Simplot's large scale vision
Wednesday, October 03, 2012 6:59 AM
Fifteen ranches and 30,000 cows are key to Simplot's efforts to produce quality beef - and other ag products - for a growing population. They are one of the largest privately held food and agribusiness companies in the world.
J.R. 'Jack' Simplot began his colorful career at the age of 14 when he quit school and went into business on his own in 1923, near the small farming community of Declo, Idaho.
Young Jack put his energy into many endeavors, and by the early years of World War II, the J.R. Simplot Company had become the largest shipper of fresh potatoes in the country and was selling millions of pounds of dehydrated onions and potatoes to the military.
When wartime shortages made it difficult to buy fertilizer, Jack built a manufacturing plant in Pocatello, Idaho, and produced his own. That kind of ingenuity and determination continued during the early 1950s as the Simplot Company created and marketed the first commercially viable frozen french fries in the world.
Jack passed away in May 2008, but will be forever remembered as the founder, leader and inspiration of the Simplot company. Today, scores of dedicated employees contribute to the success of the global company which includes food plants, fertilizer operations, mining entities, seed operations, livestock feed production and retail stores as well as ranches and feedlots. Simplot also has a global presence with business entities in Mexico and Central America, Canada, China, Korea and Australia.
For the future, Simplot is focused on sustainability. In his statement on the company's website, current Simplot president and CEO Bill Whitacre says, "Producing more with less of our earth's resources is not only good for business but it is truly the right thing to do. Being a sustainable company means developing technologies and systems that have the potential to decrease the land, energy and water needed to produce the enormous amount of food required to feed a growing world population. It also involves social sustainability, which is our role in supporting a safe work environment and in investing in our communities. We approach sustainability as a core value in everything we do. It is how we do business, ensuring a long-term, generational company for the future."
Today, the company includes a diverse array of venues: food plants, fertilizer and seed operations, mining, ranches and feedlots, livestock feed products and retail stores.
That large-scale vision can be traced back to one man - and the potato. In the early 1920's a young J.R. "Jack" Simplot channeled his entrepreneurial spirit into many endeavors and found great success with potatoes - something his home state of Idaho has become quite well-known for. (See sidebar for more history.)
Cattle feeding was eventually added to the Simplot repertoire as an innovative way to utilize large quantities of potato by-products generated by Simplot food processing plants. Then, to become vertically integrated and supply those cattle to the feedlots - and control the quality of the genetics - ranches also became a part of the Simplot legacy.
Today, Stephen Scribner, 60, serves as general manager of ranches for Simplot - which includes 15 ranches and 30,000 cows, and they are currently at full capacity. Presently, their size ranks them second out of the top 10 cow/calf operations in the U.S.
Scribner, who grew up in a ranching family in northern California and had managed a large cow/calf and yearling operation in the West for 23 years, joined Simplot in 2008 and calls himself very fortunate to be part of the team that is headed by Simplot Land & Livestock president Tom Basabe. Their headquarters are located in Grand View, Idaho.
Scribner notes that the advantages of being large include: economy of scale, spreading risk and sheer volume. But there are two sides to every coin, and he acknowledges the disadvantages can be the vastness of operations, remoteness and the logistics to effectively manage.
As an example of the challenges Simplot's managers must overcome is the variety of lands their ranches utilize, including United States Forest Service, Bureau of Land Management (BLM) and private lands that range from mountains, to meadows, to high desert, to irrigated pastures and grasslands.
For Simplot to be successful in the beef industry, Scribner says, "We have focused on producing a quality beef animal that first performs positively in our high desert environment and then goes on to feed well through Simplot feedlots. We have done this with genetic selection of quality bulls and A.I. sires. We raise all our own replacement heifers with our focus being on a moderate frame black baldy/black cow as our ideal animal. The cow has to thrive in the high deserts and mountains of southern Idaho, eastern Oregon, northern Utah and Nevada."
Simplot ranches selectively use Charolais bulls as terminal sires in their herds. "Simplot is actively selecting those sires that will best enhance the feedlot performance of those calves. Our goal is to produce a healthy product in a sustainable way that is desired by the consumer," explains Scribner.
Simplot's size and status today is an indication they have found the strategies to overcome the industry's challenges - but they are not resting on their laurels. Scribner adds, "We are constantly working to improve our present operations both in quality and cost effectiveness rather than just maintain operations."
Along with that, they are poised to grow. Scribner says, "We will continue to methodically expand our land base and grow our operations as opportunities present themselves."
Looking to the future, he says, "The beef industry is in a great place with prices, export demand and low cow inventory. We should all be striving to be at maximum cost-effective inventory. We should not forget that $1.60 calves could be $1.00 calves one day, and so we still need to manage input costs."
As well, Scribner points out that the world population is growing and more demand is being put on grains to go directly to human consumption. Of this he concludes, "Cattle are ruminant animals that produce high quality protein from plant material that can't be utilized by people. Therein is our industry's opportunity to be both productive and sustainable for the future."