Illinois Family Farms Rick E' Rosentreter

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Illinois Family FarmsRick E. Rosentreter

• Presentation to
• Illinois Society of Farm Managers and Rural
  Appraisers
• September 26,2008

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4 Topics

• What is our outlook on the future of production
  agriculture
• Technologies and communication tools we use to
  keep landowners informed
• How do we plan on dealing with rapidly rising
  input costs as it relates to growth
• Business model plans and procedures for future
  growth

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Cornell UniversityApril 2003

• We are heading toward a bimodal structure with a
  few very large producers and a larger number of
  small, local niche marketers. Medium sized farms
  will become fewer and will be a transitional
  group of small farms becoming large.

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Consolidation

• Poultry Controlled by Tyson and a few other
  firms
• Pork 30 producers control approximately 45 of
  the sows
• Beef Feed lots Only a handful of large
  organizations remain
• Without any doubt, we believe dairy and
  production agriculture are rapidly consolidating

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2002 USDA Farm Size Data
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The plight of production agriculture today is
very much like that of other business.

• Crop farms are in a dramatically consolidating
  environment.

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Where do I feel the industry is headed?

• I am of the opinion that the crop production
  industry is headed the way of the chicken and
  pork industries. Operations must identify whether
  they want to stay same, try to grow and stay
  ahead of the consolidation, or merge into one of
  the systems that are already being developed.
  The choice is theirs!

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• Unless an organization is changing on the
  inside as fast as the industry is changing on the
  outside, the end is in sight.
• Jack Welch, former CEO
• General Electric

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• How and Why did we develop Illinois Family Farms

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Issues we identified

• Where did I feel the industry is headed
• Where will I fit in ?
• What will be the implications of our decision ?

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Business Plan Development

• Business plan
• Strategic Analysis (SWOT)
• Organizational Handbook
• Operations Handbook
• Standard operating Procedures (SOPs)
• Acreage Growth Handbook Processes
• Landowner Management Handbook
• Mergers/Acquisitions Handbook
• Crisis Management Emergency Action Plans
• Public Relations Handbook
• Certification

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Organizational Plan Development

• Identify the limitations of each structure.
• glass ceiling
• Clearly define your goals
• Clearly define the roles
• Cleary define the rules
• Develop a culture that supports the top three

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1. Clearly define your goals

• Set up your growth and profitability goals.
• Develop action plans that are measurable to
  achieve these goals
• Make sure that you management team agrees with
  the goals and the processes, procedures vision
  behind them

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2. Clearly define the roles

• Setup an organizational structure that allows for
  the growth and can transition easily in the
  future
• Make sure you get the right people in the right
  box. Make sure they stay there until it is time
  to move to a new box

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Reason for OrganizationalStructure

• Define lines of responsibility and authority
  within the organization.
• Facilitate and channel the flow of information.
• Achieve the efficient coordination of work
  activities of the different managers and
  employees.
• Illinois Family Farms Manager of Mangers
  Structure

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3. Cleary define Rules

• SOPs
• (Standard Operating Procedures)

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Standard Operating Procedures (SOPs)

• Standardization of processes and procedures.
• Create a format to report data
• Provide an avenue of tracking and performance
• Limit Liabilities
• Job description

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4. Development of supportive culture

• Set standards of conduct and positive treatment
  of people

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Growth alone does not ensure success!

• Growth creates economies of scale, However, the
  allocationof the additional revenues generated
  will define if growth gives you a true
  competitive advantage.
• 2007 Illinois Family Farms
• ROA 56
• ROE 182

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Illinois Family Farmsareas of investment

• Working Capital
• Infrastructure
• Technology
• People

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Summarization

• Our Outlook Consolidation
• Technologies and communications for landowners
  printed material, newsletters, Website,
  Meetings, Webinars, Web Cam
• Plan for rapidly rising input costs Working
  capital, summer fill, infrastructure.
• Business model plans and procedures Business
  plan, Organizational structure, Working Capital

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• Whether you think you can or cannot you are
  right!
• Henry Ford

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For more information on Illinois Family Farms

• WWW.ILLFF.com
• Questions?
• Thank You!