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Bob Majkrzak Reflects on Extensive Sunflower Career

Tuesday, August 27, 2019
filed under: News

Robert (Bob) Majkrzak’s introduction to sunflower came way back in 1968 as a 12-year-old bouncing along on the seat of an International Harvester 706 tractor, cultivating an open-pollinated sunflower field for a neighbor.
       Now, 51 years later, he is retiring as president and CEO of Red River Commodities, the Fargo, N.D.-based company with which he has been associated since 1985.  He will remain as advisor to management at Red River until January 2020.
       During his long career with Red River Commodities, Majkrzak has been very active in the sunflower industry in general, serving for 12 years on the National Sunflower Association Board of Directors. He likewise was a member of the NSA Confection Committee for many years, some as chairman.
       Majkrzak additionally served several years on the board of the Northern Crop Institute, including as chairman from 2011 to 2013. He also is a former board member of the North Dakota Trade Office.
       As he approached retirement this summer, Majkrzak sat down for an interview with The Sunflower’s Don Lilleboe to reflect upon his career, progress at Red River Commodities through the years — and the state of the U.S. confection sunflower industry in general.

Could you provide some background on your childhood and education?
       I was born and raised on a farm near Thompson, N.D., in the central Red River Valley.  After graduating from Thompson High School, I went to North Dakota State University, eventually earning a B.S. degree in civil engineering with an emphasis on structural engineering.
       Of five boys in our family, four of us got engineering degrees.  Our father (Walter) was very mechanical, a real “hands on” guy.  He was always working on something — and we boys were right there with him.
       He gave us that background of work ethic — and to always ask the question, “What’s the cause of the problem, versus what are the symptoms?”  That’s been a guiding principle for me ever since.  You can always have people tell you the symptoms; but the person who asks, “Why would that happen, what’s the source of what’s causing the problem?” . . . If you have that ability, that desire, you can succeed in any business.
       As to my introduction to sunflower, with several brothers there was always a surplus of labor around our farm.  When a neighbor, Francis Ackerman, needed someone to cultivate his open-pollinated sunflower field, I got the job and did that for a couple years.  Francis said, “These are for birdseed.”  He had bought a six-row cultivator with rolling shields. Nothing was more beautiful than seeing a freshly cultivated sunflower field — absolutely gorgeous!
       My father started growing sunflower right after hybrids first came on the market in the 1970s.  He grew them until the early ‘80s.  Had some midge problems; but really, it was “sugarbeet pressure” that moved him away from ‘flowers.  My brother Dan was coming back to the farm, and they decided to take on more acres of beets, retooling the farm and equipment.

What steps did your career take prior joining Red River Commodities (RRC)?
       My first job out of NDSU was with John Deere Harvester Works in East Moline, Ill. I was in the Manufacturing Engineering Department, responsible for the methods and designs of facilities to build combines.  Over the next couple years I worked in various departments and spent time at different John Deere operations.  It was a great first job.
       My brother Dave was an engineer at Steiger Tractor in Fargo at the time. Steiger recruited me to do basically the same type of work as I’d being doing at John Deere.  The job was to design the manufacturing process to produce the product as efficiently as possible.  I really enjoyed it, and the co-workers at Steiger were phenomenal.

How did your connection with Red River Commodities come about?
       The Gunkelman family had built a reputation on being specialty grain traders and processors of confection sunflower products since the early ‘60s. They started Red River Commodities in 1973, and later partnered with Dutch investors.
       Red River built its Fargo plant in 1982 as the first “green field” approach to confection sunflower processing.  The Dutch investments in RRC built upon the idea of this new operation and encouraged the latest technology to be incorporated into the new facility.
       But with the new process and controls, they struggled to get the plant up and running properly.  The dean of the NDSU College of Engineering, Joe Stanislao, was consulting with Red River at the time, and he advised they bring in someone who had some manufacturing/ processing background to work through the problems.  He recommended me, and that’s how my RRC career started. That was in 1985.  My first position was “manager of production and engineering,” with my job being to improve the efficiency of operations.  I became president and CEO in 1989.

Would you provide an overview of the growth and diversity that has occurred at Red River Commodities during your tenure there?
       When I started with RRC, we operated only the Fargo facility and were mainly focused on domestic selling.  In the ‘80s, weather issues created supply problems due to the confection acreage being concentrated in North Dakota and Minnesota.  Like some other confection companies, we realized that to stay a recognized good supplier of sunflower, we needed to risk manage the raw supply of the crop much better.
       Ultimately understanding that “confection” sunflower meant “in-shell,” we focused the company’s effort on developing hybrid seed, growing regions and processing that would, year after year, produce the best quality and consistent supply.  This meant establishing acreage in the High Plains states of Kansas, Colorado and Nebraska.
       By 1989 we were able to purchase the processing operation in Colby, Kan., allowing for local processing and stability of supply.  We found other great growing locations in Texas, and in 1995 RRC built a complete confection sunflower operation in Lubbock.
       During that time, among the other key issues that came to light was the difficulty in moving the amount of bulk birdseed the company was producing.  So we decided to begin packaging in a consumer-ready bag.  Soon we were being asked to supply more and more birdseed, from straight sunflower to mixes.  We invested in a small grain operation in southern North Dakota (Delamere) that allowed RRC to buy ingredients for both the human food and birdseed markets. Growth in demand eventually led to our building a new birdseed operation in Fargo in 1999.  That was followed two years later by a second one in Lubbock.
       At the same time, we started seeing the foreign competition in our kernel market, with low-priced kernel coming from China and Argentina.  Also, people started hulling some oil types, proving to the world that it didn’t really need confectionery seeds to make a kernel. That was a major, major shift.  I told the guys here at RRC that the only way we could survive was to understand that “confection” sunflower equals “in-shell.” You didn’t need it for bird food, you didn’t need it for kernel.
       That led us to ask, “What more can we do domestically with kernel?”  And one of the ideas was SunButter®.
       SunButter was not a new idea; another company had introduced it to the market back in the ‘80s.  But we felt a new approach to development of the product could allow it to win in the marketplace.  So we tested the heck out of it.  We tried to formulate it as closely as we could to peanut butter, and we figured how to get rid of the green coloration problems.
       At the same time, in 2003 the CDC (Centers for Disease Control) declared peanut and tree nut allergies in children to be an epidemic.  We already were working with USDA to determine whether there were any protein links at all between sunflower and peanuts and tree nuts — and they confirmed there were none.  So our timing was really good — or maybe really lucky!
       SunButter has since grown tremendously and is now available throughout the United States and in several other countries.
       SunButter also brought us into roasting and salting, and that led to the launch of SunGold Foods.  We didn’t have a roasting plant when we started SunButter, so Sun Valley Products in Horace, N.D., was producing the product based on our specifications.  We later brought it “in house” with our SunGold division, which became our domestic roasting/salting/flavoring operation. So we do it all — ”from the farm to the consumer” — when it comes to SunButter.
       Finally, in 2016 we developed a business model for trading products both domestically and imported through Red River Global Ingredients, which is located at Winkler, Manitoba.  That division allows us to acquire things like pumpkin seeds and other specialty grains or seeds in the world market — and then add value to them with roasting, salting and so forth.
       So for me, the biggest change at Red River Commodities in all these years is this: When I got here, we had zero products packaged in a consumer bag.  Now, the majority of all our value is in a consumer package bag.

Let’s address the U.S. confection sunflower industry in general.  What do you see as some main areas of progress in recent decades and key shifts in emphasis?
       Well, the introduction of hybrid seed in the ‘70s was huge — as it was for the oil-type sunflower sector.  It allowed for the development of specific characteristics that consumers wanted, while at the same time growing more-consistent quality and providing improved opportunities for growers.  And the confection hybrids have continued to get better through the years.
       Once the industry found a domestic demand, the export business soon followed as foreign buyers appreciated the consistency in quality.  We all enjoyed the explosion of the newfound export market back in the ‘80s — especially kernel use in the bread baking industry in Germany.
       We also penetrated the in-shell market in Spain.  Luckily for us there was, at the time, a change in the subsidy programs over there — from farmer-based to processor-based.  Oil processors got the subsidy while confection processors did not. So basically no farmers in Spain wanted to grow confection sunflower.
       So we (the U.S. confection sunflower industry) were just finding ourselves. The hybrids allowed us to become more consistent in quality, and processors were investing money.  When you have quality coming off the farm, and then you have facilities that are enhancing their side of the quality equation, the world finds you.
       But then, once we developed all those markets, the rest of the world sought them as well.  For anybody who gains a market, there’s always somebody else who wants to go there and get a piece of it.

What do you see as primary challenges, today and going forward, for the U.S. confection sunflower sector?
       The U.S. will never be the cheapest supplier.  There’ll always be others elsewhere who will grow for less money. So we always have to stay focused on what value we bring to the customer, how we stay relevant.
       There’s always a price versus quality relationship.  And value is a component of not only what the customer can hold in their hands and see; value is also created by the fact that you do what you say, the contracts are worthy, and you manage the crop and supply correctly.
       Sunflower is a huge crop worldwide, and just a small percentage of growers shifting from oil sunflower over to confection can throw a huge imbalance into the market.  With that in mind, the U.S. confection sunflower industry needs to stick to high quality and stand by its contracts.  There will always be buyers for products of a company that does this.

Reflecting on your tenure as president and CEO of Red River Commodities, what are some highlights that stand out?
       The development of the company from one processing division to five divisions with seven operating plants has been very gratifying.  The development of SunButter, our wildlife food business, and the other advances is a big tribute to our employees who have worked so hard in achieving all this.
       As far as the industry in general, watching it become recognized over the years in so many areas around the world as a global market leader in terms of new products, quality and contract reliability has been a great experience.

What are your personal plans as you move into retirement?
         I look forward to being able to focus on new projects and remaining very active. Agriculture is in my DNA and always will be.  I want to assist those who have assisted me in the past.  It takes one heck of a great team to make a good business, and I have been blessed to be with so many great people during my 35 years at Red River Commodities.