Operating a family-owned business in an industry that is increasingly dominated by large corporate feed millers, Famo Feeds of Freeport, Minnesota, U.S., has carved out its niche by being an efficient, dependable and responsive provider of feed products to customers in a six-state area in the upper Midwest.
In its 116th year of operation, including the last 40 years under the ownership of the Beste family, Famo Feeds was recognized during the International Production and Processing Expo last winter as the winner of the 2018 American Feed Industry Association/Feedstuffs Feed Facility of the Year award. The award recognizes overall excellence in feed manufacturing operations, including everything from employee development to operating efficiencies to regulatory compliance.
“Famo Feeds is a family-owned business — the first ever to win this award — and I think that shows in how they treat their customers,” said Gary Huddleston, director of feed manufacturing and regulatory affairs for the AFIA, when presenting the award.
In an interview with World Grain at the company’s plant in Freeport, John Beste, president of Famo Feeds, said the recognition is largely due to his employees.
“Good people — it just comes down to that,” he said. “It’s a core group of people that make this award possible.”
The company’s workforce features a nice blend of experienced workers — Beste said the average tenure is around 12 to 15 years — and new employees with fresh ideas. The staff includes employees in six different areas: 15 in production, 10 in sales, 5 clerical workers, 5 supervisors, 5 truck drivers and 3 in technical support.
Collectively, they have helped Famo Feeds gain a reputation for quality products and service not only in Minnesota, but the five surrounding states they serve: Wisconsin, Iowa, South Dakota, North Dakota and Montana.
“We’re always looking to expand, but that has been our consistent area for the last 10 years or so,” Beste said. “I’d say we’re doing the same amount of business we’ve always done with fewer customers. We’re also a dealer-driven company; 95% of all of our sales go through distribution.”
Famo Feeds, which was formed in 1903, began as a flour and feed milling company. Eventually the flour milling part of the business was shut down and the focus shifted strictly to feed. It was owned by the Thelen family until 1979, when Al Beste, John’s father, who had worked for many years for Famo Feeds, bought the business. His sons, John and Tom, who is vice-president, have worked for the company for many years.
Until a recent illness, Al, 87, came to the office every day, even after he had officially retired.
One of the things the Beste brothers learned from their father was that establishing a trusting relationship with customers was paramount.
“We try our very hardest to take care of our customers,” Beste said. “It starts with communication. That means once they’ve placed an order, making sure it’s correct and making sure it gets there when they want it and how they want it. And if there’s a problem, making sure there’s immediate communication.
“If we’re short something, we call them as we’re loading instead of back ordering it. We ask them how soon they need it? Do they need us to direct ship it when its ready, or can they wait until the next order? Just the little things like that can make a big difference.”
He said being nimble and flexible is one of the advantages that Famo Feeds enjoys compared to its larger corporate competitors.
“If we have a standard operating procedure that doesn’t work, we can go out into the plant, watch it and say, ‘Yeah, it doesn’t work. Let’s change it then,’” Beste said. “Tomorrow it’s changed, and we can watch it again and if it’s still not working, we can change it again until we find something that works. It doesn’t take six months to make a decision and go through a long chain of command.”
That lack of “red tape” is particularly beneficial when it comes to customer service, said Kurt Marthaler, plant manager.
“If a customer calls in and wants a custom feed and they want it today, we can tell them OK, we can get it to you,” he said. “If you’re in a larger company, it wouldn’t just happen overnight.”
Famo Feeds used to have two feed mills — one located in St. Joseph, Minnesota, and the other in Belgrade, Minnesota. But when lightning struck the Belgrade plant in 2002, burning it to the ground, the Bestes decided to move all their production under one roof by building on a greenfield site near Freeport.
The feed mill, which is located about 90 miles northwest of Minneapolis, Minnesota, on Interstate 94, is a highly automated, state-of-the-art facility. It has undergone a number of improvements and upgrades since it was built in 2004, including a pellet mill rebuild, a mixer rebuild, a boiler upgrade and the installation of the Repete FLX automation system in March 2018. Beste said the new automation system has allowed Famo Feeds to increase its production efficiency in the facility, which operates from 5 a.m. to 2:30 a.m. Monday through Friday with three shifts each day, but the company did not reduce staff.
“It frees up our employees to do other things,” Beste said. “And we were probably a little short-staffed before anyway because it seems everybody today needs a different ingredient. You go from 10 hand adds per batch to 15 hand adds and there goes all your labor savings.”
The mill has a 50-ton per day production capacity for some of its feed products, which are made for a wide variety of species, including dairy and beef cattle, horses, sheep, goats, swine, rabbits, elk and deer.
“With just about any request we get, we can make it,” Beste said.
The company produces complete feeds, starter feeds, supplements, concentrates, vitamins, minerals, pre-mixes, base mixes, milk replacers, pet foods as well as specialty and custom feeds that are tailored to the customer’s specific requests.
About 40% of the product is bagged and 60% is moved in bulk shipments. Since there is no rail line running near the facility, all of Famo Feeds’ finished product leaving the facility as well as the raw materials coming into the facility are moved by truck. Beste said most of the grains and oilseeds used as raw materials for the company’s feed production come from the upper Midwest.
Although the feed mill itself has not been expanded, the company added 200 feet to its warehouse space several years ago to enable more feed storage.
A benefit for Famo Feeds employees is a quarterly tonnage bonus in which for every ton of feed produced, employees receive a bonus.
Quality and safety focused
Product quality and safety always have been emphasized at the Famo Feeds facility, which is certified for hazard analysis and critical control points (HACCP), Safe Feed/Safe Food and Facility Certified Institute-Restricted Use Protein Products.
Being proactive in these quality control and safety areas made for a relatively smooth transition when it came time to implement the Food Safety Modernization Act (FSMA).
“In 2012 we got HACCP certified, which was about the same time that they first started talking about FSMA,” said Rosie Cabral, a member of the food safety team at Famo Feeds. “We had something to start with, so it wasn’t a blank slate trying to figure out how to do hazard analysis. But it still took a long time to put it all together.”
Beste said keeping up with all the new safety standards is one of the biggest challenges facing small feed companies.
“We stay ahead of everything, but there’s an impact because it adds cost and it is time consuming,” Beste said. “There are always new policies and procedures to deal with, and that doesn’t stop.”
In fact, the regulatory environment is changing so rapidly that it’s hard to identify what the biggest challenges facing the company will be in the years to come, he said.
“The industry moves fast,” he said. “Politics plays such a big role in every business, and that’s definitely the case in our industry.”
As the names and faces leading the company have changed over the years, the daily mission always remains the same.
“Every day, we build upon Famo Feeds’ commitment to create quality nutritional solutions for livestock and poultry,” John Beste said.