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Canadian Bounty

November 2, 2010
By: Jeanne Bernick, Top Producer Editor
 
 

Roger Kleweno flips his suspenders and breaks into a grin when a white SUV with the Canadian license plate “HUDYE” pulls up in front of his insurance office in Burlington, Colo. One of his favorite landowners, Ben Hudye, has just rolled into town. Hudye makes the 1,100-mile trip from Norquay, Saskatchewan, at least three times a year to discuss crop insurance decisions and to visit tenants who crop-share the 16,000 acres his family owns in Colorado and Kansas. 

“The Hudyes are good people,” Kleweno says. His Colorado Federal Agency, Inc., office serves as a coffee stop for local farmers and as an adopted home base for Ben and his brother, Greg. “It’s nice to see them go out of their way to personally know growers and farm suppliers in the U.S., even down to the local equipment store staff,” Kleweno adds.

There is a personal touch in everything the Hudyes say and do. From the moment you meet theTP 022 T10176 brothers and their family (four children are involved in the business), you get the sense that they are genuinely happy to know you. The Hudyes make on-farm visits with their tenants a requirement and spend thousands of dollars to put on educational field days in Canada for clients of their soil services company. Hudye Farms may be spread across tens of thousands of acres in two countries, but the Hudyes maintain a tie to nearly every acre.

Ben and Greg’s father, Paul Hudye, now in his late 80s, began Hudye Farms in small-town Saskatchewan in 1946, growing mostly wheat and canola and later producing livestock, including bison and elk. In the 1980s, the family started Hudye Soil Services, a full-service farm supply company, which today includes three retail fertilizer chemical plants. Meanwhile, they began eyeing land in the U.S., starting with a few sections of ground in eastern Colorado.

“We learned early on from our father that relationships matter,” says Ben, who is president and general manager of Hudye Farms Inc. “It is our philosophy that no one works for us, they work with us.”

Hudye family business pursuits now include grain farming in Canada and the U.S., wind energy projects, oil and gas development and real estate investments, and the family owns 95% of the 32,000 acres it farms. You don’t garner that kind of asset base without a keen sense of relationship building. 

Growth in Tough Times. Amassing the impressive amount of acres the Hudyes farm has not been simple.

In fact, the Hudyes were forced to reinvent their business several times.

The family went through a period in the 1980s when they struggled to juggle farming land in the U.S. and Canada while starting up their soil services company. The economy was tough on both their farming operation and the operations of their producer customers. Accounts receivables ballooned.

By the mid-1990s, the Hudye Group of Companies was financially on its knees and survival was uncertain. “We paid some mortgages at 20% interest and struggled through,” Ben says.

About that time, opportunities for expansion ripened in the U.S. The Hudyes realized they could not continue to manage and do all the physical labor themselves. “Our farm reached a level of complexity where in order to grow, we had to change our business model,” Ben says.

A blip in the wheat market gave the Hudyes an opportunity to sell off all the property they had originally acquired and completely restructure their business. That’s when they developed a plan to buy farmland but not farm it themselves. Masters of networking, they began contacting the best local farmers and established cash/crop-share arrangements.

“We networked with young, aggressive growers who had a need for additional cropland and were willing to share part of their success in crop production with us,” Greg says. “This has worked effectively and allowed us to generate the degree of cash flow required to fund expansion.”

The Hudyes also severed ties with their longtime bank, which didn’t understand or support their business objectives. It was a tough decision, Ben says, but part of being good at relationships is knowing when it’s time to end a business arrangement—especially when your partner is not listening or valuing your interests.

“The decision to change banks was the difference between night and day for our business,” Ben says. “Once we tapped into an institution that supported us, it completely changed our financial future.”

Family and Growth. As a result, Hudye Farms U.S. has grown its assets more than 2,700% in the
past nine years. “We have diligently chosen assets that have potential for capital appreciation while at the same time having the ability to cash-flow themselves,” Ben says. “I’ve always known that if we could maximize productivity, be as efficient as possible and manage resources properly, chances are we’d be allowed to stay in the game.”

One of the main objectives of the Hudye brothers has been to build a financial pie big enough to provide an opportunity for each and every family member to be involved in a business that is all about family but is run with business goals and objectives in mind. The majority of the Hudye children work for at least one of the business units. Last month, the Hudyes brought on four of their children as full partners.

“There is nothing more gratifying than to sit in a boardroom with my children, my brother, his son, my father and our employees and share knowledge to move our business forward,” Ben says.
During peak harvest season, the Hudyes employ up to 60 people. Several employees have worked for the family for more than 25 years, with many seasonal employees returning year after year. The family holds countless employee functions.

Beyond their family and farmer tenants, the Hudyes consider the most valuable players in their business to be their banker, accountant and lawyer. “Not only are they business associates, they’re friends,” Ben says.

Agricultural accounting and financial consulting firm Kennedy and Coe has been working with the
family since the early 1990s.

“We have observed the Hudye family over the years in their decision-making process as they consider different investments. They gather a group of advisers on which they rely, but they also are hands-on in the evaluation,” says Jill Eberhart, Agribusiness Group leader for Kennedy and Coe.

“Whether it is preparing cash-flow projections on new investments, traveling to personally view a piece of property, managing the crop insurance sign-up or negotiating with vendors, they are personally involved,” Eberhart says.

The Hudyes spend a lot of time defining their objectives, sitting down once a year with their internal management team and writing out short-term, medium-term and even long-term objectives.

“If you have a problem with a direction we are taking, this is the opportunity to voice concerns,” Ben says. “Beyond that, for the next year, we are working off the same page.”

Every morning at 7 a.m. during peak season, the leadership team gathers for a 30- to 45-minute meeting where they plan the day’s events and work through any potential challenges. “We go around the table and tell what we are working on and discuss if we can help each other
with the chores,” Greg says.

Both Ben and Greg’s children expressed interest in investing in commercial real estate. The third
generation collectively formed an entity called Capital Seven Corp., which currently owns and manages a commercial real estate portfolio.

“We want them to be passionate about a faction of the family business that fits their personal career goals, even if this means venturing into new areas of business,” Ben adds.

Land Purchased Openly. Back in Burlington, Colo., as Kleweno and Ben Hudye work through reams of paper related to crop insurance decisions for 2011, one of Hudye’s tenants, David Hertneky, walks in.

“I always make time to see Ben and Greg,” Hertneky says. “They are our business partners, but they are also friends. For guys like me who farm their land, they’ve helped bring us up to another level in terms of crop farming and management. They share their knowledge, consultants and farming practices from Canada.

They purchase land at auction so that everyone has a chance.”

Hudye greets Hertneky with a handshake and asks if he is coming to Canada anytime soon for fishing. The Hudyes are already planning their local employee fishing trip, where they provide the transportation, lodging and fishing gear.

On the two evenings of the trip, the brothers will even take turns cooking dinner for the crew—another personal touch. “Greg cooks the fish and I take care of the steak,” Ben says.


Hudye Farms Highlights

Family: Ben and Greg Hudye are the second generation of their family to farm in Norquay, Saskatchewan. Their father and farm founder, Paul, still advises at age 87. Ben and his wife, Carol, have four children, three of whom are actively involved in the farm business: Braden is vice president and sales manager of Hudye Soil Services (HSS); Fallon is customer relations team leader with HSS; and James is director at HSS and Hudye Farms and operations manager of the Kamsack plant. Greg and his wife, Lori, have three children. Their son, Nathan, is vice president and operations manager of Hudye Farms. Their two daughters, Jana and Amanda, are involved in Hudye Enterprises related to real estate investments, along with Ben’s youngest daughter, Jennifer. All seven of Ben and Greg’s children are partners in a commercial real estate investment company called Capital Seven Corp.

Business Structure: A multi-entity operation, the Hudyes’ business structure includes Hudye Farms, based in Norquay, Saskatchewan, where they grow wheat and canola; Hudye Farms U.S., with farms in Colorado and Kansas that produce corn and wheat on a cash/crop-share arrangement; Hudye Soil Services, a full-service retail farm supply company based in Canada; and Hudye Inc., a real estate business and holding company. The family owns more than 32,000 acres in the U.S. and Canada. Recently, the Hudyes began developing wind energy and oil and natural gas businesses.

Hunger Donations: Ten years ago, the Hudye family decided to combine its career purpose of producing quality food with the goal of supporting young people in leadership and faith-based activities. The family now donates the meat requirements for five summer church camps within a 60-mile radius of their home in Saskatchewan. In 2009, they took their community service to the next level by organizing the “Helping Feed the World” initiative to showcase to local media how farmers are committed to feeding the world. Using their retail service business, the Hudyes asked local farmers to donate proceeds of 10 acres of crop for humanitarian purposes. In 2009, the money went to Kernels of Hope, a religious organization that works with the government of Canada, which agreed to match funds for every dollar raised by $4. The Hudyes helped raise $116,000 for the campaign.

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FEATURED IN: Top Producer - November 2010

 
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