FALL 2009 ISSUE


Family Matters



Craig Ludtke thought he’d work in his family’s grain elevator business forever. Little did he know that he’d actually create a new family business that is the exclusive commodities trader and risk management provider for the nation’s largest ethanol producer.




It’s second nature for Craig Ludtke to incorporate the values that are commonly associated with small yet successful family-owned businesses — values like honesty, integrity and old-fashioned common sense — into his work as President of Albert Lea, Minn.-based POET Risk Management. After all, Ludtke started his career working for his father’s grain elevator business, and a few decades later employs his own two kids, Marcus and Mollee, at POET Risk Management.


“It’s been fun having my kids work for me,” Ludtke says. “When I first started out I thought the family grain elevator business was what I would always do, and I didn’t have any vision that my kids would want to be in that.”


But a different career path was in store for Ludtke. He ran the family business — Clarks Grove Elevator Company — for 15 years before leasing the elevator to Peavey/ConAgra and spending a decade working for Peavey, where he managed the company’s inland grain elevators in Minnesota and Iowa and oversaw its Midwest rail trading office, rail positions and rail trading activities. Then, 11 years ago, Ludtke formed his own company and became the exclusive commodities trader and risk management provider for POET. Soon after Ludtke ventured out on his own, first Marcus and then Mollee came on board with him — additions that surprised and pleased him.


“The fun part is that I get to see them every day,” Ludtke says. “The biggest challenge is to keep work separate from the personal side.”


Son Marcus, now the Head Trader at the seven-employee POET Risk Management, says his dad is a great role model who has established a stellar reputation and track record in a complex field.


“People trust him, is what it comes down to. He has a high sense of integrity,” Marcus says.


POET Risk Management is responsible for forecasting future prices of corn and other commodities, and trading those commodities to maximize and protect the best margins possible for the POET ethanol plants, a difficult task during a recent period of unprecedented volatility in the corn and other commodities markets.


“I knew my dad would teach me more in a year than I would’ve learned in 20 years at a big company,” says Marcus, noting that his dad graduated from college with a teaching degree. “He’s so patient, and he’ll stop what he’s doing to make every day a teaching moment even when he’s busy.”


It makes no difference whether Ludtke is teaching a new employee or a top POET executive the ins-and-outs of the complex realm of commodities trading.


Jeff Lautt, POET’s Executive Vice President of Corporate Operations, remembers sitting in on Ludtke’s annual risk management seminar during his first year with the company.


“It only took me two hours into the program to realize that risk management is a lot more complicated than I had realized,” Lautt says with a chuckle. “I gained a whole new respect for it in just a couple of hours… I remember thinking ‘this guy is brilliant; he has a phenomenal amount of knowledge.’”


Brad Nelson, a corn and soybean farmer who has known Ludtke for 35 years and is on the board of POET Glenville, near Albert Lea, Minn., also respects his longtime friend and colleague’s “very sharp” business sense.


“Craig has done a lot of forecasting over the years of where the business might be headed and what the margins might be. And a few months later, it’s pretty much what he says… That’s what makes him good. He’s got a good head on his shoulders and thinks things through. He doesn’t shoot from the hip. He knows what the facts and numbers are,” Nelson says. In addition, “he’s as honest as the day is long, and he works really hard at what he does.”


As POET has grown from a very small business to the largest ethanol producer in the nation in the last 11 years, Ludtke “has never really skipped a beat,” Lautt notes. Ludtke himself takes special pride in POET Risk Management’s adaptability to this staggering growth.


“POET is 30 times bigger today than when I started with [POET CEO] Jeff [Broin]. Being able to keep pace with skill, size and knowledge base, and being able to change and evolve our business to fit Jeff’s ever more complex business model is probably our biggest accomplishment,” Ludtke says.


To put the company’s growth in perspective, POET had three ethanol plants at the time Ludtke was hired, and had only consumed 18 million bushels of corn annually, Ludtke estimates. Eleven years later, the company has 26 ethanol plants and consumes over 500 million bushels each year.


The high volume of commodities Ludtke trades, not to mention the volatility in the corn markets, doesn’t phase Ludtke one iota.


“In trading commodities, it’s like you’ve got a batting average. You’re going to be wrong sometimes and you’re going to be right sometimes. What you have to do is have a high batting average,” Ludtke says. “You have to be fluid, able to change and always looking for the next opportunity. That’s how you create a winning percentage. As long as you use the philosophy that every change in the market creates opportunity, then you’ll approach our business correctly.”


POET executives concur that Ludtke’s batting average is exceptional.


“Since Craig has come to POET, we have regularly out-performed the competition in the area of risk management. His batting average is very high,” says POET Chief Executive Officer Jeff Broin. “Craig has an innate ability to analyze risk portfolios and to create risk management solutions for those situations. His decades of experience in both managing grain elevators and trading large volumes of grain on the Chicago Board of Trade are extremely valuable to POET and our investors,” Broin says.


In addition to excelling in his job with POET Risk Management, Ludtke is a “valuable” member of POET’s Board of Directors, Broin says.


“He’s an all-around great guy to be around. He’s always positive, and always willing to tackle any situation that’s ahead of him with a great attitude and a smile.”


No doubt his nearest and dearest colleagues — his family — would agree.





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