BEEF: What's your vision for Agri Beef? Where would you like to see the company positioned in five to 10 years?
Rebholtz: As a cattle feeder — and within our other divisions — we're currently positioned in the middle of the beef industry. Our goal is to figure out how we play that role — how we affect the profitability of a cow/calf producer and the profitability of a packing plant.
We'll try to get closer to our customers at all levels. Then, we'll be able to manage our system to somehow take part in that value creation.
Segment division in the beef industry is disappearing. The price margins in the industry are going to tighten, so the question is how can we expand the margins? The best way is to take costs out of the system.
We know there will be opportunity in exchanging information on the ranching and feedlot sides. We've learned a lot about that from our animal health division (MWI) where we do a lot of business electronically.
BEEF: With cattle numbers dropping and a looming over-capacity facing the cattle feeding business, are you concerned about where you will find cattle?
Rebholtz: Yes. A lot of external factors — like urban sprawl, environmental restrictions, water issues, proliferation of hobby ranches — will make it much more difficult to find cattle. We've been working to fine tune our feeding operations and design our systems for that eventuality.
The feeding and packing industries will face pressures of over-capacity. But, that also creates opportunity for additional profit, assuming we can find sound operations that are willing to develop relationships throughout the system.
BEEF: Will there continue to be a place for family ranching as we've traditionally known it, at least within Agri Beef's sphere of influence?
Rebholtz: We sure hope so. I think we're at a point where we can provide a standard service and share with ranchers the linkages we have built throughout Agri Beef and our packing associates.
There's a lot of information we can share with producers to help them overcome production inefficiencies. There's also room for improvement in marketing practices.
As an industry, we tend to fall into comfort zones and don't spend time developing different marketing options. The survivors will be the people that take the inefficiencies out of their marketing practices. That's something each person has to look at and evaluate for himself.
BEEF: Speaking of markets, as a rancher and feeder in the Pacific Northwest, are you being hurt or helped by Canadian fed cattle imports?
Rebholtz: We need to somehow continue to welcome those fed cattle supplies in order to keep our packing plants open. I hope cow/calf producers can see that, too. If we lose a packing plant, we'll lose a market.
BEEF: What do you, as a big supporter of the beef checkoff, say to those critical of the program?
Rebholtz: I think the checkoff has been a benefit to all beef industry segments, especially in the areas of food safety, new product development and consumer education. If we lose the checkoff, then we must rely on the packing industry to support those activities.
I envision companies like Tyson, Excel, ConAgra and Farmland doing their own promotion and research and development. But, they would be looking at projects shorter term in nature and with a more immediate financial return to them, as opposed to a more focused, longer-term industry perspective, which the Beef Board tends to have.
I also think that the checkoff has helped some smaller food companies like Harris Ranch, Farmland, RMH Foods, etc., compete with the big boys. More competition helps these companies differentiate themselves and eventually benefit the producers.
Without the checkoff, the evolution of the industry would slow down, and we'd lose a lot of credibility as beef producers. We have to get beyond the antagonistic relationships between the industry segments of the industry. I think that has a lot to do with the checkoff controversy.
BEEF: Agri Beef always has been innovative in marketing and procurement. What are some of your newest ideas?
Rebholtz: Look at our Web site. You'll see where producers can list cattle they have for sale. Agri Beef managers can look at the listings and buy or basis contract cattle, partner on feeding cattle or simply discuss retained ownership opportunities with sellers.
We also have a feedback system for group carcass and performance data on cattle. This gives ranchers an opportunity to sell direct before calling the video rep or loading up for the sale barn.
We also have listings of cattle we've procured and available for re-sale. You can “shop” around Agri Beef Co.'s feedyards in Idaho, Washington and Kansas. When you find a set of cattle you're interested in, just click on the lot number and fill out the form. We'll get back to you.
And, with MWI — we're initiating some programs where we can again get closer to our customers, in this case, veterinarians.
We've set up a “pharmacy” system where a vet can prescribe a product, and we'll ship it out under the name of the vet to his or her client. It saves the vets from having to maintain a huge inventory and relieves them from a great deal of financial risk.
BEEF: Look in your crystal ball. Where's the beef industry headed?
Rebholtz: I see a further segmentation in consumer beef markets, which will create more marketing opportunities. There will be the white tablecloth markets, the middle-of-the road steakhouses and markets for branded products as well as continuing markets for lower-cost commodity beef. And, there will be branches within each of those segments that will provide production opportunity.
There will be a shakeout in the alliances, but it will be slow, and the fallout will depend more on the business efforts of the alliance than necessarily the type of beef marketed.
Remember that people will seek out the sources of the foods they prefer and become loyal customers. But those people want to be more than consumers. They want to become part of the process. That's where readily available production and processing information will become more important.
We have a great industry, and I'm really excited about our future.
Editor's Note: Paul Christopher Rebholtz, 34, passed away Oct. 16 in an Elmore County, ID, plane crash. Paul worked with his brother Robert at Agri Beef until May 2000 when he began his entrepreneurial venture XY Genetics. Our condolences to Paul's wife, children and the entire Rebholtz family.
In 1978, Bob Rebholtz incorporated his livestock feeding businesses into Agri Beef Co., based in Boise, ID. With two feedyards under his arm, Rebholtz moved Agri Beef forward on an underpinning of high-tech information systems and economies of scale in procurement, management and marketing of fed cattle.
Later, Rebholtz expanded Agri Beef by attaching businesses designed to support the feedyards. The idea of the ancillary enterprises was to help reduce the cost and price risks associated with feeding.
A recognized cattle industry innovator and leader, Rebholtz died of cancer in January 1997, leaving his family with one of the nation's largest agri-business empires.
Today, his son, Robert Rebholtz, Jr., 37, holds the reins, and he's guiding Agri Beef into a new era of innovation and expansion. Surrounded by a cadre of old and new managers within the company's several divisions, Rebholtz couples youthful exuberance with a great affection for the beef industry.
Cattlefeeding is the backbone of Agri Beef. The ninth-largest cattle feeder, Agri Beef produces more than 350,000 fed cattle and manages 40,000 head of customer calves each year.
Agri Beef's holdings include Snake River Cattle Feeders, American Falls, ID; el Oro Cattle Feeders, Moses Lake, WA; and a partnership in Supreme Cattle Feeders LLC, Liberal, KS. The latter acquisition moved Agri Beef into a partnership with Farmland Industries Inc. and National Beef to form the Farmland Supreme Beef Alliance (FSBA).
The most recent addition to the Agri Beef cattle division is Boise Valley Feeders LLC, a joint venture with Ed Johnson and his son, Jeff.
Agri Beef expanded into ranching in 1988 with the purchase of the 1.4-million-acre IL Ranch near Tuscarora, NV. Now the nation's 24th largest cow/calf producer, the ranching division provides more than 5,500 calves for Agri Beef feedlots each year, along with about 9,000 lambs.
Agri Beef also has its own trucking division to transport cattle, grain and other commodities. A team of in-house livestock marketing specialists manages company-owned cattle and assists with marketing customer cattle.
Snake River Farms
Snake River Farms fills a specialized niche for high-quality Wagyu/Kobe beef markets in Japan and the U.S. With breeding stock from several Wagyu genetic lines native to Japan, Snake River Farms is directly involved with every step in producing highly marbled Kobe beef.
Through contracts with cooperating ranchers, Snake River Farms crossbreeds the Wagyu lines with selected Angus-based herds. Half-blood calves are purchased back from ranchers, and the calves are finished on a marbling-enhancing feeding program at Snake River.
Vet Products And Services
Purchased by Agri Beef to support its livestock health programs, MWI Veterinary Supply has expanded far beyond the cattle division. MWI markets more than 6,000 pharmaceuticals, supplies and pet foods to veterinarians.
Established in the mid-1970s by M.W. Ickes, DVM, MWI maintains a sophisticated online inventory and order-processing system and provides immediate access to inventory and pricing information. Orders are shipped from MWI warehouses located throughout the U.S.
PerforMix Nutrition Systems is Agri Beef's feed supplement and livestock nutrition company with production facilities in Idaho, Washington and Kansas. PerforMix produces liquid supplements for Agri Beef as well as feedlot, dairy, cow/calf and stocker customers in the West.
A team of nutritionists also provides a broad range of value-added services. These include ration formulation, feed analysis, ingredient break-even values, dairy records analysis and feed mill audits.