October 03, 2007 03:41 pm
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CARROLL, Iowa (Oct. 1) — Lawhon Midwest LLC, a subsidiary of Lawhon Farm Services of McCrory, Ark., announced today its decision to close its business. Its customers better know Lawhon Midwest, a marketer of corn and soybean products, by its well-recognized brand name, Stauffer Seeds.
Parent company Lawhon Farm Services has lived through its share of unfortunate events in recent years. Its Beltwide Cotton Genetics division, started in 2002, was well received as a newcomer by the farming community, but a near complete shift in the demand for a new technology caused a large surplus of cottonseed inventory with no demand. A subsequent sale of that company came to an abrupt halt when one of Beltwide’s largest competitors became available for purchase. This left the bidder an option they took advantage of and subsequently Lawhon closed the doors in December 2006 and faced a sizable loss.
In August of 2006, the nation’s rice crop was found to be contaminated with an unapproved, genetically altered event LL601, prompting Europe and other nations to stop accepting U.S. rice. Two of Lawhon’s largest selling rice seed varieties were also found to have been contaminated, even though Lawhon was never involved in testing or growing the unapproved version. Lawhon lost hundreds of thousands of bushels of its best sellers. Class action lawsuits by American rice farmers against the LL601 event owner are pending.
This past spring, Lawhon’s Delta King soybean company, the third largest soybean provider in the Midsouth, experienced a sizable decrease in anticipated sales as farmers moved away from soybeans and into corn and other crops. On Sept. 10, the Delta King soybean business was transferred to Cullum Seeds, who markets soybeans under the Armor brand, leaving a restructured Lawhon Farm Services with a contract wildlife and production and processing business for other companies.
Lawhon had hoped to attract another company to acquire its profitable Stauffer business to save the company and its employees, but time simply ran out.
“We had a buyer for the company, but the offer was significantly less than the value of the brand and we were not able to reach acceptable terms,” said Noal Lawhon, company president. “Another company was seriously looking at our Stauffer brand but got a late start in the process and may easily have taken another two months to complete. We were faced with a situation where we could have continued to take orders and early payments from customers for 2008 sales, but possibly not be able to make delivery if the sale of Stauffer did not go through. Taking a risk like that with my customers’ money is not something I was willing to do.”
“Our people are among the best in the business and none of them will have difficulty finding opportunities elsewhere,” said Craig Williams, general manager of Lawhon Midwest and the Stauffer brand from its Carroll, Iowa, office. “But for most of us, this was more than a job, it was a tight-knit family that worked well as a team and that’s going to be near impossible to replace. This is a sad day for our customers and the farming community as well. We didn’t just talk about providing our customers with the best product possible, we lived it. The loss of the Stauffer brand is the loss of one more possible choice our customers have in an industry that has seen an unprecedented amount of consolidation recently.”
Employees were notified on Sept. 24 that the business would close effective the following Friday. Williams and one other employee will stay on for a few months to ensure an orderly closing of the business and disposal of assets.
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