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SF Special: How Holden Farms Successfully Brought Five Family Members Into the Business
At the headquarters of Holden Farms near Northfield, Minnesota, Successful Farming magazine sat down with family members to talk pigs, turkeys, and how to keep the farm business growing for at least another 40 years.
The Holden family includes brothers Kent, 69, and Barry, 68, (not present for the interview).
Kent’s sons: Nick, 40, oversees sow farms; Nate, 37, oversees hog marketing, feed, and new construction; Tyler, 35, oversees nursery and finishing.
Barry’s sons: Blake, 36, oversees turkey operation and financials; Kyle, 31, oversees maintenance, logistics.
SF: How has Holden Farms changed over the years?
Kent: My father grew up on a dairy farm but started raising turkeys and decided to make that his livelihood and primary business. I got started in the pig business during college in the late 1960s. It was a sideline to the turkeys until the early 1990s. There were four of us brothers farming together until 1991. Barry and I decided we were going to focus on pigs. We thought there was more opportunity in the pig business than in turkeys. Our two brothers stayed with turkeys.
Blake: We are still involved in the turkey business. It is about 5% of our farm’s revenue. We produce 14 million pounds from 800,000 to 900,000 birds each year. We own part of the turkey processing plant in Marshall, Minnesota. Four growers own the plant together, and we are the smallest grower. The only way we have been able to stay profitable in the turkey industry, which has gotten so consolidated, is to be a part of that plant. If not for that turkey plan, it would be tough to be competitive.
SF: The farm grew from 6,000 sows in 1994 to 55,000 today. How has the pig business changed in that time?
Nick: If you look at our history, we haven’t grown by big leaps and bounds. It’s just been more of a steady approach. When the timing is right and we are ready – and the market is ready – that’s when we try to expand. We’ve always done more organic growth vs. acquisitions. In the next three to five years, we will do more steady growth when it makes sense. We don’t want to add 20,000 sows or anything on that scale. We are in the process of trying to permit a farm in southern Minnesota for more sows. We also have sows in Iowa and Wisconsin. We want to put new sows where there aren’t many pigs already, and that’s challenging.
Tyler: Every year, we add 40,000 contract finishing spaces. Farmers are spending more money on finishing barns today, realizing they last a long time.
SF: Where does Holden Farms have an advantage?
Kent: Back in the 1980s, the threshold of pigs per sow per year was 20. Now it is over 30, due to improvements in genetics, feed, labor, and management. These five guys have been focused the last few years on recruiting and retaining good people to work in pig production.
Blake: The size of sow farms has grown and that’s required a different type of person. We have farms now that have 20 employees. Our first farm was an owner-operator situation. With smaller farms, managers could be everywhere at once. We can’t do that now. Changes in production practices required changes in management behavior.
Nate: We are producers at our core; that’s our strength. One value Kent and Barry instilled in us is that we do need to be out in the field. We need to understand the work and have relationships with our teams in the field. They are the ones who make the farms go every day. We are support staff to them in a lot of ways.
Kent: My brother and I have always believed that we must be present and supportive, helping the people on the farms who are doing the day-to-day operations.
SF: What are the biggest challenges for Holden Farms?
Tyler: Labor. If we are going to expand, we must get the people in place first. I spend most of my time working with people; the pigs do what they are supposed to do. We are always trying to figure out how we make sure Holden Farms is a good place to work. We want employees to help us recruit. About 65% of our hires are referrals.
Kent: Our current president has threatened to take away some of the trade relationships the U.S. has with other countries. That is a huge concern to us. As we expand, we have to rely on the export market to take our pork. About 24% of U.S. pork production is exported now. With five new packing plants coming online in the industry soon, that export number will be more like 33%. If something happens in those trade relationships and we get shut off, we are going to be in trouble.
Blake: There’s more political pressure from environmental groups, and the swine industry has done a bad job of telling our story. We are doing much better as an industry as far as our environmental impact and carbon footprint. We haven’t owned that story as an industry.
SF: How did the younger generation make the transition back to the farm?
Kent: All five of these next-generation guys made the decision to come back. My brother and I didn’t put any pressure on them. They made the choice to come back, and they all came back on their own time. All five of them spent time in pig production for the first couple of years when they started here. They learned the business on the farm level. Each of them now has clear responsibilities in management.
Nate: We all went to four-year colleges and spent time working other places before coming back.
Kent: These guys all want to be here and are excited about being here. They all have ideas and want to do things. They work well together, and, so far, have gotten along well together. My greatest enjoyment right now is working with these guys and seeing how they develop and how they mature and take on responsibility. They show the excitement and passion of wanting to be here and get things done.
SF: Have you used advisers to help in the farm succession planning?
Kent: Yes, we’ve worked real hard at bringing in outside consultants. For the past 10-plus years, we’ve been working on the whole transition process. The advisers make us think about what we need to do differently now that we have more people in our management and ownership team. We look at what attributes, abilities, and talents people have and how can we utilize that. It’s really about communication, transparency, openness, and being able to be honest with each other and trust each other. It’s a learning process. There are always challenges to work through. At the end of the day, we may not all agree, but we move forward and make a decision. Tomorrow is a new day.
Nate: What I took away from the consultants is self-awareness. How do we work as individuals and how do we work as a team? We hold board meetings quarterly and the board consists of just family members. In addition to that, the next generation of Holdens – the five of us – meet monthly in an organized fashion. We have done a good job of setting up a business where there is autonomy, but also things that we work on together. We are proactive about making sure everyone is communicating.
Nick: I give our fathers a lot of credit for starting to work on this many years ago. A strength of our company is we like to ask a lot of questions and get as much help as we can. We take all that information and use it. We’ve consciously put a lot of time and effort into transitioning and trying to do it right. It is hard for family businesses, especially farmers, to allocate time to transition planning.
Tyler: You have got to be able to have conversations about individual goals and desires.
SF: Kent, how does this transition process differ from your generation?
Kent: My three brothers and I didn’t collaborate enough. We were in business together for many years, but we didn’t do the things these guys are doing now. We didn’t communicate well. We each had our own areas and didn’t understand what the others were doing. We ultimately went our own ways. When Barry and I were in our late 50s, we knew we had to tackle the ownership transition. We wanted to develop the next generation of leadership.
Blake: You’ve got to give Kent and my dad a lot of credit. They were like, ‘Hey, we can’t just ignore this issue.’ They have been proactive and open to talking about it.
Kent: Every Monday after lunch, we have a meeting of all people who are present. We take a half hour to review what happened the prior week and what people’s plans are for this week. We can go for days without seeing each other, so it’s important to understand what’s happening. It’s all about communication. By the time we have the monthly board meeting, we’ve researched issues and talked to people who are involved. We know what we want to do. If we run into obstacles, we work through them.
Nick: What’s different about Holden Farms is we’ve really put a lot of effort into transition planning. We have five people in this next generation who want to keep growing the business.
Kent: My father passed away in 1973 at age 58 of a heart attack. People always ask me what he would have thought about the farm today. He was always progressive. He started the turkey business, which was unusual in our area. He was always looking to adapt new things and new ways of running the business. He worked real hard at the business. Today, Barry and I help out where we can, but we try not to get in the way of these five guys in the next generation.
SF: Will you get involved in vertical integration into pork packing?
Kent: We may need to have ownership in an integrated system. We are always asking, ‘What do we need to do to be sustainable and competitive long term in the industry? What things do we need to do differently to try to capture more of the opportunity that the packers have been having the last four or five years?’ The packers are in the driver’s seat right now. We sell to multiple packers and always have our eyes open to see what opportunities are out there. We’ve seen the progression into vertical integration in the poultry industry. Our ownership in the turkey plant has worked well. Now we wonder if we need to do the same thing in the pork industry.
Nate: We sell 5% to 10% of our hogs every week to the open market for transparency as far as bid prices. Only a small handful of people do that.
Nick: The negotiated market is a big deal right now for our industry, and only a handful of people are doing anything about it. Nate is on the phone every day trying to sell pigs to five packers. We worry about how many pigs are priced off of that mechanism
SF: How do you tackle big changes to the company?
Kent: The seven of us would all talk it over and see if it made sense. We would ask these questions: Do we have the resources? Do we have someone who really wants to do it? How will we get it done? Do we have the backing of everyone? At the board meetings, we solidify what decisions need to be made on a larger scale and the direction the company is going.
SF: Final thoughts?
Kent: These guys have done a great job of taking over the operations of the company and doing the things that are important to keep the business competitive long term. There are challenges certainly, but it’s fun to see these guys develop and work together. They are excited about what they are doing and interested in the business. If this next generation wasn’t coming back, Barry and I would be talking to someone else about what we are going to do with the business.