The Maschoffs – a great family-run business

Source: Irish Farmers Journal

welve years ago the Maschhoffs, an Illinois, USA, -based family run pig business with 10,000 sows had just commissioned their own feed mill alongside the pig unit.

A journalist was being proudly shown around the new facility by brothers Ken and Dave Maschhoff. In the mill control room an unassuming elderly gentleman attired in bib & brace overalls and a baseball cap, was pushing a broom around, keeping the dust down. It transpired that this ”hired hand” was in fact Wayne Maschhoff, Ken and Dave’s father – just keeping an eye on things.

Even today at the age of 80, Wayne is still a visible fixture at the farm business, running errands and watching the family farm business grow, while occasionally offering advice.

Typical of the Maschhoffs business philosophy of being thrifty is the fact that instead of using expensive custom built trucks to haul sows around the Carlyle farmstead they use modified redundant yellow school buses.

Ken Maschhoff is now the company president and CEO. ”We now have 192,000 sows and have become one of the largest private family companies in the US pork industry. However, we do not anticipate going public. We have grown through acquisition. Buying Minnesota based Land O’ Lakes’ 60,000 sows in 2005 doubled our size overnight. Earlier this year we had another large addition, taking on 50,000 sows from Nebraska Pork Partners. We would like to continue to grow.

”Most of our production is based in the Midwestern states of the US, but states such as Oklahoma have been attractive in the past as they have fewer hogs and therefore disease is less of a problem. We are marketing and harvesting 3.5million slaughter pigs and 0.5million feeder pigs annually.”

The Maschhoff family have been farming in the Southern Illinois area since the mid-1850s. After university Ken and Dave went on to work at the family farm and in 1979, while they were still in their early 20s, they became 50-50 partners with their parents.

They began to effectively run the business, with Ken and Dave’s wives looking after the accounts and records. Then in 1991 the two brothers bought out their parents.

Because of the family nature of farming, many farmers insist on ”hanging on to the reins” when they should be handing over to sons and daughters who are much younger and who have more energy, drive and initiative. Wayne Maschhoff was a forward thinking man and happy to step aside

”I saw too many farm boys stifled by their fathers. I wanted my boys to keep growing,” he stated.

The Maschhoffs have seen an amazing increase in the size of their operation. The business is now the third largest swine operation in the USA, with key decisions being made by Ken Maschhoff, chief operating officer Bradley Wolter PhD and Jason Logsdon chief financial officer.

The company motto is ”Progressive farming. Family style” and the word ”family” is key to the ethos and modus operandi of the Maschhoffs.

”Being the third largest swine producer in the USA, a foreign outlook is important” states Ken Maschhoff

”Exports are vital to our industry – currently about 20-25% of all US pork production is exported and we realise that we must keep our export markets open. The US also has free-trade agreements in the pipeline with Columbia, South Korea and Panama that will benefit the entire US pork industry.

”There is a world demand for protein and the USA is the most cost competitive in producing pork – we still have the cheapest corn and soya plus the best national infrastructure. The USA can compete successfully on a global basis because farmers have access to capital.

”Brazil has many attractions but our family has focused on US production at this point.”

Animal welfare issues continue to dominate the US pork industry and the USA looks ever closer at European developments, as what happens in Europe will eventually happen in the USA.

The Maschhoffs use both pen and stall gestation housing. They continue to study and research housing systems with the goal of developing a sound understanding of their impact on animal welfare and the appropriate stockmanship required by various housing systems. Maschhoff feels the size and scale of the systems in the US are different from many in Europe and that stockmanship must be altered to handle sows in large groups with consideration for both the sow and the stockman.

The recession in the States has been tough and the US pork industry has suffered of late. However, the Maschhoffs take a conservative approach to managing risk and have in fact used hedging for many years to help keep the company in profit. A two man team focus full time on risk management of all key production inputs as well as hog sales. The swine industry has always been cyclical and is likely to stay that way with commodity prices continuing to increase. Dr Walters is one of several graduates from the University of Illinois that have joined the company.

”The Maschhoffs have a close relationship with the University of Illinois and in particular with swine specialist Dr Mike Ellis”, enthused Bradley.

”We have developed a joint programme whereby we can provide internships on our farms and the students can use our pigs and facilities for their MS and PhD projects.”

Feed is the major cost of any pig business and the Maschhoffs produce 70% of their own feed using five feed mills, owned and leased, with three members of staff purchasing ingredients on a full time basis.

Production is ”on demand” and they have 14 different commercial diets, from breeder through to finisher. The remaining 30% of feed is bought in and they carry out quarterly audits on these mills.

The Animal Care Division of Maschhoffs is a key sector of the company and Steve Quick holds the position of Senior VP Animal Care. ”For optimum productivity we highlight the Big 4. Feed, Water, Air and Animal Care. We continue to focus on sound stockmanship and good animal welfare practices to ensure pigs are treated and handled correctly.”

Production guides have been in place for five to six years. To quote one example, there is a data sheet/guide explaining how a feeder should be maintained and adjusted to ensure it dispenses adequate feed without wastage. In terms of quality control, audits and assessments are carried out on a regular basis. Looking to the future, the Maschhoffs are looking to develop ISO -like animal care quality management programmes..

The Maschhoffs is an amazing business, run by amazing people. Progressive farming – family style. Long may it prosper.