jeff rusch, glenn stolt - evolution and change: preparing for tomorrow

Evolution and Change – Preparing for Tomorrow

2015 Allen D. Leman Swine Conference

September 22, 2015

One of the largest integrated pork producers in the United States

Presence across nine states (Minnesota, Iowa, Illinois, Nebraska, Colorado, South Dakota, Missouri, Utah, and Montana )

Employs approximately 1,200 people and holds over 1,500 contract relationships (live production)

Manages 175,000 sows on 54 sow farms (company-owned) and over 450 nurseries and grow finish sites (both company-owned and contracted)

Operates 5 company-owned feed mills located in Minnesota, Iowa, Nebraska, and South Dakota

Markets approximately 4 million hogs per year through Triumph Foods and other key packer/partner relationships

The largest stakeholder of Triumph Foods located in St. Joseph, Missouri

Through Triumph Foods, Triumph members own 50 percent of Daily’s Premium Meats

Triumph Foods and Seaboard Foods partners to launch new harvesting plant in Sioux City, Iowa

About Christensen Farms

3Respect ⦁ Integrity ⦁ Excellence ⦁ Adaptability ⦁ Innovation

U.S. Sow Base – 1994 to 2014

4

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CAGR

Ch

ristensen

Farm

sS

ow

Bas

e an

d T

op

25

Pork Powerhouse # of SowsTop 25 Total Sow Base Christensen Farms

514.84%

61.15%

55.63%

Source of data: Pork Powerhouse Ranking

2014 U.S. Pork Powerhouses

5

A Timeline of Significant Events and Decisions

Leading Through Major Inflection Points

6

2010

Bob Christensen

Pursues Talent

Acquisition

2011

2012

Christensen Farms

Recovers from ‘08/’09

Bob Christensen

Suddenly Passes Away

2013

Strategic Investment Plan – More Than $100

Million Plan

2013

2014

2014

2014

PEDv Hits Christensen

Farms

Christensen Farms

Acquires Exetare

Partnership

Christensen Farms Sets

Future Strategic Direction

Christensen Farms

Launches Organizational and Individual Development

Process

2014


New Performance

Goals

2014

Triumph Foods

Acquires 50 Percent of Daily’s Premium

Meats

2015

Triumph Foods and Seaboard

Foods Announce New Sioux City Plant

2015

Christensen Farms

Responds to Animal Welfare

Situation



7

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

2010 – Bob Pursues Talent Acquisition

8



9

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

2011 – CF Recovers From ‘08/’09

10

• Sow Expansion• Foreign Animal Disease• Export Market Availability• Labor Availability

“I think we’re in good enough shape to start making the same mistakes again.”



11

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

November 3, 2012 – Passing of Bob

12

Bob Christensen1961 - 2012

Recognized as an Industry Leader



13

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

2013 – CF Launches Investment Plan

14



15

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

PEDv Hits Christensen Farms

16



17

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

January, 2014 – CF Acquires Exetare

18



19

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

1. Review and Recommit to CF’s Mission, Values and Focus on People

2. Launch an Organizational and Individual Talent and Leadership Development Program

3. Strengthen the Foundation - Best in Cost –Top 10% in Agri-stats and Other Available Benchmarks

4. Enhance Liquidity Position to Manage / Weather Business Volatility

5. Seek Strategic Growth Opportunities within the Core Business or within Ancillary Verticals

6. Capture the Full Value of an Integrated Model

March 24, 2014 – Strategic Priorities

20

Two Tracks of a Successful Business

The goal is to maximize speed, decrease friction, minimize resource requirements, and expand the

capacity of the organization

Strategy & Business TrackLeadership & Team Track

21

Our Mission

22

The Christensen Farms team is committed

to and takes pride in being an industry leader

in responsibly producing quality pork

for the noble purpose of providing

food to a growing world.

23

Respect We honor the contributions and accomplishments of others and

embrace the diversity of individuals.

Integrity We will do what is right every day, even when no one is looking.

Excellence We continuously strive to be the best in the industry.

Adaptable We anticipate, pursue, and embrace change for the benefit of the organization.

Innovative We continuously seek and communicate new ideas that drive

improvements in the business, regardless of position.

Our Values

Our People

24



25

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

High Performing Organizations

26

High Performing Organizations Starts with People and How They Work in Teams

High Performing Organizations

Collaborative and Productive Teams

Talented Individuals and Leaders

People Strategies: Integrated Approach

Alignment is achieved throughout the organization by

establishing a leadership competency model that

articulates a common set of leadership norms and

expectations.

Three people strategies are leveraged to communicate expectations, assess gaps, and prepare leaders and

team members for success.

27

Examining Performance and Potential

28

• Partnered with 2 Ph.D. Industrial Psychologists and 1 Professional Individual and Team Coach

• Leaders Underwent a Comprehensive Assessment Process Testing Cognitive, Social and Leadership Qualities Using the Following:

₋ Hogan Personality Inventory and Development Survey

₋ California Psychological Inventory

₋ Occupational Personality Questionaire

₋ In-Basket Simulation

₋ Two Cognitive Numeric and Verbal Testing Exercises

₋ Interview with Industrial Psychologists

• Individual Development Plans and Alignment Meetings

• Team Assessments, Exercises and Coaching

Individual and Team Assessment

29

Performance and Potential Development

30

• What are the natural strengths of our leadership?

• How do we communicate?

• How do we make decisions?

• How do we manage change?

• How do we manage conflict?

• How can we work together and more fully engage the organization?

31

How Do We Lead The Organization?



32

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

CF Production at a Glance

33

3.00

4.00

5.00

6.00

7.00

8.00

9.00

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Wean to Market

Mortality %6.12 7.01 7.32 7.39 8.75 8.04

Wean to Market Mortality %

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Feed Cost $/Lb of Gain $0.27 $0.38 $0.39 $0.41 $0.33 $0.28

Feed Cost $/Lb of Gain

26.50

27.00

27.50

28.00

28.50

29.00

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Pigs/MatedSow/Yr 28.19 28.18 28.32 28.52 27.19 28.39

Pigs/MatedSow/Yr

4,500

5,000

5,500

6,000

6,500

7,000

7,500

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Lbs. Mated Sow/Yr 6,793 6,593 6,344 6,403 7,020 6,672

Avg. Weight 276.41 275.48 272.31 268.53 279.11 274.78

Lbs/Mated Sow/Yr

Comprehensive Business Accountability• Employee and Animal Safety

• Animal Wellbeing/Compliance

• Human Resource Management

• Turnover and Retention

• Environmental Monitoring

• Asset Management

• Cost/Input Management

• Biosecurity Compliance

Empowerment & Accountability

34

Production Key Performance Indicators• Breed/Farrow Target• Total Born/Born Alive• PWM• SDL• Replacement/Removals• Farrow Rate• LSY• PSY

Jul

2011

Au

g 2

011

Sep

201

1

Oct

201

1

No

v 2

011

Dec

201

1

Jan

201

2

Feb

201

2

Mar

201

2

Ap

r 20

12

May

201

2

Jun

201

2

Jul

2012

Au

g 2

012

Sep

201

2

Oct

201

2

No

v 2

012

Dec

201

2

Jan

201

3

Feb

201

3

Mar

201

3

Ap

r 20

13

May

201

3

Jun

201

3

Jul

2013

Au

g 2

013

Sep

201

3

Oct

201

3

No

v 2

013

Dec

201

3

Jan

201

4

Feb

201

4

Mar

201

4

Ap

r 20

14

May

201

4

Jun

201

4

Jul

2014

Au

g 2

014

Sep

201

4

Oct

201

4

No

v 2

014

Dec

201

4

Jan

201

5

Feb

201

5

Mar

201

5

Ap

r 20

15

May

201

5

Dollar Cost Advantage/(Disadvantage) to the Avg. Co in Agri-Stats

(12 Month)

WP/Cwt Nursery/Cwt Gain Finish/Cwt Gain WTF/Cwt Gain Cwt $ Total

35

$0

Measuring Success and Progress

36

Equity per Sow

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Forecast

Equity per Sow



37

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

Daily’s Premium Meats

38

September, 2014



39

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

Sioux City, Iowa Plant Expansion

40

April, 2015



41

2010

2011

2012

Christensen Farms


Bob Christensen


2013


Million Plan

2013

2014

2014

2014


Farms

Christensen Farms

Acquires Exetare

Partnership



Christensen Farms


Process

2014


New Performance

Goals

2014

Triumph Foods


Meats

2015



2015

Christensen Farms


Situation

Bob Christensen

Pursues Talent

Acquisition

August, 2015

42

August, 2015

Integrated Model – Pork Value Chain

43

Bio-Security, Health & Animal Welfare Management

Nutrient Management

Further Processing and Direct Markets

Designates Christensen Farms Complete or Partial Ownership

Retail

Restaurant

Primary Processing

Packer Partners

Triumph Foods

Marketing Partner

STF

Christensen Farms

44

Our Mission

Our Values

Our People

Our Strategies

The Christensen Farms Team is committed to and takes pride in being an industry leader in responsibly producing high quality

pork for the noble purpose of providing food to a growing world.

VISION 2020

Respect

Integrity

Excellence

Adaptability

Innovation

Our People are Our Most Valuable Asset

Our Focus is to Attract and Retain Highly Motivated Talent

Our Goal is to Provide a Growth and Development Oriented Culture

Our Pursuit is to Work as a Team and Recognize the Accomplishments of Our People

Strengthen the Foundation

Organizational and Talent Development

Capture Full Value of the Integrated Model

Seek Strategic Growth and AncillaryBusiness Opportunities

Thank You&

Questions