Fast Growing Family Feed Yard Becomes National Industry Leader in Just Ten Years

Location, Location - Great Bend Feeding, located a few miles northwest of Great Bend, is one of 8 locations that are owned and operated by Innovative Livestock Services. What started as a family venture has, through a series of mergers and acquisitions, become the 15th largest cattle feeding company in the entire nation. “A lot of people don’t realize the scope of our operation,” says COO Andrew Murphy. “We have over 200 employees spread over several states, and we’re based right here in Great Bend.”

Most Great Bend residents probably know what is at the intersection of Broadway and Main – financial institutions, doctors’ offices and the northwest corner of the courthouse square. What they may have overlooked, however, is the headquarters for the 15th largest cattle-feeding company in the United States. It is called Innovative Livestock Services Inc. and was started by local businessmen.

The well-appointed, visitor-friendly ILS suite of offices is located at 2006 Broadway, on the first floor of the Bank of America building. The 10 administrative employees there stand watch over a wide range of ventures that employ more than 200 of their colleagues.

“When our capacity got to 150,000 head, we became the 15th largest cattle-feeding company,” said Chief Operating Officer Andrew Murphy. “And we are based right here in Great Bend.”

This success didn’t happen overnight; instead, the solid, gradual growth that started in 1999 is the live version of the ILS mission statement. Its three main ingredients are profitability, environmental stewardship and hiring the best people in the industry, Murphy explained.

ILS Executive Staff

“You have to have profitability, because if you don’t have it you won’t continue on,” Murphy commented. “And environmental stewardship is a big issue with us. We really want to be at the front of it. We want to set an example and be representative of the industry.

“We are not perfect; no one is,” Murphy added. “But that’s what we are shooting for. And this is not just meeting basic standards. This is doing things that are above and beyond. It is even part of our employees’ compensation.”

The other mission ingredient - the best personnel - is what ties it all together, he noted.

The birth and subsequent growth of ILS illustrates how the various mission components have blended to form the national, and even international reach of the enterprise.

Feeding Frenzy - Cattle gather at one of the numerous feed basins during meal time at Great Bend Feeding. “We take the health of our animals very seriously,” ILS COO Andrew Murphy says. “Each pen of cattle is on a set diet, usually a mixture of roughage and corn that varies with the age of the cattle and their buyer.”

Murphy had been employed by Koch Industries and was based in Ulysses in 1997, when he returned to his family business, Great Bend Feeding. Since 1990, he has been a stockholder in that business, which opened in 1959.

His father, Roger Murphy, and Lee Borck, who owned Ward Feed Yard at Larned, were friends who began talking about ways to combine their separate businesses. “They were two independent entities,” Murphy said. “In 1999 we were looking at the synergies that existed between our companies. We had the same directional philosophies, business orientation and long-term goals. We looked at how to get to longer-term goals.

“So in 1999, ILS was started with a single little venture,” he continued. “We had a good grain buyer at Great Bend Feeding and Ward Feed Yard had a good risk-management professional. We started crossing over duties and seeing how we could work together.”

A feed-yard purchase in St. Francis was a result of the conversation. That was the first acquisition but Great Bend Feeding and Ward Feed Yard were still two separate entities. The St. Francis location was sold in 2003, the same year McClymont Feed Yard in Holdrege, Ne., was purchased.

Pens-A-Plenty - At Great Bend Feeding, the local feed yard for Innovative Livestock Services, there are over 25,000 head of cattle at any one time. Each pen at Great Bend Feeding is assigned a unique identifier and a GPS tracker. This technology allows the feed crew to ensure that each pen of cattle is being fed, but that they aren’t fed too much.

“Then in 2005 we had a strategic-planning session,” Murphy recalled. “We talked about a true merger under one management structure. The full merger began and we became Innovative Livestock Services Inc. on Jan. 1, 2006. The official entity to oversee all facilities was created.

 “We added capacity, and had good leadership and strong capabilities,” Murphy noted. “During our strategic-planning session, we decided we were a fairly sizeable company and we needed to act like it.”

Today, in addition to Great Bend Feeding, Ward and McClymont, ILS owns and operates Thomas County Feeders at Colby; Dillwyn Feed Yard at Dillwyn; Windmill Feeders at Elba, Ne.; Lewis Feedlot at Kearney, Ne.; and Roberts Cattle Co. at Lexington, Ne.

The core executive staff includes Murphy, as well as Lee Borck as chief executive officer, Jon Skelton as chief financial officer and Cheryl Rapp as administrative office manager.

In most cases, a feeding business either makes it or breaks it on its own. The consolidation of several enterprises makes ILS unique in the industry.

Murky Maintenance - At many companies, maintenance employees are responsible for vacuuming and taking out the garbage. At Innovative Livestock Services, however, the ‘garbage’ is a lot bigger responsibility. Of the four main types of employees, maintenance is one of the most consistent jobs. “It doesn’t matter what the weather is like or whether our office is open, the cattle will still be getting rid of their waste,” Andrew Murphy says. “Maintenance is a full-time job for several employees at each yard.”

“To take two really separate businesses, operate them separately, then consolidate, we don’t know of anyone that has done this in the livestock sector,” Murphy commented. “We are unique. But again, this stems from our common philosophies. We had different starting places, but one mindset.”

The 800,000 U.S. cattle producers are where the whole thing starts in the feeding business.

“The producers start at the mama-cow level and then take the calves to the sale barn, which is the marketplace for livestock,” Murphy explained. “This happens when they reach a target weight at about a year old.

“A feed yard is designed strategically to finish for harvest,” Murphy continued. “Then we negotiate with packing companies.”

The four main ILS customers are Tyson, Cargill, JBS and National Beef. ILS also is a custom feed yard that caters to individual customers. Depending on the time of year, ILS owns 25 to 40 percent of the cattle under its care.

All that being said, cattle are not the only ILS product available to its customers. It also provides financing, marketing, risk management and access to specialized national programs.

Mind the Mill - At Great Bend Feeding, all of the products being fed to the cattle are produced on site at the operation’s own mill. Each site has their own mill where the corn and roughage mixtures are created using a computerized batching system to ensure the best quality and accuracy.

“We have a different mix of clientele,” Murphy noted. “We view everything as customer driven. All feed yards are the same as far as running feed trucks and feeding cattle.

“But what separates one feed yard from another is the extremely high level of skilled people,” he elaborated. “Our job is to make the customer successful.”

ILS cattle are fed a primarily corn diet, including cracked, steam-flaked and high-moisture corn; distillers’ grains, alfalfa and soy-based protein supplements round out the menu. The company’s steers grow to about 1,250 pounds and heifers to about 1,100.

“We consider ourselves an agriculture company,” Murphy pointed out. “Our philosophy is directed not only at feed-yard capacity but also the service industry, companies that service ag.”

This is why ILS also owns Agri-Fuels Co., Alfalfa Pellets and GK Environmental Services. Mohrlang Manufacturing Inc., Brush, Co., is the most recent acquisition. It manufactures cattle feedboxes, manure spreaders and trailers.

“MMI is a unique company regarding technology applications, and environmental and feeding compliance,” Murphy said. “They are linking GPS with spreader boxes to apply more accurately.”

Storage Solutions - Pictured are several of the grain storage bins at what was formerly known as Turner Farms, located a few miles West of Great Bend on Kansas Highway 56. Innovative Livestock Services purchased the storage location several years ago when their operations were expanding beyond their capacity. “We use the Turner Farms location for grain and equipment storage,” COO Andrew Murphy says. “We’ve had that property for a few years now, and rely heavily on it now.”

ILS Farms, another entity, encompasses 20,000 acres in Barton, Stafford and Pawnee counties, and another 2,000 acres in Nebraska. In addition, ILS has some direct management over Stella and Chewy’s, a natural dog food business in Milwaukee, and will be investing in an operation in China that is similar to cattle feeding but more retail oriented.

As the company continues its growth pattern, its leaders are always aware of the cyclical nature of the business.

“It has been an extremely difficult three-year period in the livestock industry, with variable grain prices and high-volatility markets,” he noted. “We have had tremendous challenges. But we have nothing to complain about. Everyone has tremendous challenges.

“We have done a pretty good job of managing our risk,” the COO continued. “We have personnel in the right place and are maintaining focus on what we are trying to accomplish here.”