Kala Jenkins: Are You Ready for Vertical Integration?

I write my first Farm Journal column fresh off a two-week tour of agricultural operations across the Pacific Northwest.

I’m in my second year of the Indiana Agriculture Leadership Program. Every few months, 28 of us meet to learn about effective leadership skills and how to analyze public issues from various perspectives. At the end of our first year, we visited Washington, D.C., meeting with legislators, their staffs and other decision-makers.

This year, the pandemic prevented us from taking our international trip. Instead, we visited Washington, Oregon, Idaho and Montana, traveling 3,000 miles by bus after we landed in Spokane. We visited several farms and ranches and spoke with their owners and managers. 

I came away deeply impressed by what some of those operations are doing in the way of vertical integration.

PATH TO PROFITABILITY

One of those success stories is Feddes Family Meats, which has been raising cattle in Montana’s Gallatin Valley since 1925. Two years ago, the Feddes family took the opportunity to purchase the Amsterdam Meat Shop in Bozeman. 

Today, they source, process and provide locally raised and processed meat to area restaurants, online customers and local consumers at their retail shop. They label their meat high-quality, grass-raised and grain- and grass-finished, so customers know exactly what they’re eating.

Another family operation that’s reached a new level with vertical integration is Agri Beef. Headquartered in Boise, Idaho, Agri Beef has expanded from a small family ranching and cattle-feeding business into a multistate operation that spans every step of the beef life cycle, including beef processing. It works with ranchers in several states and even offers a risk management team and a nutritionist for producers. 

Agri Beef has a robust e-commerce business, global reach and four premium brands, including its main Snake River Farms label. 

CONSUMER CONNECTIONS

These are examples of agricultural operations that found ways to increase revenues and profitability. They’ve built marketing campaigns for their products, and they share a commitment to telling their story and connecting with consumers. 

They’ve also helped educate legislators, regulators and community leaders about their operations so they can be advocates for the industry. They understand without advocacy of local, state and federal leaders, agriculture’s voice can easily be lost.

I encourage all ag producers to think about vertical integration, starting with these questions:

• What else could our farm or ranch do to increase revenues?
• Who else can we partner with or bring into the operation?
• What would need to change in our business model?

When you’re ready, reach out to an expert who can help you consider pros, cons and a feasible path. Vertical integration could be the opportunity for you, and your successors, to expand and grow.