable and vertically-aligned operations on 770 acres near Coalmont. The company grows 700 acres of corn annually to supply feed for bait worms that they ship to markets across the U.S. and produces nearly all of the packaging containers and equipment necessary for the operation. The worm crop is grown in large buildings where the worms are harvested and prepared for shipping through a network of 80 distributors across the country. Worm castings that are naturally produced during the growing cycle are sold as fertilizer and potting soil under the Silver Bait Wormganic brand to local nurseries and co-ops as well as U.S. and international markets desiring sustainably produced natural fertilizer and soil nutrients. 

In 2017, Silver Bait had annual sales of approximately $6 million and a long waiting list of potential customers for which they could not meet demand due to the limitations of their facilities and power service. At that time, the company had 25 full-time employees. The owner began to develop plans that would enable Silver Bait to substantially increase production and double its capacity by adding 270,000 additional square feet within the next 3 years. The owner projected new capital investment of approximately $5 million and the creation of an additional 25 full-time jobs.

The economic impact of the Silver Bait expansion would be great in the distressed county; however, in order to complete the expansion, new three-phase electrical infrastructure would be necessary. A large nearby poultry operation would also put a strain on the current electrical supply as the agribusinesses grew. In 2018 that business, Campbell Poultry Operations, had been requested by Tyson Foods to add eight additional growing houses over the next three years to its current location.  

The planned Silver Bait expansion made the project eligible for new Tennessee Agriculture Enterprise Fund (AEF) assistance. The opportunity to provide needed three-phase power to both producers made the project eligible for Appalachian Regional Commission (ARC) infrastructure grant funding.

The Silver Bait owner reached out to the Tennessee Department of Agriculture (TDA) Agribusiness Development leaders for advice and assistance. When TDA staff visited the location and saw the opportunity to assist both the worm farm and the planned poultry growing operation, they contacted the Southeast Tennessee Development District (SETDD) and Sequachee Valley Electric Cooperative (SVEC) to explore possibilities to secure funding. SVEC leaders were eager to provide assistance; the new service lines could connect to the existing grid that ended at a nearby high school. The installation would include 3 miles of three-phase electric lines along State Route 108 to connect to both businesses located within ½ mile of each other.

Silver Bait owners developed an application to the AEF grant program with the assistance of the TDA. The project met all four objectives of the new program including: Increase in Farm Income, Increased Access to Markets, Increased Capacity, and Agricultural Innovation. The additional 270,000 square feet of worm production space would allow the company to keep up with demand and broaden their customer base. The increase in casting production would allow Silver Bait to supply local nursery customers who were dependent upon the Wormganic product in their growing processes and help the company meet growing national and international demands for this product.

Extension of three-phase power would support the use of innovative agricultural approaches and sustainable business models that thrive in the remote community. In addition to the Campbell Poultry Operation’s plans to add additional jobs, the company would increase the purchase of grain from nearby farmers with their expansion. Silver Bait would then be able to accept additional chicken litter produced by the poultry grower to incorporate into their farming and worm growing processes. The timing was perfect for all of these partners and resources to come together to support both agribusiness expansion projects that would immediately contribute to Grundy County’s economy and employment opportunities.  

Collabrotive Partnerships

The project resulted in collaboration between the Grundy County government, two business owners, Sequachee Valley Electric Cooperative, and several state and federal partners. SETDD economic development staff worked with the Grundy County Mayor and SVEC to prepare the ARC grant application. TDA Agribusiness Consultants provided technical assistance to Silver Bait in the preparation of the AEF application. SVEC committed to provide engineering services and installation of the power lines using in-house personnel and certified installers and to manage all aspects of construction.

The partnerships paid off. In April of 2018, Grundy County was awarded ARC funding. In June of 2018, the TDA awarded Silver Bait an AEF grant that provided matching funding for the ARC grant that lessened the burden on both rural producers who contributed to the project. SVEC was prepared to begin right of way preparations, procurement of goods and services and installation to fulfill project timelines. This leveraging of public and private funding along with the utility’s resources made installation of three-phase electrical service to the serve both company’s expansion schedules possible.  

Economic Impact

With access to three-phase power, Silver Bait and Campbell Poultry Operations collectively plan to invest $6.6 million in new capital direct investment and create 28 new full-time jobs and 15 part-time or seasonal jobs. The improvement catalyzed both companies’ expansions and opened this remote area in Grundy County to future economic development opportunities that require access to a larger capacity power grid.

Now this distressed rural county has two expanding employers that will provide new job opportunities along with direct and indirect payments to local farmers that provide grain and other local suppliers who sell electricity, fuel, equipment and other materials necessary to keep both businesses in operation. Three-year projections include:

Silver Bait LLC

New Full-time Jobs Created  25
New Part-time Seasonal Jobs Created 15
Direct Capital Investments $5,000,000
Increase in Worm Production  50%

Campbell Poultry Operations

New Jobs Created  3
New Broiler Houses Constructed 8
Direct Capital Investments $1,600,000
Increase in Poultry Production  50%

Project Funding

Agriculture Enterprise Fund Grant $50,000
Appalachian Regional Commission Grant $230,000
Silver Bait LLC and Campbell Poultry Operations $7,500

Program Leadership and Partners

Tennessee Department of Agriculture – Agribusiness Development
Grundy County
Silver Bait LLC
Campbell Poultry Operations
Southeast Tennessee Development District
Sequachee Valley Electric Cooperative
Appalachian Regional Commission
Tennessee Department of Economic and Community Development

For more project information visit the Tennessee Department of Agriculture

Tennessee Department of Agriculture – Agriculture Enterprise Fund

The Agriculture Enterprise Fund (AEF) is an incentive program that supports Governor Haslam’s priority of job creation and economic development by facilitating agricultural development in Tennessee. The AEF will award grants to starting or expanding agricultural, food and forestry businesses; farmers, nonprofits, local governments; and other entities in Tennessee. Successful grant recipients must demonstrate a strong potential for impact on local farm income, access to markets, increased capacity or agricultural innovation. The AEF is a product of the Governor’s Rural Task Force and supported by the Rural Economic Opportunity Fund. It is administered by the Tennessee Department of Agriculture in conjunction with the Department of Economic and Community Development.

Tennessee Infrastructure Programs – Appalachian Regional Commission

Adequate infrastructure is a fundamental component of successful economic and community development. The mission of the Appalachian Regional Commission is to innovate, partner, and invest to build community capacity and strengthen economic growth in Appalachia. TNECD serves as the lead agency in administering Tennessee’s ARC funding and programs. Through ARC, TNECD is able to assist in the award of grants each year for economic and community development projects in the 52 counties in middle and east Tennessee served by ARC.

For more information visit TNECD Community and Rural Development.