Hueber Feed proves that thinking outside the box leads to profits
One family-owned feed mill in Illinois has seen three decades of growth because of its willingness to adapt to the demands of a constantly changing market.
“When my brother Jan and I started in the feed business 30 years ago, we saw other people and other feed mills that wouldn’t change,” Jon Hueber recalls. “They would only do things one way. We decided then that we didn’t want to be like that; we decided we always wanted to think outside of the box."
This approach has clearly worked for the Huebers and Hueber Feed LLC. Over the years the company has consistently evolved to meet market demands. As a result, it has logged increased sales every year since its founding, and with one exception, increased production each year as well.
Brothers Jon and Jan Hueber, together with their father, started Hueber Feed LLC with the purchase of a feed mill in Creston, Ill., in 1982. They purchased another mill in Shabbona, Ill., in 1985, and one in Holcomb, Ill., in 1988. The Creston and Shabbona mills primarily manufactured swine feed, and the Holcomb mill manufactured feed for beef cattle and equine.
From the outset, the Huebers' approach to feed was different. “Chalk it up to our German orneriness, but from the beginning, Jon and I insisted on selling nutrition, not just making feed,” Jan says. “When things get tight, some people will just make feed out of whatever comes in, but we refused to do that.”
The Huebers' commitment to quality helped bring in customers, and fueled the company’s growth through the 80s and 90s. In 1996, the Hueber brothers bought out their father, who continued to work for the company for several more years before retiring.
While the Hueber product was bringing in customers, something else was fueling the company’s growth: the Huebers' commitment to service. Hueber staff was quick to share information, to the point of going on-site to provide knowledge and assistance. “We were easily spending 10% of our time helping our customers manage their operations better,” Jon says. “People trusted us, and they began to look at me and Jan and our team as having the ability to manage hog operations and bring in new concepts. Of course we always wanted to sell feed, but if you sell great feed to an inefficient producer, he’s going to have terrible luck and say bad things. Really, it was in our best interest to see everyone succeed.”
With producers’ need for knowledge constantly growing, the Huebers realized a change was in order, which prompted the formation of Great Plains Management.
Great Plains Management
In 1997, Jon and Jan started Great Plains Management together with Bill Pfaff, an industry colleague. It is a separate entity that works with Hueber Feed, but not under the Hueber Feed name. “We started managing sow farm and sow operations,” Jan says. “It gave us that opportunity to cultivate those clients and market some nutrition to them.”
Great Plains Management now works with a number of sow farms throughout Illinois, Indiana, Iowa, Wisconsin and Missouri, and feeds roughly 30,000 pigs per year. What makes GPM unusual from similar operations at other feed companies is that clients are not required to use Hueber Feed products. In fact, trust in the organization is so high that they have been called in to manage sow farms serviced by other feed companies.
By the early 2000s, business at Hueber Feed was going so well that in 2004 the Huebers brought on a business manager, Joe Male. Male sized up the Hueber operation and initiated another change.
“The guys were working 16 hours a day doing 200 to 240 tons,” Jon recalls. “Joe looked at our per ton operating cost, factored in overtime, and then calculated how much it would cost to upgrade the existing Creston facility to meet market demand. Ultimately, we determined the best thing to do was build a new mill.”
Financing the construction of a new mill in 2005 was a fairly courageous move. Economic growth was slowing sharply in the last quarter of 2005, and economists were beginning to warn of a potential burst in the housing bubble. Nonetheless, the Huebers went forward and built the new mill in Creston. The facility went live in 2006.
"The new mill has been very successful for us,” Jan says. “I think we have capitalized on it very well. If we hadn’t built it when we did, we never would have had time to take on some other projects that have turned out to be strong growth areas for us.”
The Holcomb facility is now used for equine and specialty feeds. It provides bagged feed, and after the Creston plant was built, the Huebers installed a mixer and bag line to accommodate the facility’s output. By 2006, it became clear that the Shabbona mill was simply too antiquated to keep open, particularly since it served a small customer base that could be more easily served out of Holcomb and Creston. As a result, the Shabbona mill was closed in 2006.
One thing that the Huebers can’t be accused of is fear of change. “We want to be as diversified as we possibly can,” Jon says. “In the last three years the swine business has not been very good. If we had said ‘We’re going to be the swine nutrition company for Northern Illinois,’ well, we’d be in trouble now. We always want to have a portfolio of feed products that will complement each other and never have all of our eggs in one basket. We want to have multiple species products on the market, so at any given time if one or more sectors face troubled times or reductions, we can rely on the others.”
The Huebers laughingly say they’ll service “any” species, though their emphasis is still primarily swine and beef cattle, with dairy and equine feeds filling out much of the rest of their operation. However, they hold a special place for equine and “lifestyle” feed, which is an area where they see tremendous growth potential. In fact, they see such potential in the area that they brought on Laura Sadecki, a recent Murray State University graduate with an M.S. in equine nutrition, as the company’s equine specialist (see sidebar).
Since 2000, Hueber Feed has used Hubbard Feeds as its source for bagged feed and as its nutritional provider. Hueber Feed does its own formulation, but does so with input from Hubbard.
Given the success of that partnership, when Hueber decided to expand its dealer network, it turned to Hubbard. With Hubbard’s assistance, particularly that of Dianne Haught, Hubbard sales and marketing coordinator, Hueber has been able to establish a network of 18 dealers. Hueber is now one of the top ten distributors for Hubbard Feeds.
“We’ve got a nice relationship with Hubbard Feeds,” Jon says. “They've let us go into many areas, and if we’re working near another Hubbard dealer, we've got an arrangement worked out where we can go in and consult for a farm, say in Iowa City, and go out and help him with a customer on the hog production side.”
Hueber also acts as a network. If one of its farms has animals for sale, they let all farms that they serve know, as a service.
Growing a sales team
In another move fueled by market demands, the Huebers have been adamant in building a large sales team with experience in many different species’ feed, giving particular credit to Jake Pierce, Joel Prestegaard, Steve Florschuetz and Matt Hueber. “Companies often let their sales team go when things get tight. We won’t do that,” Jon says. “It goes back to our commitment to manufacturing nutrition, not just feed.”
The Huebers realize that staff in their feed stores may not be able to answer all the questions that customers have, so they make resources available, as best as they can, to those who ask.
Hueber Feed has increased in profits every year since it’s founding, and with the exception of 2008, when corn prices shot to $7, it has increased its production each year as well.
A packing house proposed for the Quad Cities offers the possibility of a new wave of integrator facilities coming into the market which could potentially increase its feed mill business. However, the Huebers are looking in other areas as well.
“One of the goals that Jan and I have is to have Laura Sadecki and Dianne Haught grow the lifestyle side of our business so that it matches our commercial side in dollars and tons, and then we’ll continue to grow the commercial side,” Jon says. “That way we won’t be in trouble if the commercial livestock industry takes another bump; we’ll still have our lifestyle customer base.”
Not surprisingly for a family business, attrition is low, and a number of Hueber's 24 employees have been there almost since the company’s launch. Both Jon and Jan have children involved in the business, so there are no succession concerns. And the Huebers haven’t ignored technology, either; they operate a website complete with online video.
“I hope Jan and I never lose that enthusiasm or open mindedness to do something different,” Jon adds. “I don’t think we’ll ever be happy with where we’re at. We’ll always want growth.”