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2006 Minnesota Business Hall of Fame

Thomas Rosen

July 2006
Tom Profile Pic
Photograph by John Mowers/Unleashed Productions


According to the U.S. Department of Agriculture, Minnesota’s farm economy generated more than $11 billion in output in 2004, out of a state gross domestic product of $224 billion—and that doesn’t include ancillary industries. But while an urbanizing Minnesota is increasingly unaware of its agricultural roots, farming still constitutes one of the state’s top industries. And that accounts for the under-the-radar Tom Rosen and his company, Rosen’s Diversified, Inc.

Headquartered in the southwestern Minnesota town of Fairmont, Rosen’s specializes in beef processing, agriculture-chemical distribution, and fertilizer. In 1998, the company’s annual revenues were $550 million. In 2005, they hit $2 billion.
“In the early ’80s, there were some times that were pretty tough” in agriculture, Rosen acknowledges, recalling the farm crisis of that period. “But as a general rule, over the last 20 years, the ag economy has been rather stable and fairly successful.”

To be sure, farming has changed during those two decades. There are far fewer farmers, for instance, and those in the business have much larger operations. A key part of Rosen’s success has been an ability to convert these changes into opportunities. It’s a trait he inherited from his father and his uncle, who founded the family firm in 1946. The brothers began as livestock traders; in the late ’50s, they branched out into feed, fertilizer, and chemicals. In 1974, the Rosen brothers further expanded by purchasing a bankrupt packing facility in Long Prairie, which marked their company’s entrance into the beef-processing industry.

Tom Rosen joined the family business in November 1972, selling farm chemicals for the company after working for Kansas City pharmaceutical firm Marion Laboratories (now part of French pharma giant Sanofi-Aventis). After nine years as a salesman, he became head of the chemical division, and then was named CEO of the entire company in 1991. 
Thirty years after the Rosen family entered the business, beef processing accounts for about 75 percent of company revenues. “We have five harvest plants—not slaughter plants, but harvest plants,” Rosen says wryly. “It’s the buzzword now. It just sounds better.” These plants, which handle 7,000 head a day, chiefly process older cattle, grinding hamburger for a fast-food clientele that includes McDonald’s, Wendy’s, and Taco Bell. (Rosen’s also provides products such as steak and corned beef for supermarkets.) In addition, the company owns three processing plants that produce snack items such as beef jerky and beef sticks. In August 2005, Rosen’s meat division increased sales $750 million when it merged with American Foods Group in Green Bay. That has added more high-end “choice cattle” to Rosen’s offerings and positioned the company to broaden its geographical market.

The other 25 percent of the business comprises wholesale distribution of agricultural chemicals and fertilizer to co-ops and retailers covering 17 states, mostly in the Great Plains and the Midwest.

“People don’t realize how much [ag] technology has changed,” Rosen says. “A lot of the ‘hard’ chemicals [such as organic phosphates] are gone.” The newer, gentler chemicals, he says, can do more with less. “The amounts that you use [today] are so small—one ounce, two ounces. We used to use pints and quarts. A lot of big makers’ products are off patent, so we can buy them all over the world.”

During the 1990s, Rosen’s Diversified sought further diversification by starting businesses in bottled water and agribusiness software. All have been sold as the company returned to its focus on beef processing and chemical distribution. The other operations, Rosen says, “never seemed to work or fit in quite as well” as he had hoped.
Just as there are fewer farmers than 20 years ago, so there are fewer competitors in Rosen’s markets. For instance, many chemical distributors have sold out or closed shop. Rosen’s Diversified has grown in large part by acquiring several of these departing firms. Rosen suspects that chemical consumption will continue to decline as seed technologies continue to progress, though it won’t disappear. In meat processing, meanwhile, “there are just six major meat-processing firms in the United States,” Rosen notes. The chief challenge for those remaining firms is a cattle shortage. The mad-cow scare a few years back caused Asian countries to close their markets to American beef, and he also believes the U.S. ban on Canadian cattle has hurt cattle numbers for slaughter.

But perhaps Rosen’s greatest concern—one he shares with his wife, State Senator Julie Rosen—is the future of greater Minnesota, whose population is aging and shrinking. “That’s our biggest challenge,” he says. “How are we going to run our infrastructure, how are we going to run our schools?” Even with a stabilized farm economy, rural Minnesota can take nothing for granted. Neither has Tom Rosen. 

July 2006 | by Gene Rebeck                  
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