The New Face of the Family Farm
A third generation builds on 70 years of tradition at Lundberg Family Farms
By anna harris
Jessica Lundberg loves rice. Her voice crackles with enthusiasm as she talks about everything from the genetic makeup of a single grain to the taste of a honey-nut rice cake hot from the popper.
For Jessica (BS, Biological Sciences, ’98), rice is a basic source of sustenance in ways that go far beyond the dinner table. Rice has sustained her family for three generations and counting—nutritionally, economically, and socially.
Jessica is board chair and seed nursery manager of Lundberg Family Farms, a family-run business located in the tiny farming community of Richvale, about 20 miles south of Chico. The farm has 15,000 acres under cultivation, 10,000 organic and 5,000 “eco-farmed,” which means chemicals are used on the crops only when needed. Five thousand acres are farmed by the Lundberg family; the rest are cultivated by local farmers who are part of the company’s family of contracted growers. The business fills a specialty niche, selling sustainably grown rice and other products such as rice cakes and chips, snacks, and risottos.
The company got its start in the 1930s, when Albert and Frances Lundberg left Dust Bowl-ravaged western Nebraska with their four sons: Eldon, Wendell (Jessica’s father), Harlan, and Homer.
Albert had watched as intensive farming led to topsoil depletion and erosion across great swaths of the Midwest. He settled in California determined to be a conscientious caretaker of the soil, leaving his cropland healthier than he found it.
Albert’s four sons were inspired by his ecological approach to farming—and care for the land has continued to be the family’s guiding principle.
A healthy foundation
Eldon, Wendell (BA, Industrial Arts and Credential, ’53), Harlan, and Homer ran the family rice farm with their father and became pioneers in organic farming in 1969, when they built the smallest rice mill in California and started selling their rice directly to customers. At the time organic farming was considered a fringe and somewhat radical idea, but things had always been done a little differently at Lundberg Family Farms.
For example, Albert implemented crop rotation, allowing fields to lie fallow every two to three years, and planting cover crops in these fallow fields to restore nutrients to the soil, reducing the need for chemical fertilizers and pesticides. While these techniques challenged conventional wisdom at the time, says Jessica, they are based on traditional farming principles.
Albert also stopped burning straw stubble. While many other farmers were burning the stubble left in the fields after harvest—the easiest and cheapest way to get rid of the stubble as well as pests and disease—Albert was concerned about the effects on his farm workers, wildlife, and neighboring residents. “My grandfather said, ‘Straw is a nutrient, and we should be putting it back into the soil,’ ” says Jessica.
And there’s a lot of stubble to “put back”—about 3.5 tons per acre. On the fields without cover crops, Albert and his sons designed large rubber rollers and iron cage rollers to mash the byproducts of rice production back into the ground, flooded the fields, and then allowed them to rest all winter.
During the winter, nature takes over: Soil processes, heat from the sun, water, and overwintering waterfowl decompose the straw. The fields become seasonal wetlands, and the birds eat the leftover rice kernels and fertilize the fields. By spring, the fields are ready to plant again.
Albert was ahead of his time in limiting burning—because of air quality, public health, and environmental concerns, rice straw burning has been drastically reduced in the Sacramento Valley in the past 10 years.
Today, Lundberg Family Farms maintains its commitment to the environment, investing in the latest technology and integrating new practices to maintain that healthy foundation. Two solar arrays provide 15 to 20 percent of the company’s total electrical use; the rest of their electrical use is offset by the purchase of wind energy credits. The company’s commitment to energy efficiency earned them a National Green Power Leadership Award from the Environmental Protection Agency and Department of Energy in 2004.
The family continues to follow Albert’s basic soil preservation practices, which earned them recognition by the Conservation Security Program of the USDA’s Natural Resources Conservation Service in 2005. They plant purple vetch in the fields each fall to enrich the soil and provide bird habitat. Each spring, before mowing the vetch in preparation for planting, duck eggs are collected by volunteers and the tractor drivers. Some years local schoolchildren help with the collection as part of an “Egg Aid.” The eggs are hatched and cared for by licensed Fish and Game volunteers until the ducklings are released back into the wild.
Succeeding generations
(Top) Harlan Lundberg in a family rice field during harvest. (Bottom) Frances, Harlan, Eldon, Homer, Wendell, and Albert Lundberg pose for a family portrait.
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The American farm faces a number of challenges, and Central Valley farms are no exception. Farms depend on land and water, resources that are spread thin as populations increase.
The family farm appears to be particularly affected by problems of high costs and limited resources, according to the California Farm Bureau: “Of the 2.13 million farms in the United States, 30 percent may pass to a second generation, but less than 10 percent will pass to a third.” Lundberg Family Farms has not only successfully negotiated a transition from the second generation to the third (see sidebar, page 17)—it is also planning for a succession to the fourth.
Jessica Lundberg chairs a board made up entirely of third-generation Lundbergs and in-laws: her sister Alysicia; Harlan’s sons Bryce (vice president of agriculture) and Mark; Homer’s daughter Ingrid and her husband Tim Schultz (vice president of administration); and Eldon’s son Grant (CEO) and daughter Jennifer’s husband Kevin Parrish (safety manager). Together, they make all the business decisions, such as whether to launch a new product or make capital improvements or invest in solar panels.
As a board, the cousins, as their fathers before them, have planned carefully for the company’s growth. “We had the opportunity to jump on the bandwagon of several trends and grow the business really quickly,” says Jessica, pointing to the popularity of natural foods, organics, and whole grains.
While the company has benefited from these trends, the family has decided to focus on consistency and sustaining the company beyond this generation. “We are vertically integrated,” says Jessica. “For us to grow quickly means we’d have to farm more acres, which means we’d have to have more storage, and we wouldn’t be able to provide good prices for our rice.” Then, during the next downturn, the family and its network of farmers would be left with uncultivated farmland, excess storage, and a declining market.
Instead, the family’s strategic approach to growth has provided a healthy consistency for their growers, their employees, and the company. Even with the recent popularity of the Atkins diet and low-carbohydrate foods, the company has seen a steady rate of growth from 5 to 10 percent, and even 10 to 12 percent in the past few years, says Jessica.
United by business
While the Lundbergs very deliberately maintain the level of professionalism required to run a successful business, they don’t forget that they’re family. “I think it works to our advantage,” says Jessica. “There’s a love for each other that makes us more conscientious, more patient with each other. We also have a shared culture that guides our decisions. But at the same time, because we know each other so well, we can’t put up these facades—some of the cousins, we used to swim in the ditches together! It’s like, ‘Come on, you’re not going to pull one over on us!’ because we know each other so well.”
The board works toward consensus, says Jessica, and no matter the negotiations and disagreements behind the boardroom doors, the family presents a united front in running the business. “We’re working for everyone to agree,” she notes. “But we also know that’s not always going to be the case. At a certain point we vote, and there’s no division when we walk out—we all agree that that’s what we go forward with.
“It’s a business and it’s a family, and when you mix the complexities of both, it can get challenging. But my dad and uncles decided that they were more productive working as a group, that the four of them together were more intelligent than each one of them individually. That kind of spirit of working together and being open and having the general good in mind has really carried through.”
Essentially, the family is unified by a love of the business. Eight of eleven cousins and two in-laws are involved in operating Lundberg Family Farms, not because they have to be, or because they were pressured to be, but because they want to be. Jessica had originally planned to become a doctor, but in her senior year at CSU, Chico, she decided to give the family business a try. Other family members have found a place at the farm: For example, Eric (Harlan’s son) is grower services manager, Joe (Wendell’s son, Jessica’s brother) is industrial sales manager, and Kent (Homer’s son) is an IT consultant for the company.
Now opportunities are opening up for the fourth generation, who range in age from 1 to 21. Vice President of Administration Tim Schultz and the human resources department have put together an internship program for the kids who are interested. They work in each department at Lundberg Family Farms: packing products, pulling samples in the mill, planting, working in the seed nursery, and making rice cakes—a little bit of everything. The program helps the fourth generation discover whether their niche, too, is at the family farm.
Not every Lundberg chooses to go into the family business. Jessica’s sister, Alysicia, is studying to be a large-animal veterinarian, her cousin Mark is the Butte County health officer, and cousin Jennifer Parrish (BS, Home Economics and Dietetics, ’81) works at Enloe’s Prompt Care Clinic, although they also sit on the Lundberg board. Other cousins work in computer technology or have been involved in politics and geological studies, says Jessica, who emphasizes that being part of the Lundberg family expanded her opportunities rather than limiting them. “My parents have always made it clear to me that I was free to come and go as I pleased,” she notes. “There’s no pressure at all.”
Extended family isn’t the sole Lundberg labor pool. Many of their employees are CSU, Chico graduates. The family considers the University a key resource for their business and for the North State, says Jessica. “The quality of students that come out of Chico State is excellent,” she says. “There is a constant flow of students who have great ideas and are excited about what they are doing.”
Like her father before her, Jessica is on the Agricultural Advisory Council for the College of Agriculture and on the committee that chooses the University’s Rawlins Professor of Environmental Literacy. She accepted the University’s first Greenie award for a sustainable business on behalf of the family farm during the This Way to Sustainability III conference in November 2007.
Inspiring loyalty
The Lundbergs extend their definition of “family” to their growers, their employees, their community, and their consumers—and it shows in their business decisions.
The farm was named the 2007 California Workplace of the Year by the Employer Resource Institute (ERI) for the way it rewards and retains its 180 employees. Company employees enjoy competitive bonus and profit-sharing programs and 100 percent tuition reimbursement for employee training in addition to regular pay. Employees also reap edible rewards, getting two free products of their choice a week.
The company also offers comprehensive health insurance, free fruit and vegetables at work, reduced-fee gym memberships, daily stretching exercises, and free at-work flu shots and blood pressure screenings—preventative care services all but unique in the agricultural sector, according to ERI. Lundberg employees respond with an astounding degree of loyalty—the average employee spends 8.28 years with the company, and 10 percent of employees have been there for 20 or more years.
“We have this attitude that people aren’t working for the business, that we’re working with each other,” says Jessica. “There’s a real pride here, a sense that [our employees] have this connection with our consumers and with the products.”
The Lundbergs believe the investment in their employees shows in the quality of their products. “When people take pride in what they do, they’re more careful, and that shows in the consistency and quality of the products and in our safety record,” says Jessica.
Making connections
Consumers also feel a part of the company, adds Jessica. “We’re still a family farm,” she says. “If you buy one of our products and flip it over, our address is on the back.” People who buy the rice start to feel like they know the Lundbergs. “We get the most interesting letters from people; they’ll send things to my dad and my uncles and say, ‘Hey, thanks so much for your pasta. I had it the other night, and my daughter really loves it. She especially likes putting cheese and broccoli with it.’ It’s like a friend down the street telling you about their life.
“It’s nice for consumers—I think most people want a connection with their food because it’s so integral to their lives. It’s nice for us too—it adds a real depth to your life when a job isn’t just something you come to and you drive away from, but it really does make connections with people.”
These kinds of farm-to-table connections are maintained by a host of family farmers across the North State and beyond. Ultimately, rice helps to sustain the North State—nutritionally, socially, economically, and environmentally—in much the same way it sustains Jessica Lundberg. And with her family finding new ways to prosper in a changing rural landscape, the future of the family farm seems a little brighter.
Photos courtesy Lundberg Family Farms
A Smooth Transition
The Lundbergs have proved that passing a family business on to the next generation does not have to be a process fraught with acrimony. They approached the succession of Lundberg Family Farms with characteristic respect for each other, deliberating as a team over a strategic plan and mission statement.
The board also enlisted a special consultant, Jeff Trailer, chair of CSU, Chico’s Department of Management, to help formalize the strategic planning process. “They’re making a transition from a small family business to a more formal American corporation, which can be harsh and destructive for a company,” he says. “So they called in someone from the School of Business to weigh in from a strictly business perspective.”
When asked what made the Lundbergs’ transition so successful, Trailer points to their reverence for the family history and values. “They openly discuss the perspectives of the senior family members, and they use that to then guide them in making decisions,” he says.
While Eldon, Wendell, Harlan, and Homer have been involved in the transition of the board to their children, they were more than ready to pass the day-to-day work and decision-making responsibility on to them. “The third generation is doing such a nice job of running the company that [Eldon, Wendell, Harlan, and Homer] don’t feel like they have to be involved to maintain the quality and the effectiveness of the operation,” says Trailer, adding that this makes the Lundbergs unusual in the business world.
“All the family members I’ve worked with are equally enthusiastic and participative,” he says. “Every single family member that I have worked with, to a person, has been a very enjoyable, optimistic, pleasant human being. Is that a family characteristic? I don’t know, but I think that it is part of their success.”
In fact, Trailer predicts that the biggest challenge the Lundbergs (see current board, above) will face in the future is an increasing demand for their products. “I’m honored to be part of the process because Lundberg Family Farms is really an example of the best of America—the idea that capitalism and profitable business can coexist with social welfare.”
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