3. Investment in Affiliates

On April 9, 2015, the Company entered into the Red River Valley Egg Farm, LLC (“Red River”) joint venture with Rose Acre Farms, Inc. The joint venture will build and operate a state of the art shell egg production complex near Bogata, Red River County, Texas. The plans for the complex provide capacity for approximately 1.8 million cage-free laying hens. Constuction of the complex has commenced, and the initial flocks are expected to be placed in November 2015. The company did not incur material costs associated with the joint venture in fiscal 2015. The Company expects to fund its 50% share of approximately $73 million of construction and startup costs for the Red River joint venture during fiscal 2016.

On July 25, 2014, the Company entered into the Southwest Specialty Eggs, LLC (“SWS”) joint venture with Hickman’s Egg Ranch. The SWS joint venture subsequently acquired the Egg-Land’s Best franchise for Arizona, southern California and Clark County (including Las Vegas), Nevada. The Company owns 50% of the SWS joint venture.

The Company owns 50% of each of Specialty Eggs LLC and Dallas Reinsurance, Co., LTD. as of May 30, 2015. At June 1, 2013, the Company also owned 50% of Delta Egg Farm. During fiscal 2014 the Company purchased our joint venture partner’s 50% interest in Delta Egg Farm (Refer to Note 2 – Acquisitions). Investment in affiliates, recorded using the equity method of accounting, are included in “Other Investments” in the accompanying Consolidated Balance Sheets and totaled $13.1 million and $3.5 million at May 30, 2015 and at May 31, 2014, respectively.

Equity in income of $2.7 million, $3.5 million, and $3.5 million from these entities has been included in the Consolidated Statements of Income for fiscal 2015, 2014, and 2013, respectively.

The Company is a member of Eggland’s Best, Inc. (“EB”), which is a cooperative. At May 30, 2015 and May 31, 2014, “Other Investments” as shown on the Company’s Consolidated Balance Sheet includes the cost of the Company’s investment in EB plus any qualified written allocations. The Company cannot exert significant influence over EB’s operating and financial activities; therefore, the Company accounts for this investment using the cost method. The carrying value of this investment at May 30, 2015 and May 31, 2014 was $3.1 million and $768,000, respectively.

The Company regularly transacts business with its affiliates. The following relates to the Company’s transactions with these unconsolidated affiliates (in thousands):


	For the fiscal year ended
	May 30, 2015		May 31, 2014		June 1, 2013
Sales to affiliates	$	40,746	$	44,798	$	43,270
Purchases from affiliates		62,659		74,325		71,325
Dividends from affiliates		1,250		4,650		5,875

May 30, 2015

May 31, 2014

Accounts receivable from affiliates

Accounts payable to affiliates