The mid-1990s tossed one disaster after another at Andy Snider like 100-mph fastballs. Any of them could have put him out of the game, but he used each as a catalyst for change and ended up hitting a homerun.
Today, Snider Farms is a runner-up for the 2009 Top Producer of the Year, an annual award sponsored by Challenger. While its crop acres and sow herd have expanded, turkeys are the key players for this Hart, Mich., farm. The Sniders are among the top organic turkey producers in the United States, a market he helped develop.
"Andy has had serious setbacks, but they never paralyzed him," says Henry Hoekstra, senior financial service officer of GreenStone Farm Credit Services, also in Hart. "It's hard to say if he made lemonade out of lemons or if they were blessings well disguised."
Good start. In January 1995, Andy and his wife Beth bought his parents' share of the farm, after a 13-year partnership. The downside: They were highly leveraged and dependent on their own labor.
Their 60 registered Holsteins were often cited among the state's top 10 herds and they'd just finished building turkey barns so they could contract with Bil-Mar Foods, a Sara Lee subsidiary. Though time consuming, hogs kept them solvent. They also grew 70 acres of alfalfa and 120 of corn.
Strike one. At the start of 1995, the Sniders' cash on hand plus savings totaled $700. All told, including their 1989 Ford Aerostar minivan, household goods, Andy's small airplane and a few other things, their total net worth was $279,922. And that was before things turned bad.
On Nov. 17, 1996, at about 4:30 in the morning, Beth woke up and saw a glow reflected on the bedroom walls. At first she thought they had overslept. She soon discovered their dairy barn, located directly across the road, was burning.
The barn was a total loss. Only one milking-age cow survived. "We were faced with the decision to rebuild or exit the dairy industry," Snider says.
Goodbye cows. They figured they'd focus on their new turkey business, while expanding the hog operation. They depopulated their hogs, built a new gestation barn and repopulated their sows, quadrupling the sow herd. They planned to sell pigs at weaning.
Their hog expansion loan came through on June 10, 1998, and cement was soon poured. If the timing had been off by just a few weeks, the future would have unfolded differently.
Strike two. On July 31, six weeks into construction of the Sniders' gestation barn, Bil-Mar held its annual meeting with its turkey producers in the area and announced it was immediately exiting the turkey production business in Michigan.
"We were in the fourth year of a 10-year contract. We were out of the dairy business. We were now out of the turkey business as we knew it, and we had depopulated our entire sow herd," Snider says. "Had the turkey announcement come six weeks prior, we would not be farming today."
Snider kept a positive attitude. "As contract growers, we only got 3¢/lb.," he says. "At the end of 10 years, it was supposed to rise to 5¢. That was an OK deal, but we weren't going to make lots of money on it."
Three independent turkey growers had done well selling birds to Bil-Mar without contracts. That got Snider's attention. A couple of months later, a group of turkey growers held a brainstorming session. From that informal meeting, Snider and 15 other farmers formed Michigan Turkey Producers Co-op, which, after initial funding difficulties, went into business in late 1999.
Challenges. By that time, the Sniders were selling weaner pigs in a market experiencing a 30-year low, but they believed they were on the verge of something new, something good. The hog barn was full and turning out healthy pigs. The new turkey co-op, located in an old potato-chip plant, was processing birds and selling meat. "From the fire until the spring of 2000, three and a half long years, every part of our business had changed," Snider says.
The changes were just beginning. He took on more corn production, even though his five-year average yield stood at 105 bu./acre on sandy soil near Lake Michigan, where chilly winds limit heat units. In 2001, he built a second grain bin along with a new, larger dryer. A serious drought held 2000 corn yield to 29 bu./acre.
"We were discouraged, but there was potential in growing corn and storing it for a low-cost backhaul in feed trucks," Snider says.
He pushed corn acreage, with 1,321 acres today. He also has 323 acres of soybeans and 25 of rye, with all but 225 acres rented. As acreage grew, yields increased to better than 130 bu./acre in 2005. Corn looked good enough to build a new grain storage facility in 2006.
Relationship. At about the time Snider started increasing his corn acres, he began farming the land where wastewater from neighboring Peterson Farms' fruit processing facility was applied through center pivot irrigation. "The goal was to do a better job than their limited fixed guns were doing and to comply with environmental regulations in handling the added water from their growing production facilities," Snider says.
Oddly enough, the water added to his production challenges, and the corn crop was disappointing. "Because of very, very high rates of cold water, we nearly had a failure. Running the combine through 100 acres of downed corn at 35% moisture and 45-lb. test weight around Thanksgiving was a learning experience."
Undeterred, Snider adjusted again. In 2004, he bought a 12-row planter and traded for a bigger tractor and disk. "We decided to run our cropping enterprise as a profit center, not just a support mechanism for our hogs and turkeys," he says. "So we increased acres for machinery efficiency."
Timely planting helped, but Snider still had problems with drowned-out areas of fields. In 2006, Snider and Peterson signed a deal in which he took on year-round management of the wastewater. He assigned day-to-day responsibility to an employee. Now, with a sixth center pivot added to the system, the water goes onto fields nearly 365 days a year regardless of weather. He farms 500 acres of Peterson's ground rent-free, trading management and labor for land use.
Winning attributes. Snider's accomplishments don't surprise Gary Rasmussen, his certified public accountant at Brickley DeLong in Muskegon, Mich. "Andy has long-range vision and a short-range will to farm. He is proactive in establishing markets. He asks the right questions. He has good solid advisers but is not afraid to get second opinions. And he remains optimistic despite setbacks. He's a tremendous example for young farmers," Rasmussen says.
That business acumen, although vital to Snider Farms' success, is not what most impresses Henry Hoekstra, his Farm Credit Services lender.
"Andy has done well financially but I suspect that his faith, family, employees and the community are all more important to him than making money," he says.
The soft-spoken Snider tends to downplay his success. He's learned from his experiences, good and bad.
"Not being afraid of change is important. Change can be good. You have to manage risk," Snider says. "You have to be able to communicate well, whether it's with a spouse, the employees, the lender, the community or the government. You also need to be able to ask the hard questions and answer the hard questions.
"The banker relationship is key," he notes. "The more intense you are with them about goals, the better. As my business has grown, I've made this one of my priorities."
Organic Turkeys: The Winner
While Andy Snider was busy repopulating his sow herd and expanding corn acres, he also had to learn a few new wrinkles about the turkey business. In 2004, he began raising some ABF (antibiotic-free/animal byproduct– free) birds. It worked well enough that, enticed by the higher profit potential, he decided to take the next step toward organic turkey production. Now all his birds are qualified ABF turkeys and some are certified as organic.
"We made it work by trial and error," Snider says. "There are a lot of hoops to jump through, but there is a market. We make a little more money and the co-op is turning a nice profit. All the birds are high-quality, and I don't feel this meat is any different. But some consumers are willing to pay for organic."
Death loss is higher on organic turkeys, he adds. "And it's harder to keep buildings in good shape. The feed is three times as expensive, so our feed bill is huge. We truck in organic feed from 120 miles away. It's kind of a crazy thing to do, but that's the only mill that can supply the feed we need."
People who think organic production means turkeys running around in a barnyard might be taken aback when seeing Snider's commercial production setup. "The idea of going organic on a commercial level flies in the face of the backyard organic producer," he says.
The co-op's biggest organic turkey buyer is Whole Foods. The plant, Snider says, makes $2.50/lb. to $3/lb. profit on the organic product. He was surprised when he visited a Whole Foods store and discovered that the co-op's organic turkey was selling for $1/ounce.
A prominent animal rights group (unnamed because its endorsement is unofficial) likes the co-op plant's self-developed humane turkey handling system, which reduces stress. That thumbs-up got the plant a test contract with the restaurant chain Panera Bread, potentially another profitable market.
Andy Snider, Hart, Mich.
Family time: Andy and Beth Snider met in junior high school and married right after high school graduation in 1981. For the next 13 years, they partnered with Andy's parents, Larry and Becky Snider.
Andy's parents started farming with his grandfather in Ohio. They purchased the farm outside Hart, Mich., when Andy was a youngster. In early 1995, the elder Sniders moved to Florida, where they started other careers, and Andy and Beth bought their share of the farm on a 21-year contract.
Deep Roots: "My parents gave me the opportunity to farm and taught me how to work," Snider says. "Beth's parents loaned us $100,000 six years ago as a long-term debt, displacing an unserviced portion of our operating line of credit. This loan improved our working capital position. The loan to us represented some of their retirement funds and we pay 6% interest only. There have been no financial gifts nor in-kind help."
Andy and Beth have three children. Luke, 24, is an electrical engineer working as a civilian at Wright-Patterson Air Force Base in Ohio. Holly, 22, is a senior at Moody Bible Institute in Chicago majoring in counseling/social work. Zack, 18, a high school senior, plans to attend Michigan State University and return to the farm to work with his parents.
Employees important: The Sniders used to do just about all the work on the farm themselves. As the business grew, however, they had to bring on employees. Now they have four full-timers and two part-time workers.
The longest tenured employee draws a salary because that's what he prefers. The others get hourly wages. Giving workers adequate compensation is important, Snider says. "If I've erred on paying them, it's been on the high side. We're on the high end of the pay scale around here."
All full-time workers drive company pickup trucks, along with receiving yearly bonuses and an Individual Retirement Account with a 3% match.
Snider and the employees eat breakfast together on the farm each Thursday. The meeting promotes teamwork and brings all workers
up to date on important issues involving the farm.
"I try to treat employees like I'd want to be treated," Snider says. "We have a Christmas dinner for them. I gave them all coats last year. I go to their kids' school events, like wrestling matches."
Up In The Air: Flying is one of Andy Snider's passions. He got a pilot's license in 1991 and still enjoys his hobby.
The farm has its own airstrip. Parked in a hangar near the house is his latest plane, a 100-hp two-seater RANS S-6ES Coyote. Snider and his son Zack built it from a kit during a two-and-a-half-year period. He flew it around Lake Michigan to the annual air show in Oshkosh, Wis.
Snider plans to turn it into an amphibious plane by adding floats. That will let him combine flying with another hobby, watersports. He's an avid water-skier.
To contact Charles Johnson, e-mail CJohnson@farmjournal.com.
Top Producer, March 2009