Jo Dexter, Contributing Editor

Colorado is the fourth-largest cattle-feeding state, and in May 2005, became the headquarters for the world’s largest cattle feeding company – Five Rivers Ranch Cattle Feeding, LLC, with offices in Boulder, Colo. Five Rivers has a combined total of 10 feedyards in Colorado, Idaho, Kansas, Oklahoma and Texas. The company’s one-time feeding capacity is 811,000 head. A 50/50 joint venture between ContiBeef LLC, owned by ContiGroup, Inc., and MF Cattle Feeding, Inc., owned by Smithfield Foods, the company name was chosen because of the five major rivers that influence their yards and business.

Currently, Five Rivers buys cattle from all channels and sells to four of the five major packers. The majority of their cattle are sold on a grid; less than 10 percent are sold on the cash market. Five Rivers purchases 85 to 90 percent of their feed, and fills their yards with both custom and company-owned cattle.

Priorities for success
Mike Thoren, formerly president and CEO of ContiBeef, is now Five Rivers president and CEO. He has been involved in the cattle-feeding business since 1991.

“Our first priority has been to integrate and unite the two companies with the same management and business culture,” Thoren said. In doing so, they are focusing on decreasing variation, controlling production costs and striving to build a company that is more economically focused and less supply focused.

“We are implementing a systems approach by building management models with operational focus that offer effective risk management and marketing, resulting in continuous economic improvement for the company,” Thoren explained.

Some of their biggest challenges have been finding qualified labor; sourcing cattle that make sense for their yards; integrating all of the company’s information technology and accounting; and combining management styles from northern yards with southern yards. Five Rivers currently employs 630 people and believes those people are a critical foundation of their business, empowering them to make decisions locally that reflect the management philosophy of the entire company.

“Another priority is for our yards to stay involved with local communities,” Thoren said. “The partnerships we form and relationships we build in each community are extremely important to our success at the yard level and corporate level.” Management teams for each yard depend on local farmers and businesses to provide the feed and resources to operate the yards.

The size of each yard and the Five Rivers Company as a whole imposes a high profile, requiring accountability and the need for high standards. “We have heavily invested in our facilities, establishing environmental management technologies that address the needs of each yard and meet current environmental regulations, as well as the needs of the community. Additionally, we have high standards for animal husbandry and animal handling,” Thoren stated.

In addition to creating good will, these investments have also helped the yards operate more efficiently and lower production costs.

Industry partnerships
The Five Rivers philosophy also extends to sectors and associates within the cattle industry. They are committed to quality customer service and value the partnerships they have with producers, packers and industry organizations. “We do not have limitations on procurement and marketing channels; we depend on all operators and even deal directly with producers to purchase their cattle,” Thoren said. “Additionally, we hope to become a key supplier of specification-verified cattle for branded-beef companies and offer our customers the price benefit for participating in those programs.”

Five Rivers also dabbles in research and education. In May 2005, Five Rivers made a $2.5 million facility donation to Colorado State University College of Agricultural Sciences, establishing the Southeastern Colorado Research Center. The facility, formerly the Continental Beef Research Center, will become an animal food safety, nutrition, environmental impact and management research site for CSU’s Department of Animal Sciences. The facility has nearly 15 acres of land and will hold about 1,500 head of cattle. Five Rivers will continue to be involved with the facility and have access to use and study research conducted at the center. “Although research is not a core area for our company, having CSU as a partner creates a mutually beneficial situation for both parties, providing Five Rivers access to a broader group of industry expertise and the university with resources to cultivate that expertise,” Thoren said.

Now and the future
“We are a part of a great cattle industry and Five Rivers takes their responsibility to their customers and their involvement seriously; by implementing high operational standards,” Thoren said. “Our company priorities and focus for the next several months are clear. Work to merge and unite both the north yards (MF Cattle Feeding, Inc.) with the south yards (ContiBeef, LLC) while lowering costs and risks as well as maintaining a localized identity and implementing a quality management team at each yard.

“Because of our size, we will continue to be challenged to find qualified labor as well as cattle that work in our business model,” Thoren said. However, he agrees that they will also have opportunities that are the result of their large scale and year around marketing abilities.

Thoren believes the industry is experiencing a unique time where there is profit in cattle and more political support than in many years, and yet our industry is more divided than it has ever been. “All sectors and operators need to work together to form unity in our industry,” Thoren said. “We should let the free market system work and dictate price with less regulation and intervention and then the industry will thrive.”

Thoren believes that export markets are a critical issue today and must be reopened for the economic benefit of the industry. When asked what advice he could pass along to others in the business, Thoren said, “If you make people a priority in your business and focus on reducing production costs and economic risks, you will be a successful operator in the feeding industry.”