#90 - Joe Morgan, Chasing Premiums at Poky

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Well, hello there and thanks for joining me for episode 90 of Practically Ranching.
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I'm Matt Perrier and we're here thanks to Dalebanks Angus, your home for practical profitable genetics since 1904.
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I grew up here in the Flint Hills, which for those outside of our fair state are in the eastern one third on the western edge of the eastern one third of Kansas.
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My great uncle John Perrier owned a feed yard in southwest Kansas near Dodge and I've since gotten to serve with several different cattle feeders throughout the years in Kansas Livestock Association work and other producer groups.
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And every time that I get to visit with one of these cattle feeders, I am blown away with their, their business mindset, their tolerance for risk, and just a laser focus on financials and breakevens in their business.
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This week's guest certainly embodies all of those traits and probably a lot more.
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Joe Morgan is CEO of Poky Feeders, a custom cattle feeding organization near Scott City, Kansas, with a one time feed yard capacity over 100,000 head.
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In this episode, we cover basically all of Joe's professional career.
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We talk about his early days at Poky Feeders as a founding member of US Premium Beef.
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Joe was instrumental in the formation of this visionary branded beef company, and he currently serves as its vice chair of the board.
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We talk about the driving forces that helped start US Premium, and then helped Joe and his family grow Poky feeders.
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Today, Joe's son, Grant, is now general manager of the yard, and Joe shares some of, of his perspective on generational transition for family beef businesses.
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Finally, we get Joe's thoughts on how cow calf producers and others who would like to look into feeding cattle can navigate this decision of whether to feed those at a, at a custom yard in the future.
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You know, loyal listeners of this podcast realize that I have a passion for ranching and for the rural way of life.
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I also have a passion for strategic-minded businesses, and sometimes those two worlds don't live in harmony.
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But Joe demonstrates how they can.
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Joe's an Iowa farm kid originally, and he treats the cattle business today as exactly that, a business.
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He has diversified into other proteins and other segments of the beef industry, both up and down from the cattle feeding segment, and he's even branched out into other businesses outside of production ag.
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It's no shock to most of you who are listening, but the island mentality theory is still alive and well in the beef community.
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Ranchers, feed yards, packers, retailers.
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We love to hate each other.
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We love to bicker and we love to make assumptions about what the other one is up to in their business dealings.
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This week, it sounds like the Department of Justice might have added a little fuel to that age old fire, but as unpopular as this opinion might be in cow country, I think a little communication and understanding and dare I say trust of our industry counterparts can help us all deliver a better product to the consumer.
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When we do that, more money comes into the beef business and the market is able to spread that additional profit across the segments.
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I think Joe Morgan gets that.
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He's fought hard through the years to make his customers and his company money.
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He's negotiated with the packer while trading hundreds of thousands of Fed cattle.
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Heck he now even owns a portion of one.
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Even today, he continues to negotiate with farmers and companies to purchase the feed that a yard of their size consumes every day.
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But through it all, he's helped build a model that is, has the ability to reward his customers and his family by working with those around him to offer what it is that makes them money.
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It's a great concept, and this is a great discussion with a business-minded leader in our beef business, Joe Morgan.
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why don't you give us kind of, uh, your history of how you got into the cattle feeding business and, uh, how pokey got to where it is today.
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I know a lot of folks know that story, but I'm just fascinated with, with growth and with businesses, um, coming into their own and, and I think Poky Feeders has one that's, uh, a great story to tell.
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Well, I appreciate that.
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I graduated from college and went home to my family farm in Iowa and farmed with my dad for several years, and then the eighties came along with, know, the, all the problems that agriculture had in the eighties.
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So, I was offered an opportunity to manage a feed yard right outside of Omaha.
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And we fed cattle on the farm and, uh, did all that, but, uh, had never been in the commercial setting.
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my uncle had helped build a feed yard in the panhandle down by Fiona, Texas.
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And so I had spent some time down there in both high school and everything and, and, uh, had started feeding down there with my dad.
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And so I knew a little bit about the commercial, but I started in a feed yard outside of, uh, Iowa and eventually put a group together and we leased it for a short period of time and they, they owned Poky.
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so I moved down to Poky and started managing that.
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And, by mid late eighties they were having a lot of financial distress too, and so was able to purchase, uh, big share of Poky and, and started growing it from there.
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Um, I got there in 1985, Poky could hold 17,000 and then we just started the growth going from there to today.
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We can hold one time capacity of 105,000.
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That's, that's phenomenal.
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That is a, a really cool story.
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It's just amazing to me to see that kind of growth and along the way, you've even grown a little outside of just cattle feeding, have you Not in terms of other business ventures, both in, in ag and outside of.
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yes.
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in fact, for several years there, we actually leased, uh, in partnership other feed yards in Kansas.
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as one of my older partners that kind of watched the day-to-day of that retired, we, we let those leases go.
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And today we're still in a partnership on a, a feed yard in, uh, in the Holdridge Nebraska area.
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So we do have another yard there.
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It holds just short of 20,000 up there.
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And then in the late nineties, I grew up in Iowa, of course, and had some hog background, and we were looking for some diversification.
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So we built a sow unit there at Poky, and we ship all the pigs up to Southwest Minnesota and Northwest Iowa to be fed out.
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So we also have some, you know, interest in the hog business.
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And then, my older partner that actually, hired me when I started, he was involved in, in nursing homes and retirement villages.
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And so he got us involved in that and, and we've got into that.
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And, uh, I think we have 10 facilities in Kansas and Iowa, and we're partners in that.
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We don't own'em exclusively, but we're partners in those deals.
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there's been some other, you know, different, different things we've got involved in as, as the growth, you know, came through the years.
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That's a pretty diversified portfolio for agriculture.
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what do you attribute that to?
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And I know you said that, you know, some of that was your partner's interest in those, but, um, how, how does the Iowa Farm kid go from I, uh,, presume a fairly traditional upbringing to as diverse of a business portfolio as you've seen today?
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Well,
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Well, I think, uh, like you mentioned, my older partner, he was diverse in other things besides the feed yard.
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And, and so he, you know, he brought along opportunities for us that we, that we took uh, you know, we got to a point where we felt like we wanted more diversification, you know, just for the tough times and, and, uh, try to get involved in other things.
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And of course, as you well know, you know, we were one of the, you know, the Scott County was really where US Premium beef started.
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that was another
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Okay,
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as we got into the packing side of the business.
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so let's talk about that In those early days and maybe the precursor to, in the discussions that led up to us premium beef's formation.
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I was a, I was at Kansas State University from 1992 to 1996, and personally, I didn't think that I wanted to come back into production agriculture of any kind really, but especially not necessarily the beef industry, because no shock to you it, it wasn't the prettiest time to, to be raising or feeding or anything else, cattle and beef in the, in the early and mid nineties.
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we will go a little further into a conversation that I remember with you fast forwarding into the two thousands about this, but.
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You imparted some wisdom on me about the formation and, and so I think it would be fascinating to everybody who thinks they know why and how US Premium Beef started, to hear from one of the actual founders of how you and your perspective saw that formation.
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And you can go back as far predating us premium beef's formation as you want to kind of tell us why it's here today.
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Well, it is quite a story.
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I mean, looking back, I don't know if I'd have the guts today to do what we did back then.
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But uh, after you see what happened with so many other try and startup companies.
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But, uh, well, you know, as industry, like you mentioned, we were in really tough times.
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Cattle feeding wasn't profitable.
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We are a commercial yard.
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Uh, fortunate today, I think we're probably the largest custom yard in the country.
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So we were really, you know, growing and had a lot of customer base and we were trying our best to get these cut customers profitable.
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so in those days there was a lot of conflict in the industry, uh, of which direction the industry needed to go because.
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We were losing beef consumption, if I remember right, by the data that I looked up recently, you know, consumption.
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It got down to close to 50 pounds per person and we were losing a lot of, uh, uh, consumer to other proteins.
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And we had got ourselves into a place where we'd started selling the whole show list one price fits all.
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we were really, you know, incentivizing people to improve the quality of their cattle because they got the same price as the people had the planer cattle.
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And, you know, we heard that repeatedly from our customers.
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Well, it doesn't pay me to go out and buy a real good bull because I'm gonna get the same.
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So KLA had got involved.
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And, uh, having meetings and, and they were by far the largest turnouts that the KLA had ever had at any meetings.
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And I've said this before, you know, the, the meetings got relatively hostile.
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I mean, we had just such a fracture in the industry of, of which direction, the, uh, membership could go as far as marketing.
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They didn't want to tell a person how to market their cattle, nobody really knew what to do.
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as we kept coming back to Scott County, we, we started having some meetings and just visiting about the problem.
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And just realized that, you know, at that time that, you know, the was large and there was just so many different arrows being shot in the air that nothing was sticking and, and nobody really knew.
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So we started getting together, thinking about how we could provide something for our customers because Scott County, you know, was always all custom cattle feeding country.
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All the yards were custom cattle and all had customers.
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So a small group and I don't remember exactly six or seven feed yards.
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We started meeting and coming up with ideas and, you know, I've told this story many times that, you know, we were really afraid of retaliation.
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We didn't know how the industry's are gonna accept us, how the packers are gonna accept it.
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we literally started meeting at night, you know, after work and we'd moved the meetings around to, uh, everybody's office and
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And.
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we came up with, you know, a lot of ideas at first.
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You know, we decided we were gonna hire Czar and try and get one guy to manage the inventory, make the packers come to us.
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But after researching that over several months, and you know, we literally met at least once a week, sometimes twice a week.
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And, uh, just kept coming up with all the ideas.
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And, uh, we finally threw that out the window.
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We decided that wasn't gonna work.
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And so then we started going down the path of, uh, maybe building our own packing house, but didn't take very long for us to do After we did a little bit of due diligence, you know, we, none of none of us had enough money to do that.
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so that didn't last very long.
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And,
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As we.
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we continued to grow, you know, our friendship got stronger.
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And, and I still remember, we, we all, uh, stood up one night at my board table and shook hands and said, you know, no matter how many arguments we have and how many diff disagreements we have, you know, we're gonna go home as friends every night.
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And we did.
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And, uh, so we kicked it around and kicked it around and fer.
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Finally, uh, Jerry Kirkman.
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A close friend of mine yet today, uh, he had a, a, a real good customer that fed a lot of cattle with him, and he felt like he knew a lot more people on the outside than we did.
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And so we confided into him what, what we were doing.
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And he suggested we hire Steve Hunt, who had banking knowledge, was a, you know, grew up in a INE family.
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And we met Steve and liked Steve.
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And so we hired Steve to start, you know, as a kind of a manager of the company for us to go down that road.
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uh,
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We actually.
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uh, thought we had to deal with another, you know, had interest level from another packer.
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And we came up with this idea to try and do somewhat what's today?
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Everybody's so familiar with the grids, but like I've said before, when we started talking grids, we didn't even really understand what the word really meant.
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You know, we were just looking for a way to get premium our customers so we could incentivize them to, you know, produce better beef get paid for it and get a premium for their cattle.
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So we actually thought we were gonna make a deal with another major packer, and, uh, we got the deal kind of finalized with them, uh, Steve had heard that, farmland was going be forced because of a sundown clause or something that they were gonna have to sell part of, uh, national beef.
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so Steve pursued that and, and, uh, they were interested in talking to us.
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And, uh, like I've said in other, uh, visits, you know, that, Farmland didn't even know who they were dealing with.
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It was a producer organization because we were just so scared of retaliation so we just couldn't jeopardize all our customer's cattle by having some wild idea and getting blackballed in the industry.
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And, uh,
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So.
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so anyway, Steve was able to keep that, that confidentiality and everything.
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And with farmland's, you know, philosophy of, of, of helping producer organizations, uh, they made a deal with us.
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And, uh, so we actually, um, made the deal in July of, uh, I believe it was 98, and, we had, uh, the opportunity to, to buy up to 50% of the company and we had to buy 25% to make the deal go.
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And, you know, they gave us really good terms as far as voting power, reto, you know, veto power, all those kind of things in an organization.
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So we were blessed in that regard with, with farmland.
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But anyway, the long story goes then we started out at that time going around the country and, and I was seeing my customers and, and my friends were seeing their customers and trying to, know, explain the new theory, what we were gonna try and do, and, and all those kind of things get commitments on stock.
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Uh, we sold the at the very beginning for$55.
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50 cents a share.
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And, uh, one share gave you the right an obligation to kill one animal a year.
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And in those days we had a penalty.
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So people had to, you know, honor their, their commitment or else they paid a penalty.
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And, uh,
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It took until right
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right, the, the, actually, the day before we had to have the money and we were still struggling get to the
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25% it.
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It seemed like it was real easy at the start, but it got tough, you know, and a lot of people, I don't blame'em at all.
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A lot of people, it was all new.
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And, uh, a lot of people, you know, the nineties weren't profitable and cattle fee and a lot of people were just scared to, to invest or to do anything.
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And, you know, it was all new.
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We didn't know how it was gonna work for sure either, but we were just committed to make it go.
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And so long story short, in December that year, we started, uh, slaughtering cattle on the grid.
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And, and, uh, as you go know, you know.
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well grids are now today, but I remember the first year, I think our cattle brought about$10 premium.
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We thought it was, you know, we were elated.
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It wasn't even dollar a
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Yeah.
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and we were related that it was profit and uh, but the whole theory behind it is, is that you have market access with US premium beef, which is, you know, still a valuable, a asset to have when you've got fat cattle.
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And we've seen that even recently when the plant fire Tyson, those things, you know, market access stuck its head up again, how valuable that was.
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And other part is theoretically, and I think it works pretty much that way, is when cattle feeding's profitable, usually the packing house isn't.
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And so.
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you're a cattle feeder, you can live on the cattle profits.
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And when the cattle cycle turns and the packers are making money, and we're not as a cattle feeder, hopefully, you know, we'll get rewards from the packing house to offset some of those losses.
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And of course, the grids changed as the industry has changed over the years.
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And, uh, of course we knew it at the time, but it is hard to face.
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You know, we were the, you know, we were the cornerstone of the block for a long time.
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And now the other packers, of course, have been forced into providing grids or, you know, because they weren't gonna let all the good cattle go down the street to, to a different packer than them, you know?
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So it's changed the industry a lot and it's, we know today, you know, look at the beef demand we have, you know, I still think that was a turning point for our industry, honestly.
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Without a doubt, without a doubt.
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And sometimes as we get into discussions about price discovery or captive supply or any of the hot button issues, I'll hear producers say,"well, you know, when the Packers forced this value-based marketing and the, and being able to lock these cattle up on a grid, and that's when everything started getting into their, into their hands." And I just have to laugh because, you know, in 1997, a packer wasn't about to buy'em on a grid.
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They had the old grading yield or grading steel, and a few people used that, but they did not want, they got drug kicking and screaming by your group and a few others alliances that were trying to do similar things into this value-based marketing grid.
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It was, this was never the Packer's idea.
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Now they had to do it to get the cattle they wanted and that would the consumer wanted.
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But yeah, it was truly a producer led initiative.
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Good, bad, or in differently.
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I, I give a lot of credit to, to the national guys at that time, John Miller, he's retired now, but John Miller, of course, was the CEO of National.
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And Tim Klein was the president at that time.
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And they had enough foresight to see, you know, that they had, they were the number four packer, I think, even in those days.
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And they, they had the foresight to see that
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It.
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edge over competition too.
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And they, you know, they wanted to produce a better product and get into these stores and stuff.
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And I think they saw that as an opportunity too.
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And so they bought into it early and there were some people in their organization that didn't.
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you know, they within a short time left the organization because they just couldn't accept that
00:21:54.815 --> 00:21:54.875
Yeah.
00:21:55.670 --> 00:21:59.210
And, uh, and the same thing with our customers.
00:21:59.569 --> 00:22:03.650
It wasn't just all Roses right away because we had customers that.
00:22:04.444 --> 00:22:11.525
know, their grandfather had started this cow herd and they did everything just like their family's always done.
00:22:11.525 --> 00:22:15.815
And, and you know, I've told my sons when they used to ride with me, their ranches,
00:22:15.875 --> 00:22:16.095
Son
00:22:17.015 --> 00:22:17.884
there's two things.
00:22:17.884 --> 00:22:21.275
You, you never, you know, to discuss with those ranchers.
00:22:21.674 --> 00:22:22.184
don't talk
00:22:22.234 --> 00:22:24.755
talk about their children and you don't talk
00:22:24.785 --> 00:22:24.984
about.
00:22:25.025 --> 00:22:27.125
their cattle because, you know, those,
00:22:27.634 --> 00:22:28.664
Those are very important.
00:22:29.045 --> 00:22:29.464
to'em.
00:22:29.585 --> 00:22:46.731
And, uh, it was really difficult for us with these people that raised these cattle, especially, you know, they thought they had the best in the west and, and the packer was always, cheating them for what they thought they had.
00:22:47.092 --> 00:22:50.182
And they found out that the cattle weren't near as good as they thought they were.
00:22:50.932 --> 00:22:55.115
And we had the whole gamut of acceptance.
00:22:55.115 --> 00:23:01.789
We had some customers that just instantly took that data and started wanting to improve their quality of their cattle.
00:23:02.509 --> 00:23:08.690
we had other customers that drugged their feet, but it didn't take very long for them to, uh, come around.
00:23:08.690 --> 00:23:15.859
And, you know, when your neighbors start getting big premiums and you're not, you know, they look in the mirror and decide, Hey, I better do something about this.
00:23:15.859 --> 00:23:17.630
So we were fortunate.
00:23:17.660 --> 00:23:28.519
And even for the purchasing cattle people that bought, you know, sale barn cattle, it didn't take very long for them to figure out which ones they really wanted to give more for or what kind of cattle they wanted to feed.
00:23:30.035 --> 00:24:01.694
You know, I love you talking about market access and you kind of glazed over it just a bit, but that's a point that I want you to flesh out a little bit more because everything you've said outside of that area about why it is that US premium beef has worked and why it has revolutionized--my opinion--, the way that we, um, not just merchandise fat cattle or beef, but also reward those premiums all the way back down through the segments.
00:24:02.144 --> 00:24:07.545
But I'm reminded by a conversation that I remember vividly.
00:24:07.815 --> 00:24:13.201
You probably won't, but it was a, it was a watershed moment in this Cowboy's life.
00:24:13.652 --> 00:24:18.122
You ran for the US Premium Beef Board in 2007.
00:24:18.217 --> 00:24:19.531
Does that sound about right?
00:24:20.132 --> 00:24:20.912
Six or seven.
00:24:21.602 --> 00:24:27.721
And I happened to get the opportunity to sit on the nominating committee, and I was as nervous as a cat.
00:24:27.721 --> 00:24:33.541
I'd been back at the ranch for three years tops, um, you know, college for a few years.
00:24:33.541 --> 00:24:36.842
Worked for the Angus Association and a beef council for a little bit.
00:24:36.842 --> 00:24:38.507
But I, I was.
00:24:39.317 --> 00:24:40.846
Still pretty wet behind the ears.
00:24:40.906 --> 00:24:48.497
And as I went into this room, one of the other guys on the committee said, now you're on this committee to ask questions.
00:24:48.527 --> 00:24:55.307
You want people on this board that are going to be good thinkers and that are gonna be able to operate under pressure.
00:24:55.307 --> 00:24:59.567
So don't throw'em meatballs, throw'em hard questions, and challenge'em on it.
00:24:59.567 --> 00:25:01.217
And I'm just like, what right?
00:25:01.217 --> 00:25:02.146
Do I have to do this?
00:25:02.146 --> 00:25:17.446
Well, stupid me, I took the bait and you walked in and you gave your spiel and, and I, I think I asked you something along the lines of what is the most important part of US premium beef success, or why did they make it?
00:25:17.477 --> 00:25:21.436
Why have we made it at that time, nine years-ish, maybe 10.
00:25:22.426 --> 00:25:23.656
And you said,"well, that's easy.
00:25:24.257 --> 00:25:40.547
It's market access." I said,"well what about rewarding the right kind of cattle so we can make more?" And you got this smile across your face and you said,"you seed stock guys all wanna brag on genetics and passing the premiums back.
00:25:40.547 --> 00:25:46.967
But us premium beef would've never worked had it not been for its market access piece.
00:25:46.967 --> 00:25:56.207
And knowing that we'd have a slot for these cattle when we needed to get'em processed." And that was something that was today, definitely would be foreign to people.
00:25:56.207 --> 00:26:01.457
'cause we have the lever and, and you know, there's plenty of opportunity for market access.
00:26:01.457 --> 00:26:12.346
But talk about that a little bit for other cow calf producers like myself who don't necessarily have to worry about that market access piece and what, first of all, what that is.
00:26:12.346 --> 00:26:19.636
And second of all, why it was such a big deal in 19 96, 7 98, when you all were having those dealings,
00:26:20.912 --> 00:26:24.271
Well, at the time, of course, you know, we were in a different era than we are
00:26:24.376 --> 00:26:24.646
right.
00:26:24.751 --> 00:26:28.451
and we all can remember just yesterday and can't remember back very far, but.
00:26:29.326 --> 00:26:36.767
But you know, it was a, you know, getting rid of your cattle, that's a poor way to term it, but be getting rid of those fat cattle every week.
00:26:37.487 --> 00:26:48.586
You know, I remember back in those days, you know, I'd have a show list of say 2,500, you know, today we average, you know, close to 5,000, but maybe 2,500, 2000 even.
00:26:48.586 --> 00:26:52.487
And you know, you think you're gonna get real tough with the packer and you're not gonna sell.
00:26:52.487 --> 00:26:59.717
"By, God, we're gonna get more for our cattle." And then next week you got 4,000 cattle and then the next week you got 6,000 cattle.
00:27:00.406 --> 00:27:10.787
You can talk a big story, but you know, pretty soon, you know, you gotta trade cattle and the packer can see that every feed yard goes to the list is growing.
00:27:10.936 --> 00:27:21.586
And uh, so that market access is a huge item because you get to pick the day or the week you want to sell your cattle.
00:27:21.707 --> 00:27:27.707
And it's part of our commitment with National, you know, they have to take our cattle.
00:27:28.517 --> 00:27:30.287
next week, you turn'em in on noon.
00:27:30.376 --> 00:27:31.426
Noon by Tuesday.
00:27:31.426 --> 00:27:33.557
And I think most other grids are that way today.
00:27:33.946 --> 00:27:35.807
And you know, they, they go next week.
00:27:36.136 --> 00:27:40.067
So it fits in the hand of, of risk management.
00:27:40.426 --> 00:27:42.826
You, you know, when you can, you know, your cattle are gonna go.
00:27:42.826 --> 00:27:46.757
So if you want to get out of the futures, you know, this week ahead of time, you can.
00:27:46.757 --> 00:27:48.616
If you wanna wait till next week, you can.
00:27:49.576 --> 00:28:05.416
it gives you more, know, flexibility in marketing, but also you wanna remember a a a lot of people, not so much today in our organization, but I see, you know, in the old days a lot of people only had cattle on feed once a year.
00:28:06.346 --> 00:28:12.406
So they were really, you know, that that was their livelihood when they sold those fat cattle.
00:28:12.467 --> 00:28:25.396
And so this just gave them, you know, more leverage and more opportunity to be able to pick the time they wanted to sell the cattle and put'em on the market and have confidence that they're gonna be killed, you know, and, and market.
00:28:27.392 --> 00:28:30.602
I think it's been a huge deal, and I think right now, of course, market
00:28:30.632 --> 00:28:30.781
Isn't a
00:28:31.142 --> 00:28:31.442
isn't
00:28:31.471 --> 00:28:31.682
deal.
00:28:31.741 --> 00:28:34.051
deal, but it, it will come back again.
00:28:34.051 --> 00:28:35.311
It always has and it will
00:28:35.612 --> 00:28:35.821
Yeah.
00:28:35.821 --> 00:28:42.602
Especially if we continue to, you know, close plants and throttle back our infrastructure and things like that.
00:28:42.602 --> 00:28:42.842
Yeah.
00:28:42.842 --> 00:28:52.951
The next time that we have a time of high supplies, it could, could rear its ugly head again and always does the cyclical nature of, of a commodity business as, as such.
00:28:52.951 --> 00:29:10.906
But yeah, I, I, that story stuck with me and, and I think it goes to the point as to why US premium beef's model and structure, were so well poised for that time because it couldn't have just been guaranteed access.
00:29:10.906 --> 00:29:16.007
You also had to incentivize producing the right kind of beef and the right kind of cattle and et cetera, et cetera.
00:29:16.396 --> 00:29:33.047
But from your standpoint and what you drove home with me, it couldn't just be sending out some carrots and premiums to produce the right stuff you had from, from your old standpoint, from a feed yard standpoint, that right to deliver cattle the obligation as well.
00:29:33.047 --> 00:29:37.936
But that right, to have a slot for those when you were ready was pivotal and was huge.
00:29:37.987 --> 00:29:38.287
Yeah.
00:29:38.673 --> 00:29:39.313
give a lot of credit.
00:29:39.663 --> 00:29:40.022
to, to
00:29:40.313 --> 00:29:41.903
Steve did a great job of.
00:29:42.063 --> 00:29:46.803
Of keeping us out of the ditch, you know, when you, when you get a bunch of ag guys together.
00:29:46.803 --> 00:29:47.853
All groups I guess.
00:29:47.853 --> 00:29:52.323
But, you know, everybody's got a different idea of which way they wanted to the ball to roll.
00:29:52.413 --> 00:30:02.762
And, uh, but you know, Steve did a good job of, of, uh, guiding us and, you know, keeping us out the ditch, you know, and, and, uh, so that, that worked really well.
00:30:02.762 --> 00:30:04.742
I mean, you know, there was some things we did that.
00:30:05.462 --> 00:30:13.593
I didn't like, or somebody else didn't like, but we always got it back in the middle of the road and, and kept us down the path of, of, uh, success.
00:30:13.593 --> 00:30:24.482
You know, and I look back at some of these other ones that have tried it and, and failed, and I don't know all the reasons, but you know, I've told my sons, you know, timing has a lot to do with the success of a rain dance.
00:30:24.512 --> 00:30:24.992
You know?
00:30:24.992 --> 00:30:28.202
And so the timing industry was just right too.
00:30:28.202 --> 00:30:44.643
We went through several years of losses people were, you know, if they wanted to be in the business, they were committed to change, you know, and that's, that's what brings change is when tough times come along, incentivized to, to take on more risk and, and to make a change.
00:30:44.643 --> 00:30:47.942
And that's, that's what happened for us, is just the timing was right.
00:30:48.288 --> 00:30:48.498
Yeah.
00:30:48.617 --> 00:30:48.857
Yeah.
00:30:48.857 --> 00:30:58.657
And as a, a kid of the seventies and eighties watching that from a front row seat coming into my professional career, I mean, the word alliance was used.
00:30:58.657 --> 00:31:13.238
I mean, there were, I don't know how many dozens of different alliances that would have been very similar to the, at least the goals and the vision of US premium beef in that we reward the right type of cattle and beef and pass those premiums on down through the chain.
00:31:13.238 --> 00:31:21.067
And we have opportunities to, to connect consumer, to processor, to feeder to cow calf all the way back through, there's dozens of them.
00:31:21.667 --> 00:31:28.417
And USPB is one of the few, definitely the most successful one, but one of the few that even made it past 2000.
00:31:28.442 --> 00:31:36.847
And, and I think that, that what you've said is why it was just the, the vision and the diversification and the thought process that went into that.
00:31:37.988 --> 00:31:50.498
Well, well, one thing in our deal too was, is that realized from the beginning it was gonna take some larger commercial feed yards to get enough numbers to get the packers'
00:31:50.538 --> 00:31:50.887
Right?
00:31:51.667 --> 00:32:09.337
but it also allowed our producers that had 102 hundred and 300 cows to be able to market their cattle and they were struggling to get a packer to come to their farm feed yard or whatever buy those cattle and to know what the market was and whatever.
00:32:09.337 --> 00:32:11.827
So it really worked hand in hand.
00:32:11.827 --> 00:32:21.998
You know, it was a good mix that we had both a small producer and, and we had the large, uh, feed yard that was, would allow enough numbers to, to make an effect in the market.
00:32:22.553 --> 00:32:22.732
Yeah.
00:32:22.732 --> 00:32:26.242
And as we Monday morning quarterback, those early days and hear that.
00:32:27.532 --> 00:32:32.002
One share of us premium beef was worth$55 and 50 cents when we started.
00:32:32.002 --> 00:32:36.053
We all should have bought all of them, but at the time, that was a tough sell.
00:32:36.053 --> 00:32:47.752
I remember my dad, Tom, er, who fed a few cattle, but very few and trying to get other customers, neighbors of ours to buy the minimum units.
00:32:47.752 --> 00:32:51.053
I think it was 110 maybe shares that, that you had to buy.
00:32:51.083 --> 00:32:52.643
And he didn't wanna stand it on his own.
00:32:52.772 --> 00:33:01.053
Uh, So he tried to get some other producers and they liked the concepts, but nobody was gonna do anything more than stick their toe in the water in the group that he was talking with.
00:33:01.053 --> 00:33:14.403
And so, yeah, I mean you all those, as I think you all termed them,"the blue sky tour" where on those final few days, we're going all over the, the cattle feeding regions of, of the high plains, trying to get that minimum.
00:33:14.823 --> 00:33:17.913
Amount of capital to buy that 25% it.
00:33:17.913 --> 00:33:19.468
It was not an easy sale at the time.
00:33:19.803 --> 00:33:21.002
No, it wasn't.
00:33:21.002 --> 00:33:22.299
It was, it was difficult,?
00:33:23.210 --> 00:33:24.529
you know, I'm no difference.
00:33:24.529 --> 00:33:39.886
You know, I, I flew around the country, with our pilot, I remember, and, and putting on these, and I'd go to, you know, maybe, you know, two or three communities where we had a, a group of, of customers in that area.
00:33:40.576 --> 00:33:41.987
I felt like a carpet bagger.
00:33:42.017 --> 00:33:55.126
You know, I'd run in there and I was always, I was so busy trying to get all these places in a few days, you know, and, you know, I had, I had several customers that had committed to more stock than the day they actually wrote the
00:33:55.442 --> 00:33:55.662
Huh?
00:33:56.176 --> 00:34:03.017
You know, well, maybe I'll better not take quite so many, you know, and they'd, they'd back up you know, I understood.
00:34:03.017 --> 00:34:04.817
'cause it was risky, but.
00:34:05.686 --> 00:34:17.266
I'm, you know, I'll tell you here today that, uh, customers that got involved in it from the very beginning, uh, honestly, have, have
00:34:18.331 --> 00:34:18.902
More money.
00:34:20.177 --> 00:34:24.677
on their stock and us premium beef than they probably have ever feeding cattle with me over all the
00:34:24.947 --> 00:34:25.166
Yep.
00:34:25.936 --> 00:34:26.286
Stock
00:34:26.626 --> 00:34:30.166
has just been tremendous asset to everybody, and it, it's been life
00:34:30.376 --> 00:34:31.077
for a lot of people.
00:34:31.186 --> 00:34:31.246
of
00:34:31.447 --> 00:34:31.726
Yeah.
00:34:31.936 --> 00:34:32.987
You know, it, it was a
00:34:33.706 --> 00:34:34.387
was truly a
00:34:34.487 --> 00:34:34.976
a, a
00:34:35.186 --> 00:34:35.306
changing
00:34:35.327 --> 00:34:36.706
changing event for Poky.
00:34:37.067 --> 00:34:47.836
Uh, you know, because at the very beginning, especially, you know, uh, you know, everybody wanted to kill those cattle on us Premium beef and, and, uh, especially people that had high quality cattle.
00:34:49.067 --> 00:34:53.777
And so it really gave a boost to Poky and our growth too.
00:34:53.836 --> 00:34:56.987
It was, it was a huge value, you know, value to us by far.
00:34:57.692 --> 00:34:59.342
There's, there's no doubt about it.
00:35:00.061 --> 00:35:06.661
So that's kind of what helped you take Poky to that next level, and it continues to do so.
00:35:06.661 --> 00:35:08.702
Tell us a little bit about it today.
00:35:08.702 --> 00:35:23.992
You went through size and scope there at the beginning of the podcast, but as you talk about being the largest custom yard in the country, I think everybody that's listening to this understands the difference between company owned cattle and custom fed or customer owned cattle.
00:35:23.992 --> 00:35:31.521
But how does that structure and, and what type of customers are they cow calf producers on a retained ownership type of deal?
00:35:31.521 --> 00:35:33.081
Are they investor customers?
00:35:33.081 --> 00:35:34.072
Is it a mix of both?
00:35:34.072 --> 00:35:37.922
And if you're able to share that, kind of give us a, a lay of the land there, at least at Poky.
00:35:38.931 --> 00:35:41.661
Well in our operation it is.
00:35:41.692 --> 00:35:46.942
That's changed even in my career, initially.
00:35:48.097 --> 00:35:57.396
I had a lot of, uh, customers from the Iowa area where I grew up in northern Iowa that, you know, people I didn't know, but I had that Iowa tag on me where they felt confidence, you
00:35:57.512 --> 00:35:57.802
Sure.
00:35:58.416 --> 00:35:59.976
I was an Iowa farm boy.
00:36:00.577 --> 00:36:05.856
But, you know, I bought a lot of cattle in the sale barns and resold them to those
00:36:06.001 --> 00:36:06.291
Okay.
00:36:06.757 --> 00:36:25.206
And, and when we were going through an era in the whole industry where a lot of those farmers in Iowa either, uh, had labor issues, their feed yard was, was too small for what they wanted to do and didn't want to put any more infrastructure in, the sun had came back.
00:36:25.867 --> 00:36:33.367
Uh, farming had got profitable and, and the cattle feeding wasn't so much so the son wasn't interested in feeding cattle, but the dad still had it in his blood.
00:36:33.367 --> 00:36:43.597
You know, I fed for a lot of those kind of people uh, but today, uh, our customer base has changed a lot and.
00:36:44.152 --> 00:36:50.481
We feed for a lot more people that run yearlings, you know, buy calves and run yearlings and send'em to us.
00:36:50.541 --> 00:36:50.961
Especially our
00:36:51.141 --> 00:36:51.891
our customers outta the
00:36:52.206 --> 00:36:52.286
customer,
00:36:52.431 --> 00:37:00.262
they, they'll have yearlings, you know, multiple times of the year and off of grass, off of wheat, different projects.
00:37:00.876 --> 00:37:00.916
Northern
00:37:00.952 --> 00:37:08.152
northern customers, their yearling deal is mostly seasonal, uh, through the fall, four months mostly, or five.
00:37:08.152 --> 00:37:14.121
And cow calf guy, as we grew, that is one thing that we had to change.
00:37:14.121 --> 00:37:16.072
We, we don't take any calves
00:37:16.086 --> 00:37:16.376
Sure.
00:37:16.911 --> 00:37:17.722
anymore.
00:37:18.141 --> 00:37:21.891
You know, a calf in a hundred thousand head yards a recipe for disaster,
00:37:22.097 --> 00:37:22.317
So.
00:37:22.461 --> 00:37:24.501
and so don't do that.
00:37:24.501 --> 00:37:30.862
I do have two grow yards tied to our operation, but we use those primarily for our own use for ranches.
00:37:30.952 --> 00:37:35.032
You know, we, grew the company with doing a lot of ranch things.
00:37:35.032 --> 00:37:37.072
We partnered with a lot of people on ranches.
00:37:37.072 --> 00:37:38.572
We bought a few ranches.
00:37:40.311 --> 00:37:45.681
And so we do do that yet, turn out wheat cattle and things like that and use that for inventory.
00:37:46.197 --> 00:37:52.978
But you know, today, you know, probably 95% of the cattle in, in pokey are owned by somebody else besides pokey.
00:37:53.998 --> 00:37:59.398
And our ranch deals, uh, we put customers in on those ranch deals too, and partner.
00:37:59.398 --> 00:38:03.867
We always stay in because we got the expense of everything, of checking on'em and everything.
00:38:03.867 --> 00:38:05.788
That's the only way we can get rewarded for that.
00:38:05.788 --> 00:38:15.882
But, but today, you know, I, I'm amazed at of the customers Grant's handling today, how many cattle they run at a young age.
00:38:15.882 --> 00:38:19.677
You know, the consolidation, you know, has really changed.
00:38:19.827 --> 00:38:32.728
And some of it says as, uh, know, the son or son in-laws came back and they've gotta expand the operation to have enough to feed all the families, you know, and, and we really see a difference in that as.
00:38:33.282 --> 00:38:37.572
But most of the people that we feed for today are, you know, they're all agriculture people
00:38:37.733 --> 00:38:38.393
The old days.
00:38:38.472 --> 00:38:43.362
days that we had that deal with the doctor and the lawyer, we don't have that clientele.
00:38:43.452 --> 00:38:45.043
You know, we just, we never did have that.
00:38:45.838 --> 00:39:33.268
So for the cow calf producer that's listening and either is considering retained ownership with Poky or whomever, uh, or wants to be sure that they are providing you something that is gonna hopefully make you money as well and come back and buy theirs again next year, describe to me the ideal, and obviously like you said, you're not taking calves directly, but if a very traditional cow calf production system weaning those calves 60 ish days, either retaining ownership through the yearling phase and then sending them to you or selling them, then what, what does that cow calf person need to do to make sure and set himself up and you up for making money on that calf going forward?
00:39:34.463 --> 00:39:35.672
Well, first of all.
00:39:35.788 --> 00:39:39.358
of all, the key to the calf deal to make it work is the health program.
00:39:39.838 --> 00:39:44.038
You know, I've traveled all over the country talking about that and how important that is.
00:39:44.614 --> 00:39:51.304
And a good cow calf producer, you know, that's really considering feeding.
00:39:51.304 --> 00:40:01.215
You know, he is spent some money on genetics, of course, and for him to get truly rewarded, you know, he can get a dollar more, 2 million,$2 more in the sale barn.
00:40:01.215 --> 00:40:04.724
But to, to really get rewarded, you know, he's gotta feed those cattle.
00:40:04.784 --> 00:40:06.014
That's the only way you're gonna get it.
00:40:07.155 --> 00:40:14.505
you know, we can get'em all the data, of course, so they can make improvement and know how to, you know, improve their herd.
00:40:15.255 --> 00:40:22.094
But, you know, the basics is they're gonna have to wean their calves and they need to get'em, you know, healthy and straight.
00:40:22.860 --> 00:40:28.230
Honestly the best, you know, 90 days people talk about 45 days, but it's not enough.
00:40:28.260 --> 00:41:02.539
And, and you know, with the genetics we've got today, that's one of the things we try and encourage in all of our purebred operators that do business with us, you know, is that they need to promote to their people, you know, how important, weaning the calves are and, and, and health of those calves because, you know, we've got these calves growing so fast anymore through these genetics and we struggle sometimes with the health of these cattle and, and I don't know if it's got left out of the breeding decisions or what, but health's still, you know, really important.
00:41:02.539 --> 00:41:04.909
And it is today, especially with the cost of, feeder
00:41:05.114 --> 00:41:05.405
Sure,
00:41:05.480 --> 00:41:11.690
we don't wanna lose any, so I, I encourage these people, they need to, at least wean the cattle.
00:41:11.690 --> 00:41:17.960
I know a lot of people don't have enough country to actually, you know, raise lings and raise their cattle calf operation too.
00:41:18.664 --> 00:41:24.275
But at least get the calves weaned and, uh, get'em on solid footing before they send'em to the feed yard.
00:41:24.585 --> 00:41:24.875
yeah.
00:41:25.914 --> 00:41:28.940
Is the health of these cattle today worse than it was?
00:41:29.420 --> 00:41:30.980
10 years ago, 20 years ago.
00:41:31.070 --> 00:41:32.690
And if so, how?
00:41:32.690 --> 00:41:35.809
And what is it and why, in your opinion?
00:41:36.684 --> 00:41:39.204
Well stick my head out here.
00:41:39.275 --> 00:41:39.684
It's alright.
00:41:39.789 --> 00:41:40.474
and a limb, but,
00:41:40.545 --> 00:41:40.764
But
00:41:41.494 --> 00:41:42.155
uh,
00:41:42.855 --> 00:41:43.545
yeah, I did.
00:41:43.565 --> 00:41:45.125
it is, there's no doubt about it.
00:41:45.364 --> 00:41:55.925
And, uh, you know, I look back when I was a kid, you know, my dad had a bottle of combiotic on the dash, the pickup, and, and it treated everything.
00:41:55.925 --> 00:41:57.394
And, you know, that was the whole
00:41:57.585 --> 00:41:57.804
Yep.
00:41:58.594 --> 00:42:09.304
And what I see today is, is that genetically, you know, the rewards, of course are in choice and prime and all those things, so people are so focused on that.
00:42:10.070 --> 00:42:14.570
we've kind of forgot about livability and, you know, survival.
00:42:14.929 --> 00:42:21.530
Because, you know, when you send a a, a calf to a feed yard, you gotta remember the viral cloud is huge over that feed yard.
00:42:22.250 --> 00:42:23.090
In our feed yard.
00:42:23.090 --> 00:42:27.289
Think how many feeder cattle come in our place every day, week.
00:42:27.590 --> 00:42:32.900
So these cattle have gotta be sound, you know, and, and we're gonna vaccinate him and we're gonna do all that.
00:42:33.679 --> 00:42:41.119
also speaking about the labor, for example, you know, it, it is more difficult, just, that's just life.
00:42:41.119 --> 00:42:45.079
It's way more difficult find the people.
00:42:46.114 --> 00:42:53.824
I think had the old knowledge of, of, uh, cattle and health as, as we did as I did 10 or 20, 30 years ago.
00:42:54.635 --> 00:43:09.454
You know, in those days, so many people grew up on a farm at the farm or the ranch wasn't big enough for the sun to come back, so they'd come work at a feed yard and had that knowledge of, of their own home health, you know, and, and knew all that.
00:43:09.454 --> 00:43:11.284
Today, that's just not the case.
00:43:11.614 --> 00:43:15.485
Those people are going home like you did to your family operation or whatever.
00:43:15.485 --> 00:43:19.925
And so you don't have that, that of people that we can hire with them.
00:43:19.985 --> 00:43:30.295
And, uh, I also blame a little bit on, uh, you know, like Drax and for example, it's a great product, it's a great product for people to use in a dart gun.
00:43:31.045 --> 00:43:35.215
a great people for people to use in the, in, uh, in raising their cattle.
00:43:35.635 --> 00:43:41.635
And so we see it, you know, a lot of people able to save that steer on the ranch.
00:43:42.460 --> 00:43:49.000
then when he comes to the feed yard, got some lung damage, he's got some damage of some kind, and we don't know it.
00:43:49.780 --> 00:43:53.800
And then he gets sick and the first thing my guys do is use draxxin again.
00:43:54.250 --> 00:43:57.909
And they won't work near as good the second time or the third time.
00:43:58.719 --> 00:44:09.400
then by the time we figure out that, hey, we gotta change drugs, well then you go to changing drugs and you know, just, just that much farther behind on the, on the health of the animal.
00:44:10.420 --> 00:44:18.489
And I think that's come to a big, you know, it, it is really starting to see it in the industry because it's, it's a cheap drug, everybody can use it.
00:44:18.940 --> 00:44:23.320
And so, you know, it just makes it more difficult for health at the feed yard.
00:44:23.994 --> 00:44:30.255
Yeah, that's, that's the challenge, is that, um, judicious use of the tools that we have.
00:44:30.315 --> 00:44:32.894
And, um, yeah, it's probably all encompassing.
00:44:34.244 --> 00:44:45.885
From a standpoint of, um, replacing that lack of labor or that that difficult, uh, labor pool that we, that we can find that's able to do the things you need'em to do.
00:44:46.469 --> 00:44:54.300
Where do you see technology coming in, in the next 5, 10, 15 years in the, at the feed yard level, to address that?
00:44:54.389 --> 00:45:02.250
Do we see these steers having wearables on'em that tell us when they're starting to develop a fever or whatever the case may be?
00:45:02.250 --> 00:45:05.250
What's what'll happen in that arena with AI and everything else?
00:45:06.289 --> 00:45:09.434
It, it will, it'll, it, it'll keep coming along.
00:45:09.434 --> 00:45:23.925
And, and we've done several trials on different products, you know, from the ear tags that light up to, you know, some where they're trying to monitor how often the cattle go drink or come up to eat and all those things.
00:45:23.925 --> 00:45:28.905
And so I think it will, right now the industry is struggling with the cost, I
00:45:29.070 --> 00:45:29.429
Sure.
00:45:29.804 --> 00:45:32.744
to be, to, to be, you know, quite frankly.
00:45:32.744 --> 00:45:38.985
I mean, it is just, what's it worth, you know, is a custom yard, does the customer feel like that we can charge him for that?
00:45:38.985 --> 00:45:42.255
Or does he feel like we need to stand that cost in the feed yard?
00:45:42.255 --> 00:45:47.385
And, so far the tag's been relatively high, to do all that.
00:45:47.541 --> 00:45:50.601
you know, I, I envision though that that'll be resolved.
00:45:50.931 --> 00:46:02.362
And as will, as we've seen in all industries, you know, as it gets through the RD stage and, and they get out into the real world, it'll get competitive and, but that, that will happen.
00:46:02.452 --> 00:46:11.722
I, I don't doubt it at all, especially as we get more and more restricted on drugs that we can use and all those things, we're gonna have to depend on more and more of those kind of products.
00:46:11.992 --> 00:46:12.262
Yep.
00:46:12.291 --> 00:46:13.161
No doubt about it.
00:46:13.851 --> 00:46:18.081
So back to that cow calf producer, or really anybody that's considering, uh, feeding cattle.
00:46:19.567 --> 00:46:28.072
Uh, on a custom basis, today's market, and let's just say for the next year you could shine your crystal ball up a little bit.
00:46:28.112 --> 00:46:34.172
How do you navigate what we're looking at from a risk standpoint and a price standpoint?
00:46:34.172 --> 00:46:42.512
And as cattle feeders, you guys have never backed down from a little risk, but, uh, sometimes us cow calf producers have got a little bit more traditional mindset.
00:46:42.992 --> 00:46:48.842
What do you tell a commercial producer that comes to you and says, Hey, I am investing more money in genetics.
00:46:48.842 --> 00:46:53.851
I am doing everything I can to make sure that these cattle are as bulletproof as I can make them.
00:46:53.972 --> 00:47:04.952
And I know I need to own these things womb to tomb if I'm gonna get paid for everything I'm doing, but they're also worth 3000 bucks as I sell'em as a six weight calf.
00:47:05.090 --> 00:47:05.510
Mm-hmm.
00:47:06.052 --> 00:47:16.231
from a market standpoint, uh, what's, what's the right call going forth, for somebody who's trying to decide, do I put these cattle on feed or do I cash out now and, and get out from under'em?
00:47:16.768 --> 00:47:31.197
you know, we, we struggled with that turning into early two thousands, and that's one of the things that Wayne and my older partner and I decided that we needed to get more to the risk management part of it to help our customers.
00:47:32.157 --> 00:47:33.333
we hired a, a.
00:47:34.873 --> 00:47:37.182
Full-time risk manager in the office.
00:47:37.188 --> 00:47:44.023
And, and, and, uh, we have one today that's been with us probably 15 years, I must say, and does an excellent job.
00:47:44.233 --> 00:47:51.793
And, uh, you know, he was a commodity broker before I hired him, and he was actually A-A-A-C-P-A.
00:47:51.793 --> 00:47:55.663
So he has, you know, really good detail, uh, about him.
00:47:55.663 --> 00:47:58.512
And, and he's helped our customers immensely.
00:47:58.512 --> 00:48:02.052
And, and so we're a big risk managers today.
00:48:02.112 --> 00:48:09.492
You just have to use risk management if you're gonna participate, you know, the volatility we see today is unbelievable.
00:48:09.552 --> 00:48:14.742
You know, last Friday for example, we saw the feeder board drop$10 in six minutes.
00:48:14.833 --> 00:48:20.623
You know, younger people in the industry, they, they've become accustomed to it.
00:48:20.623 --> 00:48:24.132
Older guys like me drives me crazy, you know, I can't believe it.
00:48:24.163 --> 00:48:26.952
You know, and how can the value change that much?
00:48:26.983 --> 00:48:27.672
And it can't.
00:48:27.672 --> 00:48:28.512
You and I both know
00:48:28.577 --> 00:48:28.927
Right.
00:48:29.847 --> 00:48:31.797
With, uh, the way we trade today.
00:48:31.797 --> 00:48:32.847
That's just what happens.
00:48:32.847 --> 00:48:41.427
And that's why it's so important that you have risk management of some kind, you know, whether it's, know, puts or something that puts a floor on the cattle.
00:48:41.847 --> 00:48:50.097
But I think it's an individual decision on each operation, because if they're highly leveraged, yeah, these are great opportunities to, reduce debt.
00:48:50.128 --> 00:48:51.688
I'm not gonna deny it one bit.
00:48:51.717 --> 00:48:54.387
You know, this might not be the time to start feeding cattle at the record
00:48:54.538 --> 00:48:54.827
Yeah.
00:48:55.978 --> 00:49:01.197
And, uh, you know, we're, we're really big into a lot of things.
00:49:01.197 --> 00:49:18.507
I mean, you know, maybe you feed half your calves, maybe you feed your heifers, maybe you, you know, feed half the steers or partner with us, you know, call us and we'll find a customer that wants the other half of your cattle, or we will, or, you know, but there's just a lot of opportunities to get your toe in the water.
00:49:18.958 --> 00:49:21.057
If you're a cow calf guy and you want data.
00:49:21.117 --> 00:49:25.018
You'll get all the data without even owning all the cattle.
00:49:25.378 --> 00:49:29.818
And that's just part of the risk management right there by do you know, doing a little bit of everything.
00:49:29.818 --> 00:49:50.007
You know, I'm, one of the roles I still have just to help Grant is I'm still buying all the feed for the company just to take some burden off him when I knew this transition was coming and, and, uh, I'm just a big believer and always have been of doing a little business the time, and I think it's just a good way with these cattle feed or these ranchers to feed cattle too.
00:49:50.007 --> 00:50:00.867
You know, you don't have to feed'em all, but you can feed part of'em or do something to, you know, to try it, see what you got, how you get along, and, and, but you have to use risk management.
00:50:00.867 --> 00:50:02.398
I, I really believe it anymore.
00:50:02.458 --> 00:50:06.327
It's just the market is so volatile and especially at the level we are now.
00:50:07.057 --> 00:50:15.313
Yeah, I think, I think that's the, the part that I think is great from a standpoint of a small to mid-size cow calf producer.
00:50:15.313 --> 00:50:24.762
If you can get a load together, you don't necessarily have to have a 250 head pen, but if you can get a load of calves together, there are plenty of you all out there that say, Hey, we'll partner with you.
00:50:24.762 --> 00:50:28.603
We'll, we will buy half of'em right now and we'll own half of'em together.
00:50:28.603 --> 00:50:34.393
And you can spread your risk and decide, going forth how much you wanna own, uh, the next, next time around.
00:50:34.393 --> 00:50:36.193
But yeah, there's, there's lots of options there.
00:50:37.483 --> 00:50:39.163
Changing gears a little bit again.
00:50:39.163 --> 00:50:44.713
You mentioned Grant a couple times and you used the word transition there just a minute ago.
00:50:45.112 --> 00:51:07.597
Tell us a little bit about that transition and how you see a family business, being able to, as you've done, not necessarily just leave and ride off into the sunset, never to show up again, but little by little turn over some of those reins to the next generation and how you see that that can be a successful, uh, situation for, for a family.
00:51:08.527 --> 00:51:09.036
Well.
00:51:09.231 --> 00:51:20.782
You know, it's, it's a big transition for everybody and, and, uh, be honest with you, I have two sons and uh, when they both went to K State, they both told me, don't save any of this for us.
00:51:20.782 --> 00:51:21.891
We're not coming back.
00:51:21.952 --> 00:51:23.782
You know, you, you work me too hard.
00:51:23.842 --> 00:51:25.731
They're not gonna work that feed yard life.
00:51:25.882 --> 00:51:26.101
Yep.
00:51:26.391 --> 00:51:28.911
And, uh, because it is, it is a tough life.
00:51:28.942 --> 00:51:31.702
It, you know, you're busy all the time, every day.
00:51:32.856 --> 00:51:41.706
uh, but I was fortunate, my youngest son, uh, he went to work for IMI global, uh, the company, you know, with the ear tags.
00:51:41.706 --> 00:51:50.467
And that was really big when the, uh, source was going big, you know, and he was doing a lot of the audit work and in charge of a lot of the auditors.
00:51:50.467 --> 00:51:58.806
And, uh, so he went and did that and, and that, that travel and all those things, pretty soon he was more interested in coming back home than I thought he would be.
00:51:58.806 --> 00:52:07.036
And so he came back and he was back with the company for about 10 years, before we started to make the transition.
00:52:07.036 --> 00:52:18.436
And, and he was at the age, you know, I wasn't really quite ready to leave, but the day to day, but I knew that if I didn't include him and get him involved right away, that I was gonna lose a big opportunity.
00:52:18.496 --> 00:52:26.777
So started making the transition for Grant, and of course, I'm like any father, you know, I worry to death about it, but you know.
00:52:28.081 --> 00:52:35.101
Nobody knew it publicly, but, but we had, I had committed to Grant that, you know, this is when I was gonna step away day to day.
00:52:35.101 --> 00:52:46.802
And, so I had taken him with me to do a lot of my ranch business and customers, and so he got to meet him, you know, talk to him, see him.
00:52:47.431 --> 00:52:54.061
Know, once a year we have a customer appreciation weekend in July every year, and we have a really good crowd that comes every year.
00:52:54.092 --> 00:52:57.811
And, uh, so the, you know, he had been around him quite a bit.
00:52:57.811 --> 00:53:00.992
And so actually I, I've been really blessed.
00:53:00.992 --> 00:53:04.561
I mean, the, the transition went way better than I thought it would.
00:53:05.911 --> 00:53:06.422
I'm not gonna
00:53:06.646 --> 00:53:07.277
Really hard.
00:53:07.501 --> 00:53:12.902
on me at first because I didn't want him to fail and I didn't wanna let our customers down.
00:53:13.802 --> 00:53:16.831
so I was really concerned and it was hard on me.
00:53:16.831 --> 00:53:17.521
And, you know.
00:53:18.211 --> 00:53:28.021
When you've worked every day, all your life, mostly it, it's hard to step away from anything, you know, but as I get, you know, more years away from it, I'm less involved.
00:53:28.021 --> 00:53:34.141
And, and Grant's done a great job and, I, I can't say anything bad about it has worked good.
00:53:34.231 --> 00:53:47.132
My oldest son, uh, he just in the last year or two has came, got more involved, got, he's on the board now and, and he's actually taken more interest in our outside investments.
00:53:47.132 --> 00:53:49.802
And so he's starting to do more of that for us too.
00:53:49.981 --> 00:53:53.371
And, uh, so we're, we're really lucky right now.
00:53:53.371 --> 00:53:53.791
We're in good
00:53:54.012 --> 00:53:54.737
That's great.
00:53:54.976 --> 00:54:00.112
It doesn't sound like you necessarily had a rule that the boys had to go work somewhere else.
00:54:01.052 --> 00:54:02.282
But they chose to.
00:54:02.282 --> 00:54:07.561
And then one and maybe eventually both come back to the family business.
00:54:07.561 --> 00:54:10.021
How important is that hiatus?
00:54:10.021 --> 00:54:20.626
Is that break between the time they leave the house, go to college and even still get a paycheck from somebody that doesn't have share their last name?
00:54:20.757 --> 00:54:21.208
I think it's
00:54:21.447 --> 00:54:24.418
It is really important, and I think most people realize that.
00:54:24.418 --> 00:54:28.527
I think it's, it's really important because then they, you know, they know what it's like at
00:54:28.887 --> 00:54:29.068
right.
00:54:29.637 --> 00:54:36.958
and once they go try it someplace else, then they can decide if they like it better than home or they like being back at home, you know?
00:54:36.958 --> 00:54:57.177
And, and we were fortunate enough, and I give a lot of credit to Wayne, my older partner, you know, that gave me the opportunity to grow the company because, you know, I needed his, his support, you know, to make all those decisions when you're growing that fast and doing all those things because matter how hard you try, every step you make is incorrect.
00:54:57.628 --> 00:55:00.898
So you've gotta live with some of those bad decisions too.
00:55:02.097 --> 00:55:02.518
uh,
00:55:02.742 --> 00:55:02.963
so.
00:55:02.967 --> 00:55:05.367
so were big enough.
00:55:06.088 --> 00:55:17.967
It was easy to bring Grant into the company and, you know, uh, I had, uh, a pretty good group of foreman, you know, and, and department heads.
00:55:18.268 --> 00:55:22.648
So, you know, they didn't need a lot of training when Grant came.
00:55:22.648 --> 00:55:26.038
And, and so he, he had a good support group behind him too.
00:55:26.188 --> 00:55:27.447
And, uh, they're still there.
00:55:27.447 --> 00:55:41.338
The guys that in those heads when he took over, uh, I think it's about seven years now, maybe six or seven years, and he's been day to day and they've all stayed with us and, and in the growth.
00:55:41.338 --> 00:55:48.538
And so it's important that they step away, but I also think it makes it a better relationship when they come back.
00:55:48.987 --> 00:55:49.197
Yeah.
00:55:49.197 --> 00:55:53.128
And I think they just, there's so many lessons that they, that we can learn.
00:55:53.128 --> 00:55:58.797
'cause I had a similar path and, and yet, like you said, um, you already knew what it was like at home.
00:55:58.797 --> 00:56:02.938
You know, kind of what it's gonna be like if and when you move back there.
00:56:03.898 --> 00:56:17.367
But until you go and experience the other side and see whether that grass really is greener on the other side of the fence and it's, you just have too many question marks when you do come home, if you haven't seen that for yourself.
00:56:17.367 --> 00:56:23.547
And I think it, I think it's important anytime that I get to talk with kids, parents, even better, both.
00:56:23.648 --> 00:56:32.557
I, I try to at least share that as an option because quite often, especially in farms and ranches, um, it's not even considered.
00:56:32.557 --> 00:56:33.967
We need day-to-day labor.
00:56:34.027 --> 00:56:37.507
We've got opportunities within our family and we can't wait.
00:56:38.137 --> 00:56:40.208
To get to work with them side by side.
00:56:40.208 --> 00:56:48.307
And sometimes when that gets rushed, I think for the longevity and the sustainability of that family's business, it, it sometimes compromised.
00:56:48.338 --> 00:56:54.668
Not always what's right for some isn't for others, but, uh, but I think that's, that's a pretty good path.
00:56:54.668 --> 00:56:57.847
I think that that Grant and, and, uh, you all have charted.
00:56:58.748 --> 00:57:07.748
So before we finish up, I got the opportunity about a year and a half ago to be there when you got inducted into the Cattle Feeders Hall of Fame in Nashville.
00:57:07.748 --> 00:57:18.277
And, and um, you said, you said a lot during that and if anybody can Google and find a video of that, and I know the Hall of Fame had that on their website for a little while.
00:57:18.277 --> 00:57:20.978
It was, it was fascinating.
00:57:20.978 --> 00:57:24.668
I think they played the music to get you off the stage, if I remember right.
00:57:24.668 --> 00:57:29.498
But I could have sat there and listened for another hour, all the wisdom that you were imparting on us.
00:57:29.858 --> 00:57:31.358
But I've still got.
00:57:32.018 --> 00:58:05.978
A card that, a note card that I wrote while you were talking and I wrote down, I think this may have been a quote that you attributed to your dad and you said, make your customer, or I guess he said,"make your customer money and it'll be your customer forever." And of all the different things that you've talked about and all the different philosophies on business and on transition and on seeing opportunities to grow your, your yard and, and everything that you've done, that's the one that sticks with me as much as, as any of them.
00:58:06.128 --> 00:58:08.858
Make your customer money and he'll be your customer forever.
00:58:08.858 --> 00:58:14.847
And I, I think that's what it looks like to me as a custom cattle feeder and, all of your business dealings.
00:58:15.297 --> 00:58:15.898
That's it.
00:58:15.987 --> 00:58:18.657
Uh, Charles Koch calls it good profit.
00:58:18.717 --> 00:58:25.668
Um, you know, when everybody is able to make some money, by doing business with you, they're gonna come back and do it again.
00:58:25.731 --> 00:58:26.032
Mm-hmm.
00:58:26.722 --> 00:58:27.027
Yeah, I agree.
00:58:27.172 --> 00:58:28.012
I agree with that.
00:58:28.101 --> 00:58:35.541
And that was, my dad told me that when I left Iowa, you know, he said, just always remember, you know, if you can make your customer money, it'll be your customer forever.
00:58:36.021 --> 00:58:52.032
And we've just kept that as, as one of our forefront, goals and our company forever, you know, is that we made the decision in early days, I didn't have the capital to feed that many cattle, so I was dependent on getting customers.
00:58:52.032 --> 00:58:57.192
And the only way with the competitiveness in our industry is, is you, you've gotta make'em
00:58:57.407 --> 00:58:57.626
Yep.
00:58:57.672 --> 00:58:58.661
That's all there is to it.
00:58:58.661 --> 00:59:02.802
If they're happy and they're satisfied in, they're making money, they're gonna come back.
00:59:03.041 --> 00:59:07.481
And, uh, so I think that holds really, you know, a lot of truth.
00:59:07.661 --> 00:59:07.871
Yep.
00:59:08.081 --> 00:59:09.371
And there's a lot that goes into it.
00:59:09.402 --> 00:59:13.302
I mean, we all talk about treating each other like we wanna be treated ourselves and
00:59:13.547 --> 00:59:13.967
Mm-hmm.
00:59:13.992 --> 00:59:17.442
have an integrity and everything else, but that's a part of it.
00:59:17.472 --> 00:59:25.992
When we're doing business dealings, whoever it is we're doing business with, whether we're buying something from them or selling something to them, or them providing a service, um.
00:59:26.561 --> 00:59:32.322
If they're helping us make a profit, we're probably gonna continue that relationship and, and, uh, go forth.
00:59:32.322 --> 00:59:34.811
So yeah, I think that says a lot.
00:59:34.811 --> 00:59:38.262
And I think it's something that we try to adopt here in our business.
00:59:38.262 --> 00:59:42.092
And, the words that your dad put that into I thought were just pretty profound.
00:59:42.389 --> 00:59:43.440
Yeah, I appreciate that.
00:59:43.530 --> 00:59:43.960
Thank you.
00:59:43.974 --> 00:59:44.364
You bet.
00:59:44.394 --> 00:59:44.755
You bet.
00:59:44.755 --> 01:00:02.815
Well, Joe, I appreciate you being on here today and, and, um, yeah, great story, great information and, sometimes different segments of the beef industry think we know what it is that that other segment is doing or how they see things or, or why, and quite often these.
01:00:03.190 --> 01:00:09.099
Quote unquote,"big cattle feeders." Um, take a few shots from the cow calf producer.
01:00:09.099 --> 01:00:19.780
Now, right now, in today's market, I don't think we better be slinging arrows very far because if you look at the profitability amongst segments, we're sitting in a pretty good spot as, uh, as a bunch of cowboys.
01:00:19.780 --> 01:00:35.949
But, uh, yeah, I think anytime that we get the opportunity to talk with someone like yourself from a segment that we may not have a day-to-day understanding or, or in-depth knowledge from is, is really beneficial for us making decisions as we go forth.
01:00:36.925 --> 01:00:45.385
You know, one thing I'd like to offer too, to your, to your clientele and your listeners are, is that, you know, a lot of people don't understand how a big feed yard really
01:00:45.635 --> 01:00:45.855
Yep.
01:00:46.465 --> 01:00:47.099
and so they're nervous.
01:00:48.144 --> 01:01:02.855
You know, to call a big feed yard and say, well, I got 60 head I wanna send you, you know, first of all, you know, everybody starts at a certain level,, so it, it doesn't, you know, we don't have everybody in the world feeding 5,000 head, you know, so, know, don't be
01:01:02.909 --> 01:01:03.570
And the other thing.
01:01:03.635 --> 01:01:10.414
thing is, is come visit these feed yards, you know, not only ours, but even our competitors, you know, and you'll see the difference.
01:01:10.414 --> 01:01:22.605
You'll see which one fits your needs the best, you know, and, and you'll, it's just like doing any kind of business, you know, when you meet the people in person, it still carries a lot, you know, right away.
01:01:22.605 --> 01:01:33.804
You either connect or you don't, so I, I encourage people to, you know, before they send, a group of cattle with the investment, they are, they, they need to go look at the facility and see what they, how they're gonna take care of.
01:01:33.804 --> 01:01:43.585
'cause you and I both know, know, if you go to a facility that's really well kept and, you know, looks like they're on the ball, you know, the odds are they're gonna take good care of your cattle too.
01:01:43.719 --> 01:01:43.869
Yep.
01:01:43.974 --> 01:01:45.804
And so people just need to do that.
01:01:45.804 --> 01:01:46.195
You know?
01:01:46.644 --> 01:01:49.344
I know it's a travel, but it, it does everybody good.
01:01:49.480 --> 01:01:49.659
Yeah.
01:01:49.659 --> 01:01:58.869
And, and every time I've been on someone's yard and either going up and down the alleys in a pickup or sitting down at the office or whatever the case may be, I learn something.
01:01:58.900 --> 01:02:03.960
I mean, it's just, anytime we get into that opportunity, it's an opportunity that makes us better.
01:02:04.152 --> 01:02:05.742
That's one reason we started this podcast.
01:02:05.742 --> 01:02:08.862
That's one reason I talk to people that are outside of my wheelhouse.
01:02:08.862 --> 01:02:13.483
Uh,'cause I always learn something and hopefully anybody that's listening will as well.
01:02:13.483 --> 01:02:27.994
So yeah, take that opportunity when you get a chance to, to go see those and call, make calls out there because yeah, even though we think, well, we're too small, we're too big, whatever the case may be for that guy or gal, until we ask, we probably don't know.
01:02:28.226 --> 01:02:28.831
Yeah, you're
01:02:28.847 --> 01:02:29.117
Yep.
01:02:29.177 --> 01:02:29.476
So.
01:02:29.987 --> 01:02:30.347
All right.
01:02:30.347 --> 01:02:31.726
Well Joe, thank you very much.
01:02:31.726 --> 01:02:34.757
Good luck this weekend and uh, we'll catch up again soon.
01:02:34.757 --> 01:02:34.817
Hey,
01:02:35.492 --> 01:02:37.291
Hey, I appreciate the opportunity.
01:02:37.291 --> 01:02:37.862
Thank you for
01:02:38.041 --> 01:02:38.422
yes sir.
01:02:39.096 --> 01:02:43.085
Thanks for tuning in to Practically Ranching, brought to you by Dalebanks Angus.
01:02:43.115 --> 01:02:44.585
All the best to you and your family.
01:02:44.646 --> 01:02:48.635
May God bless each of you throughout the spring and we will talk again soon.