posted on Tuesday, September 26, 2017 in Central Region News
In 1987, in the worst of the Farm Crisis, a farmer sat in Daryl Olsen’s truck and unburdened his financial woes, looking for advice from this young veterinarian, just five years in practice.
“I was still wet behind the ears, and he got in the truck with me and asked me for financial advice on saving his farm. He had confidence that I could help him,” says Olsen. “That taught me an awful lot. I realized that people really trusted veterinarians, so I had to do everything I could to maintain that trust and deserve that trust. I realized the responsibility I had.”
Today, Olsen is driving down the same roads around Audubon, Iowa, and pointing out sow farms in the AMVC Management Services system (AMVC stands for Audubon-Manning Veterinary Clinic). Olsen is the senior veterinarian and one of 12 partners in AMVC. The system owns or manages 117,500 sows in seven states.
“We work as a system to provide oversight for health, production, and nutrition for independent producers,” says Olsen. “We provide the advantages of a system approach to pig production and let everybody maintain their independence.”
[Editor's Note: The ranking of the 2017 Pork Powerhouses will be released Monday, October 2.]
Lessons learned
The farmer Olsen advised 30 years ago has passed away, but his sons are still farming. The advice was taken to heart. “I told him he was a heck of a producer, but he was overextended and interest rates had blown out of proportion,” says Olsen. “Get back to what you are good at and don’t get rid of the ability to be a great producer. He let some things go, and ended up in a better position than ever because he was good at what he did.”
The AMVC Management Services company started in 1994 when clients came to Olsen inquiring about contract production. “They asked if we had ever thought about overseeing a sow unit,” he explains. “They requested a service we weren’t providing at the time. We started providing that service and it’s been growing from there.”
AMVC added 2,500 sows this year, which is a slowdown in growth from past years. “We haven’t been pushing growth right now, because it seems like there are a lot of extra pigs out there,” says Olsen. “We’ve been a little concerned with all the extra numbers in the industry, so we have been a little cautious about growing.” AMVC plans to add 12,500 sows in 2018, both additional multiplication and commercial production.
“I never believed 20 years ago we would be at this size,” says Olsen. “I remember saying, if we ever get to 45,000 sows that would be the perfect size. Now we are close to 120,000 sows.”
Rapidly throwing down sow farms for the sake of putting down sow farms is not what the industry needs right now, he says. “I want us to be profitable and I want our producers to be profitable. If everyone throws down a boatload of sows, in the end it makes us all unprofitable, so let’s be cautious about it. We haven’t had a lot of aggressive growth plans the last few years, but we are putting out a lot more pigs.”
Creating a system
It’s no secret why AMVC has been successful, says Olsen. “We are professional and extremely transparent. We are an open book. We tell you, here’s what we can do and what we can’t do. Our goal is to create a system where you can maintain your financial independence, but have the advantages of working within a larger system.”
Farmer producers have a great advantage because they have labor, equipment, and a way to use the manure back on their own ground, says Olsen. “That is why independent producers have a place and will continue to have a place in the industry.”
The key for AMVC is building relationships. “You develop relationships over time and people feel comfortable with us,” says Olsen. “They have confidence in us and hopefully we can continue to deserve their confidence in us. Veterinarians develop a unique relationship with your clients. Most of my best friends started out my clients. In a community, you end up really close to them.”
Rewarding growth
Olsen grew up on a livestock farm in South Dakota and came to the Audubon clinic right after graduating from Iowa State College of Veterinary Medicine in 1982. He’s been there ever since. “I’ve had the beautiful opportunity to stay in the same place my whole career.”
He had been a large animal veterinarian, mainly cow-calf and feedlot, for 15 years when he made the switch to full-time swine management. “Besides loving swine production, one of the reasons I changed was I did not want to end up a crippled large animal veterinarian. You get beat up in hurry in a cow-calf practice,” he says with a laugh.
“When this opportunity came it seemed like it was going to be really rewarding, it seemed like it was something that our clients really wanted. I didn’t think we were going to grow this much in as many states. We’ve changed, but it’s really been fun.”
Pig production has been booming in the AMVC system and across the country, says Olsen. Health is good overall, so there are a lot of pigs coming to market. “We are as productive as we’ve ever been, total born alive has been really good. Our approach to production is to look at whole herd productivity and not just sow productivity. That has been the key to us.”
AMVC manages sows in Wyoming, Colorado, North Dakota, Ohio, Iowa, Illinois, and Indiana. AMVC, like other large systems, has built a lot of finishing farms in the past two years.
It has been a quiet year for disease issues. There was a little PEDv and PRRS, but nothing they couldn’t handle, says Olsen. “PEDv can be devastating, but if you have the right protocols in place it doesn’t affect you very long. It’s a one-time affair and pretty manageable. You are able to wean some pigs early and then you can add some weight on the finishing end.”
PEDv is less of an economic blow to a farm than PRRS, he explains, because you never lose performance on the pigs. “With PRRS, not only do you have the effect on the sow farm but you have poor-performing pigs all the way through the system to market. PEDv is a sow event, and then it’s over.”
Many producers have accepted that PEDv is endemic, says Olsen. “It is pipe dream to think we can get rid of it. Many producers keep all their gilts exposed. It’s going to be an endemic disease issue for the foreseeable future.”
People management
“Pigs are the easy part, people are what drive the business,” says Olsen. Three years ago, AMVC started a leadership development program. “We needed to make sure we had great talent in the pipeline. Three years is a long time for millennials to stay at a job. In my generation, you gutted it out. We are dinosaurs. Have there been times that it hasn’t been perfect? Yeah, but you gut it out and make it better. Today it’s much easier to leave, and the opportunities are there. As an industry, we have to spend more time on training and developing, because the idea that everybody is going to stay with you forever is a fallacy.”
AMVC is the largest employer in Audubon and Audubon County. “We try to give back to the community,” says Olsen. “If you want these small communities to survive you can’t count on outside money; you have to give back.”
Besides swine management, AMVC operates a mixed-practice clinic on the north side of Audubon and another mixed-practice clinic in Manning. “We have six vets that work strictly in mixed animal practice, and that’s still an important part of our business,” says Olsen.
Looking ahead
Olsen is a bit cautious about 2018 for the swine industry. “It’s always difficult when you go through those low commodity prices, but we are in the commodity business; it’s very cyclical and you better plan for the lows. Enjoy the highs, but you better not spend it all.”
The markets are going to give you up and downs, he says. “If you think they aren’t, you are in the wrong industry. But spending all of our efforts as producers worrying about markets doesn’t change anything.”
Make sure you have strong equity and solid risk management protocols in place, Olsen advises. “That doesn’t mean you have everything hedged, but it means you understand your risk. And then just try to do the very best job you can in production. Great production trumps great risk management every day.”
If we have an oversupply of pigs, prices are going to go down, he says. “Pig producers are notoriously bad at taking all their profits and throwing it back into pigs. Maybe we need to learn how to do something else with it.”
Planned growth is good, says Olsen, but you have to have the people and the processes in place. Growth also needs to be profitable. “Right now, everything tells us we should be cautious.”
The key for AMVC growth with independent farmers is making sure the clients are comfortable, says Olsen. “They have to fit our philosophy, because we are kind of like a family. If we are not comfortable with each other we tell them there is probably a better fit for them other than us. We try to be very transparent.”
The story of independent farmers/producers working together in a system to produce pork is important to share, he says. “We have to tell our story, because it’s a great story of agriculture working very efficiently.”
Story credit to Betsy Freese, Successful Farming
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