Before doing anything else you might want to contact your state Dept of Ag to find out what kind of licensing/paper work/regulations you'd need to comply with.

From what I've heard, commercial feed mills are getting all kinds of regulations thrown at them and its only a matter of time before it starts hitting the farm level feed mills.

As far as being a waste of time it all depends on how much demand there is for what you want to sell.     Here I think it'd be a hard to make it go without getting hooked up with a well know feed brand.

Have you researched much about the pellet mill?  I have worked in a couple of feed mills and we always had a boiler to condition the feed prior to pelleting and also a cooling tower to cool and dry the pellets.  It seems like that would get expensive in a hurry.

It also takes a lot of experience to run a pellet mill properly.  And then you compound the problem once you start bagging.  If you bag too wet, you get mold.  Too wet also causes shrinkage after it is weighed/bagged so your 50.5 pound bags may only be 49 pounds and the state shuts you down.  Then if you try to allow for it, you get 52 pound bags so then 4% of your product goes out the door with the 50 pounds you charged for.  We had a semi go out with "50,000" and got stopped at the DOT scale for being overweight.  The trucker was not happy, neither was the mill manager.

You run into the same scale problem with bagging any feed.  And then there is the analysis issue already mentioned.  And watch for the guy who brings in soybean meal spiked with urea to bring the protein test to specs.  Or the bin that does not empty out and you mix a batch using part of the previous batch.

If your are organic, maybe USDA will not be such a problems but they are a real burger on any residue that is not mentioned on the label.  We had issues with stock rotation also, and dust control and even regulations as far as "PCB's" in electrical transformers at the facility (but this was 30 years ago.)  Oh, is OSHA still out there?

BTW, welcome aboard newagtalk, and good luck with your venture.

I bought a feed mill as part of an unintended venture (another story) and have learned an awful lot since making that decision.  The first problem is the very, very low margin available in the industry.  Manufacturing feed involves a large number of issues that still haven't been covered here.  The very first thing you need to do is obtain a feed manufacturing license.  Next you will need to publish labels for each product you need to manufacture and get them approved.  That is a very big venture in itself, especially when you include medication in your ration.  You will need to do this for any additional state that you wish to market/ship to.  Then there is the feed mill ton taxes that you will need to report and pay.  You will need product liability insurance.

You now must record the lot numbers of all ingredients purchased and assign lot numbers of all products manufactured.  The rations will need to be accurate and provable when the state inspector shows up.  The inspector will need proof of the inventory on hand and you will need to establish why you have the correct amount of medication in inventory.  Any time a product lot number changes with the ingredients, you will have to change the lot number on the manufactured product again.  All of this has to be documented and maintained for 4 years.  When changing between products you will need to "flush" the mixer, grinder, scale, etc. with a product that can be used later in the next process, all of which must be stored in a separate location and labeled until used.  This also must be documented and the record retained for 4 years.

Some incoming ingredients must be tested for aflatoxin and the test results kept on file.  The analysis of the incoming ingredients must be proved and the records maintained.  Your feed will include some type of dressing for dust control which must be approved and included at the correct rate.  If you don't pay attention to all of these areas, the first customer that comes in and blames you for "killing" his pigmy goat will be able to take you to the cleaners, possibly destroying your business. 

Then there are lots of issues with the packaging and quality control in general.  Vented bags for some feeds, non-vented for others.  Pleated or non-pleated, flat bottom or taper, etc.  Consistent product appearance and smell is another consideration that will be an issue with the customer.

With marginal sales some inventory will go out of condition and need to be re-milled or disposed of.  If you sell through dealers you will have to be able to manage this problem in some fasion or "your" feed will be sold to a customer when out of condition.  Most feed other than mineral will have a relatively short shelf life.  Mineral can even go out of condition if not stored in a dry place.  Rodent control will be a necessary battle that has to be won daily.     

The software costs to start will run you more than $5,000 for formulation and if you include feed tags support it easily doubles.  A complete software package for feed mill automation is many times that.  If you deliver any feed it will quickly become another web of legal and regulatory hoops to jump through.

I could go on and on but just remember where I started in this reply.  Low margins.  All of this and a lot more to compete against a market that denies any reasonable return on your investment and risk. 

Would you like to buy a feed mill? 

Single ingredients won't change the regulations for manufactured feed.  Also you mentioned pellets and as stated above, you will need to use steam and cool the pellets before packaging.  Pellets are difficult at best to produce and involves a lot of trial and error.  With the right setup and enough skill you can succeed with the process, but it isn't for beginners.

If you really want to get into the feed business I would suggest that you start with single ingredient, simple processed feeds such as cleaned oats, cracked corn, etc.  There are lots of feeds that can be simple to process without involving all of the headaches of the blends and hard to process rations. 

You would need a seed/grain cleaner and a corn chopper.  As I said, very low margin, really close to zero and plenty of expense to pay out of that.

If you want to get into something while your young and make a decent return on your investment, I would jump throught the hoops and start processing biodiesel.  There can be a large margin and plenty of demand.  However, (however, however, however) you must be determined to succeed.  That will require lots of study and hard work.  The good side is that you can make a very good living doing it.

I would forget the feed business myself since you don't really know it and spend my time learning something with a profit potential.  To reinforce what I'm telling you, I have an operating and licensed feed mill that I would sell to you as a complete business or one piece at a time.  You want a corn chopper, I will remove it and sell it to you.  Same for a seed cleaner, a bagger, a pellet mill, a pellet cooler, etc.  Pick and choose and you can have it at a great savings.  Just don't expect to make any money with it.  There is no margin to capture in the market.   

There was a niche for a while of roasting feed.  I don't know how that turned out, but may be cheaper than a pellet mill.

Our "pellet mill" man was good at getting the pellets we wanted but we were noticing the bag weight variation I mentioned about.  I was the quality control man so I was watching Larry pretty close to see what all went into the process.  The ration/production sheet called for a certain about of water per ton; it was computerized, but what does a computer know about running a pellet mill.  Once in a while Larry would add another 5 gallons of water so I asked him about it and he said, yes, he added water if it helped make a better pellet.  Once we got his input and thoughts we were better able to predict what we needed to do to control the bagged weight.

As a side note, we were in a small town in CO and Larry lived up the highway a few miles in another small town.  He drank a little too much one night and whipped a couple of cops who made the mistake of thinking maybe Larry was a little out of line.  They got some backup and put him in jail overnight.  Now you never met a nicer guy than Larry sober, quiet and reserved, loved a good joke.

The mill manager was out of town for the week and the mill superintendent got wind of the weekend incident and was struggling with what to do, he sure didn't want to lose his best pellet mill man but he did not like the idea of someone beating up those poor law folks.  So he asked me for some advice.  I asked him if Larry had ever let him down on the job, and he said no, he had never missed a day without some good cause and he was by far the best pellet mill man he had.  I told him to let the law worry about Larry's mean streak and to only judge his employment on how he performed his job.  Larry was still working there after I left.

So, be careful how big you get, qualified people are hard to find and keep.

I suggest you find a local feed mill and go in an visit with them.  Be up front about your interests, you may find a good sales job or a production job that would fulfill your ambitions while you are learning the game.  CO just down the road from me has a great operation (Ranchway) that probably would be great to work for.  They recently saw a demand for organic feed and have been producing some for a year or two.

Locally you may find a mill that knows of a niche they have no interest in pursuing that you could fill, or maybe you could help them develop that niche as an employee.  Employee is sort of a dirty word, until you add in a few words like guaranteed income, benefits and nights and weekends home.