Mike Lessiter: When you look back at the product innovations that have come out in your time, going back to 1991, what are you most proud of?
Lars Paulsson: What I'm most excited about right now is our DynaTrac setup. That is something that makes so much sense, and you don't really have to change the management style on the farm. The problem we had with front hitches is that you have to find two things that you can do at the same time, at the same speed, and the same width, farmers don't think like that. You know, we do this, and then we do that, and this is faster way to do this and that.
But the precision positioning of seeds and nutrients in depth and distance between in all directions, that makes a lot of sense, and farmers spend a lot of money on getting auto-steer on the tractor. They get the RTK and you get subinch accuracy on the tractor. Well, it's nice to know where your tractor's at. But if you can be subinch, there's little things that the tractor does that easily move your implement off way more than an inch. There's little things people don't think about. You're on a side hill, and the tractor will grab like this, the implement's going to be even further off. Or on the side hill, your lower wheel is going to be compressed more than your up side wheel. Well, then tractor is no longer parallel with the ground, so all... if we're going with these kind of accuracies, what is unique with what we do that nobody else does is that we couple the implement free from the tractor. The tractor calculates the ideal guidance line, and then we make sure that the tractor is not pushing the implement somewhere, and the implement isn't pushing the tractor somewhere.
And especially now with the three point mounted systems, you get an intelligent quick coupler on the back, and it can move in all directions, and what is moving it is the implement. It doesn't move the tractor. It moves the quick coupler. The interface between tractor, it moves that so you stay. The implement is actually going to be more accurate than the tractor by doing that, and it's something you can use in almost all crops. Especially if you use GPS as your signal and you record, then you know exactly where the seeds are when you put them in the ground, and you can go in and cultivate before the plants come up. Or in going along with your dad, with things like strip-till, then you can strip-till in the fall and put in your own nutrients; you'd know exactly where your rows are. You put your seeds, your seeds an inch off, you put them on the inch off; you know where they're at. That is something that's exciting.
Mike Lessiter: How did that development and invention come to be?
Lars Paulsson: That comes really from Hubert and the design of the front hitch system, where you also have to know what is right. If you do this on the front, what is the tractor going to do? If you have something on the front that doesn't have like a wide tube and some of the shanks go down a little deeper, then that's where the tractor's going to go. And you can fight it with your steering all you want, but that's what will happen. So you get an intricate knowledge base of exactly how the behavior of the tractor influenced the implement and the implement influences the tractor, and you see as if you didn't tow it by hand or by the rear, you have to figure out a way to couple and uncouple them both this way and that way and this way. And well, he came up with a little, nice patent.
Mike Lessiter: What are the best application for that that you see here in North America? Who's buying them?
Lars Paulsson: A simplified version of that is what we call a DynaTrac classic, which works on tow-behind implement, where you don't need to worry about this so much, but you steer the implement with a tongue rather than trying to steer the wheels. If you steer the wheels with the implement, you have to shove the shanks that are in the ground sideways somehow, so you're fighting that all the time. If you steer with your tongue, it'll follow you like a wagon, and that's taken off with corn and soybeans, even in Wisconsin. Right now probably the leading state is Nebraska, for some reason. We have sold some in Wisconsin too, so basically in this corn-belt: Iowa, Minnesota, Illinois, Ohio.
Mike Lessiter: You've been working with us and with who we are to the Precision Farming Dealer Summit, and come to the National Strip-Till Conference.
Lars Paulsson: Sure. This is right up there. It's exactly what it's intended for. And getting back to this, about me being alone, we hired Kyle Frazer. Really good guy who's kind of taking care of the eastern part of the country now. He lives in Illinois, and he used to work for Orthman. Came highly recommended and hasn't disappointed us, and he has taken the guided hitch setup kind of under his wings. That's his shtick.
Mike Lessiter: What's a little known fact about Laforge? What would people, our readers or our listeners, be surprised to know about your company?
Lars Paulsson: I think maybe that there are actually French engineers. It's not just cheese and wine. There are actually some guys with brains. I think we see that quite often, that people are surprised. I say that, and I'm not even French.
Mike Lessiter: What's the size and scope of the operation over in France?
Lars Paulsson: It's bigger than it is here, but it's definitely considered a small company. Now in the little niche of front hitches, we are relatively big. But in Europe, we have 20 competitors.
Mike Lessiter: Wow. So, 20 competitors overseas, but only a few here in the states?
Lars Paulsson: Three points on the implement are standardized, so everybody knows what a Category 2 and a Category 3 three point is, but on the tractor side, it's all different. I think we have something like 20 different just for John Deere or 8 series tractors, depending do you have suspended ax or non-suspended axle? Do you have the Tier 4 engine, the interim Tier 4 engine or a Tier 3 engine? It makes all the differences, so if that's not your core business, there is no way a sales guy can stay on top of that, and if you don't discover it, then the guy will spend 15 hours in the shop trying to install it.
Mike Lessiter: What you just described there, 20 different configurations for a single tractor, and thinking about what you do and your very lean operation, I think it'd be fair that you say Laforge in the U.S., and everyone thinks of you, right?
Lars Paulsson: I've done this now for 30 years, so people recognize my accent over the phone, and they know.
Mike Lessiter: Plus, you have an attractive wife that you bring to the farm shows who–
Lars Paulsson: Oh, is that why (laughs)—
Mike Lessiter: You work to death in the mud fields in Wisconsin.
Lars Paulsson: Yeah, there's a picture of that (laughs).
Mike Lessiter: But how did you handle that, bringing a new product into the States, having multiple configurations? You have sort of thousand different dealers?
Lars Paulsson: I think we have 1,100 open accounts with the help. We are an allied supplier for John Deere, we do the other major guys also, but we don't do Chinese tractors and compact tractors and that kind of stuff. But one reason why we don't use importers, for instance, importers and distributors, because it's extremely challenging to keep the right stuff in inventory and the factory has a month lead time, and then there is a lead time, over a month, to ship an ocean container across, so you have to see that far ahead in your forecasting. Getting the right stuff in inventory is very challenging, and you hate paying freight for these things that are two-three thousand pounds a piece. So there is no reason to have importers, because having one big inventory or one inventory is challenging enough.
We decided to do it full run. There were some bad apples out there, but if you have a specialized product, the guy knows that he will eventually need a spare part. If he didn't pay his bill the first time, he's not going to get any parts, so I will say... I don't usually worry about that stuff. If they are, we look them up on the internet, and we see what the building looks like in the picture. Then I say, “If you don't pay your bills, I come and visit you.” And yeah, extremely few non-payers over the years. I think I've lost like 2,500 bucks total in 30 years.
Mike Lessiter: Oh, yeah? Doing well.
Lars Paulsson: Yeah, that side I'm proud of.
Mike Lessiter: Let's say you take a dealer call. How many configurations can you personally walk a dealer through?
Lars Paulsson: Well, so dealer calls and he wants a hitch, what he's used to is a rear hitch. All they worry about on the back is how much can if lift, because it has to be some really strange thing if you're going to drive away with a tractor and a hitch still stuck on the implement back there. That's not going to happen, and lifting, that's a challenge. On the front, you know, there's not that deal. The meanest thing you can put on the front is dozen blade weight. Has no give in it. Guys push silage. Yeah, a typical Wisconsin guy, yeah, I guess we want to push some silage, and then new light hitch. Oh, and it only weighs 1,500 pounds, except I don't make anything that lifts less than 6,600, so the lifting is not the thing. The thing is you push silage, and then you back down, and you happen to catch the corner of the blade out on the concrete wall. There goes the hitch, if not the tractor.
That's the kind of stuff, so when the dealer calls, first thing: “what is he going to do with it?” And you're surprised how many dealers have no idea… “Oh, he just want a hitch. It's all.” That somewhere in the picture he wants a hitch. So most tractors, we have like three hitches: a good, a better and a best. The guy who also drives a Cadillac than Chevy, he should get the best one. They both do about the same thing, but he's never going to come back and complain. And we probably end up about at least 50% doing the middle one, especially on the mowing side, and we have most tractors. It can fold up. If those guys have a loader, you fold it up, and you're driving three loader. So yeah, I mean, there's thousands of different combinations you can come up if you see how many tractor models are there.
Mike Lessiter: Most of our listeners or readers here are going to be North American. You have a global perspective that you bring to this, of course. What do you think the ag market in Europe and the ag market in Unites States doesn't know or recognize about the other?
Lars Paulsson: There is a misconception on both sides for how subsidies work, and I am not a specialist on either one, European or American to understand exactly how it works, but I know that farmers are protected in a way that no other group of people are, on both sides, in one way or another; and I think it's exaggerated somewhat how much subsidies American farmers think Europeans get and vice versa actually. There are some things like trade barriers that come up all the time. For a while, there was a serious discussion about... in Europe, they have this C marking of equipment if it is approved, and you are... it's up to you. You self-audit. You put that sticker on there, and you are not going to be able to sell your equipment if your bolts and nuts were not metric. I think they kind of stepped away from that, but those are little things that... Europeans do not like American meat that is hormone treated. They do not allow that, and that is an issue of some discussion. Roundup is another one that comes around.
Mike Lessiter: What would be one of the things, something that you have to remind Hubert on, the things that he may be wanting to do or is frustrated about here in the United States, and you have to say, “Hold on a second, Hubert. This is the North American market. This is what you need to understand.” What would some of those things be?
Lars Paulsson: One that sticks out is how much we spend on advertising.
Mike Lessiter: (laughs) You mean so little that you spend? Is that what you said?
Lars Paulsson: (laughs) Right. I wish. You wish. Well, I mean, Hubert is not really a good representative, he comes here almost five-six times a year, especially now since he has to watch the Iowa operations, so he goes to Iowa all the time, and so I don't really have to remind him all that much, but something that is different, in general, he is... especially on the west coast, how many hours we spend on equipment a year. That is way different from what they do in Europe, and if you take the Midwest, you have the width of equipment that is way different than what they do in Europe, which was an argument for us on the front three point thing. Okay, there are only three ways you can be more efficient with a tractor: you can go faster, you can go wider, or you can try to do more than one thing at the same time, and you can only go so fast. The life expectancy of a shank in a ground goes down by 50% for every mile an hour that you increase your speed. Plus, your accuracy tends to suffer from that, and you can... even here, you can only be so wide. Eventually, your stuff gets so heavy... you can fold it up, but then when the folding up gets so heavy, it gets out of sight and expensive. So the combining passes we thought would be a bright idea but still after 30 years, hasn't really taken off. There's special things they do with the front hitches that are not really the cutting down on passes.
One sector that I forgot that's come up after we talked about the triple mowers that is really coming strong now, both on front hitches and on the rear guided hitch, is the organic growers. They run the rolling crimpers. Well, it's typically something you should do before you drive over the stuff, because the... the crimper's not going to work in your tracks; so they need a front hitch, and they do a lot of passes through the field. They use GPS for their planting. They can come back and cultivate, and they can spray without crop damage. That's really a sector that's coming strong for us, and you might not always agree to the philosophy of organic in principal, but growers can make money doing that, and why not? And they pay their bills. Why not work with them?
Mike Lessiter: We're doing a study of some opportunity in cover crops right now, and I imagine that that crimping that cover crop would probably be an application that we could see some promise in. It's slow here for you after 30 years, you know, looking back 30 years ago... but what do you think the next 10-20 years looks like for application of Laforge?
Lars Paulsson: There is steady growth in what we are doing. There’s some talk about these guys that do other vehicles and tractors, and when they go autonomous vehicles, when the Canadians come up with that deal that they have, I still think the tractor is going to survive for another 20-30 years. It is still a versatile vehicle that does a lot of different things. It can stand still and power stuff. It can run fairly fast for transports, and it's adaptive to pretty much anything; and it has become a comfortable working space for the operator.
So different ways of attaching stuff to it, there's going to be a need for it moving forward. Challenge will remain for us as a specialist in what we are doing to stand apart from the majors, so that there is still a reason for us to exist.
Mike Lessiter: That's a nice segue into a question that I'm asking for this project, this series.
Lars Paulsson: Is there a right or wrong answer?
Mike Lessiter: Well, I'll tell you... I'll let you go, and then I'll tell you it's wrong afterwards (laughs). That this whole series is about innovative specialty manufacturers, like yourself and all the other ones we've done. Tell me what life is like for the American farmer if we don't have this strong, specialty supplier What would it be like, you know, to remove it for a moment?
Lars Paulsson: Well, I mean, pretty much all significant innovations that you can think of have come from small companies and later been adopted by the bigger guys. So if we disappeared, innovations would stop, and—
Mike Lessiter: You think the farmer stops to think about that?
Lars Paulsson: Well, I mean, a lot of our small companies started out as farmers, so one way or another. If the farmers stop to think and come up with solutions for issues that they encounter, and if it is a good enough solution, they can make a company out of it. And I don't think that would ever stop. I think we are an essential part of the whole picture. We all fit our little niches, wherever we're at, and we try to stay alive as best as we can with honesty and integrity and a smile on our face.
Mike Lessiter: Your smile usually comes only after I've endured a beating (laughs).
Lars Paulsson: No (laughs). I have so much respect for you.
Mike Lessiter: I've told Darren this — I don't handle many accounts anymore, but I handle yours, because one, I enjoy working with you, and two, I feel like you're capable of educating me. On every call that I take, I get smarter.
Lars Paulsson: Oh, yeah? (laughs) You're making me blush. What makes us kind of special is that we have been around doing this for 30 years here and not working out of Europe, like a lot of other Europeans do, having a rep over here. You need some spare parts, you have to wait for three months to get that from Europe, and we do speak half as decent English. I think that's what sets us apart. We have, like I say, 1,100 dealers with open accounts right now. Another 1,300-1,400 probably have contacted us one time or another, but we've never been able to close the deals; so they have never gotten to set up an account, but they are in my CRM system. So there is sales support, warranty support everywhere. For a small company like this, I think that is a valuable asset to have, and I don't really know any dealer who is mad at us. We try to support them and support the farmers.
Mike Lessiter: I've never heard a bad word said about you, other than in our office (laughs). Most of that was from Darren.
Lars Paulsson: Yeah, I'm sure (laughs).
Darren Foster: One thing I just thought of though as you were saying that: a lot of the large dairies... I live in Indiana. A lot of the large dairies, the ownership is from European, Dutch and other places. Is that beneficial to you, having—
Lars Paulsson: Yup, it is. I mean, I speak Dutch, so I get some business coming my way. It helps in that—
Mike Lessiter: You negotiate like a Dutchman.
Lars Paulsson: Huh?
Mike Lessiter: You negotiate like a Dutchman.
Lars Paulsson: (laughs) Yup. You know—
Mike Lessiter: It's not really negotiation when he gets whatever he wants. (laughs) Well, I think I got what I was looking for today.
Lars Paulsson: Yeah? I'm glad.
Mike Lessiter: Thank you for doing it. I appreciate taking the time. This was fun to do.
Lars Paulsson: It was. Entirely my pleasure, well, telling stories to Mike.
Mike Lessiter: Good.