One by one during the past three years, Allen Lash has quietly assembled a network of farmers to invest in FamilyFarms LLC. The pitch to buy into the company—and its concepts—is grounded in disciplined business practices, fueled by aggressive ambition and focused on competing in an agriculture industry that is consolidating at warp speed.
Teamed with Harold Birch and Leroy Jones, a former Kennedy & Coe LLC partner, Lash has selectively invited producers he believes have the attitude and desire for future success. A cloak of secrecy helped create the intrigue surrounding the effort. Ironically, that has also turned FamilyFarms into one of agriculture's most talked-about secrets.
It's a club of sorts that walks and talks like an invitation-only franchise system. Those who buy in on a per-acre basis receive Class A shares in the company and agree to adhere to the FamilyFarms set of standard operating procedures for members. As in many franchises—think fast food or hotels—it is all or nothing.
Why? "To help keep families on the farm," says Lash, the well-known consultant and founder of AgriSolutions in Brighton, Ill. "It's going to take a substantial investment of money, time and resources to remain an economically viable business. Not everyone is going to be willing to make the commitment to education and implementation I believe it's going to take to survive. We don't have the choice but to change our farm operations at unprecedented rates."
The promoter of business thinking points to USDA's 2007 Census of Agriculture. Lash says 5% of U.S. farmers account for 75% of all farm sales. Furthermore, 0.3%, or 5,541 farms, represent 27.9% of total sales.
That pace, says Texas A&M AgriLife economist Danny Klinefelter, is about to rev up. "As farmers drop out, existing operations will absorb those acres. The capital costs and management requirements are just too prohibitive for new farmers to come into the industry on a commercial scale. That means the bulk of production will be concentrated in fewer and fewer operations."
Management disciples. Lash maintains the goal is not to create titans of agriculture. "It is education-focused, but what's really different is we're focused on implementation," he says. "You can train people, but if you don't provide a way to implement the training, they often don't get the desired results."
Lash tags Rick Rosentreter as one of the "best students" he's worked with. A general partner in Illinois FamilyFarms (IFF), in Carlinville, Ill., Rosentreter has adopted the FamilyFarms principles lock, stock and barrel. "I believe this will ensure the legacy for family farmers. It will change agriculture," he says.
Not only is he the first investor, but Rosentreter is also listed as one of four managers (along with Lash, Birch and Jones) on the FamilyFarms LLC filing with the Illinois Secretary of State. The concept, he says, helped him think like a manager and provided a springboard for growth.
He's especially proud of then-21-year-old Matt Weyen joining the business when IFF formed. "Here is a young guy with 660 acres whose grandfather was retiring. Without this concept, he couldn't compete," Rosentreter explains.
- SPRING 2009