Farm Horizons, May 2003
'Companion' animal feed is helping farmers to turn profit at Munson's
By Lynda Jensen
The future of feed includes "companion" animals such as horses and the like, Dave Pruess of Munson Lakes Nutrition told members of the Associated Milk Producers Inc. (AMPI) in March.
Pruess spoke to a group of about 60 farmers in Glencoe during AMPI's annual meeting.
AMPI owns 10 percent of Munson Lakes. The rest of Munson is owned by a consortium of four cooperatives: Centra Sota, Lake Region, Glencoe Butter and Produce and Land O'Lakes.
Breaking out of a skid
Munson's expenses right now are down, and the sales are surprisingly up, Pruess said, saying that the past year was brutal but that decisions were made to keep Munson's viable, better, and flexible.
Events that made 2002 so tough were the layoff of six employees, not accepting grain any longer at Howard Lake in July, and the closing of the grain facility in Cokato December, since Munson's decided not to renew its lease there, he said.
The reason for the closings was that it was costing too much to source grain, Pruess said.
"To run a profitable elevator you must create 1 million bushels of volume for every employee," Pruess said. It requires at least two people to keep an elevator running, and the elevators were not generating this kind of volume, he said.
"The elevators were high maintenance, low volume, antiquated facilities," he said. "The decision was fairly obvious, but very public and very emotional."
The cuts, although painful, brought about the desired effect, he said.
With the cuts made, the future looks bright, he said.
Munson's picked up 13 significant feed accounts in February and March is starting out well, he said.
Looking toward the future, Pruess said "The speed of change is breathtaking, and nothing is for sure."
However, Munson's expects to turn a profit in 2003, is figuring how to do business with its remaining feed customers, . . . and making money with companion animal food in addition to its core feed business, he said.
Companion animals are horses, sheep, dogs, ducks, rabbits, chickens, pheasants, and the like.
"It doesn't sound like much selling bags of dog food," Pruess said.
However, the return on this kind of feed is different and greater than the traditional feed, and unlike dairy, the numbers of companion pet owners is growing.
In fact, this kind of product may be the difference between a profit and loss, he said.
For this reason, Munson's is interested in being the supplier of choice for hobby farmers, 4-Hers, and companion pet owners, he said.
There are nine million dairy cows in the United States and seven million horses, he said.
Minnesota is home to the largest horse population in the nation, with most horse owners being around the Twin Cities area, Pruess said.
For this reason, the Howard Lake Country Store was phenomenally successful, Pruess said.
Companion feed is sold in Howard Lake and Buffalo at the Country Stores, which are owned by Munson's, Lake Region opened a Country Store in Maple Lake, and AMPI in Glencoe has taken on a Country Store flavor at its office.