Summit Views on Livestock Farming with Dr. Kohl
October 7, 2022
A trend toward diversification into livestock production, sold as a commodity or value-added product, is increasing in the Midwest and throughout the United States. Whether it’s a startup or a farm business in transition, entrepreneurial talents and expertise in livestock production aligned with understanding changing consumer demands are important skills. Many producers raise livestock to make the most of land less suitable for crops, while others desire the manure value, particularly in this economic environment. Some raise livestock to fulfill a passion or a vision.
A group of motivated, high-energy farmers participated in Farm Credit Illinois’ Livestock Farming Summit at Fair Oaks Farms, Ind. The event provided an intense 24 hours of information, action strategies, and all-important networking with fellow lifelong learners.
Nic Anderson, a highly respected livestock consultant, provided his expertise ranging from manure as the most valuable product to working with regulators, local community, and land and water management.
John Herath, from the U.S. Meat Export Federation, provided expertise on the current and the future outlook of export markets. The growth of beef and hog exports in the Asian marketplace, specifically South Korea, China, and Japan, was highlighted. He discussed some of the trends in domestic and international meat consumption which has increased in terms of total dollar value in recent years.
I discussed inflation, interest rates, geopolitics, trade, and a possible economic downturn to round out the classroom experience.
A tour of both the hog and dairy operations at Fair Oaks Farms and a discussion of futuristic viewpoints with a family member, who served as our tour guide, was eye-opening. Over 250,000 people visit Fair Oaks Farms annually with the majority residing in eight zip codes surrounding the Farm, which is located on land that was originally designed to be the new Chicago airport.
We ended the day with a fine steak dinner recapping the day's events on the Farm lawn. The setting was very relaxing and eye-opening. I observed very few cell phones being used as people enjoyed discussing everything under the sun as the moon came up!
A debriefing session was conducted the following day after the morning lecture on points and perspectives of improving the odds of business success in an economic environment of getting comfortable with the uncomfortable. The following are some of the key summit viewpoints and perspectives.
- Manure is becoming more valuable on today’s farms. Manure application can improve soil health, organic matter, and reduce dependence on commercial fertilizer, which is controlled by authoritarian economies.
- Plant-based products and substitutes for traditional meat and milk were presented. While the group did not think these products were fierce competition, they did agree the industry needs to do a better job of marketing the benefits of meat through messaging and product innovation – particularly for consumers under 40 years of age.
- Export markets and trade agreements are necessary for a strong market. Whether it is pork, milk, or beef, understanding consumer trends outside the borders of the U.S. is critical for success.
- The participants found the 96-4-50 rule thought-provoking. 96% of customers and employees are no problem. Four percent will cause problems, and you will spend 50% of your time dealing with the four. Sometimes you must fire customers and employees, even family members, to channel your energy to where it counts.
- The next five years will be characterized by random shortages and bumpy roads. We have been here in the past and opportunity awaits those who are plugged in. “Just-in-time” input management will have to shift to “just enough.”
- Be careful of institutional panic such as the Federal Reserve’s actions regarding interest rates and inflation, Food and Drug Administration’s policies, environmental regulators, and state and local regulations and lawmakers. Often, the outcome of these regulations drives the industry toward consolidation. However, entrepreneurs and small businesses built America and created our economic advantage.
- Maintaining focus on your finances and conducting financial sensitivity analyses is critical.
These were some very interesting viewpoints shared during the Livestock Farming Summit and may provoke some new actions on your farm.