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Published June 13, 2011, 05:30 AM

AGWEEK EXCLUSIVE: Dahl cultivates markets, friendships in Russia

MOSCOW-To succeed in the Russian agricultural equipment world, Howard Dahl has become as comfortable In the financial center of Moscow as he is in the farm fields pr Russia and Ukraine.

By: Mikkel Pates, Agweek

MOSCOW - To succeed in the Russian agricultural equipment world, Howard Dahl has become as comfortable in the financial center of Moscow as he is in the farm fields of Russia and Ukraine.

He is president and chief executive officer of Amity Technology L.L.C. of Fargo, N.D. In 2011, he became president of AGCO-Amity J.V. L.L.C. - a joint venture between Amity and one of the largest farm machinery makers on the planet. Howard currently is serving a stint on the Minneapolis Federal Reserve bank and travels regularly to Washington as a member of the regional audit committee chairman. He has been a speaker for functions at Export-Import Bank of the United States.

Amity evolved from Concord Inc., a company Dahl founded in 1 MOSCOW - Watching as Howard Dahl reads signs in public notices and signs in downtown Moscow, I am amazed at how he been able to read the signs that have led to success for his company and so many North Dakotans.

I first met Howard in the mid-1980s, when his father, Gene Dahl, introduced us. I'd known Gene through his years as chairman of the board of Steiger Tractor Co. - a signature North Dakota/Minnesota company. Gene was the son-in-law of E.G. Melroe, who started a company that eventually developed the Bobcat brand, another signature company for the state.

Back then, Gene asked if I'd be interested in talking to Howard about a story for The Forum of Fargo-Moorhead about Howard's Concord air seeders  Howard and his brother, Brian, had been building his business for several years by then, bringing pneumatic seeders and minimum-till technology to the Upper Great Plains.

Gene smiled a lot at this interview, but I remember Howard was distracted.

"The late 1980s were a very difficult time for anyone building farm machinery," Howard recalls, years later.

Howard had grown up in Gwinner, N.D., home of Bobcat. He'd gone to the University of North Dakota in Grand Forks, then on to work for Campus Crusade for Christ in southern universities. He met his wife, Ann, in 1972 and went on to graduate school at Trinity Evangelical Divinity School, where he earned a master's in the philosophy of religion. He loved the academics, but was pulled back to his heritage in Fargo, N.D.

He'd spent time in Hungary on behalf of his father's company in 1974 as Steiger began to use axles made in that country. He found himself interested in the lives of people who had lived under the atheist mandate of the state.

In 1977, he and younger brother Brian, also a UND grad, joined him in founding Concord Inc.

Dahl doesn't answer simply when asked whether it was an easy decision to return home to take up a manufacturing legacy that was two generations old in agricultural manufacturing giants. Brian says a relative advised him to go into business with his brother.

Choosing to come home was a matter of discerning God's will, through "many counselors," and then "letting the peace of Christ rule in your heart," he says.

Brian says Howard always has focused on the "what" to do, and Brian has focused on "how," or the process.

Solving the puzzle

In the mid-1980s, Concord was taking off in North America, and he started looking at the Soviet Union markets.

Part of the success of the company has been finding outside advisers.

"Dad always insisted on outside board members," he says, noting that the early ones were Roald Lund, former North Dakota State University agriculture dean, and Norm Jones, of Metropolitan Federal Bank.

One of Howard's early target markets was in Siberia, where large-scale wheat production was in need of his no-till drills.

"We knew that our air seeder was performing well in very large fields, and they have some of the largest fields in the world there," he says.

The climate was not unlike northern Minnesota or the prairie provinces of Canada. It was like home.

In fall 1991, Concord had shipped five machines to the then Soviet Union. In March 1992, Howard went them to see them running - first in the Stavropol region in the Caucuses, and in the fall to Siberia, to the Kemerovo Oblast (province), across the border from Mongolia and Kazakhstan, hosted by a Russian agricultural scientist.

The market was a fascinating puzzle. In the early 1990s, Dahl in one deal bartered 10 Concords for rapeseed, which could be sold to the Germans for making vegetable oil. He remembers one case where a potential customer offered polar fox pelts for a machine, a deal he probably should have made.

Among other things, Dahl later discovered he'd initially had a poor translator and didn't know it. He didn't make as much progress as he should have in matching his products with an exciting market, but he was on the right side of history.

He's never taken formal Russian language training, but has learned "many words" through practice and often can understand what he needs to. Understanding as much as he can is his goal, and he's read numerous books on the economic, political, cultural and spiritual heritage of a place that nearly is his second home.

Everybody raises wheat

The timing for the Dahls' early entry into the market was fortuitous.

The large "state farms" were privatized by giving each worker a proportional percentage of the farm.

At first, the lands were rented out and, in the past several years, they've been aggregated by wealthy Russians and Westerners. The small farms before the 1930s had been made into "collectives" in the Stalin years, and these, too, were privatized. It was a kind of free-for-all.

The oligarchs were amassing fortunes and people who understood the market had an advantage.

"Everybody raises wheat - all over Russia," he says.

He also looked south to Krasnodar, a city that of the same name as a region. Krasnodar is in the southern part of Russia, on the Black Sea.

In 1998, Concord sold more than 200 air seeders through the governor of Krasnodar. Shortly after the sale, in August of that year, the ruble depreciated by 80 percent, and Russia faced an enormous financial crisis. It particularly hit agriculture because oil and gas were priorities for the government. For the next three years, sales were difficult.

In 2001 and 2002, things took off again as the ruble recovered.

"The infrastructure was in place, so that anyone with vision and capital could assemble large farm holdings," Dahl says. "People were buying sugar factories for $100,000, if you could keep people employed."

At this time, there were four-wheel-drive tractors - mostly the 270-horsepower K-700s, built by Kirovets or "Kirov Zavod" (plant) of St. Petersburg, which once employed 54,000 people at a single location. The K-700 tractor was able to pull 28-foot-wide machines easily, but nothing more than 40 feet.

Concord experienced rapid growth both in the U.S. and in the former Soviet Union. Case offered to buy it in 1995. Significantly, the Dahls retained the marketing rights to the air seeder business in Russia until 2001. The Dahls were out of the "air seeder" business for about seven years, but eventually got back to its roots in air seeders with the acquisition of Fargo Products, a company developed by former Concord employees.

Strategically correct

Dahl says Concord, and later Amity, grew in Russia and Ukraine based on earned trust.

"Initially, we did letters-of-credit on almost all shipments," he says, however he took risks with a certain, few individuals with whom he'd built relationships.

"We made many mistakes," he says. "Sometimes the tactics needed to be completely changed, but the big picture - the strategy - was right. Our equipment was well-suited for this market."

By 2003, it became obvious how important the Russian/Ukrainian markets were to the Fargo-based company. That year, Amity sold 146 "sugar beet combines" in Russia and surrounding countries, even as they'd sold only 80 in the U.S. Since then, the sales have evened out, Howard says, with roughly the same number of "rows" sold in the two markets.

Dahl says Russia and Ukraine have been key to viability of Amity's Wil-Rich and Wishek sales, and to their workers back in North Dakota.

Says Dahl: "It's really made the difference between being a struggling company and a very successful 977 with his brother, Brian, and father, Gene. Howard and Brian have taken their place as the latest in a family of North Dakota entrepreneurs who have marketed to the world for more than 60 years. He has been doing business in the Russia area for nearly 20 years.

Amity's brands include equipment - and now through its partner AGCO - air seeders and tillage equipment. The company's sales of these products are roughly $100 million a year, and Russia and Ukraine account for a third of Amity's business - a third  of the jobs back home.

Dahl returns to the region about four times a year. He invited Agweek as a traveling companion on his 62nd trip to Russia.

Moscow's influence

Since making his first trip to Russia in 1992, much has changed, but the financial action still is in Moscow.

The city's population officially is about 10 million people but really is home to many millions more, as many people work there but are officially "registered" in their home countries in the Russian Federation.

Some people here are fabulously rich. Others have relatively meager salaries, but it's what they have to spend on food that counts, Dahl says. In the transition to a market economy, most people here were given title to their apartments, mortgage-free.

"The disposable income in Moscow is higher than in some parts of Europe," Dahl says. That's what drives demand for food, and for equipment used in growing it.

On the periphery of Moscow are forests of birch and pine. And then there are the forests of massive 18-story, ugly rectangular apartment complexes. Glassed-in balconies often are draped with drying linens, giving them the feel of a tenement.

Near the center of Moscow, the conditions become richer. It is a cosmopolitan place that is at once the center of the government, and the centers for politics, finance, religion and art - a kind of Washington, New York and Rome, all rolled into one. There are a lot of Escalades, Mercedes-Benzes, Range Rovers and Toyota SUVs - mainly black- among the onion-domed cathedrals of the Russian Orthodox Church that doggedly survived Communist persecution.

A place to meet

In the early years of his business in Moscow, Dahl economized on lodgings and logistics to visit prospective business partners.

"I remember staying in one hotel where I woke up to find hundreds of cockroaches, crawling across my bed," he recalls of a particular stay in Siberia. In those days, he'd spend much of his time in transit, visiting key people - often sitting in taxis for two hours on the way to visit prospective customers.

Several years ago, Dahl came to realize that CEOs from various companies on his itinerary actually would come to him if he stayed in nicer hotels.

On this weeklong trip, Dahl's itinerant corporate headquarters of choice is the Radisson Royal in Moscow.

It is an imposing structure - one of the so-called "wedding cake" architectural skyscrapers in Moscow. Rooms run $500-plus per night.

"Moscow is the most expensive city in the world for the business traveler," he says. "An American friend one night paid $1,000 a night at a Holiday Inn in Moscow when the hotels in the city were completely booked."

Still known to locals as the Hotel Ukraina, the Radisson Royal stands on the west bank of the Moskova River. The structure stands 675 feet tall, including the 239-foot spire. The Radisson people refurbished it and reopened it in April 2010.

The hotel's architectural style (Stalinist Gothic, Socialist Classicism) is the design of seven landmark skyscrapers in Moscow. The hotel is the second tallest of the "Seven Sisters" that were built from 1947 into the 1950s. Others among the "sisters" are the main building of the in Moscow State University and the Ministry of Foreign Affairs.

Morning to night

Mostly using an iPad, Dahl tightly schedules his day from breakfast to supper.

On one evening, he hosts a dinner gathering in a 29th floor restaurant. Dmitri Rylko, a friend of Dahl's since the mid-1990s, is one of the nation's premier agricultural economists and speaks worldwide on the condition of Russian agriculture. Also at the dinner is Ryan Offutt, a leader in the Agricultural Construction Technologies, a string of John Deere dealerships in the Krasnodar region, a joint venture with RDO companies in Fargo.

Rylko talks about the prospects for political change, and his plans for organizing a meeting of large farming entities in May in New York, to connect with potential U.S. investors and venture capitalists. He says he has a "dream" to translate books by Hiram Drache of Fargo into the Russian language. Drache's "Creating Abundance: Visionary Entrepreneurs of Agriculture," and The "Day of the Bonanza" should be translated, he says. Such a project might take $18,000, Rylko says.

On a later morning, Dahl greets his contacts in the elegant surroundings of the 11th-floor executive lounge. It is not a stuffy environment - jeans, an open shirt, a sport coat.

Dahl breakfasts with Bob Foresman, Russian country head for Barclay's Capital. The two are board members of the Russian American Institute, a Christian liberal arts college. They and others have invested some $22 million into a facility for the purpose of turning out undergraduates. The college opened in 1996, but it recently has faced demographic and economic challenges. They talk about how they can partner with the Russian Orthodox Church and train people for "family support" work - family ministry, social work and English language.

Before long, Dahl is meeting with a parade of people connected with elite agricultural organizations in the country - "private holdings" that can purchase dozens of machines from Amity in a year. Some prefer anonymity.

Million-acre farms

First among them on this day is Gustav Wetterling, director of procurement forAgro-Invest (Black Earth), based in Moscow, which is owned by a large Swedish investment fund. The company's farming entities are roughly a million acres.

Wetterling's company owns 250,000 hectares, manages another 100,000 and has 328,000 hectares under contract. Dahl says companies have three ways of buying land - buying from another farming entity, buying from municipal land funds, or buying from old collective structures - a tedious process, but in some ways preferred. They also can lease it on a 49-year lease.

Wetterling talks about their sugar beet planting plans, the look of their winter wheat in the wake of the 2010 drought. Dahl discusses the new, 12-row technology for sugar beet equipment will be ready for export in 2012. Amity has supplied sugar beet planters for Agro-Invest's 3,700-acre pilot project.

Howard tells Wetterling that the market for machinery is so hot that manufacturers worldwide are at full capacity.

There are discussions about sending farm managers to the United States to study techniques for raising sugar beets, potatoes, soybeans and winter wheat. Wetterling says some of the younger farm managers would be better candidates.

"If we send the older guys, they will say, 'They have nothing to teach us,' which is not true," he says.

Among other things, Dahl talks to Wetterling about a disk harrow, which is a strong candidate for "reclaiming" land that has been idled for up to 15 years after the collective farms went bankrupt. It'll go through volunteer trees that are up to 7 feet tall, Dahl says.

Of drought, embargoes

Another agricultural manager later in the morning is less comfortable. His company's crops were devastated by the 2010 drought, he says. There will be no purchases of new equipment this year. The man brings up a specific problem: Amity had arranged for a third-party beet cart for the farm in 2010. It works with normal-sized beets, but needed narrower chains to handle beets like last year's, that were the size of carrots.

Dahl listens patiently, says he'll do what he can to help on the chains, even though this isn't his company's product. After the departure, Dahl says the news of them not buying new equipment wasn't unexpected.

"We really were out of inventory to sell him anyway," Dahl says.

Often, Dahl refers to a recent online Wall Street Journal article, which discusses how these companies have emerged as today's investment opportunities.

"The story lists five companies and four of them are very big customers of ours," Dahl says. "Four of those companies each have 60 or more sugar beet harvesters, built by us."

Dahl thinks there are about 20 of these companies that have more than a half-million acres each in Russia and the Ukraine. The Journal qualifies the picture by describing the pitfalls here - of "high debt levels, unproven management teams and climatic vagaries" that "leave plenty of room for doubt."

Middle manager needs

In an evening dinner meeting, Dahl visits with one of these company managers. The man has North American roots and is running the affairs of an immense Russian farm. He discusses the risks and rewards of the Russian agricultural scene, but declines to be identified in an article.

The man says the biggest challenge to agriculture on this scale is finding and keeping competent middle managers. They need bonuses so they will work - as needed - from 5 a.m. to midnight. Production bonuses have to be set to almost double the salary. Managers can make $3,000 a month, plus a bonus. "Tractorists" (tractor drivers) can make $1,000 a month, or more, he says, speaking in general terms.

"No one has been successful at corporate farming in wheat," the man says, although he says his company has done well in a variety of crops, such as oil-type sunflowers.

Government-sponsored money can influence people into a livestock operation, the man says, but sometimes without the full understanding of the logistics. One beef producer imported Angus cattle, but lost 30 to 40 percent of them over time, and 70 percent of them aborted their calves.

"Over the last two years, they lost up to $35 million," he says.

With all of its problems, the man says, corporate-run agriculture in Russia and surrounding regions is going to succeed and offers an ominous summary: "The consolidation and integration of farming enterprises, if done successfully, will create an environment that the North American farmer will have a tough time surviving," he says.

It seems he takes no joy in saying this.

Black soil country

After a few days in Moscow, Dahl is ready for a foray into the farm country. Sergey Shkurenko - a close friend and farm owner-customer - is Dahl's traveling companion. Shkurenko's business card lists him as general manager of Interregional Agroindustrial Co. Ltd.

Shkurenko lives in a Moscow home and is building a multifaceted farming enterprise in the Kursk region. We travel in style - a luxury Mercedes SUV, traveling two-lane highways for six hours one day, 11 hours another. One of Shkurenko's regular drivers is at the wheel as the executives make phone calls and check Internet messages.

Russia has 120 million hectares of arable land - nearly 300 million acres. Farmland accounts for 23.5 percent of Russia's land mass. Some say a third of it is fallow. Land that was selling for $40 an acre in the early 2000s has increased, but getting a fix on the land inflation is not easy.

One large farm's chief operating officer says his firm has averaged about $100 an acre and now is looking at prices of about $320 an acre.

Charles Bausman, a director for Global Ag Investing, offers a different take in an op-ed piece in the The Moscow Times on the day Dahl was staying there. Bausman writes that Goldman Sachs had set up a $10 billion private equity fund, part of which would be allocated to agribusiness. He says farmland in the most productive regions of Russia sells for about $500 per hectare, or $1,235 per acre, which is about 15 percent of the cost of land in comparable markets. Efficient farmers can generate $400 or $500 per hectare in profits, making the opportunity "more than obvious."

The government, rich from oil, is investing in infrastructure, he says. There are incentives for growth in the meat sector, with a goal of 85 percent meat self-sufficiency by 2015. Large pork, poultry and dairy operations are being installed. Production agriculture is undercapitalized.

Aerospace to agriculture

A native of Ukraine, Shkurenko explains he was trained as an aerospace engineer, but has been developing the agricultural business since about 1994. Within an hour of Moscow, the fields become large and the soil becomes blacker.

This "black soil" (chernozem) country is aptly named and breathtaking to the agriculturally-minded viewer - topsoil as black as the Red River Valley, but up to 6 feet deep. Plowing still is common here, but the country has fewer problems with wind erosion than the Upper Great Plains of the United States. While it is obvious that big agriculture is at work here, it is too wet and cold to see any field work.

We pass through small villages with clapboard houses in blues and yellows, seemingly linked by painted gas pipes. We pass ever-present chickens, men on bicycles, or driving horses. Along roadsides babushkas (grandmothers) set up impromptu booths to sell honey, potatoes and other wares.

Sugar beets are significant in the black soil region, in the Kursk oblast (province) and surrounding areas. Sugar beet acreage in the past five years has ranged from about 1.98 million acres to 2.47 million acres. The region is quickly modernizing its sugar beet industry, but still has much to do.

Kursk is a city of 400,000 people, but somehow seems smaller. Here, Dahl meets with Boris Saposhkov, owner of a John Deere called Jupiter 9, in the black soil region. Dahl is anxious to assure Boris and his son, Mikhail, that a new joint venture between Amity Technology and AGCO will not disturb their relationship as a supplier of Amity equipment.

Shkurenko's farm

Shkurenko's farm is a sizable operation by U.S. terms, but is not yet massive by Russian standards - 25,000 acres of wheat and barley, 5,000 acres of corn, 2,500 acres of field peas, 2,500 acres of potatoes and 7,000 acres of sugar beets. Shkurenko raises potatoes for the fresh market and for Frito-Lay.

Shkurenko says he sold all of his potatoes for 22 rubles per kilo, or about 30 cents a pound, while potatoes in the supermarkets were $3 per kilogram or $1.36 a pound. We visit the farm's potato warehouse, which is provided with ventilation equipment, sold by Amity and manufactured by BTU of Perham, Minn., an RDO-related company. Much of the facilities are modern, but some of the women workers here are sitting next to the piles, putting potatoes into bags by hand for the tablestock market.

The farm also operates a 2,000-cow dairy. The barns were made by Cover-All of Canada. Elsewhere, Schkurenko has built a 5,000-sow pork farm, run by a couple from the Netherlands and Italy, using Dutch equipment. .

Significantly, Shkurenko and his farm manager, Sergey Kosinov, are anxious to show Dahl how they'll expand by 5,000 hectares, or about 10,000 acres. They plan to irrigate some of this land, they say, and plant more potatoes. We off-road it in the upscale SUVs, looking at the land that has fallen into idleness from bankrupt collective farms of 20 and 30 years ago.

Dahl joins Shkurenko and Kosinov, and several key farm employees for a dinner at the farm headquarters - actually a refurbished equipment factory headquarters. Kosinov's wife, Natalia, is the office manager for the farm. There are numerous sumptuous meat and vegetable dishes to sample, all prepared in the kitchen that daily takes a meal to all of the company's farm employees.

The Russians are robust hosts. Kosinov is quick to offer chilled vodka, but patient if mystified with a visitor who wants only limited amounts of liquor. The toasts sometimes are lengthy, always heartfelt - to long friendships, to the future of their ventures, to Dahl, and his equipment that is bringing prosperity to their farm.

"The most important thing is the friendship," Dahl says in his toast, noting that he first met Shkurenko in fall 2001 and has seen him 40 times in Russia and two times in America.

Four bullet holes

The last day on the agricultural tour starts with a wake-up in a hotel/spa room in what was built as a proud country palace by a Russian prince in the early 1800s. Rooms are pre-arranged by Shkurenko, and he offers a walking tour of its opulent rooms, its ponds, its English gardens, as yet unplanted.

Our first appointment of the day is St. Nicholas Monastery. Dahl is building a relationship with Russian Orthodox Church. He shares a tour and tea with Abbot Pankrati, a robust and kind man in a black robe and a pointed hat. Dahl is moved when the abbot gives him two gifts - a blue kerosene lamp and a gold leaf finished, six-pointed star that had been a decoration on one of the monastery's onion domes. Dahl is astonished to learn that the star had four bullet holes from when the Soviets desecrated the monastery in the 1930s.

After a quick lunch, Dahl is anxious to get to Ukraine.

He is headed for the Poltava area, where he plans to meet farm managers for a major client - Astarta-Kiev, one of the country's largest, integrated farms. Shkurenko once was a partner in that farm and his brother is one of its farm managers.

But there is a problem. Americans can't cross at the first customs point. Dahl waits an hour for permissions that don't arrive, and then opts for another crossing that will extend the journey by three hours.

Dahl and company hurdle across pothole-pocked "main" roads at more than 80 miles an hour on roads that appear to be a mortal threat. At one point, we are stopped at an impromptu police checkpoint. The policeman seems to be asking for a bribe, but doesn't take any money when he realizes his father works on Shkurenko's farm.

Badly behind schedule, Dahl's vehicle makes only one extra stop - to take a photo of an impressive double rainbow - somehow emblematic of opportunities here.

Poltova's promise

As evening arrives, we pull into Yareksi, a town with an Astarta-Kiev owned sugar beet factory. The village is in the area of Poltava, a town of about 300,000. Howard immediately huddles with 10 farm managers from Astarta-Kiev.

Astarta-Kiev is a Netherlands-based company, listed on the Warsaw Stock Exchange. It is led by Viktor Ivanchuk, a personal friend of Dahl's. Ivanchuk is a Ukrainian native who has his master's degree in business. His resume says he was in a "civil service" job before starting Astarta-Kiev in 1993. (Dahl explains that Ivanchuk is not available to see us, as he was out of the country spending a week praying and meditating at Mount Athos an exclusive Orthodox monastery on a Greek island.)

Dahl chats with the farm managers and officials for more than an hour, apologizing for his tardiness, telling them about the new 12-row harvesting machines that will be available to them in 2012. They potentially will replace six-row machines that are more common today. In the meeting, Dahl is flanked by Matt Faul, an engineer, originally from West Fargo, N.D., who is spending four weeks in Russia and Ukraine this year.

Amity has sold 500 pieces of equipment to Astarta-Kiev over the years and regularly hosts visitors from the company in Fargo.

Eventually, the meeting is over. The men of Astarta-Kiev end the meeting and reconvene to a rural restaurant, with sausages and other delights. It is hard to realize that this group of farmers is a piece in a much larger concern.

Farm's quarterly report

Astarta-Kiev is publicly traded on the Warsaw Stock Market. It employs about 7,000 people and describes itself as an "agri-industrial holding" and the leading Ukrainian sugar producer, which Dahl says represents more than 25 percent of the country's domestic production. It is vertically integrated, with six sugar factories. It aspires to reconstruct and modernize the plants to comply with European Union standards.

The corporate-style Astarta-Kiev has grown rapidly since starting at 89,000 acres in 2003.

For three straight years, the company has had a $10 million annual operating line with the Export Import Bank. The company is divided into 35 farms, each with about 12,400 acres - around 370,000 acres in all.

The company controls some 555,000 acres and added about 37,000 acres in the first quarter, according to its quarterly report. Because of rotation needs, the company raises grains and oilseeds and is in the dairy and cattle business, milking 1,200 cows. The production goal is about 1,850 gallons per year, compared with the U.S. average of about 2,200 gallons.

After increasing its "land bank," in the past year, the company enlarged its machinery fleet by more than 200 units. Revenues grew 58 percent, year-on-year, for the quarter.

The farming schedule is similar to the Fargo area. Astarta-Kiev was projecting planting to be completed by the second half of May. Sugar beet harvest starts at the end of August.

Dahl says Astarta-Kiev's beet yields are about 30 percent higher than the national average, and Amity is one reason why. On May 23, the company's quarterly report noted it had completed its spring sowing "in full conformity with the production plan," including 106,250 acres of sugar beets, 84,000 acres of soybeans, 81,500 acres of corn, 32,100 acres each of sunflower and barley and about 62,000 acres of forage crops. Another 111,000 acres were planted to winter crops.

In 2010, the company produced 1.56 million tons of beets, but had unexpectedly low sugar extraction of 12.7 percent, compared with 14.8 percent in 2009. An important factor in "optimizing the timing" was modern equipment and "intense training of machine operators," Astarta-Kiev announced.

My world is here

Perhaps Dahl's greatest strength in this market is a projection of sincere friendship and concern - a certainty that he is not looking at Russia and Ukraine as just some cornucopia of untapped wealth, to be ripped off as quickly as possible.

He listens a lot.

When he's not conversing, he's almost always on the phone or staring into his iPad, getting the latest news. Significantly, he often asks questions about the European competitors who are closer geographically. They were slow in responding to Russia's needs for bigger, more robust equipment in the 1990s, but they have improved. He and Amity must improve, too.

"I used to have a number of farmers say, 'I wish you weren't helping the Russians,'" Dahl says.

His response has always been, "If we weren't there, 100 percent of the business would go to European Union companies. I would just as soon have us get the business in North Dakota."

In 2011, Amity made a big step in forming the marketing joint venture with AGCO L.L.C. to develop and distribute air seeding and tillage equipment, in 140 countries, and has a far larger capacity to expose the company's products to the world.

Dahl seems to be preparing his company for growth that will take it beyond his personal energy, although he says he has no plans to become less active. His abilities seem specifically suited to this market.

For the time being, Dahl will tend to this "black soil" region himself.

"You can't be everywhere and I am, personally, too old to go and start new relationships and new businesses," he says. "Others can do that in AGCO, but my world is here."

DAHL ARTICLE

A career on the grow

Pulled into the family business, Howard Dahl has helped company go global

MOSCOW - Watching as Howard Dahl reads signs in public notices and signs in downtown Moscow, I am amazed at how he been able to read the signs that have led to success for his company and so many North Dakotans.

I first met Howard in the mid-1980s, when his father, Gene Dahl, introduced us. I'd known Gene through his years as chairman of the board of Steiger Tractor Co. - a signature North Dakota/Minnesota company. Gene was the son-in-law of E.G. Melroe, who started a company that eventually developed the Bobcat brand, another signature company for the state.

Back then, Gene asked if I'd be interested in talking to Howard about a story for The Forum of Fargo-Moorhead about Howard's Concord air seeders  Howard and his brother, Brian, had been building his business for several years by then, bringing pneumatic seeders and minimum-till technology to the Upper Great Plains.

Gene smiled a lot at this interview, but I remember Howard was distracted.

"The late 1980s were a very difficult time for anyone building farm machinery," Howard recalls, years later.

Howard had grown up in Gwinner, N.D., home of Bobcat. He'd gone to the University of North Dakota in Grand Forks, then on to work for Campus Crusade for Christ in southern universities. He met his wife, Ann, in 1972 and went on to graduate school at Trinity Evangelical Divinity School, where he earned a master's in the philosophy of religion. He loved the academics, but was pulled back to his heritage in Fargo, N.D.

He'd spent time in Hungary on behalf of his father's company in 1974 as Steiger began to use axles made in that country. He found himself interested in the lives of people who had lived under the atheist mandate of the state.

In 1977, he and younger brother Brian, also a UND grad, joined him in founding Concord Inc.

Dahl doesn't answer simply when asked whether it was an easy decision to return home to take up a manufacturing legacy that was two generations old in agricultural manufacturing giants. Brian says a relative advised him to go into business with his brother.

Choosing to come home was a matter of discerning God's will, through "many counselors," and then "letting the peace of Christ rule in your heart," he says.

Brian says Howard always has focused on the "what" to do, and Brian has focused on "how," or the process.

Solving the puzzle

In the mid-1980s, Concord was taking off in North America, and he started looking at the Soviet Union markets.

Part of the success of the company has been finding outside advisers.

"Dad always insisted on outside board members," he says, noting that the early ones were Roald Lund, former North Dakota State University agriculture dean, and Norm Jones, of Metropolitan Federal Bank.

One of Howard's early target markets was in Siberia, where large-scale wheat production was in need of his no-till drills.

"We knew that our air seeder was performing well in very large fields, and they have some of the largest fields in the world there," he says.

The climate was not unlike northern Minnesota or the prairie provinces of Canada. It was like home.

In fall 1991, Concord had shipped five machines to the then Soviet Union. In March 1992, Howard went them to see them running - first in the Stavropol region in the Caucuses, and in the fall to Siberia, to the Kemerovo Oblast (province), across the border from Mongolia and Kazakhstan, hosted by a Russian agricultural scientist.

The market was a fascinating puzzle. In the early 1990s, Dahl in one deal bartered 10 Concords for rapeseed, which could be sold to the Germans for making vegetable oil. He remembers one case where a potential customer offered polar fox pelts for a machine, a deal he probably should have made.

Among other things, Dahl later discovered he'd initially had a poor translator and didn't know it. He didn't make as much progress as he should have in matching his products with an exciting market, but he was on the right side of history.

He's never taken formal Russian language training, but has learned "many words" through practice and often can understand what he needs to. Understanding as much as he can is his goal, and he's read numerous books on the economic, political, cultural and spiritual heritage of a place that nearly is his second home.

Everybody raises wheat

The timing for the Dahls' early entry into the market was fortuitous.

The large "state farms" were privatized by giving each worker a proportional percentage of the farm.

At first, the lands were rented out and, in the past several years, they've been aggregated by wealthy Russians and Westerners. The small farms before the 1930s had been made into "collectives" in the Stalin years, and these, too, were privatized. It was a kind of free-for-all.

The oligarchs were amassing fortunes and people who understood the market had an advantage.

"Everybody raises wheat - all over Russia," he says.

He also looked south to Krasnodar, a city that of the same name as a region. Krasnodar is in the southern part of Russia, on the Black Sea.

In 1998, Concord sold more than 200 air seeders through the governor of Krasnodar. Shortly after the sale, in August of that year, the ruble depreciated by 80 percent, and Russia faced an enormous financial crisis. It particularly hit agriculture because oil and gas were priorities for the government. For the next three years, sales were difficult.

In 2001 and 2002, things took off again as the ruble recovered.

"The infrastructure was in place, so that anyone with vision and capital could assemble large farm holdings," Dahl says. "People were buying sugar factories for $100,000, if you could keep people employed."

At this time, there were four-wheel-drive tractors - mostly the 270-horsepower K-700s, built by Kirovets or "Kirov Zavod" (plant) of St. Petersburg, which once employed 54,000 people at a single location. The K-700 tractor was able to pull 28-foot-wide machines easily, but nothing more than 40 feet.

Concord experienced rapid growth both in the U.S. and in the former Soviet Union. Case offered to buy it in 1995. Significantly, the Dahls retained the marketing rights to the air seeder business in Russia until 2001. The Dahls were out of the "air seeder" business for about seven years, but eventually got back to its roots in air seeders with the acquisition of Fargo Products, a company developed by former Concord employees.

Strategically correct

Dahl says Concord, and later Amity, grew in Russia and Ukraine based on earned trust.

"Initially, we did letters-of-credit on almost all shipments," he says, however he took risks with a certain, few individuals with whom he'd built relationships.

"We made many mistakes," he says. "Sometimes the tactics needed to be completely changed, but the big picture - the strategy - was right. Our equipment was well-suited for this market."

By 2003, it became obvious how important the Russian/Ukrainian markets were to the Fargo-based company. That year, Amity sold 146 "sugar beet combines" in Russia and surrounding countries, even as they'd sold only 80 in the U.S. Since then, the sales have evened out, Howard says, with roughly the same number of "rows" sold in the two markets.

Dahl says Russia and Ukraine have been key to viability of Amity's Wil-Rich and Wishek sales, and to their workers back in North Dakota.

Says Dahl: "It's really made the difference between being a struggling company and a very successful company."

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