Meet the Gutsiest Guy in the Pig Business
You can always count on Bill Prestage, 82, to tell it like it is. The day we sat down for this interview in his Clinton, North Carolina, office, the hog futures market was limit down, due mainly to China’s retaliatory tariffs on pork. Family-owned Prestage Farms, 35 years in business, is the sixth largest pork producer in the U.S., with 175,000 sows, and a vertically integrated turkey producer. The company will open a new pork packing plant near Eagle Grove, Iowa, later this year.
SF: What is your mood right now?
BP: I’m not happy. It’s a frustrating time. Our competition is global, and the NAFTA agreement has always been a great thing for the United States. Any interruptions in the way we do business globally hurts us all. The tariff war with China is alarming, but for now, I guess we have to trust the process and hope for a good outcome. But I know this: The biggest thing we export out of this country is agriculture. What is going to happen if those exports continue to suffer? That would hurt the whole country – not just agriculture.
I’m not happy with the gun laws in this country either. I love to quail hunt, and I love my guns. I think every person should be allowed to bear arms, but I don’t think anybody needs an AK-47 or a pistol that holds 40 shots. I have written my legislators. Everyone else who is concerned about this should speak out, too. We outlawed machine guns in the 1930s because too many people were being killed. Well, that is happening again today. It is time to do something.
SF: How did you get started in agriculture?
BP: My wife, Marsha, and I are both from Battle Creek, Michigan. In 1960, I was working for my dad, a beer wholesaler. He was a great guy, but I didn't want to be a beer wholesaler. I had a company car, and I made pretty good money, but I just didn’t feel like that was the job for me.
I took a job selling feed for Central Soya for $4,800 a year. I didn’t have an agriculture background, but I liked animals, and I knew I could sell anything. I was a true novice. They told me I was going to Spartanburg, South Carolina. When we loaded our three boys in the car, everybody was crying, including the grandparents, but away we took off south.
When I was transferred to eastern North Carolina, I met Ottis Carroll. Mr. Carroll raised chickens and had one of the larger hog operations in the state. In 1967, he asked me to partner with him 50-50 in the family business, then called Carroll’s Mill [later Carroll’s Foods]. We built it into the best commercial hog operation in the United States. Our farms were designed well. We had slats in our barns, and other companies still had animals on dirt or on concrete floors. When our hogs went to market, they were clean and they yielded high.
Mr. Carroll died in 1982, and his family chose to buy the business in 1983. Honestly, it was very traumatic for me when I sold my part. I loved that business, and we had worked very hard to build it. I’ve thought about that a lot since then, and I realize now that the right thing happened for the right reasons. Mr. Carroll would have wanted his company to stay in the family.
Marsha and I, along with sons John and Scott, started Prestage Farms in August of 1983. Our oldest son, Ron, joined us later in 1994. This year, we are celebrating 35 years in business.
SF: All the major pig farmers in North Carolina know each other, don’t they?
BP: This part of the world really gets along very well together, and, yes, all the pig farmers know each other. We are all very competitive, but in a good, fair way. In the 1990s, several of us formed a company called Ag Provision to buy supplies together. The more we purchased, the better deals we could get. We also formed a company to keep the railroad lines open in North Carolina. At that time, the railroad was talking about taking out our rail lines, and we stopped that. If we had not joined together, transportation in North Carolina would have really suffered. If we have a grower that is unhappy, that grower has the right to talk to any other company he wants to, and the same goes for employees. Part of the success we’ve had here is the way we work together.
SF: When did you get involved in the Midwest?
BP: In 2003, we bought a hog operation in Iowa. Iowa has cheaper grain and a good base of packing plants. We felt like that was the right place to expand. We purchased another existing operation in the Oklahoma/Texas panhandle in 2011, and they have both done well for us.
SF: Tell me about the new packing plant being built near Eagle Grove, Iowa.
BP: Right now, we’re just spending money getting it built. It won’t be done until November. It’s a 10,000-per-shift plant. We put some innovations in it like a vertical scald. We designed a way to bring customers in the plant and allow them to walk overhead and view the operation. About half of the daily kill will come from our Iowa farms, and all of our trucks will be washed before they leave the premises. We do that in the poultry business. There is not a poultry plant in the country where the trailer is not completely washed and disinfected when it leaves that plant. That’s the way this hog plant is going to be. The rest of our kill will come from other producers in the area. It’s going to be challenging in February with all that ice out there, but we have a plan. Our offal plant will be completely enclosed, and the plant is environmentally controlled with air scrubbers that will not let odors escape. It is a good design. I know we will have a lot to learn, but we love a challenge.
SF: Why build a pork packing plant?
BP: We have a turkey processing plant and it’s done very well for us. We are high on service and quality and that’s the way we'll be with this pork plant. We’re known to have a good product and we focus on giving customers what they want. Building the plant is the right thing to do. The turkey business and the chicken business are completely integrated. Even the big cattle lots are owned by the packers. The hog industry is changing quickly to be like the poultry businesses, and we have to keep up to stay competitive.
It’s going to be a tough start-up. Our biggest challenge will be hiring and training the people to work in the plant. We built it in a rural part of Iowa. If we can get the right people, we can be successful. If we get the people, we can make this thing work. We will pay a fair wage, offer good benefits, and provide a good work place. Its hard work and not for everybody, but hopefully there’ll be enough people looking for a good job that we’ll be able to entice them to come work for us. That’s our biggest challenge. To kill 10,000 hogs a day, we’ve got to have the people. We will start slowly with just our own hogs first.
Right now, we have a good relationship with the people of Eagle Grove. When we get done with this plant, I want the neighborhood to be better than before we got there. We will do what we have to to make sure that happens.
SF: What about the pig supply to the plant?
BP: We are going to supply a little over half of the pigs to the plant. The rest of the pigs are going to be supplied by Iowa producers. We will get the hogs. I’m not concerned about that.
SF: Where will you sell the meat?
BP: We’ve had a lot of people contact us, including importers from Mexico, China, and Japan. We have had major grocery chains in the United States that are familiar with our turkey operation asking to buy pork from us. We will not have a further processing operation initially. I’m not worried about selling the pork.
SF: Carroll’s Foods sold to Smithfield Foods in 1999 when the hog market crashed. How did you survive that time?
BP: Hogs were losing money big time, but our turkey operations were doing pretty well. You put the two together, and we kept ourselves in business. We have one of the most efficient hog operations in the nation. Marsha and I have always chosen to leave the profits in the company, and you have to have a strong balance sheet to survive times like that. We’ve never thought about selling out. We have been approached several times, and I have always said, “No.”
SF: Would you sell Prestage Farms?
BP: I wouldn’t sell it, but if the boys want to sell it, that’s up to them. Today, we are not for sale. When people sell, they’re afraid of the future. There is a lot more at stake here than just our family interests. However, no matter what happens to this company, our growers have a future in the industry. They could sign another contract tomorrow if they wanted.
SF: Smithfield Foods is owned by a Chinese company. Does that concern you?
BP: Not really. I’d rather they were not, but all your major corporations are publicly owned and you don’t know who owns all that stock. Big operations are worth lots of money, and you shouldn’t limit who can buy them. That’s not fair to the company that wants to sell out. I don’t think you should limit who people can sell their business to. If you do that, you cap what businesses are worth.
SF: What is the future for farmers?
BP: Farmers have a great future. There is always a future for farmers, because people need their goods. The problem is with the young guy who wants to come in the farming business. How can you afford to do that? You need a niche. You have niche marketers growing hogs in the dirt, organic, ABF [antibiotic-free]. There are many markets available if you are willing to take the risk. Back in the 1980s, the niche around here was contract hog farming and the reason was because of tobacco and row crops. Farmers wanted to diversify and find ways for a more steady cash flow. It wasn’t any problem at all getting people to build hog or turkey buildings for us.
That’s one of the nice things about our industry. The people we deal with are farmers. As far as honesty and hard work go, there’s not a better group of people in the world than farmers. They are very opinionated, but they are smart, hardworking, good people. I’ve been very blessed to work with them all these years.
SF: What is the transition plan for the next generation of Prestage Farms?
BP: I don’t own very much of this business anymore. The three boys – Ron, Scott, and John – own the operations in Iowa, South Carolina, and Mississippi. I have two grandchildren in the business already, with more to come. I have the best of both worlds. I work when I want to. I go to meetings when I want to. The boys are very much the ones who run this business. But make no mistake: Miss Marsha is involved, too. She is not as high on the packing plant as the rest of us are. She thinks it’s a lot of money to spend, but we’ll show her.
SF: Tell me about your wife, Marsha.
BP: She’s always been involved in the business. She handled our benefit programs, the 401k, and she was instrumental in hiring employees in the office when we started out. When I go to Iowa, she goes with me. She’s very much involved in what’s going on in agriculture. Not every wife would have packed up her three babies and moved from her home state, but she did. She’s always been a great listening board for me, and much of this business’s success is due to Marsha. It’s been a great experience for both of us.
SF: What else do you have planned?
BP: Well, you never know. I’m looking right now at the broiler chicken business in Mississippi. We’ve got a feed mill there. We’ve got all the infrastructure. I think that’d be an excellent place to put in a chicken operation. You are either building and going ahead or you’re standing still and sinking. I think you’ve got to keep on going. That, to me, is the fun part of business. I enjoy that.