Management Insights

Change - It’s something that happens all the time. Sometimes it can be gradual and not obvious from day to day, much like the changes in our mountain ranges. Other changes can be very dramatic, and have a huge impact on our daily lives. There are several ways you can deal with change. One might be to ignore it, hoping it would go back to the way it was. Another approach may be to fight it and fight it only to finally give in, and accept the inevitable. Neither of these options are traits of a successful business. A successful operation will see the trend of change early and adapt the business to embrace the change and use it to remain competitive. This approach has always been the trademark of Beef Northwest.

The closing of the Tyson plant in Kuna, Idaho in the fall of 2006 was one of those events that had an impact on the cattle feeding industry in the Pacific Northwest. That single event has led to several changes in the BNW Nyssa yard. One of the obvious changes is the distance that cattle must be transported to be harvested. Traveling those extra miles comes with added expense. However, we have adjusted in many ways that have kept us very competitive as a cattle feeder.We have seen this as an opportunity to diversify our facility, minimize our risk, and align ourselves with businesses that need what our company has to offer. We have leased out half of the feedyard to a large local dairy operator. His plans are to bring in heifer calves to grow into replacements for his milking operation. We are changing many things in that half of the feedyard so as these calves mature and are moved to the dairy to be milked; they already will be accustomed to many of the surroundings and hardware they will encounter. Some feedbunks have been taken out and are being replaced with a different shaped bunk, more suited for a smaller calf, along with mechanisms to get them used to the head catches that are used when they begin production. Other bunks have been retrofitted with head catches to perform the same function. The calves have been arriving the past couple of months, and we are very excited to see that phase of our operation develop.

A big advantage of this relationship is that it is allowing BNW to utilize higher levels of potato by-products in the ration. Potato by-products are a cost effective commodity for finishing cattle to harvest weights and quality. The higher potato inclusion rate has brought down our ration costs to more than offset the higher cost of freight to the packer. An additional result of leasing out half of the yard is that all our efforts can be focused on half the number of cattle. We have had to decrease the number of employees at the Nyssa yard, but it has given us the opportunity to retain those people that share some of the same core values that keeps our operation successful. They have integrity – they do the right thing, even when no one is looking. They respect the cattle, the customers, fellow employees, and our industry. They help us evaluate our opportunities, their boots are on the ground every day, and we encourage and value their opinion, they all have that desire to excel, to learn, and to grow. Another advantage of fewer cattle in the yard is that we are able to better utilize locally grown commodities. We support a strong customer commodity base in our local economy. Many thousands of tons are purchased each year and used to provide a nutritionally balanced ration to the cattle. We have also been able to provide an additional market for local growers for their corn. This past season we contracted several thousand ton directly out of the field and hauled to our feedyard facility located in Boardman , Oregon. That option will also be available for this upcoming season. We are experiencing several new inquiries from retained ownership ranchers that are looking for an extended market for their livestock. Our competitive ration costs, excellent animal health and feeding programs, along with customer services and support such as risk management, coupled with predictable cattle performance with grid marketing is an attractive package that will provide to our customers a profitable outlet for the calves they produce each year.

We feel that the changes we have made to adapt to the ever changing beef industry have been a positive move in reaction to what many have considered a negative impact to our local economy. Change is what you make out of it; you can fight it or embrace it. Beef Northwest has chosen to embrace the change and remain THE Company to contact to feed or market your cattle. We are excited about 2010 and the direction we are headed.