Bill Gauch Called in in October of 2011:
Absolutely right, Bill.
It's sad to see; they were a locally owned and operated mill that provided a good quality product since the 1920s.
I have never understood why they didn't pursue the retail markets for their feed. There's more dollars of feed sold today than there has been at any time in the past, its just in 50lb bags and for things like horses and chickens and pigs.
The basic issues seemed to be that the profit margin wasn't there for feed; that the biggest customers, dairy farmers, were the least able to pay their bills, so they had a lot of receivables, and that the mill was going to need some maintenance that would be costly.
Just to give you an idea of what I was thinking: They were selling feed at $400 a ton; which ends up being about $10 for a 50lb bag.
All of the feed stores in this area are selling bags of pig feed for $15-20/bag. A simple retail store with a little work could have sold them feed at $800 a ton, and they could have supplied a local feed to every retail store -- even if it cost more than cargill, people will pay a little extra for local.
So they could have been making a nice profit, but they pursued the declining dairy market until it was nearly dead, and ignored the booming sack feed market. And then sold the business to cargill instead of another local mill.
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