Today’s interview is with Amity Technology’s Howard Dahl, probably one of the most important farm equipment families our industry has seen. Having done several stories and interviews with Howard over the years, we would describe him as a southern gentleman type, but that doesn’t really seem to fit all that well for a North Dakota guy. Perhaps a village elder works best. Either way, we’re talking about a calm demeanor from a sage leader we respect, who has seen it all and openly and willingly shares with all his fellow men. For a fresh approach with Howard, and with you as well, today’s recording is presented through the Q & A of our own Darrell Bruggink, our long-time Executive Editor and Publisher in our Ag division.
“Steiger went from $2 million to $105 million in sales in 6 years. And the factory sits less than a mile from where we’re sitting right now, and for me, it’s a great deal of personal satisfaction to see the Steiger name still on Case tractors throughout the world, and see Bobcats everywhere I go in the world.”
That’s Howard Dahl talking about his family, with the Steiger Tractor and the Bobcat, among others, secured their heritage in farm equipment history even before he launched the Concord air drill. Today he and his brother Brian lead Amity, and several related companies, including a joint venture with AGCO.
Darrell dropped in to see Howard in Fargo during his recent six-day journey. They met for the morning interview in Howard’s second-story office at the Amity building in Fargo. What follows today is the best of that conversation, including stories of innovation, business, exports, family and life lessons too. It’s a great dialogue, with lots of historic names throughout — Howard’s grandfather, E.G. Melroe, uncle Les Melroe, father Eugene Dahl, the Keller brothers, the Christiansens and some famous equipment brands that many of you won’t realize had origins in the Melroe and Dahl family tree. It’s a great dialogue, with lots of historic names throughout.
Darrell Bruggink: Darrell Bruggink with Lessiter Media, No-Till Farmer and Farm Equipment. We're recording here in Fargo, North Dakota today. We're at the facilities of Amity Technology in Fargo, west of downtown. Howard, just go ahead and introduce yourself on camera, and just a few words about what you do at the company and a little bit about the company itself.
Howard Dahl: Well, I started the company, predecessor company Concord Incorporated. Actually been at this address since April 23rd, 1979. After we sold Concord to Case Corporation, the same day we sold it, we started a new company called Amity Technology. We could not keep the name Concord because Case wanted it, but Amity means the same as Concord. It means harmony, mutual agreement, partnership, working together. Amity and concord are synonyms. With Amity, we primarily built sugar beet equipment in our early years. That's still the major product we have is sugar beet harvesting equipment.
Darrell Bruggink: And now you've got yourself and it's your brother?
Howard Dahl: My brother Brian, yeah.
Darrell Bruggink: Brian, right, and you started Amity back in 1977?
Howard Dahl: Concord — back in '77.
Darrell Bruggink: And Amity was after Concord.
Howard Dahl: Yeah, so my brother and I have been partners really since August 31st, 1977. And he was still a college student at the time but I wanted him as a partner in the business.
Darrell Bruggink: I've been with No-Till Farmer here for the better part of 15 years, and of course work with Frank Lessiter closely. I think it was him that told me that you discovered Concord was really a good product for no-tillers, and direct seeders then was almost, I think he said it was almost kind of by accident.
Howard Dahl: Yeah, I absolutely can recall. Coincidentally, just a couple days ago the board members, the founding board members of the Manitoba North Dakota No-Till Association were meeting at Joe and Gene Breker's lodge just a little over an hour from here. A number of them that I knew very well called to greet me, but I was tied up in meetings. I finally talked to one person at the end of the day, and it was just an incredible reunion for these people to get together on a dream that they created in the late '70s, 1980s, somewhere in that area. Well, I was asked to speak at the Manitoba North Dakota No-Till Association meeting, I believe it was '82. I was not aware at that time that our machine was an ideal machine for direct seeding or no-till. It was designed primarily to be just a really good air seeder that would put seed in the ground at an even depth and pack. Most of the air seeders at that time did not have adequate packing, and so our patented breakthrough was our packing system. It wasn't designed from day one as we're going after the no-till market, but a large percentage of the leaders of the Manitoba North Dakota and then in Saskatchewan, and Alberta as well. So I spoke at many of their conventions over the years and gradually became fully aware of the merits of the product we'd created.
Darrell Bruggink: Would you say that no-till really played a pretty big role in the growth of your seeders here and even overseas, and likewise do you feel like it helped with the growth of no-till as well — your equipment?
Howard Dahl: I don't think there's any question. I have a lot of anecdotes of individuals that I've known for a lot of years that would come to me and say “I watched my neighbor with your machine year one, year two, year three, year four. I knew he was going to fail. I knew it just couldn't work. He was doing no tillage and just planting into the previous crop residue. I knew he was going to fail. And after six years of him having better crops than me, I finally bought your machine.”
This happened to be a prominent seed grower who was a real close friend of my uncle's, my late uncle. And he just said “Shame on me for being so skeptical, and I love your machine.” And so I had loads and loads of stories. It was a remarkable experience to watch the Concord air seeder develop to where it became... Well, the floating hitch that we had became the standard design, and row by row packing for everybody else. Having a variety of openers whether it was a very, very narrow opener to get virtually no disturbance to where in Siberia and other places people wanted to kill weeds while they're planting so you put a wide sweep on the unit. So we had, I would expect 20 different openers that were put on the unit, and all depending on the requirements.
Darrell Bruggink: Talk about today real quickly again too, what Amity manufacturers today around here in the U.S. — and is distributing throughout the world.
Howard Dahl: Well, in our Fargo operation it's sugar beet harvesters, sugar beet defoliators, and sugar beet carts. That's our core business. Most of our team members have split loyalties. They're on the sugar beet side as well as on the seeding and tillage side that we have in our joint venture with AGCO in our Wahpeton operation. And so we build a shank drill, precision shank drill, and a single disc drill. So for seeding, both those products have gotten a lot of traction in areas. And then we actually build a machine, almost a complete replica of the old Concord, and we sold a lot of those overseas. A number of them domestically but the bulk of them had gone into the Kazakhstan market.
Darrell Bruggink: Now these would be things that were either left over when Case bought Concord, back in '96, or these are some new things that you've developed since?
Howard Dahl: The air till drill we build is very similar to the old Concord. We had a ten year non-compete with case, and won't go into all the details of that but we clearly honored it. And then in 2007 we got back into the air seeder business in a slow way at first. We built a double disc drill, a very conventional one, as well as a comparable product to the old Concord, and then developed our single disc drill which we have running in a lot of countries right now. And obviously there's a big difference from 1996. There's a lot of different companies building air seeders now, and building large air seeders. It was very different in 1996 when we sold to Case.
Darrell Bruggink: Take me back — how you kind of arrived at the name Amity for the company? You kind of alluded to it earlier, but tell me how you came about the naming of the company?
Howard Dahl: Well, the original dream for Concord was to build a small tractor for third world agriculture. I had worked at International Harvester in their marketing research department and became sensitized to extreme poverty in the lack of any mechanization that was appropriate for small farms in Africa, India, various other countries. China at that time. And so when I moved to Fargo, I was going to start working at Steiger in their marketing research department, but it was actually a downturn in the tractor business at that time and I thought it would be not a good thing if I took a job in the same department where a couple good people were being laid off.
So, instead of going to work directly with Steiger, I said “I'm going to go ahead and follow this dream of trying to create this tractor.” And so my wife and I spent an evening Roget's Thesaurus, and we were looking for a word that we felt sounded like a machine and had a really good meaning that could be translated into French, Spanish, various languages. And the word Concord came out to be the ideal word meaning friendship, mutual agreement, partnership, harmony, and so it was a word we liked and we actually are buying... Case had dropped the trademark for Concord in some areas and so we are recapturing the name and are looking at using in a selective fashion.
Darrell Bruggink: But that also translates well you mentioned over to Amity?
Howard Dahl: We could not keep the name Concord because Case wanted it, but Amity means the same as Concord. It's just Concord sounds a little more robust, Amity a little softer, but we try to carry out the meaning of both words in all our relationships with our employees and customers, looking at each relationship very seriously.
Darrell Bruggink: Can you kind of go over each of your various holdings?
Howard Dahl: In Fargo we have all at this one location, a little over 100,000 square feet of buildings, but actually four different buildings and we have just under a hundred employees for our beet equipment business here. We do have about 20 employees in Russia, Ukraine, and Kazakhstan. And in Wahpeton we have 330,000 square feet at our tillage and seeding equipment plant, and seasonally adjusted around 130 employees there.
Darrell Bruggink: So you are the third generation in the family, correct? Walk us through who each of the three generations have been.
Howard Dahl: Well my mother's father EG Melroe was a very, very interesting man who didn't like the way most of his machinery worked so he was continually tinkering, changing, and inventing, and he really invented the windrow pick-up to go on the front of combines and the first patented unit that he developed, he sold to John Deere the patent because he needed some money to pay for medical expenses after he had a heart attack and the amputation of his leg. That was in the '30s. During World War II, while three of his sons were at war, he made a greatly improved windrow pick-up that became the standard for farmers throughout the upper Midwest and western Canada for years and years. Then he'd invented a harrow weeder that became a standard unit for sugar beet farmers in this area and many, many others. Then he died and his sons and my father took over ownership and running of the business. And three years after he died they bought the rights to a very primitive loader that was not a skid-steer loader it was a independent clutch system with sort of a tricycle wheel at the back and out of that came within just three, four years, really the model of the Bobcat loader that we all know today.
They grew that company rapidly throughout the '60s and in 1970 sold it to Clark Equipment. And about the same time it was sold my uncle Les bought control of Steiger Tractor which was a very small company doing about two million dollars revenue and my uncle Les basically exhausted his resources after a year and he persuaded my father to come in as a major investor, CEO. And my dad brought in a team of people and there's a lot that went into the growth but the most significant factor was the Russian wheat failure of 1972. And the amount of income our farmers realized in '73, '74, was so dramatic and farms expanded so rapidly that the need for high horse powered tractor and Steiger, serendipitously it was just great for Steiger.
So, Steiger went from two million to 105 million sales in six years. And the factory sits less than a mile from where we're sitting right now and it's just for me a great deal of personal satisfaction to see the Steiger name still on Case tractors throughout the world, and I see Bobcats everywhere I go in the world so it's... I have nothing to do with either of their success but I certainly claim a heritage that I'm very, very proud of.
Darrell Bruggink: As we go through each of the generations, again your grandfather was EG Melroe. And that was your mother's dad, correct?
Howard Dahl: Yup.
Darrell Bruggink: And then I understand he might've had some equipment dealer roots…
Howard Dahl: Right, they did have a Massey Ferguson dealership in Gwinner for a short time and the farm dealership, well the factory was going, and it was no longer a dealership let's say by the time I reached at least four or five years old but I do remember as a very, very young kid a small equipment dealership.
Darrell Bruggink: And you mentioned too he had some hard times…
Howard Dahl: Yeah, he lost his farm in 1929 and so my mother as a five year old and her siblings, both younger and older, moved from a decent home to a home with no running water, no indoor plumbing, and that's where my mother spent her formative years. So, no, it was not easy.
Darrell Bruggink: Back to the Melroe Bobcat, do you recall kind of the genesis of how that came about and how were tasks being done before the Bobcat came into existence so —
Howard Dahl: Every story has different versions of it and I will try to capture the Bobcat's story as my father believes it to be the case. And my father's been dead now 10 years and if you studied Aristotle when you look at causality, what causes things, there's a whole bunch of final cause, efficient cause and likewise in any product the proper story is many, many people have a part of the success, have a certain measure in creating the successful story of whatever it is. There was a farmer named Eddie Velo from Rothsay, Minnesota, who got so tired of cleaning out his turkey barns with a shovel and pitchfork. And he thought about and he said “I think we could build a machine to maneuver around all these poles in the turkey barns and make it a lot easier.” And Eddie Velo thought about the versatile clutch system. The versatile swather had this independent clutch system where it would just basically turn in a circle. And he thought that's a pretty good idea.
And he went to a blacksmith's shop in Rothsay, Minnesota. They weren't interested, didn't have time to do it. And the guy said “There's another shop.” And so he went to the Keller brothers, Louis and Cy Keller, and they indeed went ahead and built a machine for Eddie Velo that did functionally do what he wanted. And the Keller brothers thought “We could go into business and sell a number of others.” And I believe they did build approximately 10 machines, and they were showing it at the Minnesota State Fair, and my uncle Les Melroe saw it and as we often say about Les, he couldn't read a financial statement, he couldn't read a blueprint, but he saw the future.
And he was just so excited about it and persuaded his brothers, my dad that this is the future. And so our family made an arrangement with the Keller brothers. They moved to Gwinner. They and a team of engineers worked on it. I actually have it here and it's like this. I used to drive this as a 10 year old and very, very unstable. If you'd go up on a side hill it was easy to tip over. And over the course of the next few years the Bobcat as it's now known was created with the independent clutch where it would turn in its tracks. And the first ones did not have a roll cage so you still could tip them, and the first ones were all mechanical chain drive as this 610 model that was built all the way until I believe 1979. But hydrostatics took over very quickly and the Bobcat as we know it today is obviously the standard that all skid-steers compare themselves with.
Darrell Bruggink: To look back at that, and we see how many are out there, it's got to be quite amazing to know your history, the family was involved in part of that and bringing it to the market.
Howard Dahl: Well it's clear the Melroe family committed the finances to make it possible. And there were times they questioned whether this was smart decision because it did take a lot of resources but today there are I believe 1.4 million Bobcats that have been built and it's still by far the dominant player in the market.
Darrell Bruggink: Then your dad and your uncle, more or less, their claim to fame is Steiger. And my understanding is they in just five years took it from sales of two million to 105 million, so what do you recall of that as far as what they were able to do with Steiger and why they were able to grow it like they did.
Howard Dahl: Well, my uncle Les basically took... and the Bobcat company was sold for a lot of money. In today's dollars it was a very high sum. But my uncle Les was completely out of money within 12 months buying 1,000 head of Charolais cattle, real estate in Phoenix, Steiger, and who knows what else, and he came to my dad and said “We can't even complete a tractor.” And so I've read the transcripts of a anti-trust lawsuit that Steiger was involved in, in International Harvester. I actually sat in the case in Chicago in '75. But as I recently re-read the transcripts, on day one when dad went into Steiger he had to guarantee $6 million of credit just to keep the company... in today's dollars, $6 million. And he took no salary, and most importantly he hired a team of people that he just believed in deeply.
And Jack Johnson had been head of production for Bobcat. Len Odie had been a close friend of dad's and head of purchasing, and then became president of Wil-Rich. And dad said “I'm not going to go into this and make all the financial commitment without a team of people.” So when Jack, Len and a couple others agreed to come on board, he made the commitment financially. And he told me “I'm going to risk my fortune on this but,” he said, “Blood is thicker than water and I need to help my brother-in-law.” And so it was a real challenge at first but because of a great team of people they became the leader in four wheel drive tractors.
Darrell Bruggink: You had mentioned that your dad died in 2008. Are there some specific lessons or traits that he left with you that you learned from him?
Howard Dahl: All who knew him would agree with my cousin David who became treasurer of Bremer Bank in the Twin Cities. At dad's funeral, David came to me and he said “Your dad is the only person I have known in my entire life who I never heard a bad word said about, and I never heard him say a bad word about anybody.” I thought about that, and that is a very profound statement. He was very, very smart. He was a math and chemistry major, a chemical engineering major at Michigan State. His class was drafted into the infantry but because of his skill set he became a cryptographer at the Battle of the Bulge and still could do calculus at the age of 75. But very quiet in the way in which he did his leadership. He felt his role was a coach to put the right team on the field and just to make sure he had the right people. And a big part of his role was to encourage them. And then when the tough decisions needed to be made he was there to make them.
Darrell Bruggink: And what attracted you to wanting to continue in the... you know, with the family and being the next generation—
Howard Dahl: Didn't have any expectations like that. I was originally... I'd finished a masters degree in philosophy of religion thinking I wanted to teach, and then by working at International Harvester in their marketing research department became really interested in global agriculture and so I guess part of it is DNA. I grew up in this family of equipment manufacturers but part of it was seeing that food production could be a wonderful thing to give assistance to and so those factors resulted in a change of career. But actually did continue to teach for four years while starting Concord at Concordia College, locally.
Darrell Bruggink: Compare each of the generations as far as their style, or their business style and maybe what each learned from each other?
Howard Dahl: My observations of the Bobcat company would all be as a very young child — going out taking lunch to my uncles and hired men when they were combining because our family had a very large farm and that supported the Melroe factory in the early years. So, in all three generations, hard work would be a central factor. I'd say the main word would be innovation, just a passion for innovation and maybe the second word was an optimism that when somebody says you can't do something, it's just a greater challenge that I think we can do it in spite of all the odds.
And so if you look at the budget, engineering budget of the Melroe Company, if you look at the engineering budget of Steiger vs. Deere… Deere had a much greater four wheel drive engineering budget and could not create a great tractor. In fact I met Deere executives with my father in '85 and they said “It's embarrassing to us that you with a much smaller budget have created such a superior tractor.” Direct words out of Bob Hansen's mouth. And so it was a sense of we can do it and this can do attitude, and we've tried to emulate that — imperfectly — but I guess innovation and just an optimism that it can be done would be—
Darrell Bruggink: It probably goes back to farmers, quite often are the ones who have to figure things out on the fly and find better ways.
Howard Dahl: And every farmer's a risk taker. I mean you put in a crop every year, it's a risky business, and so in that respect, the manufacturing business we do understand our customer. And I think that's one thing we've, in all three generations, tried to be very close to your customer, listening to them as to what they want.
Darrell Bruggink: Do you recall the decision behind selling the Melroe and the Bobcat product, and selling that at the time?
Howard Dahl: Yeah, I sure do. Success is sometimes not handled well and a couple of my uncles started messing around, got a divorce, so my cousins were sent to boarding school. What was once a very happy family it was a very, very tough time, the late '60s. And so to have some liquidity to finance some divorces was part of the factor. But I think part of the factor was realizing all of a sudden you have a global company and can we really do all that's necessary. But I was not involved in any of the decision making, I just know what my dad said. And it was a divided opinion. My dad did not want to sell, and at least one of my mom's brothers did not want to sell. And so there were five votes, and the decision was made to sell. But I'd say a big part of it was some realization that either you needed to do an IPO or bring in some ... to grow the business to what it really could become.
Darrell Bruggink: As we go back to your dad, Dave Kanicki, he was our senior editor at Farm Equipment and Mike Lessiter had told me you shared a story about a preamble I think that your dad wrote on every contract that lawyers would've advised him probably not to do, and can you tell us about that and what it said about his personality too?
Howard Dahl: He said a lot of the contract... Well he said business stopped being fun in about 1965 when no longer a handshake and “I give you my word, I'm going to do this.” So, at least in rural America there was a sense that your word is your bond and if you had a choice of being an honorable person with a great reputation or having $10 million, you would have taken the honorable reputation. And he uses the year 1965 to say things. And maybe part of it was the Bobcat was growing so rapidly all over the world and contracts were becoming much more necessary.
But a number of times, if we get this big contract, even when we sold to Case and he'd say “I want to be able to write something. This is the intention of the contract. This is what we're trying to do.” And he always had that view even when we... He was dead already, but when we did our deal with AGCO, his thoughts were central in that five years from now, we want to look back on this contract and say it was a win win. He said “Anybody who tries to have a win lose on a contract, it's going to be a bad thing.” And so we always tried to express this. The only reason for this contract, it has to be best for both sides and we need to make sure that five years from now we can look back and say, “We're glad we did this.” And so a lot of people think “I need to get everything I can out of this contract and if it goes bad in five years I'll have won.” That's really the part of his thinking about a preamble.
Darrell Bruggink: Interesting. I understand even before the Bobcat, there were, I think you alluded to some of these, were several inventions that came off that Melroe farm… Can you recall some of the product innovations that just came off that farm?
Howard Dahl: Off the farm really would've been just the windrow pickup and the harrow weeder. There were some other products that the Melroe company, and some they bought. The spra-coupe. It was a farmer from North Dakota who had invented the Spra-Coupe. And it was pretty crude when the Melroe company bought it but grew it to be a significant product. The Righton plow, again Ed Righton from Cooperstown, North Dakota, sold his business and became part of the Melroe product offering. There was a grain drill that eventually became I believe part of Loeston Corporation and so there were a number of other products added to... But the Bobcat dwarfed everything else and so Clark Equipment eventually realized all the farm equipment was such a tiny part that they divested themselves of each of the products.
Darrell Bruggink: Going to Concord. And that you've kind of talked a little bit too, that's a vision that kind of stems from your personal experience at International Harvester, and then working abroad too. Tell me about how that all came about again.
Howard Dahl: I tried to shorten the whole story, but when we moved here in '77 and worked on a small tractor project, it just coincidentally my dad always liked to have farm land that he could drive out and see crops growing. And so when they moved to Fargo, he bought a couple of quarters of land just outside of Fargo, and the person he had farm them, Jake Gust, a very gifted engineer who is still working for us today. He's I believe 83 years old and he worked on the small tractor and then air seeders were starting to come in and Jake said “I think there's a place for developing a better air seeder, better seeding equipment.”
So, we first of all bought a Massey Ferguson chisel plow and put grain boxes on it and planted just without air delivery but just to get an idea of what it was like to do this new style of planting. And Jake said “We need to have much better packing.” And so it was his concept of pneumatic tires that would move latitudinally and longitudinally during the field. And so you'd have even packing across the whole seeding machine. It was just a great breakthrough in thinking. And so we built a prototype in '81. But we didn't have a floating hitch on that prototype, we were looking at some hydraulic mechanism to level the hitch.
And so the first few we had some problems with but after we did the floating hitch we knew that we had something very special. For the air delivery, our VP of sales and marketing, Darrell Justesen, who just retired a year ago had been sales manager in the U.S. for Prasko. He was very frustrated with some of the things Prasko was doing and said “There's some things we need to do to build a better air delivery system.” And so Darrell brought his ideas and thoughts and with our engineers created the Concord air system as we know it and we still are using so much of the technology from the original Concord. And it's simple and a lot of farmers really like it. So that's really how it began.
Darrell Bruggink: The story as I understand it too was that when you came out with it, you sold I think about 600 units or so into Russia before John Deere…
Howard Dahl: Before they'd even sold one, yeah.
Darrell Bruggink: Before they'd even sold one. So how did that all come about?
Howard Dahl: Well, a couple of Canadian brothers who were the largest furniture manufacturers in Canada of Mennonite background whose parents had fled Russia, father in 1919, mother in 1929, were revisiting their roots. And these brothers had helped us with some investment in the late '80s that was very important for us during the difficult '80s. And they were visiting their ancestral homes and in doing that met a agricultural soil scientist who said "We need much better seeding equipment in Russia, we desperately need." And so we shipped five units over in the fall of 1991 and they were very, very successful. Now we had been doing work in Czechoslovakia in '87, '88, '89, before the Berlin Wall fell and had ... In fact I spoke to the National Academy of Sciences in Prague, Czechoslovakia in '87 on no-till farming. And the unit we had there being tested, we had 80% less fuel being used in our system vs. theirs, and we had about a 20% yield increase. And so they were very, very excited.
But when the Berlin Wall fell, all the people we dealt with were gone. I mean the system just completely changed. So in '91 is our first entry into Russia and Kazakhstan and just had some very rapid growth there.
Darrell Bruggink: As we take up to '96, what happened in '96 that at that point led to the decision that to sell to Case, and look at the years coming up to it in '96.
Howard Dahl: Well, again, this is a lot of voices in the room but on June 12, 1995, Case came into my office, which was just a block west of here at that time. We still had this building but we were growing so rapidly we had a much bigger building just to the west here. And Case came in in the morning, said “We're really interested in buying your company.” And that afternoon John Deere called and said “We're really interested in buying your company.” So the same day, it was just... there was no coordination, just pure coincidence. But we had such rapid growth and in Canada the five largest John Deere dealers did not sell Deere air seeders, they only sold ours. And in the U.S. most of our dealers were Case dealers and so we were growing rapidly. We just couldn't build enough machines every year. We turned down orders every year from '91 through '95.
And so at our board meeting, my mom's health was not real good at the time and we just felt the liquidity of that would be a good thing and there was a belief that I was going to continue deeply engaged with Case and continue to grow the Concord business. So I had a half time commitment to Amity and a half time commitment to Case, to continue to grow the business. And that was going really, really well until Fiat bought Case. Fiat owned Flexi-Coil, Case now Concord, and there became a big conflict and the decision even though we had the dominant market share in the U.S. and in Russia, Ukraine, and Kazakhstan, the New Holland or Fiat voices won out and they eventually actually shut down the Concord operation, tried to merge it into Flexi-Coil. And they took the number one and number two air seeder businesses in the world and in five years made them both number seven. If you look back it's just a heartbreak what happened. We had some great things going and if Case had still owned Concord I believe we would've been the dominant player in the world and I probably would've retired a few years ago, but spending half my time on the continued growth of the Concord business.
Darrell Bruggink: You were out of the seeding equipment business for 10 years and that was due to the non-compete rules. Tell us about the decision to get back in and why.
Howard Dahl: Well part of it was a couple of our former Concord employees saw that Case just completely shut down a very simple, double disc drill that Case had made. They scrapped it. And so a couple of our former employees said “We can do a meaningful business just resurrecting that product.” So they hired us to do the engineering and manufacture for them. So on a contract basis we did that. And they had some success, they sold a lot of units particularly in the Red River Valley here and quite a few units into Ukraine.
And then we became aware that there was a single disc drill that had been invented in Australia that it was a high speed single disc drill that looked very, very interesting. And they did not have the capacity to really develop it and so we actually bought the Fargo Products Company and their key people, Jack Oberlander, who had been our service manager at Concord and was president of Fargo products. And Gene Breker, his partner, and Peter Christiansen of Titan, who was the main owner of Fargo products. So we purchased Fargo products and at this point got back into the air seeder business.
Darrell Bruggink: Let’s maybe look at a little history and timeline with the most recent company. So you had the founding of Amity, Wil-Rich and Wishek—
Howard Dahl: Wil-Rich we bought out of bankruptcy with my brother and I and two other partners in 2001. Wil-Rich had lost a lot of money and I think most people had given up on it. And we purchased it in 2001 out of bankruptcy and were able to turn it around very slowly and because of significant export business beginning in about 2005, saw the business do very well. The owner of Wishek, Mitch Bosh in Wishek, North Dakota, was really tired of running the business and he approached us at Amity about buying it and we agreed to buy it at Amity, but then we thought Wil-Rich is a tillage business so we chose to purchase it at Wil-Rich instead of at Amity.
And we had a little bit of different shareholders in both companies, but that was 2006, and we saw especially unbelievable growth with Wishek with the clearing of a bunch of land in Russia, Ukraine and Kazakhstan that had not been farmed for years and then when CRP ground went out of CRP into production, Wishek was an ideal heavy disc to go into that CRP ground and reclaim it. So we had some remarkable sales with that. And we had to shut down the Wishek operation unfortunately and moved it into our Wahpeton operation.
Darrell Bruggink: The founding of Amity, it happened pretty much almost immediately after Concord?
Howard Dahl: The same day. Same day we sold to Case. Case wasn't interested in our sugar beet equipment and so we started Amity the same day.
Darrell Bruggink: Interesting. So that obviously took some planning. Once you knew that you were going to be selling and be ready to move. So what was that process like? Was it difficult to be ready to make that transition to in a sense a new company?
Howard Dahl: We had bought the sugar beet equipment company a year before and we had done some manufacturing for them but as for actually owning the sugar beet equipment, Concord owned the sugar beet equipment for one year before we sold to Case. But Case was not interested in the sugar beet equipment so we had to do something with it and so that's why we started Amity the same day.
Darrell Bruggink: Right, and then talk about Fargo Products again.
Howard Dahl: 2007 we bought Fargo products.
Darrell Bruggink: And the reason behind, and what they brought to the table for you?
Howard Dahl: It was the air seeding technology. You know a lot of the vestige of the Concord technology was there, and then the single disc drill became part of it.
Darrell Bruggink: Right, right. And then that was followed up with the joint venture with AGCO right? Tell us a little bit about how that all came about?
Howard Dahl: Yeah, it's like all conversations, there's many facets of it but AGCO did not have an air seeder line. A global company without an air seeder. And in much of the world, particularly all of the former Soviet Union, tractors were sold almost always in tandem with an air seeder and we were experiencing some meaningful sales in that marketplace so we have more than a couple hundred of our air seeders in Kazakhstan, mainly sold with versatile tractors and then likewise in Russia, Ukraine. And AGCO was looking for filling out their product line and were ... But all the AGCO dealers had loyalty to some other air seeder in Canada, in various other markets and so we're still with AGCO working through the long term strategy of making the air seeder a more central part of their dealer offering.
Darrell Bruggink: And then I think I also saw that an electronics company, Intelligent Ag Solutions…
Howard Dahl: Yeah, Barry Bachelor, who founded John Deere's electronics company and I started Intelligent Agricultural Solutions and created a flow and blockage sensor using acoustics vs. electronics and it's been very successful, but AGCO discovered the capabilities of Barry and said “We really want to be a partner with Barry ongoing.” So, we actually sold our share of Intelligent Agricultural Solutions to them. Part of that was what we call our farm QA business, farm quality assurance and we do have a separate business from Amity although Amity's a major shareholder, I'm a major shareholder. And we're creating a data driven software for management of big data in agriculture and just watching that company emerge.
Darrell Bruggink: The Russia thing is quite interesting, how you really seized into that market. You were probably one of the first Americans if I understand right to do any business there and that started way back when?
Howard Dahl: Fall of '91.
Darrell Bruggink: Fall of '91. And you got a lot of units in there immediately. How many trips do you think you've made to Russia overall?
Howard Dahl: Next Sunday, a week from Sunday, I'll make my 89th trip. But who's counting?
Darrell Bruggink: 89 trips. And the opportunity there, what was actually the void in the product, the trends that you saw and the way that you did business that allowed you really to get into Russia?
Howard Dahl: You had very large wheat farms which was just ideally suited for our equipment, and their equipment was terrible. And you needed simple machines, and so our Concord is we put it there, was very, very rugged. In fact so rugged that one of our first five Concords that we sold in the spring of 1982, this year put in its 36th crop. 3000 acres of soybeans. It's seeded every year for 36 years. We have hundreds and hundreds of Concords that are more than 25 years old that are still operating. So we built it very rugged, and that's I think part of the reason for its success.
Darrell Bruggink: me about Kazakhstan and the regions there—
Howard Dahl: Yeah, Kazakhstan's a lot like western Canada. Probably 30 million cropping acres, wheat and canola. Mainly wheat. And lower rainfall area, but huge farms. At one time there were three farms well over 1 million acres in Kazakhstan. All three of them have had some financial difficulties so they're breaking up a little bit but most of the farms are very, very sizable. An average farm might be 50,000 acres.
Darrell Bruggink: You talked a little bit about one of the things that kind of drove you to and I think this gets into not only your interest in business and agriculture, but I think also you talk about faith and purpose, and I think that all came into play with Russia. There was a lot of extreme poverty there you saw, and that kind of... Tell me how that all intersects when you talk business, agriculture, faith, how that all drove you.
Howard Dahl: Well when I started Concord in 1977, I'd worked with CRU, directed the work at the University of Florida, went to a seminary thinking I wanted to teach. And moving here in '77, I wrote values down that I wanted to carry out through my career, and one of them I wanted to have a life where there was no sacred secular dichotomy — where all of life was sacred. And imperfectly I've tried to apply the golden rule in every business decision, do unto others as you would have them do unto you. And that really gets to the best of... there's no good business transaction where there's not value added on both sides.
If we sell a piece of machinery and our customer doesn't benefit, it's not good for him. If we sell it too cheap, it's not good for us. And so good business really has a sense of there needs to be value added in both directions. And so that and then looking at every employee as C.S. Lewis said, there are no ordinary people. Every person's created in the image of God. And so one of our values is to have no white collared, blue collared dichotomy in our company. So yesterday I had an employee luncheon. It's almost like a quarterly lunch meeting. Every quarter I have a meeting with all our employees, I tell them the same information I speak to our board about. Where the business is at, some of the challenges, some of the victories, and then let them ask any questions they want about anything.
And so it's valuing the employees as a significant parts of all that we do. And so there's again, imperfectly that's been what we've tried to do and likewise if you talk about Russia we've had the privilege of supporting a lot of really good causes in Russia including what was a great success for a lot of years, the only Christian liberal arts school in Russia. And still involved in supporting a lot of very interesting, worthwhile projects.
Darrell Bruggink: I mean there's risk involved with that obviously, and I think if I understand right you probably had to write off some bad debt in 2008, maybe as a result of working Russia too—
Howard Dahl: Number of times. I sometimes am a little too trusting of some people and so we've probably given more credit than... It might be an exaggeration but perhaps we've given more credit than even a Deere case or AGCO in some cases.
Darrell Bruggink: That goes back to wanting to see the best in people.
Howard Dahl: Yeah, and it's... in the aggregate it's worked out well if you look at the total that we've written off over 27 years now, it's very, very small percentage.
Darrell Bruggink: Going back to the AGCO joint venture, why was the joint venture approach again which you felt was most attractive for your product line, why did you feel that was a good move?
Howard Dahl: Well, I was deeply afraid if we sold to AGCO like we'd sold to Case, the business could be destroyed. And I felt if we had a 50/50 joint venture working together, we had a higher probability of succeeding. I wanted to make sure the business was going to sustain itself long term and we're still a work in progress.
Darrell Bruggink: No I think not too long ago, I think it was Dave or Mike had done a story with you looking at the joint venture and you thought it might double sales within a few years to maybe the $100 million level. How overall would you say the joint venture experience has gone? Has it reached its potential yet? Where would you put it?
Howard Dahl: It reached its potential in 2013, but 2013 you could paint anything and call it farm equipment and it would've sold. We have not come close to reaching the potential that we have and we're working very hard on that both from an engineering and distribution stand point. But anecdotally, the number one Deere dealer in Russia who also farms about 400,000 acres of land, on his own farm he has 10 of our air seeders and he's ordering three more for the spring. He's a John Deere dealer and a Vaderstad dealer, but the fact that out of all the equipment he could buy he's buying our equipment, it speaks... there's a message there. And that's what we're trying to flesh out that message. But it's a very crowded marketplace today. There's a lot of good European companies, Canadian companies, U.S. companies that we're competing against.
Darrell Bruggink: What do you kind of remember about the early days of the business? What are some formative memories for you would you say?
Howard Dahl: Most formative are bank called our line of credit in 1987, November 20. It was a bleak time in the farm machinery business and I prayed and fasted for two and a half days and only one message came out of it: “Do unto others as you would have them do unto you.”
So, I wrote a letter to the 238 people that we owed money to, and I said “You all can force a bankruptcy and you'll likely get nothing. I believe our product is just on the verge of taking off and we'd be prepared to give you preferred shares in our company, you can simply wait but any ongoing business we do with you we'll pay cash, but you can park the amount that we owe on the back burner until we can pay you back, or if we do get some cash flow and are willing to settle at 50 cents on the dollar on the existing debt, and then in the future we'll pay cash for new business.” Out of the 238 creditors, only one moved against us. And I wrote letters to those creditors over the next two years, every few months.
And at the end of that experience I got letters from people thanking me for the way it was handled. Every one of them remained a supplier to us and in some cases, some who'd been especially good to us, one steel company in particular. In '95 their total steel quote was like $50 thousand higher than others and we gave them the business just as a thank you for what they had done for us. So we remained very loyal to those people. And the only one that moved against us would've had a lot of business from us, and they actually went into bankruptcy themselves in about 1994. So it was as far as memorable experiences, formative, that was very, very formative.
Darrell Bruggink: You talked about how you did graduate work and you went to Divinity school, right? What was your plan for life's work as a young man?
Howard Dahl: As a young man out of college I worked at the University of Georgia and then directed the CRU work at the University of Florida for three years. Just loved it but I was asked so many questions by students as I talked to them about my faith that I had no answers for. So I said “I need to get answers.” So I went to seminary. Not for the purpose of being a pastor but for the purpose of getting answers for a lot of questions I had. And so I did a philosophy of religion master of arts, and it was life changing. And I was as motivated as any student could've been. And that really served me well for the whole of my life. Just facing really tough questions, and then I think having the attitude that all truth is God's truth, not being afraid of any questions or any situations anybody faces. So yeah it was perfect preparation for what I've done.
Darrell Bruggink: Do you have a what would you call your best day in business?
Howard Dahl: Best day. Well, a couple things pop out, and it's a very monetary situation. You go to Russia and you get an order for 200 air seeders in one order from one region of Russia. That was a good day. Or we were really struggling with our sugar beet equipment but we believed that we could really help the Russian sugar beet farmers improve and so we put a few units out with really good success. When I say few, maybe 35 in 2002. I go back in the fall of 2002, in January 2003 and I accept orders for 140 beet harvesters and I come back and nobody believes we can get them built. And we'd never built half that many. So 140 domestic, 80... or 140 export, 80 domestic in 2003 and actually the last order I took was for 50, the guy wanted 70 and I said “I think we might be able to build 50 but I can't take the whole order that you want.” So, those days you look back and say that was very special.
Darrell Bruggink: Worst days?
Howard Dahl: Bank calling our line of credit and I think serial warranty issues in 1998. We put out a bunch of beet harvesters that during pre-harvest, I realized we had some problems. And I went out personally to five or six farmers to find out what the problem was and the warranty cost we had was staggering. And we felt to regain trust with those farmers, we needed to do more than just repair the problems, we needed to make some improvements which we did. So instead of it being a $400,000 warranty cost at that time, it became $800,000 because we again do unto others as you would have them do unto you. We caused some pain for farmers and we wanted to make sure that they were really satisfied with our work.
Darrell Bruggink: Right, right. What were the things that your father and grandfather probably taught you that you've applied to business and that you would hope is followed in the future?
Howard Dahl: Listen well to your customer and make sure you have something that is a value add for your customer. But dad even on his death bed in hospice care wanted to know “what are you doing that's new?” And so never being contented with where you are but always, there's got to be ways to improve and make things better. So make sure you're always looking at the improvements.
Darrell Bruggink: As we go back to your dad, Dave Kanicki, who was our senior editor at Farm Equipment, and Mike Lessiter had told me you shared a story about a preamble I think that your dad wrote on every contract that lawyers would've advised him probably not to do, and can you tell us about that and what it said about his personality too?
Howard Dahl: He said a lot of the contract... Well he said business stopped being fun in about 1965 when no longer a handshake and “I give you my word, I'm going to do this.” So, at least in rural America there was a sense that your word is your bond and if you had a choice of being an honorable person with a great reputation or having $10 million, you would have taken the honorable reputation. And he uses the year 1965 to say things. And maybe part of it was the Bobcat was growing so rapidly all over the world and contracts were becoming much more necessary.
But a number of times, if we get this big contract, even when we sold to Case and he'd say “I want to be able to write something. This is the intention of the contract. This is what we're trying to do.” And he always had that view even when we... He was dead already, but when we did our deal with AGCO, his thoughts were central in that five years from now, we want to look back on this contract and say it was a win win. He said “Anybody who tries to have a win lose on a contract, it's going to be a bad thing.” And so we always tried to express this. The only reason for this contract, it has to be best for both sides and we need to make sure that five years from now we can look back and say, “We're glad we did this.” And so a lot of people think “I need to get everything I can out of this contract and if it goes bad in five years I'll have won.” That's really the part of his thinking about a preamble.
Darrell Bruggink: What about your life's work in the business and probably at the very end of your career, do you think you're going to be most proud of?
Howard Dahl: I would say a lot of deep relationships with both employees, dealers, and farmers. Relationships that have been built in many places that it's more than just a transaction, there's a friendship. And so I'd say a lot of incredibly special friendships. And that really came from dad, he said “If you can work in a company with people that are friends, then you can sell to dealers who are friends and farmers who become friends. That makes business extra special.”
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