In an interview with World Grain, Kolkhorst, who is president of ADM Milling Co., Overland Park, Kansas, U.S., described the pride he takes in his farm roots and the unique qualities of milling that distinguish the industry within the broader agricultural sector. The interview was conducted Sept. 10 at the Salamander Resort and Spa in Middleburg, Virginia, U.S.
“I’m a farm boy from central Illinois who grew up actually growing the commodities that we mill into what becomes great tasting and nutritious food,” Kolkhorst said.
A graduate of Illinois State University with a degree in agribusiness, Kolkhorst joined Archer Daniels Midland Co. (ADM) two weeks after completing college in 1986. A grain merchandiser, he began at ADM/Growmark, a venture established a year earlier between ADM and Growmark, a regional farmer-owned cooperative based in Bloomington, Illinois, U.S.
His responsibilities included running a river terminal elevator on the Illinois River for a couple years before moving to ADM headquarters in Decatur, Illinois, U.S., and merchandising rail grain to the poultry sector in the Southeast. In the early 1990s, Kolkhorst moved to ADM’s Tabor Grain unit, heading Tabor’s country elevator division as general manager and then as a vice-president.
Kolkhorst moved away from the grain business in 1999 when he was named North American sales manager of ADM Bio Products, the global amino acid business that was part of the specialty feed sector. Kolkhorst later was promoted to vice-president and then president of the specialty business worldwide.
In 2007, Kolkhorst was named to succeed Craig A. Fischer as president of ADM Milling Co., and while he has had oversight of the business ever since, ADM has tapped him from time to time with significant further responsibilities. For instance, he returned to the company’s North American headquarters in Decatur to oversee ADM’s cocoa business.
“I still oversaw flour milling, but my ADM colleague, Kris Lutt, was president of ADM Milling at the time,” he said. “I did that from 2010 to 2012. Then we reorganized and subsequently sold our cocoa business, and Milling became a part of our Ag Services unit.”
Shortly after Kolkhorst returned to Overland Park (Lutt became president of ADM’s Golden Peanut and Tree Nuts business), he was given responsibility for ADM Alliance Nutrition, based in Quincy, Illinois. That division, a commercial feed and premix business, has plants in the United States, the Caribbean, Canada and China.
Following some organizational shifts and divestitures, ADM is now organized around four more clearly delineated business segments, Kolkhorst said — Corn Processing, Oilseeds Processing, Agricultural Services and Wild Flavors and Specialty Ingredients (WFSI).
“Milling is part of our Ag Services division,” Kolkhorst said. “It also includes our global grain and trading businesses and global transportation network.”
Background prepared Kolkhorst for milling
While Kolkhorst’s experiences have given him exposure to many parts of ADM, before taking the helm of ADM Milling, the flour milling business and NAMA were something of a revelation, he said.
“From the perspective of a 30-year ADM employee, and now almost a 9-year milling employee, I recognize, frankly, I wasn’t very familiar with the milling division when I first arrived,” he said. “It was in Kansas City. It was very much a part of ADM but also ran as a kind of separate entity.
“As I look back, NAMA’s been in place since 1998, and Craig Hamlin was the one who helped put this organization together. I look back to Joe Hale and Craig Hamlin (Hamlin and Hale were ADM Milling presidents who also served as NAMA chairmen). The assets that I have the privilege of running today are predominantly assets that they acquired and put together over the years and gave us a good footprint in the milling business to build upon and continually serve our customers.”
ADM Milling is the second largest milling company in the United States, operating 23 flour mills, in addition to 7 in Canada and 4 in the Caribbean. ADM also operates 7 flour mills in the United Kingdom. With 288,400 cwts of daily milling capacity, ADM accounts for about 19% of the milling capacity in the United States.
Kolkhorst described his background in grain trading, grain transportation, basic processing and operations as indispensable preparation for leading the milling business. Still, there was a learning curve.
“One thing I found when I came to milling is it’s a lot more complicated a business than many people recognize,” he said. “With wheat milling, you are taking different classes of wheat, many different qualities of wheat and finding the combinations that provide the right functionality for your customer. I think that was the biggest difference. You can mill flour that meets a customer’s specification, but if it doesn’t work for your customers and their products, you’ve got to find something that will work. I found the process simple — a gradual reduction of the wheat kernel into the starch and feed — but the complexity of all the functionality features of our product is amazing to me. And every year you start again. There’s still a lot of art in this business.”
The distinctive nature of milling within the broader universe of grain processing is mirrored in the wheat, corn and oat milling members of NAMA, Kolkhorst said.
“I’ve been involved in several industries at ADM, and I’ve enjoyed all the different things I’ve had the opportunity to do,” he said. “But when I came to the milling division, and especially when I got involved in NAMA and the industry, the passion in this business is something I’ve not seen in other places. I like that passion. Obviously, everyone’s there competing and doing the best they can to serve their customers, but I think true passion drives people to do things that are right for the industry, too. That’s something that struck me when I first arrived.
“If you look at NAMA compared to a lot of associations, more than 90% of U.S. flour milling capacity is represented in NAMA. The corn milling and oat milling industries are well represented, too. NAMA has a wide array of millers. You have some very large millers — from the size of Ardent Mills to some smaller family regional millers and everything in between. I think the whole industry being represented across that spectrum is very important.”
While ADM and other milling companies have been investing forever in their mills to expand capacity, increase efficiency or improve production in other ways, pressure is mounting to step up capital spending.
“I think there will continue to be investment made as in the past, but with new issues we face or as new regulations come about, that need will continue at an even greater pace,” Kolkhorst said. “It’s important to note that ADM and the industry have always been concerned about providing a good, safe product. So, just because the industry faces new regulations or recent challenges doesn’t mean that’s a new revelation. That’s always been a priority for ADM and others in the industry.”
As an organization, NAMA has remained effective even as the size disparity between its member companies has widened, Kolkhorst said. In fact, he said the membership remains as committed as ever.
“In some respect, people could say it would be harder, but look around the meeting,” he said. “People participate and are engaged. We have an excellent staff at NAMA, but it’s a small staff. They are very good at leading the discussions and organizing the activities and representing us on issues with other industry organizations and on Capitol Hill, but the grass roots work is really done at the committee level. And that takes representation from all these companies. All the companies provide resources to those committees. We have taskforces right now to address recent industry challenges, and there is very good representation of the industry on those committees and taskforces. Everyone brings a different skillset and different point of view, and I think that’s what really makes NAMA effective and successful.”
Focusing on three priorities
NAMA also has benefited from a strategic plan focused on issues of both enduring and current importance — food safety, nutrition and supply chain, Kolkhorst said.
“As we laid out those priorities, I think we felt very confident that those were the right things,” he said. “What we’ve seen in the last 12 months reconfirms that those priorities were the right priorities for NAMA. There are always going to be other things that come up, but those pillars are where we will focus our resources and our efforts.”
With two unprecedented major flour recalls in recent months, one speaker at the NAMA annual meeting described 2016 as the toughest year ever for the milling industry. Kolkhorst declined to offer an opinion on the ranking.
“I think it’s always tough to say what’s the most trying, because when you’re in it, it always seems the most trying,” he said. “But I will say that as we’ve looked at some of the issues that have come up, they’ve been very big issues, and they’ve come at a time when there’s increased scrutiny around food safety. I think the industry has certainly come together and is asking ‘How do we solve these as an industry?’ As I said, we’ve put together two taskforces around the two major issues with a cross-section of the membership and come up with industry-wide solutions to help tackle these issues together.”
While it would be premature to speculate about where the taskforce work will take them, Kolkhorst emphasized the importance of striking a balance between the longstanding dedication to food safety and the energetic way in which millers are addressing current issues.
“Our place in the chain is to provide a good, safe, nutritious product,” he said. “That’s always been our priority and will continue to be. But, some new challenges have come up that maybe some people didn’t even realize were challenges before. I can tell you, as a milling industry, we understand those challenges; we understand that we have responsibility in those challenges to provide a safe nutritious product to our customers and our consumers. That’s a responsibility that we take very seriously as an industry. We realize there’s even more to do, and we’re committed to raising the bar and doing more.”
In addition to recently marking 30 years at ADM, Kolkhorst and his wife, Charlene, will celebrate their 25th wedding anniversary in November. They are the proud parents of daughters Samantha, 22, and Sophie, 17. Thinking about his ADM predecessors as NAMA chairmen, including Hamlin and Hale, is humbling, Kolkhorst said.
“I’m a two-year caretaker of this organization in a long chain of people who have been great leaders working with great staffs,” he said. “So, I am honored to have the opportunity to do this, first and foremost. To now be so involved in an industry that links grain to goodness, having grown up growing those grains, is something I’m very proud of. I’m very proud of our industry, and I’m very proud of ADM Milling’s part in that industry.”