Below is the full interview between Mike Lessiter, editor of Farm Equipment, and Horsch Farm Equipment owner and founder Michael Horsch, in which he describes how his dream of farming turned into a $600 million shortline equipment operation fueled by family support, customer education and tailoring equipment to meet local markets’ needs — internationally.
Mike Lessiter: Tell me what Horsch Farm Equipment is all about.
Michael Horsch: Well first of all, we're not really a farm machine manufacturer. We don't see ourselves like that. Myself, I'm a farmer. I'm a classic farm boy and all I wanted to do all my life is farming. I just ended up basically doing a detour into farm machine manufacturing. Basically to make some money, to become a farmer, this is one of the driving things behind our business today. Never wanted to be as big as we are today. It was not intended. So that is probably one of the closest answer I can give you when somebody asks me what are we about.
The other answer we give is that since our main background is farming, where we come from that's where our passion is. Obviously, we seem to be more solution driven, more challenges driven, like any other short-line manufacturer in the industry. And also, because we're scattered all over the road so much, you know? We're in all the main farming areas, where the big large acre farming is taking place whether South America, North America, Australia… But most of our business is Eastern, Western European. And every area, every climate zone, every country, you have different challenges and so that means you have to adapt to those challenges. And first of all, we're interested in the challenges before we look at what we offer in terms of equipment.
Mike Lessiter: I've seen some of the story about you coming over as a teenager. Tell us that history of coming over and then what you took back to Germany after that?
Michael Horsch: Well, first of all you have to know I'm Mennonite. There's lots of Mennonites here in the states too. We Mennonites are still a small group all over the world. Everybody knows everybody and Mennonite had a program- It was a training program and for me that was the chance to come over to the States in '78, '79, '80 on a Mennonite training program working on farms. And this is what I used to come over here because that was the only way to actually stay here for at least a year and have a working permit. Back in those days there was not other way. Otherwise you could only come for three months and that was it. So I used this as a way to come here to the States as a teenager, 18 years old. And I was trying to find out what farming is like here in North America. I always dreamed about the big farms of corn and soybeans in Iowa, Illinois, and whatsever.
My father, by the way, was also a Mennonite trainee in the late '50's. He always talked about this and showed me pictures from his stays in Nebraska and Iowa where he was trainee. And so, that was my first chance to actually come here. With the idea of maybe I could find a place to stay in and a piece of land to farm and maybe become a farmer here in North America. That was basically the dream of an 18 year old that had four more younger brothers that also wanted to take over the home farm. So, there were five of us, it was clear that not all five of us would be able to get the home farm and to take it over from my father.
That was the start of it. Actually was some interesting coincidences. I had to go back in late '79. I had to go back to Germany because my visa permit ran out and I had to actually redo it from the German side to be able to come back and immigrate here. That was the intention. The problem was the German government didn't let me go out because I didn't do my service. In those days, you still had to do your army service— or I had to do civil service instead. And so they said, “still you haven't done your civil service you will not get another permit to leave the country.”
And that basically was the start of the company, during my civil service. I had to do my civil service, during the evenings I was drawing up machinery and starting to build no-till seeders. And the background of that is also something you have to know. You have to go back into the '60's when my father, two of my father's brothers, and three of my father's cousins got into farming in the early '60's. They were able to gather all the land. That was right after the war and Germany was building up and the industrial revolution was taking place. And, all the farm labor was going into the industry and there was no cheap labor anymore for farming. And there was large — large in those days — two, three, five hundred acre farms. Estate farms ran by Dukes and Lords that had lots of labor and their labor ran away. And so they didn't know how to run the farms anymore. So, they were looking for a way to either rent it out or sell out to the farmer. This was a chance for my father and his family and brothers and cousins basically to take over quite a bit of land in the '60's and become crop farmers in a big way. Big way — a thousand acres, twelve hundred acres... that was big for us in the '60's.
But they rather quickly found out that the old two bottom plow and the theory for five horsepower Massey Ferguson tractor would not do it. That would not get you anywhere. Plus some of the land my father farmed, the first farm I grew up on, was just four inches, five inches top soil, the rest was rock, you know? So I learned driving a tractor... As a five year old driving a tractor, pulling a trailer was where guys were walking behind it and picking out rocks and throwing them in the trailer. And so obviously, there was also a need to figure something else out than just plowing the thing up. And also on top of that, becoming more efficient. And so, it was actually our family that start looking into what we call a min-till/no-till farming system where there was no example for that. The scientists and the local agriculture institutes and the neighbors said, “What you wanna do is never ever gonna work.”
Mike Lessiter: What year would that have been?
Michael Horsch: '64, '65, '66
Mike Lessiter: Before it's even happening over here in the States, too?
Michael Horsch: Yes. But it's just our family approach, you know. So they tried it out themselves. And we still have, on my home farm… That's not the farm I grew up on, that's the second farm my father bought in '69... '68... Well, that one, the day they took it over they're still plowing that farm so we still have land that's over 50 years old not being plowed. Which you Americans laugh at it, but where I come from, there is where the plow was not necessarily invented but this is basically — if you hadn't plowed up your land by the end of October it was insane, you know? Maybe still is in some ways today, not quite.
Myself, my brothers, and cousins, we were basically injected with this min-till/no-till pioneer spirit from our fathers and uncles. Sundays after church, we walked fields with a spade and with my uncle, father and dug holes and looked at and learned basically how soil changes. Earthworm population went up and water infiltration went up and so on and so on... Issues with weeds and so on and so on... How to deal with it. So, we learned it basically within the family, by learning from fathers and uncles. And decide, one day if we're gonna start farming, this is what we're going to continue.
Problem with this was that there was no machinery available. So we always had to have special machinery being built and one-offs from machine manufacturers are built and then by the time they end up in our yard, we start cutting it up ourselves and rebuilding it with railroad ties and whatever. I always hated when my father — he was just rough on machinery and rebuilding it. He always worked, but he was always getting his ax and cutting stuff up and building railroad ties to it and whatever and changing openers. And I always hated it because then the nice piece of machinery with paint on it, he cut it up and didn't put paint back on it again. So, I already had some ideas about when I'm gonna build my own machinery, I'm going to make it nice and tidy and work it out first and so on and so on.
So, yes, there was some drive here. And because I was the oldest, not very good in school either. School decided that they didn't need me anymore pretty soon after high school. So, I just dropped out and here I went, took this training program coming to the States as a way to just leave the country, get out of it. And then, when I came back, I always had this in mind that I was gonna build my own no-till seeder, you know? Which was also enforced by my father and uncles. They always said, “Wow, somebody's gotta figure that out. We're gonna have to find a way to lift up the straw, place a seed underneath, and then put the straw back on top.” So it was this thing I keep hearing from them. And I was listening when they were talking and basically started to think, think, think.
And when I came back from the States and didn't like much to fulfill my civil service even though I had to do it. During evenings, I started doing some simple drawings and went out in the workshop and started putting some steel together. And when my father and uncles found out that I was onto something they said, “Well yeah, get on. Build, get it done. Here's some money if you need it. Build me one also.” This is the spirit in our family. The spirit in our family is if somebody has a good idea and nobody tells you, “You shouldn't do it. Not gonna work.” It's always the other way around. Just emphasize, “Do it. Do it. Do it.”
And so it was basically strong family support there, “Oh now finally somebody has taken this thing on and is figuring something out, because we always needed somebody to put his brain into it and start to figure it out.” Because so far, we've always built crude stuff. My uncle built crude stuff. My father built crude stuff, or had it built, and so on. It worked but it was not satisfying.
So anyway, with the family support, both financially and from a spiritual point of view, that basically was the start of the Horsch Machine Company.
Mike Lessiter: Those were the Exactor line?
Michael Horsch: '81 I built my first Seed Exactor. In '80, I kinda had the thing going and in '81 I built the first Seed Exactor for my father. And then basically every three/four weeks I had to build another one for another uncle, another uncle because the whole family came together and said, “Build me one also. If it doesn't work, it doesn't matter, we'll help you to make it work.” It was just this common thing of helping each other and making sure that if somebody — if a young guy — I was 21 years old when I did that, when I built my first machine. They always said, “Hey, if this works, this is what we need.”
This was the first rotary base with a seeding bar underneath. The machine which we first built. It's a no-till seeder. Actually, we would call it maximum no-till seeder. So, disturbance in those days wasn't quite a the way we wanted to place seed — obviously we're not in a corn and bean country where I grew up. It's mainly wheat, wheat country, winter wheat country. So, instead of putting seed down in rows, we wanted to scatter it. It was kind of a solid seeding system. No rows, but with no contact with trash. Because we always had the problem when we had too much residue in contact with the seed. The seed, well it was rotting, it was disturbing the small seeding with root system to grow. Without having some toxic issues.
That was the start... the unintended start. Because for me, it was basically just a jumping board to try to make some money to eventually just leave the country, buy a piece of land maybe here in North America, whatever, and become a farmer.
And as I kept building a few machines over the years, then I realized, “Well, maybe this is a way to stick a little longer at it and try to make actually real money.” So I had a better chance to get into farming in bigger way. Then obviously I got stuck with lots of debts and commitments. And where the dream of becoming a farmer would just drift away more, more, more. 'Cause I was stuck with the business. Then in '84, we officially started Horsch Machine Company. Before that, our family had a Horsch Cooperative where they had a large feed business and egg business and… Laying birds, yeah. And that business call was ran by one of my uncles. And he said, “Okay, as long you keep this thing going the way it is, we're going to help you to finance, we're gonna finance your steel, gonna finance your components you wanna buy. You're gonna sell something within the family, we're just gonna do the legal work and so on within this cooperative.” But eventually it got too big and then they said, "Well, you better start your own.” That was when the company was formed in 1984. But actually, it's older. Today if we go back, it is 37 years ago I started the business really.
Mike Lessiter: So, you got into manufacturing kind of accidentally or reluctantly 'cause your dream was to farm...?
Michael Horsch: Exactly.
Mike Lessiter: I was looking at your numbers coming in. 2000 employees... I mean something really big took on here. More than you had ever dreamed...
Michael Horsch: See, as I say, there was many things that happened that haven't been planned. or haven't been part of your big picture, where you wanna take something.
Another piece of my story in the '80s. 'Cause you have to understand that like I said, if you hadn't plowed up your land by the end of October, it was insane. So now me, as a young 21 year old trying to sell equipment — first of all, sold equipment to family. Family is big. Thought… I got the thing. I got it made. I got a system where I can go out and sell all the farmers — make 'em stop plowing and sell 'em this piece of no-till seeder and teach them how to do it. And this, this is the way to do it.” It did take me very long to figure out I had something nobody wanted.
And so for me, in the '80's it was very hard to actually keep that business going unless — and that's what I had to do, I figured out a new way of marketing. And the marketing was with a spade. So, what I did is, by the time the family all had their machine, I had to learn that I could not go out and talk to farmers and tell 'em, “Here, this is what I got and you better stop plowing.” The guy would look at me and say, “You're 22, 23 years old? And you have no degree, no business degree, no farming degree and you tell me what farming should be like? Nah, get lost, get outta here.” They wouldn't believe me.
So, what I had to do is I had to go far away from home, find larger farms that had heavy soils or soils with lots of rocks or stones on, that had already a problem with plowing and efficiencies. Then invited them to come and then when they come to our farm or my uncle's farm what I did is, I took the spade out and together with my father and together with my uncle, we walked the fields. So basically, we dug holes and showed 'em, “Okay, look what happens after 15 or 20 years when you don't plow. The soil structure change, the earthworm population goes up, and soil gets more active, and water infiltration goes up and so on and so on. Look at the yields. The yields are not any worse than plowing. You can improve 'em. Nothing's easy, but you can improve 'em. You have to watch this. You have to watch that.”
We kind of basically walked with a spade, we started selling the idea, not machinery, just the idea. And it took ages — they went back and forth and came back and looked at it again in the springtime, in the summertime. And then, eventually the guys start turnin' around and saying, “Now I made up my mind. What your father or your uncle does, I also want to implement that on my farm.” And then he started talking about, “Now I also need a piece of equipment.” So, actually instead of selling equipment, we sold them a different of farming. And I call this “Educational Marketing.” In a way, this is what we're trying to do here.
You see, all I did all my life, and this is probably why we're so different to any other short-line manufacturing in the world dealing with seeding and tillage equipment — we're marketing driven. We are education marketing driven. And all we did is, ever since the last 35 years, we only scaled selling with a spade, we scaled it. That's basically what we've done. We have farms all over now. We have farms in Czech Republic and Germany and France and here now we bought this small farm here in North America here. And then we have also partnership farms in Ukraine and Russia and so on. Now we're working one in Brazil.
All those farms we're using as cropping systems centers, you may call them, you know? And tryin' to develop a new ideas about — Regional idear. I cannot just take idea from what I do in Germany — what I do on a German farm I cannot take to France. 'Cause of different rotations, different climates so you have to look at it a little bit different when you introduce new tillage methods and you... Certain rotations that are common there and how to improve it with different ways of fertilizer placements or different ways incorporating straw and so on and so on.
And also, we're on a continuous research, practical research too. That's part of our marketing strategy as well. We're not competing with scientific research or with universities or other research organizations, but in a way we're trying to bring things together and research together. And make it practical, the practical side. That's what we're interested in.
The one thing you also have to understand is what happened in our part of the world in 1990. 1990 was the time when the wall came down? You see, where my home farm is, this is about half an hour away from the iron curtain. And for you Americans... Looking from American point of view, this was the end of the world. You know? Which in a way it was. 'Til 1990 it was the end of the world. Whether it was East Germany, Czech Republic or whatever, we never went there. We didn't know desire to go there because it was really an iron wall. And it came down over night, unexpected. And so, all of a sudden, overnight we had a huge access to large cooperative farms between — I don't know, between 3,000 and 10,000 acres in average, just right in our backyard. Those farms had never ever had access to any western equipment, never ever. It was all Eastern European, Russian equipment — junk! Real junk! You can't imagine what junk is. And so, those guys were desperate. Because when the wall came down, also for them it was something they could never believe but then thing they said, “We want to get rid of junk. We want only machinery from the west.” And so, whoever ended up with them, and told them what they got, as long as it is paint nicely, they bought it.
The '90s, if one had known that this would ever happen, you could have gotten ready for it. But, nobody was ready for it. Not the big guys, no the small guys. And so from 1990 on, obviously that was basically — 'til 1990, I was thinking a couple times of giving up and basically of stopping it — there was not much to sell really. I couldn't sell the business really for what-
Mike Lessiter: How big was the company in 1990 prior to the wall?
Michael Horsch: 1990? Hmm... 1990, maybe 20 people employed. Eighteen people employed, maybe.
Mike Lessiter: So you were just kind of breaking even during that time?
Michael Horsch: Oh yeah, always breaking even. Always! I was great at breaking even, but not making money. And again, if wasn't the family financing me, a bank would never give me a loan. I probably had a revenue of two million dollars in 1990.