EPISODE NAME: Survival Through Growth, Page-turning Events and Ideas that Worked: The Poky Feeders Journey 

The cattle feeding business has not been a smooth ride throughout the years, but Joe Morgan and now his son, Grant, have found ways to ride the waves by putting the needs of their customers first. This episode covers more than four decades of cattle feeding history — the high interest rates of the ’80s, the poor beef demand of the ’90s, and so on. At every junction, Poky Feeders had “page turning” events that allowed them to survive and grow. They'll tell you what they need most from Angus breeders and what kind of cattle they need in their feedyard. Hear from the father-son duo just ahead of Joe’s induction into the Cattle Feeders Hall of Fame.  

HOSTS: Miranda Reiman and Mark McCully 

GUESTS: Joe and Grant Morgan, Poky Feeders 

Joe Morgan farmed and fed cattle after earning an animal science degree from Iowa State University. In 1985, he moved to Garden City to manage Poky Feeders. Its original capacity was 17,000 and under his and now his son, Grant’s, leadership it has grown to 103,000 head.  

Growing up around the feedyard, Grant first chose to pursue other paths for his education before coming back to the feedyard. He took over as manager six years ago and has created an internship program and paths for employee growth along with leading their most recent expansion efforts.  

Joe has served on several committees with the Kansas Livestock Association and the National Cattlemen’s Beef Association. He was a founding member of U.S. Premium Beef, and he currently serves as vice chairman of their board.  
 

Miranda Reiman (00:03):
Welcome to the Angus Conversation. I'm your host Miranda Reiman with my co-host Mark McCully, CEO of the American Angus Association. And we are sitting here in the trade show at the Cattle Industry Convention in San Antonio, Texas.

Mark McCully (00:16):

Yeah, it's a great turnout here in San Antonio. Folks maybe enjoy getting out of some snow and cold weather.

Miranda Reiman (00:23):
We better be careful how much we hype that up because this is going to air in two weeks and we might all be back to the snow and cold weather.

Mark McCully (00:29):
Well, that's very true. Very true. But great turnout of producers from across the country across the globe. I was just looking at some name tags here just in the booth a few minutes ago of several international visitors. And I think here in the trade show, a lot of the allied industry partners, a lot of the pharmaceutical companies, equipment manufacturers, feed companies. It's a really, and lots of new technology. It's one of the things, I don't get to probably spend enough time walking around the trade show, but there's always some new cool things and some new products on the market and lots of producers here checking out what's going on.

Miranda Reiman (01:07):
And of course my favorite part is when we get Angus breeders and commercial cow calf producers here in the booth to visit with us. So it's a fun chance to see producers from across the United States. It's also a really fun chance for us to also interact in an educational capacity. We've got several people on the program here throughout the week.

Mark McCully (01:24):
Yeah, different programs. There's things called learning lounges where we have some of our staff giving different seminars and such, and John Stika was on a couple of the programs

Miranda Reiman (01:33):
To a packed house

Mark McCully (01:34):
To a very packed house talking about some of the initiatives around red meat yield. Another podcast we're going to have. So

Miranda Reiman (01:42):
Another two weeks, tune in to that one

Mark McCully (01:43):
Two weeks. Stay tuned for that one. But it's always a great time. Certified Angus Beef is product is everywhere, so we love showcasing the brand here at Cattle Con, as they call it. And it's always a great time to, as you always say, interact with so many Angus breeders that are here. And a lot of 'em like to call our booth home a little bit, so it's always great to get everybody together.

Miranda Reiman (02:06):
Absolutely. The one thing that I think as Certified Angus beef product really shines, it can be hard to feed a large mass of people and keep the product quality up, but we had a really great short rib meal yesterday that was delicious and held up to however long they have to plate that ahead of time. And so

Mark McCully (02:23):
Feed thousands.

Miranda Reiman (02:24):
That's right. All of you helping to create and raise that product can know it was showcased pretty well here in San Antonio.

Mark McCully (02:30):
Absolutely.

Miranda Reiman (02:31):
So today's guest, we won't give much of it away, are cattle feeders and Mark, we like to have cattle feeders on from time to time because it just kind of shows. I mean, they are the recipients of the product that Angus breeders and commercial cow calf producers they're creating on their ranches every day. So we like to hear their perspective from time to time.

Mark McCully (02:50):
Absolutely. And I think we're all guilty probably in this industry of really being experts sometimes in our segment that we operate in, but maybe not understanding how all the segments fit together, and so I think cattle feeders are always, to me, it's a fascinating segment of our industry and hearing their perspective around what's going well, maybe, as the genetic engineers as so many of the breeders that listen to this podcast would be, hearing about what we need to work on. Joe and Grant Morgan, Poky Feeders, probably a common name for many that know anything about cattle feeding industry. Joe is a legendary guy, and getting recognized tonight the Cattle Feeders Hall of Fame.

Miranda Reiman (03:42):
It was really fun to hear about the time at which he entered the industry and all the changes that have come in the last few decades. So I think everybody's going to really enjoy this one.

Mark McCully (03:49):
It's a great story.

Miranda Reiman (03:52):
Today we have special guests with us that will be honored this evening at the Cattle Feeders Hall of Fame and Joe Morgan and his son Grant are here from Pokey Feeders. So thanks for joining us on the podcast today.

Joe Morgan (04:03):
Sure. We appreciate it.

Miranda Reiman (04:05):
Why don't you start out and give us a little bit of your backstory, how you got to where you are, a little bit about your operation.

Mark McCully (04:11):
Iowa native, right? Yeah. How does an Iowa boy, end up in Kansas?

Joe Morgan (04:17):
Well, I needed a job, I guess. So I moved to Kansas. I started running the feed yards. I started farming actually out of college. I went to Iowa State and then I started managing the feedyard outside of Omaha in 1983. And then I had the opportunity to move to Kansas and manage Poky in 1985. And then in '87 they offered me a chance to purchase majority interest to the feedyard and I wiggled around and got that done and been there ever since, I guess. So

Miranda Reiman (04:47):
Very good. And you put down roots. So then in Kansas, raised your family there.

Joe Morgan (04:51):
We moved to Garden City and we've lived there our whole lives. Yeah,

Miranda Reiman (04:54):
Very good.

Mark McCully (04:55):
And now wearing purple today, so

Joe Morgan (04:57):
Yeah. K State guy. Yeah, I've turned into K State. So when I got to Poky, the yard held 17,000 and then we started gradual growth starting in the late eighties. And actually Grant did our last addition just a couple years ago and got us up to capacity of 105,000. So we've had tremendous growth over the years and still stayed as a custom yard with majority of our cattle by far are customer cattle.

Miranda Reiman (05:26):
Very good. And Grant, talk a little bit about your journey to the feedyard, gets you started there.

Grant Morgan (05:33):
Yeah, I grew up working there and growing up working there, I realized I did not want to work at a feedyard, so

Miranda Reiman (05:39):
That plan worked out beautifully.

Grant Morgan (05:40):
That's right. So I went to a flight school for college, went to K-State Salina 9/11 was my freshman year. So I changed the trajectory of being a pilot, so got all my pilot ratings and then decided I went to work for IMI Global. So John and Leann Saunders worked for them for several years and then came back to work for my dad about 16 years ago.

Miranda Reiman (06:00):
So do you still fly?

Mark McCully (06:01):
You didn't have to keep cleaning waters and bunks?

Grant Morgan (06:04):
No, we still do though. Yeah. No, I don't fly anymore.

Miranda Reiman (06:07):
Not anymore. Do you miss it?

Grant Morgan (06:08):
No, not really.

Miranda Reiman (06:09):
No.

Grant Morgan (06:09):
No.

Miranda Reiman (06:11):
Growing up working at the feed yard, what was the first job that you got to do? Would you work your way up to by the time you went to college? I

Grant Morgan (06:18):
Processed cattle most of my life and rode pens and worked on the maintenance crew. Did a little bit of everything.

Miranda Reiman (06:23):
Sure. Very good. And you took over as manager then?

Grant Morgan (06:27):
Six years ago

Miranda Reiman (06:28):
Six years ago.

Grant Morgan (06:28):
Six years ago.

Joe Morgan (06:29):
Yeah. His six year anniversary this Saturday actually. Yeah.

Miranda Reiman (06:33):
Okay. Very good.

Grant Morgan (06:34):
Which is my birthday.

Mark McCully (06:35):
So you did it on your birthday? That was easy to remember.

Joe Morgan (06:38):
That's how we knew we could remember it.

Miranda Reiman (06:41):
And so in that natural evolution of you're going to come back to the feedyard, how does that conversation start?

Grant Morgan (06:47):
It started with my dad and our two partners at the time, and I think just where they were at, I guess evolution of a business. They've been doing it for a long time and so wanted to come back to I guess already a successful business and we wanted to grow it and grow the cattle feeding as well as other interests.

Miranda Reiman (07:05):
Sure. And your dad was pretty hands off when he left?

Grant Morgan (07:10):
Depends on the day.

Miranda Reiman (07:11):
I'm reading some body language. Yeah.

Grant Morgan (07:12):
Depends on the day.

Joe Morgan (07:13):
Yeah, certain days.

Miranda Reiman (07:15):
Do you still come to the yard every day?

Joe Morgan (07:16):
No, no, no, no, no. I actually built an office there in Garden and actually we've started going to Arizona in the winter some and Arkansas. I started running horses. Well, I've been running horses for years, but got a little more active here. So we have a condo in Arkansas, so I go down there to Hot Springs, run horses this time of year. I actually flew out of Little Rock yesterday to come down here and I'm still involved a little bit overseeing our ranches. I still purchase all the feed to help Grant and I did it most anything just because I knew he's got a big job. It's hard to get all that taken care of, so I'm just trying to help him and gives me something to do that I can do anywhere on a mobile phone.

Mark McCully (07:58):
Sure. Talk about the transition of Poky from 17,000 when you got there to where it is today. Talk about kind of how you thought about, were those opportunities that landed that you could pursue? Was it all planned growth? How does that all happen?

Joe Morgan (08:13):
It wasn't planned actually. I did probably a poor job of planning each time I added on.

Grant Morgan (08:17):
I wish we planned it a little bit.

Joe Morgan (08:18):
Yeah. Each time I added on, I said, this is it. I'm not going to get any bigger. And so I didn't really plan it that well, but when I first got there, of course they weren't full. And so it took me a little while to generate business to get us full. And then for several years we weren't full every day like we have been lately, for years now actually. And so as we got a little bigger, I knew we had to get larger to be competitive and to be profitable quite frankly. So my goal, it originally was to get to someday to get to 35,000. Well, when I got there, then I thought a couple years, let's go to 50. And then we just continually added on.

(09:03):
I think we made in my career counting rebuilds and things. I think we did 12 or 13 additions to the yard, so it wasn't well planned by any means. Each time I'd have to add onto the mill a little bit to generate more feed. So I wasn't very good forecaster where I wanted to land I guess. But as we started being full, and I don't even remember how many years we've been full, but it was huge stress quite frankly, just because we were having to turn down customers. And so I hated that because I'd worked so hard to get those customers. And then our customers over the years. That's one thing that's really changed the cattle industry is that the customers we have, the ones that have survived this business, have grown too in their operations. So they handle a lot more cattle. So we just needed to grow the feedyard to be able to handle those customers.

Miranda Reiman (10:00):
Talk a little bit about what the cattle feeding environment was like at that time. Late eighties weren't exactly the

Joe Morgan (10:07):
No, it was terrible. It was terrible. And that's how the opportunities came up for me was those guys were in trouble. The whole industry was in trouble. Interest rates had been really high. It was a really difficult time. And this evening, I'm going to touch on that just a little bit. I think there's several things we did at Poky. Looking back, there were turning points for pokey that gave us a growth. The first one being in the late eighties, we realized a lot of our customers were struggling with financing. They couldn't get financing and banks were failing, banks were consolidating bankers. A lot of them had the attitude, they weren't going to loan any money out of their trade area. So for a custom yard, we were just really struggling. So in the late eighties, we started our finance program and that really gave us a shot in the arm because we were the first yard, I believe that's my story. Anyway, we were the first yard in Kansas.

Miranda Reiman (11:03):
No one to fact check him now is there.

Joe Morgan (11:05):
We were the first ones to have cattle financing in Kansas. Everybody had, I shouldn't say everybody, most people had feed financing, but they didn't have cattle financing. And that really gave us a boost. And then of course in the mid nineties, the industry was in real trouble losing demand at that time. So that's when we started the formation in Scott County, right where our yard's at with some of my best friends. We started U.S. Premium Beef, the idea of U.S. Premium Beef and put that all together. And that was a big turning point for Poky because that was a huge deal to change the landscape of how we market cattle, the genetic churn for the industry and everything to produce a better product and take some of that demand away from pork and chicken. And then in the early two thousands, we got real serious about risk management. We started that program in house, and I think those three things have been the key to really our growth customer base.

Miranda Reiman (12:05):
Dig in a little bit on that U.S. Premium Beef, the time I got the opportunity to write that story on them and interview you here several years ago. And I thought just, I mean that idea when it started was a little bit scary.

Joe Morgan (12:19):
Oh yeah, by far. I don't know if I'd have the guts today to do it over again, but I didn't at the time realize I guess how big a deal it really was. But the industry found themselves in a deal where one price fits all. We were selling our cattle for the same price. And I know in our yard and a lot of my friends' custom yards, we were encouraging people to feed a plainer poorer quality calf and get the same price as our customers that had a real high genetic, real high quality cattle. We weren't incentivizing them. So when we started, we had no idea we were going to end up with U.S. Premium Beef. We had a whole gamut of ideas that we threw in the waste basket as we went down the path. And eventually we came up with the idea of really, we didn't even know what a grid was, we just called it.

(13:08):
We were trying to produce something we could go sell to the packer and get a premium to try and get customers to build a better product. In that time, beef consumption per capita dropped almost 50 pounds per person, and they'd done a national beef audit in that time, and 46% of our consumers were having a bad eating experience. The beef industry is in real serious trouble at that time. We just started working on it and eventually came up with the idea, hired some real quality people to guide us, keep us out of the ditch. And we were just fortunate that farmland with a producer mentality they have was in a position where they had to sell part of National Beef. So we were able to make that purchase. I think the real ironic or funny thing to me yet today is that we actually signed a purchase agreement with Farmland to buy part of the packing house.

(14:12):
And they didn't know who the people were involved. They were representing us as a group of producers and nobody else would probably sell part of a big packing house, not knowing who they were going to be, their partners were, but they were in that mentality of a producer organization. And so they took the bait and sold us the packing house. And our concept at that time, of course was that if the cattle were making a lot of money feeding, probably the packer wasn't going to be making money, and we'd still survive when the cattle feeder was taking his turn in the barrel. Hopefully the packers make a lot of money and we'd be able to take some money out of the packing house to help us offset those losses of cattle feeding.

Miranda Reiman (14:52):
So tell me how those early conversations started. You just called up a friend or somebody called you up and said hey, I've got an idea?

Mark McCully (14:57):
It was a blue sky tour. Was there a blue sky tour?

Miranda Reiman (14:58):
But it was before that.

Joe Morgan (15:01):
That was after we already had the concept.

Miranda Reiman (15:04):
I want to know who's the original, like you're at a bar on a Friday night.

Mark McCully (15:07):
Bar napkin.

Joe Morgan (15:10):
Well, those meetings actually started, the industry at that time knew they had trouble. And the state organizations started having a lot of meetings, KLA and I sat on a lot of committees, marketing committees, both for the NCBA and KLA. There was just a lot of arrows being shot in the air, but nobody could really hit a target. Nobody really knew. And we were still going through an era where people didn't want to change very much from the norm because they were scared what a change it was going to be. So we were frustrated in Scott County, and so a group of us in Scott County started meeting and we started meeting in the evening and met at dark. And quite frankly, we moved the meeting every meeting. We started meeting once or twice a week, and we were adamant we were going to get something done. And so we moved to different feedyard offices. And even our staff, our employees had no idea what we were working on. We kept it quiet because frankly, we were scared of retaliation from the packer because we knew we were going to come up with something that probably wasn't going to be palatable for them.

Miranda Reiman (16:24):
And you still had to sell cattle in the meantime.

Joe Morgan (16:25):
Yeah. You were weighing that. On one hand, we were selling cash cattle and trying to keep a customer base and keep our feedyards full. And we were trying to come up with a better way to improve. Probably. I'm kind of giving you my speech tonight here, but that's all right.

Miranda Reiman (16:40):
That's alright, this will air afterwards.

Joe Morgan (16:42):
Yes, it'll be a good practice. But people have asked me a lot of times, what was the learning curve like? Well, it wasn't a learning curve, but it was straight up because we thought we knew how our cattle killed, but we had no idea being killed.

Miranda Reiman (16:58):
And the surprise you got probably wasn't the surprise you wanted.

Joe Morgan (17:00):
It was terrible. Yeah, it was terrible. And I've always told when the boys, my two sons were younger, they used to go with me to feed or to customers and ranches and stuff. And I always told them, there's two things you don't ever say when you go to a rancher. You never run down his cattle and you never run down his children in that order,

Miranda Reiman (17:22):
In that order. Is that true today, Grant?

Joe Morgan (17:25):
It is, yeah. And that's exactly what I was doing. I was calling up a customer that I needed so bad for the feedyard and telling him that cow herd that his grandfather started didn't produce a beef that we needed to go forward in the industry. And that's exactly what we were doing. And so it was tough. The first few years people think, oh, right away it worked it. It was really, really tough. And we were fortunate that John Miller, who was the CEO of National at that time, and Tim Klein, who at that time was president, they knew we didn't know. And so at the very last minute, they offered us what we called the basket system, and they guaranteed us for five months that the cattle, no matter how bad they'd killed, wouldn't take less than $1 from the cash trade that week. And that saved us because it gave everybody an opportunity to try and kill cattle, see how their cattle produced, and not take a big financial hit, but gradually like all things, some of our customers that took the pill right away and started making improvements. And some of 'em, it took a little while before they drink their milk.

Miranda Reiman (18:34):
And you probably lost some over the deal too.

Joe Morgan (18:36):
Very few. But I did lose a couple. But it is kind of coincidental. After they went out and were frustrated and tried, they came back and they came back to us. So that made me feel good that they came back and they finally understood. But the biggest thing is, I think for the industry is that the year we started killing with national, the prior year there, their average Choice was 49%. And last year it was in the mid 84%. And the whole industry has improved, not just national, but the US Premium Beef, in my opinion, really changed the industry.

Mark McCully (19:15):
Absolutely.

Joe Morgan (19:16):
And I think it's real hard for most people to understand that. It started just around our board room table in my office. The idea started, so it can happen, but it was quite, we worked on it for probably a year and a half or two years before we ever started the project, but

Mark McCully (19:35):
Well, it was also born out of a time. So many great success stories are. It was born out of a time, not out of prosperity, but somewhat a little bit of desperation probably. It was a little bit of concern about a future. We talk about the certified Angus beef story that didn't come from a place of Angus cattle are super popular, everything's going great. It came out of a little spot of desperation. That's right.

Joe Morgan (20:00):
Well, timing for us, the cattle financing came a time they really needed it. U.S. Premium Beef came a time when the industry and our customers really needed it. And our risk management program actually helping educate our customers came at a time when they really needed it. And I've told Grant many times, timing has a lot to do with the success of a rain dance.

Grant Morgan (20:25):
I was just about to say that.

Joe Morgan (20:28):
That's the truth. I mean, timing just worked out to be perfect for us and that's what really gave, I call 'em page turning events for Poky. That's what turned our deal and increased our customer base as long as still doing good business for your customer.

Miranda Reiman (20:43):
I dunno if I'm doing my math quick enough in my head, but do you remember any of that period? I mean,

Grant Morgan (20:49):
No, not really

Miranda Reiman (20:50):
Dad was going to secret meetings and you didn't know where or anything.

Grant Morgan (20:52):
I mean, he's always been doing something busy.

Miranda Reiman (20:55):
Busy.

Grant Morgan (20:55):
Yeah, so, no, I don't really remember that. I would've been in high school, middle school, high school. Sure.

Joe Morgan (21:00):
But I've got a core, they're all going to be here tonight. And there's a core group of my friends in Scott County that were right there with me in the battle that were really inspirational and the cornerstone of getting it started. So they're going to be here this evening too. So it wasn't just me. I mean, it took several people. I always tell people that those meetings as the whiskey bottles went down, the IQ went up, we really got to come up with some wild ideas. They still

Miranda Reiman (21:34):
Philosophy works.

Joe Morgan (21:35):
We probably had a lot of ideas.

Mark McCully (21:39):
Have you been surprised there's not been more US Premium Beef models, the model replicated?

Joe Morgan (21:46):
Yeah, there's been some producer organizations that have got started. I give a lot of credit to Steve Hunt, who we hired as a CEO. We had a lot of heated debates with Steve, and he was really a smart guy. And I give him so much of the credit to keep US Premium Beef successful because so many producer organizations, they struggle, I think with rewarding the owner and not letting it run as a company. And I dunno if I explained myself quite right, but I think some of these other producer packing houses, they want to have a tendency to want to drain the packing house of the profits.

Miranda Reiman (22:27):
They want to get their share.

Joe Morgan (22:27):
They want to get their share. And so then it makes it difficult for that plant or any business in that regard to survive because they don't have anything built up when the times get tough. And you know what it's like to go back to somebody later in life and ask for capital call, it's tough because at those times, usually they're having troubles. And I think that's where Steve really guided us to make us understand that we just couldn't drain the packing house.

Miranda Reiman (22:53):
That probably took some discipline at that time though too, because when you guys invested you were investing,

Joe Morgan (22:58):
It was a difficult time. I'll tell you, I had a good banker,

Grant Morgan (23:01):
Money they didn't have.

Miranda Reiman (23:01):
That's exactly what I was thinking.

Joe Morgan (23:03):
Well, people don't know. But when we made the purchase agreement with farmland, we did that in July and that year in 97, and we had to have a minimum of 25% to make the deal go through and we could go up to 50 and we never got the money and commitments. And I'm not exaggerating until late the night in December before we started the program, we didn't know if it was going to still fly. We were down there scrambling. I mean, we had all went to our bankers. We had done everything we could do to make it go. As you mentioned earlier, it was a scary time for a lot of good other friends of mine in the industry that didn't participate because not only had they been going through the bad deal, but just weren't sure this thing was going to fly. So anyway, that guy said we were young, frustrated and we wanted to do something different and try and get this thing turned around. Fortunately, those guys were bright and Steve was brighter and we were able to keep it going.

Miranda Reiman (24:11):
How did you find out that you had made, you say late in the evening of that night? I mean,

Joe Morgan (24:16):
Well, we finally just, adding machine, totaled it up where we were at, how much we had to have to come up with a check the next day. And I still remember calling my bank that night and pressing that I had to have more money. And I had went out from July until that time and had flown all around the country and held producer meetings with our customers in different areas.

Miranda Reiman (24:42):
That's the blue sky tour, Mark.

Joe Morgan (24:43):
Yeah. Well, they held another Blue Sky tour too, but I held my own. But I went to Omaha and Norfolk and Anthony, Kansas and Texas and all over and went and saw some individual large customers, ours, and sold them on the idea, explained what we were going to do, but it's like anything from the time you say you're going to do it until you get the check and committed, there's always some transparency issues there. And so it just was a big problem. And eventually we ended up just buying the shares through Poky and then reselling them from us. Then we had the shares, we knew the people would buy 'em from us, and that's how then they could feel more comfortable. But the first few years were really difficult. It was a big learning curve, big learning curve. It was hard on the industry to make these kind of changes and we'll have more changes in industry. Maybe not in my lifetime, but probably Grant's. I know there'll be more industry changes. We're struggling with this pricing of how we come to the pricing of these cattle and all those things. And so there'll be more challenges for the industry to face here short term, I think.

Miranda Reiman (25:52):
So talk to me a little bit about that, maybe how that event and maybe others have shaped the kind of cattle that you have coming into the yards. How have the cattle changed in the amount of time? I guess either one of you can answer that.

Grant Morgan (26:04):
Well, I mean, like my dad said, I mean that's the problem. Most of the cattle we feed are gridable type cattle, so all of them are going to be cattle that we'll market through our grids. And that's the problem. Most of the cattle are traded cash anymore or cattle that they don't market on a grid. So going back to what he said, how do we determine that price when the poorer cattle, the plainer cattle that are cattle that are marking the price for everything

Miranda Reiman (26:25):
Or setting the price or the base for you guys? Sure. Yeah.

Joe Morgan (26:28):
When we started US Premium Beef, there weren't a lot of other grids, so there was still a lot of cash trade. In fact, we still sold cattle cash for several years after that. But then it got to be a point like Grant said that we had more cattle on the grid or wanted to be on the grid, and so we had to come up with another grid to be able to cover that.

Miranda Reiman (26:47):
How long after your customers were getting that carcass data and the feedback back, did it take for them to, I mean, make improvements? You said sometimes there was ones that took it right to heart and got to work, but that even still takes

Grant Morgan (26:59):
Still goes on today,

Miranda Reiman (27:00):
Right? Still making improvements?

Joe Morgan (27:02):
Oh yeah, for sure. We just killed some cattle last a couple weeks ago, I guess, from some great customers out of South Dakota and they had a set of cattle. I mean it was two loads, so it wasn't just a 12 head deal, they were 75% Prime, and that'd be a record for us at our feedyard. So that shows you what we've come from. When we started, the industry average was 2% Prime.

Grant Morgan (27:29):
It gives our customers the opportunity to actually capture the margin on those cattle versus selling 'em. They can never get what they're really worth selling 'em an auction or selling 'em on the video. They have to feed those cattle out to maximize their profitability. And that's what's really neat about the grid

Mark McCully (27:45):
And USPB is a mechanism that wasn't in place to actually send the signal back and probably identify how much value difference was truly in a between from ranch to ranch or within a pen of cattle. Definitely. That's

Joe Morgan (27:58):
Right. Big variability. We knew that and we worked with a lot of our customers just with the genetic pool that if they would get the data, we passed all the data back to our customers so they could use it. They're the ones that would help. It wasn't going to help me. It was going to help them. And it didn't take very long for them to figure out that if they kept the heifers out of a cow that produced a Choice calf the year before, it upped their averages of Choice. And we had some ranches that showed me their data and it wouldn't, like you said, it didn't take that many years and their percentage Choice in their herd started really grinding higher.

Mark McCully (28:38):
Talk a little bit about your customer. For a lot of our listeners being in the seedstock world or cow calf, they maybe, so just talk about who that customer is. Are they direct cow calf, retained ownership investors, stocker operators? A little bit of everything.

Grant Morgan (28:54):
A little bit of everything. Yeah. Yeah. I mean, predominantly guys have background their own cattle and send 'em to us. We'd have several seedstock guys.

Joe Morgan (29:01):
Years ago I probably fed more direct ranch calves, but as we grew, taking a bawling calf into a big feedyard doesn't work. I don't care whose yard you go to, it doesn't work. And so I built two grow yards right there in close proximity to Poky, but we were still limited to what we could take in. And customers that wanted to do that have learned to either background them at home go to another background yard, a smaller yard or whatever. But our customers, I'd still say today, a big share of our customers are stocker operators that buy the calves, grow 'em either on wheat, grow yard, graze them, whatever, and then come to the feedyard. Don't you think, Grant?

Grant Morgan (29:50):
Yeah. And we do have a set of customers that would be investor type. They'd probably make up five to 10% of our customer base, but yeah

Joe Morgan (29:59):
But they're not outside people from the industry. Most of 'em are retired farmers from Iowa or Nebraska or their son doesn't want to feed cattle and they do and that kind of a deal. And so we still have that class of people. And for most of those people, we still buy feeder cattle about every week. And we call 'em resale list and we will call those people. And that's one of the things we've done in our yard too that a lot of yards do today, is we offer percentage of ownership. So if we buy a pen of 200 cattle and we call you, you can say, yeah, I'll take 20% and Mark can take 10% and we share ownership.

Miranda Reiman (30:41):
I bet it's rewarding. Now you would have second and maybe even third generation customers to

Grant Morgan (30:45):
Yeah, we have multiple third generation customers

Joe Morgan (30:48):
We have multiple third generation families. They're feeding with us. Yeah,

Grant Morgan (30:51):
Couple of them will be here tonight.

Miranda Reiman (30:52):
Oh, that's neat. I love that story. And I bet for them to see that your next generation's taken over as well is kind of a, I

Joe Morgan (30:59):
Think it's gave us a big boost. I do. I think it has. Grant can relate to those younger producers better than I can, I think. And I think it has gave us a big boost.

Grant Morgan (31:11):
We have, I mean surprisingly, but we have a large number of younger customers that are cattle feeders that do an excellent job of what they do, and we're lucky to get their cattle.

Joe Morgan (31:22):
What I've noticed is in my customer base is that as a son or son-in-law or both came back the operation, they had to grow their dollars to produce out of that farming operation for everybody to survive. So people that didn't feed now are starting to feed, people that didn't graze or starting to graze, another income source.

Miranda Reiman (31:45):
Sure. Have you noticed any changes in how they want communication or how involved they want to be in the cattle feeding process? As the next generation's come on board?

Grant Morgan (31:56):
I mean, that's always been probably my dad's biggest deal is communication. So we pride ourselves on that, keeping the customer informed what's going on. But yeah, a lot of 'em like texts anymore, emails. I mean, yeah, it's all a lot of that stuff now.

Miranda Reiman (32:09):
You already had a high standard you had to uphold, I guess.

Grant Morgan (32:12):
Sure.

Miranda Reiman (32:13):
Very good.

Mark McCully (32:15):
Has the investment model, I mean, obviously what fed cattle, what a feeder cattle's worth today or the amount of capital invested in this business now is a little bit mind boggling. So has the investment strategy changed for outside investors, can they still get the return that they want on the amount of capital that could potentially be tied up?

Grant Morgan (32:36):
Yeah, I mean, because we charge X dollars per head, and so that return, and then we have a customer base that don't want to finance the cattle and use their own money. So if they can break even, they're going to make their interest on their money. So yeah, it's a little bit everything.

Miranda Reiman (32:51):
So as you look ahead to the future, what are some of the biggest challenges you think that are facing the feeding industry? Well,

Joe Morgan (32:57):
The one thing I think Grant and I both agree on and we'd like to relate to is where I think the purebred operations really need to work on and focus on is the health of their cattle. I'll be the first to admit the ability, I'll use the word ability of our pen riders is not, I don't think in my eyes the same as it was 30 years ago. These people, a lot of 'em didn't grow up on a farm, didn't grow up around livestock. So it's kind of self-taught. And so we need those cattle to be as bulletproof as we can. And I think that's somewhere where the industry has, I don't want to use the word single traited, but we have worked so hard to improve the quality of cattle and maybe we've dropped back a little bit on

Grant Morgan (33:45):
Livability.

Joe Morgan (33:46):
Livability and just from the heterosis side and things like that. And I think that's something that's going to really have to be addressed because just what Mark said, I mean, when these feeder cattle are costing over $2,000 a head, death loss is a big item now. And so we try and do everything we can to keep 'em alive, but we need some help too from the producer to bring cattle that are healthy and have livability.

Miranda Reiman (34:16):
And you've probably worked closely with your customers already to solve any challenges that were management related at all.

Joe Morgan (34:22):
Grant's done a real good job with that. He probably did better than I did. He's worked with a lot of producers and

Grant Morgan (34:28):
A lot of our customers that background cattle, they know what cattle to send us, what cattle not to send us from a health standpoint. Yeah, sure.

Mark McCully (34:34):
Do you think on this health thing, we talk a lot about it. Is it resiliency? Is it, you mentioned lack of these cattle are more straight bred than they've ever been

Grant Morgan (34:44):
And a lot of more maternal genetics. Yeah. Heterosis, I don't think just as a cow herd. I mean the ranchers have grown in age. I mean, they want more of a maternal animal that they don't have to mess with. And so we haven't bred as much terminal.

Mark McCully (34:59):
Do you see anything tied to... We've also put really big intake appetite in these cattle.

Grant Morgan (35:05):
Oh yeah, definitely.

Mark McCully (35:06):
Are they harder, some of these cattle a little harder to manage in that regard?

Joe Morgan (35:10):
Well, it's like anything though. We're all feeding the cattle longer, making 'em bigger.

Mark McCully (35:15):
Yeah.

Joe Morgan (35:15):
And just the way it goes, you're going to have more death loss,

Grant Morgan (35:21):
Every week you put on animals, you've got 10th of a percent more death loss. And that's a fact.

Joe Morgan (35:24):
I'd like to see the industry do some research on these low birth weight bulls. And how does that, the industry was able to do that, to help these ranches be able to calve large groups of heifers without much assistance and all those things. Is there a correlation to the health when we did all that? Did we give up something in the health and all those things? And I know there can be heterosis within breeds. We don't have to cross breed, but we got to work on that. I think as an industry that needs to be addressed.

Miranda Reiman (35:58):
Mark, you bring up the resilience. I kind of always wonder, is it that you need cattle that never get sick or you need cattle that get over getting sick quicker

Grant Morgan (36:08):
And the age of the animals coming in the yard? We don't get as many yearlings as we did. My dad did 20 years ago. They're a lot younger. Yep. So that's part of it too.

Miranda Reiman (36:17):
Sure. Yeah.

Mark McCully (36:18):
Well, and when a feeder calf's worth what it's worth, I mean, there may be some, I've suspected there may be some cattle that you wouldn't have ever gotten before. We've have some better drugs out there for sure. Ways to keep some of those cattle alive before they ever get to you. And you may be getting them with some compromised lungs. Lungs and some things like that.

Grant Morgan (36:39):
A hundred percent.

Joe Morgan (36:40):
And I think I look back in my lifetime, I mean my dad, we drove through the pastures with the bottle of combiotic on the dash and we treated with that. Well now these drugs are so much more available to these ranchers. And so if they use a drug and treat the animal, just like Mark said, they keep him alive, or in the past, maybe more of those weaker ones die.

(37:06):
But then on top of it, when that animal comes to us and he has a recurrence of sickness, using that same drug that maybe we don't know about, and that's where Grant's really worked with these people. What are you using? So our people use a different drug because if he's already seen it once, it probably isn't going to work near as good a second time. And so Grant's done a great job of that, I think, of getting these people to understand. And there was always hesitation to pass that information on, but it's got a lot better now and people are more freely with giving away their information, I guess.

Miranda Reiman (37:41):
Did you have hesitation to pass that information back?

Joe Morgan (37:45):
Well, the US Premium Beef, the data you mean?

Miranda Reiman (37:48):
Yeah, I guess.

Joe Morgan (37:49):
Well, I always looked at it. They were their cattle, and so it was really their information. In the early years, the very first few years I struggled a little bit. I'd buy a set of cattle on say, Northern Video or Superior, and the breeder would call me and say, Hey, I'd like to see the data, how my calves did. Well, I give it to him and then next year it'd be in the catalog telling how great they did. Now here I was trying to buy those cattle and he had to give that up, but pretty soon I thought, Hey, the industry was never going to get any better if I don't give the data. So I just started giving 'em the data and forgot about it.

Miranda Reiman (38:28):
Maybe if he learned how good they were, he'd feed some of those himself.

Joe Morgan (38:31):
Yeah, maybe so. Maybe so.

Miranda Reiman (38:35):
When you mentioned the first challenge is health, I honestly thought maybe you would mention labor as the first challenge. Is that as difficult for you guys where you're located as it is...?

Grant Morgan (38:45):
I mean, yes, we probably have as good a crew management wise as we've had in a long, long time. But I would say the help side of it's gotten easier with different programs with Mexico T and Visas and those types of programs. But not to my dad's point, not necessarily they're qualified help, but we have more help available.

Miranda Reiman (39:02):
More bodies

Grant Morgan (39:04):
Yes. Okay. But it comes back to less people are on the farm, less people are on the ranch is consolidation. So getting those kids out of college that actually know what a feedyard is, that's where the really difficult part is.

Joe Morgan (39:15):
Grant started a real good program that we've never had before over several years of internships. In the summer, we got a manager trainee program that we hire kids right out of college and they stay with us for so many years. We promised them a foremanship job, so they move into management positions and that's helped us. There's no doubt about that. It's helped us.

Miranda Reiman (39:43):
You mentioned several long-term employees are coming to celebrate with you tonight, so you must not be that difficult to work for, I guess.

Joe Morgan (39:49):
Oh, I don't think that's been the case.

Miranda Reiman (39:53):
Grant is smiling and you're laughing over here

Joe Morgan (39:58):
I don't think my reputation ... is ever easy to work for. I had a high aspirations and a high bar. I think most people realize if you worked for Poky, you worked.

Grant Morgan (40:11):
I would say we wouldn't be where we're at today with the people we don't have working for us. No doubt about that. They are the success of Poky.

Miranda Reiman (40:18):
So the toughest survived,

Grant Morgan (40:20):
No doubt about it.

Joe Morgan (40:21):
Well, two of our employees that are coming tonight, really their whole life, adult life has been working for us. And so they've stayed with us and they're just a cornerstone of our family really. They've really been. But we've got several others that have all got long tenure. We've got a lot of people who've been with us for a long time. And part of that I think is as we grew, it gave more opportunities to those people too. When I started small, I didn't have the capital, didn't have the wherewithal to pay much, and so much of that just fell back on my shoulders. But as we've grown and grown, it gives these guys more opportunity and you can't micromanage as much as I did. So it's given these people that have that aspiration to manage an opportunity, and I think it's made them a happier employee too.

Mark McCully (41:20):
Well, contrary to maybe popular belief, I believe there are people that really enjoy working hard. Oh yeah. No doubt about it. And want to put in a good days and working toward a shared purpose and believe in the leadership of their organization. And

Grant Morgan (41:37):
Most of our guys we're very competitive. So that would be a lot of our guys would, we measure ourselves, we benchmark ourselves, and that's stuff we talk about on a monthly basis. And so they're all very competitive. We wake up, we want to be the best.

Miranda Reiman (41:51):
If you hope that Poky Feeders is known for something out in the industry, what do you hope that is?

Joe Morgan (41:57):
Well, for me personally is that we continue the honesty and integrity that I think we've built Pokey to be. And that, Grant alluded to it. We try and be the best every day. It's tough competition, but that's what makes us better too. And our employees have bought into that. And so I know they understand how important every little detail is and how much we want to be a leader in the industry. I always tell Grant, it's tough to tell these people we don't have room, but I still want them to call us first.

Grant Morgan (42:35):
Yeah.

Miranda Reiman (42:36):
Is that an amen to that Grant?

Grant Morgan (42:38):
Yeah, amen to that. And one thing my dad's philosophy has always been is probably what's made Poky the success that it is from a custom cattle feed is the consistency we treat every day the same. We pride ourselves and work hard to do everything exactly the same every day. Our flake quality, our feed calls, all of that, that turns back and helps the customer get the best performance we can out of his cattle.

Joe Morgan (43:01):
It's a combination of all the small details that really sets you apart from everybody else.

Grant Morgan (43:07):
We don't believe in averages. We feed the individuals.

Miranda Reiman (43:10):
Yeah

Joe Morgan (43:11):
We always have Monday management meetings, and I've told our crew for years when I was going to 'em, and I know Grant does the same thing. Is that when you're raising your children, I don't care what everybody else is doing. I know we're going to do here at Poky. So

Mark McCully (43:26):
What will be most different at Poky in five years?

Joe Morgan (43:31):
That's Grant's call.

Grant Morgan (43:33):
I don't know. I don't know. That's a good question. I don't know. Yeah,

Miranda Reiman (43:38):
He's going to think about that the whole plane ride back now,

Joe Morgan (43:41):
We're kind of at the size that it's pretty hard to expand much more. For the water issues. Even our managers, they're busy. They're pretty well tapped out in a yard our size, so listeners understand. But we average about 40 some hundred cattle a week to be shipped. So it's not only weighing and shipping 40 some hundred cattle, but to stay full, we have to receive 40 some hundred cattle a week. So there's just a lot of activity. We're currently feeding over a little right at a million bushels of grain a month. So all those trucks, all the hay, all the supplement, all the fat, all those things, it becomes a huge thing to get all that done in a day. Absolutely.

Grant Morgan (44:34):
I would say the use of technology, that's what I'm probably most excited about with either the loaders, someone riding 'em somewhere else. We've tried different tags, different biometrics markers and different things. And that's what I'm probably most excited about five years from now.

Miranda Reiman (44:49):
So we assume that most of the listeners of this podcast are Angus breeders. If you could tell them anything about, there's the genetic designers of what you guys are getting as a raw product into the feedyard, what would you tell them or what would you want them to be thinking about and focusing on to make your job easier in the next five to 10 years?

Grant Morgan (45:08):
One that lives all the way through. So vaccinating the cows, vaccinating the calves, realizing you're setting those cattle up, not for your ranch, but for a feedyard. The end point. Yeah.

Miranda Reiman (45:20):
Well, and even some of our Angus Genetics Inc. is working on projects that, really aimed at that, getting at hard data that's hard to collect.

Joe Morgan (45:31):
Well, I know Grant and I both spoke to a lot of producer groups and it still amazes me that so many people are still naive on vaccine handling and things like that. And you can go through and say, well, I vaccinated the cattle, but if you didn't do it correctly,

(45:47):
You don't have any luck. And all those little details, how important they are. Oh, I didn't realize the syringe froze, this and that. And just all those little things. Cattle handling, if you get too much hoopla, and the cattle are running around, they're not going to receive the vaccine very well. And just all those kind of things. And I think that's one of the things they can do. Like Grant alluded to, if you really have great genetics in your cattle, the way you're going to be rewarded is to feed those cattle out. That's just the truth. You're not going to get, nobody's going to give you the premium in a sale barn that you're going to receive if you truly have those kinds of cattle. So that's probably one of the biggest things we can tell 'em. I think our industry has made tremendous improvement, no doubt about our cow herd through the whole country, Mark. I mean the droughts caused a lot of that. When people replace, they replace the better animals. I think the purebred people have done a great job of selecting for these cattle that do so well in the packing house, but I still contend a lot of the animal husbandry things and things like that is where we can really see improvement.

Mark McCully (46:59):
Some of that probably is, gosh, we've been talking about this forever, right? Proper vaccine handling and things. But again,

Grant Morgan (47:07):
Those little things are what matter.

Mark McCully (47:08):
It still matters, right? It still matters. And we've not arrived, right. We not. So it's great. Well,

Joe Morgan (47:13):
Just this year we received a set of calves and that I had bought on the video and Grant called me and said, Hey, he said, these calves are sicker than sick. I've been here a few days. I said, these are all,

Miranda Reiman (47:25):
Did he tell you that you screwed up?

Joe Morgan (47:26):
Well, no.

Grant Morgan (47:27):
No.

Joe Morgan (47:29):
We try and fight the war together, but I knew they were all prevaccinated. But when we dug into it, they had just vaccinated 'em a few days before they loaded 'em on the truck. See,

Miranda Reiman (47:40):
They hadn't had time to work.

Joe Morgan (47:41):
And well, it made them sicker actually, and put 'em on stress and those things still today. And I think those are the things where we can make big improvement as an industry.

Miranda Reiman (47:54):
Sure.

Joe Morgan (47:55):
I mean, quite frankly, we've already got an X on that place. We won't be back. And I mean, that's the only way you send that message.

Miranda Reiman (48:06):
So we started this podcast talking about that you are the Cattle Industry Hall of Fame winner tonight. Are there any stories that are going to come out in the roast or anything that

Joe Morgan (48:16):
They've kind of changed that format? I don't think they have anybody roast you anymore. So I think I'm good there.

Miranda Reiman (48:21):
Or it'll be a big surprise if they do.

Joe Morgan (48:22):
I'm good there. But I will say that I've attended these cattle feeders events since the very beginning in Denver, and I've seen a lot of great people walk up there and receive that award. And I never, in my wildest dreams thought I'd be up there tonight. So I'm really humbled by it and I really appreciate the award.

Mark McCully (48:42):
It's going to be a special night and recognizing you, and again, it's compliment you and your leadership. And Grant, it's so exciting to see you following in the

Miranda Reiman (48:52):
Now you've got the legacy

Mark McCully (48:54):
Because you've had a significant leadership role and casting a vision. I truly, I point to U.S. Premium Beef as one of those things that had our industry not done, we would not be where we're at today.

Grant Morgan (49:09):
It's a great honor for my father, for our family, a real big honor. Can't be more proud of my dad to receive this honor, but it's a big deal to our partners, really big deal to our customers and to our employees. It means a lot to all of us.

Mark McCully (49:22):
That's awesome.

Joe Morgan (49:23):
When the Angus Association gave us a CAB award in 2017, I was really proud to receive that. I still remember that was the first year that CAB had went over 1 million pounds of product. And I remember at that time, and I don't want to exaggerate, but they said at that time, what percent of CAB stakes were raised at Poky feeders at that time.

Miranda Reiman (49:48):
How cool.

Joe Morgan (49:49):
And that was really quite an honor we got at that time too. So I really appreciate that.

Miranda Reiman (49:54):
We'll link that story in the show notes so people can go read that story on the archives. So very good. Well, we always do a random question of the week to wrap up the podcast, but is there anything else you guys would like to add before I make you answer a random question? No, it's the whole thing felt random, maybe?

Joe Morgan (50:10):
We appreciate opportunity to visit with you guys. We've always been involved with the Angus Association for many years and we appreciate that relationship.

Miranda Reiman (50:19):
Okay, so the random question of the week, what's your favorite time of day at the feedyard?

Joe Morgan (50:24):
First thing in the morning.

Grant Morgan (50:25):
Definitely. Yeah. First thing,

Miranda Reiman (50:29):
Are you there before the crew gets there?

Grant Morgan (50:32):
Some of the crew, yeah.

(50:33):
For sure. Our feed callers are there earlier

Joe Morgan (50:37):
For years, I called my own feed. I didn't trust anybody else to do it.

Miranda Reiman (50:41):
Speaking of being hard to work for,

Joe Morgan (50:43):
But I love that time of the morning when the sun was just coming up. Cattle are coming to the bunk, couldn't beat it.

Miranda Reiman (50:54):
Love that. And now you've passed that on to Grant. Very cool. Awesome. Well, again, thank you so much for your guys' contributions to the industry and for taking the time to visit with us today and share a little bit of the cattle feeders world with our Angus breeders and cow calf producer listeners. And

Grant Morgan (51:10):
Thanks for having us.

Miranda Reiman (51:12):
We couldn't do what we do without having you do what you do. So thank you.

Joe Morgan (51:15):
I appreciate the opportunity to speak today

Mark McCully (51:16):
Yeah, and congratulations on the honor. Looking forward to tonight, and as you said, Grant of recognition of you and your family and your customers. It's going to be fun and it's so well deserved. So congratulations.

Joe Morgan (51:29):
Appreciate that. Thank you

Miranda Reiman (51:31):
As always. Thank you for listening today to keep up on all the latest information in between episodes and editions of the print publication, sign up for AJ Daily where you get an email delivered directly to your inbox with the latest Angus and industry news. Visit angusjournal.net to learn more. This has been the Angus Conversation, an Angus Journal podcast.