So we put a lot of focus on training; really working with those people to make sure that they’re learning the ropes to begin with, but then getting on a development path so that they can see more of a future in the business. When fast food restaurants are paying $15 an hour, it is going to drive a lot of inflation in our labor costs. And so more emphasis on the team members and development is going to continue to be a big focus of ours as we move forward with that. Biosecurity has continued to have to rapidly adapt. As you look back over the last two decades of pig production, what we do today for biosecurity is an entirely different world than where we were just 20 years ago. And it continues to increase in the speed of that transformation. But even just standard biosecurity practices, and again, back to training the people and getting them to execute them every day, every time is extremely important. And then eradication in what you do when you do have the disease, that has also shifted significantly in the last five to seven years, especially when it comes to PRRS. We have a team of 13 veterinarians and a large-scale research team. A lot of those resources go towards continuing to evolve and adapt our protocols and our approaches to disease eradication, to hopefully speed it up and, not just speed up the eradication, but minimize the effects while the disease is present on the farm. So those are, I mean, there’s a lot of other things we could talk about, but the profitability issue in the industry over the past couple of years is definitely top of mind, I think, for everyone in the industry, including us. And we felt that along with our clients, we have to get better every single day, and make sure that our clients can weather the storm and come out the backside with opportunities to grow.
AN INTERVIEW WITH BEAU PETERSON
Let’s get right into it with general industry trends. Over the past two years, what significant trends have you observed in the swine industry and how has Carthage adapted to support its clients through these changes? The last two years have been interesting to say the least, I think, for the pig industry. I think stating the obvious, but the most significant, trend we’ve seen is just a significant lack of profitability. As we look at the reasons for it, they’re very wide-ranging and complex at times. We’ve seen some pretty significant inflation in feed costs. We’ve seen really significant inflation in labor costs and labor costs end up impacting a lot of things that go into the overall cost of production for a pig. And I think in the last two years, and really it’s been a longer period than that, but the disease pressure in the U.S. and just how certain diseases, particularly PRRS, have changed, has all come together to create a lot of pretty significant headwinds for producers. Our approach to that is we try to adapt quickly and try to anticipate. So when you think about the cost side of the equation, we’ve put a lot of emphasis making sure nutrition programs, that either we are developing internally for our clients or we’re working with a client who uses another nutritionist, fit their system and overall goals. There’s no such thing as one size fits all in any of these labor costs. Labor’s always been a tough one for the industry, obviously. But I think as you know, as you see the cost of labor increase it becomes more and more important to make sure that you are getting the right people into the roles and on the farm, and then retaining them so that your investment in that development doesn’t get wasted. The Carthage System has done a nice job of creating a pipeline of people from Mexico that come in on the TN visa program. And what we’ve seen internally and with a lot of our clients who started to utilize the TN Visa program is that it really is a differentiated labor supply. The people that come on that visa are highly educated. They’re highly motivated. And with that comes a different level of responsibility for development and what you have to do to retain them.
We’ve got a few hot topic questions. Let’s backtrack briefly, you’re the CEO at Carthage. How did you get here? I grew up in northwestern Illinois on a small farm, grain and livestock. I went to the University of Illinois and actually wanted to be a veterinarian my freshman year of college. And about my junior year, I met a guy named Mike Ellis, who was a professor in animal science. He started to talk to me about graduate school. And it turns out that they would actually pay you to go to graduate school. That sounded like a pretty good deal and got me listening.
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