Animal Health International’s Steve Cunningham discusses trends and opportunities in the livestock industry
As the livestock industry changes, producer customers are growing larger and across multiple sites. Technology is helping them keep pace – but that doesn’t change the need for tried-and true relationship building with their partners. To get some perspective, Vet-Advantage talked to Steve Cunningham, Animal Health International, Inc., President – Production Animal Division.
Vet-Advantage: What are the major trends you see in the livestock industry on the producer side?
Steve Cunningham: Consolidation – large customers becoming larger. As that trend continues, we’re of course seeing more central ownership of multi-site operations. Another active trend is the continuing increased focus and attention on precision feeding and precision animal management, as opposed to group or whole herd management.
Vet-Advantage: How has the industry adopted new technologies?
Cunningham: As production operations have become larger, the owners and managers have certainly become more technology savvy, for a number of reasons. Owners have always actively looked for ways to reduce input costs, maximize operation efficiency and maximize profits – and most are quite good at it. Today’s technology helps them do that even better, whether it be animal management systems, feed management systems, making genetics-based breeding and culling decisions.
At first, it appeared the livestock industry was a bit behind other industries in moving to adopt new technologies and improvements in existing technologies and tools. That’s not true of today’s producers – they realize very quickly the benefit of integrating tools into their operations which better identify and report inputs and outcomes on an animal, pen, or even herd, basis. The old adage remains true – you can’t manage what you don’t measure.
Vet-Advantage: What are the main challenges in serving livestock customers?
Cunningham: In contrast to many other industries, including even the small animal veterinary markets, livestock production is not homogenous business. Aside from the obvious differences among species, there’s significant differences in the way, say, dairies in Tulare or Dinuba operate versus how dairies in Wausau or Eau Claire operate.
The basics are the same – animal health and welfare commitments, disease states encountered, etc., but operation practices differ greatly depending on geographies, weather, resources availability. Best practices are developed over years and generations suited to specific operations. It’s a challenge, at times, but it gives a company like Animal Health International the opportunity to introduce customers to precision solutions – solutions that fit the needs of their specific region, specific operation and specific needs.
Vet-Advantage: What are the issues the marketplace has to address?
Cunningham: The industry has done a fairly good job of sharing “the story” of agriculture in general and livestock production in particular. There’s plenty of misinformation and misperceptions out there, and for a long time it seemed those were the only voices being heard.
Today, we’re doing a much better job of sharing “our” story – the U.S. agriculture industry feeds the world and is continually adjusting and improving practices that benefit and support not only local communities, but improve the health and nutrition of consumers worldwide.
Vet-Advantage: Where do you see the areas of growth in the livestock industry?
Cunningham: In a few areas. Certainly, on the whole, export markets have been driving overall industry growth, and I expect that to continue.
The world looks to the United States ag industry for nutritious, high-quality protein and dairy products. There’s always cyclical pressures on particular segments and geographies, but the industry has gotten better at planning for those cycles, and, overall, we’re well positioned to meet global needs. Continuing to be the worldwide leader in producing high-quality, affordable and sustainable protein drives our industry’s growth.
Meeting growing biosecurity needs, which includes facility and operation sanitation and pest management, is an area of growth and continued focus for Animal Health. Technology, again, is a growth area as producers look for more ways to be effective and efficient at managing their operations.
Vet-Advantage: Are there any new product segments that are making a difference in overall sales and margins?
Cunningham: Certainly pre and probiotics are an area of growth now, across all species, and not only because of the new VFD requirements. The science and technology advances every day, as does our customers’understanding and acceptance of these products.
Vaccines continue to be an area of growth, as producers and veterinarians rely more heavily on disease-prevention as opposed to disease treatment. Immuno-enhancing agents is an emerging category and solution, and we expect great developments in this and other bio-pharmaceutical agents to drive growth over the next few years.
Vet-Advantage: What types of products or services are you adding to help address the changing livestock industry?
Cunningham: Animal Health International has always looked for products, practices and tools which provide solutions to our customers. We work with over 1,500 manufacturers – a lot to manage, yes, but our close relationships give us an opportunity to be on the forefront of new products and new technologies that provide those needed solutions. We also listen – closely – to our customers. That’s really what keeps us on the forefront of providing innovative and effective solutions.
Vet-Advantage: How is your company integrating technology in your day-to-day business? Cunningham: As it applies to how we run our business, we’re driving forward with a number of initiatives that will improve our efficiencies and allow us to better serve our customers.
As you know, Animal Health International was acquired by Patterson Companies in 2015. To best integrate the businesses, we’re improving and modernizing our enterprise management software and practices companies-wide. At a distribution-center level, we’re modernizing there too, adopting various RFID and bar-code technologies that will allow us to serve our customers better, and make it easier for our sales representative, and the whole organization to focus on what we do best – identifying customer needs and providing solutions.
Vet-Advantage: What are your company’s plans for the future?
Cunningham: We continue to strive to be the ‘partner of choice’ for our manufacturing-partners. Treating them fairly, and with integrity, deep engagements and openness allows us to work closely on our number one shared goal: serving our mutual customer. While not new for Animal Health International, that will continue to be a very important focus for us into the future.
Vet-Advantage: As you look ahead, what are the trends in veterinary products distribution that will most affect your company?
Cunningham: Our customers demand not just “the right product, delivered from A to B, at a fair price,” but more – they want a partner who will listen, provide educated and informed consultations and advise, and ultimately provide solutions to the challenges they face. That’s true across every segment, every species, and every channel. The successful distributor is the one that meets these needs.
Vet-Advantage: How do you hope to strengthen your company in the years ahead?
Cunningham: We’re making significant capital investments in our systems and infrastructures to be well-prepared for an exciting future. We’re investing time, energy and resources into assuring we have strong partnerships with our suppliers to meet our mutual goals of providing industry leading solutions and services to our customers. And, importantly, we invest in our greatest assets – our employees.