Farmer’s Copper has prospered through disasters both economic and natural to become one of country’s largest distributors of copper and brass.

By Dan Markham,
Senior Editor

• Quick Facts
  

Whether it’s an oil crash or a violent storm, Farmer’s Copper Ltd. has weathered the worst.

In the 1980s, shortly after Farmer’s Copper was founded in Galveston, Texas, the Houston-area economy suffered a tremendous blow when the bottom fell out of the oil market. Bankruptcies and closures followed for many of Farmer’s neighbors, but the family-owned copper business didn’t succumb to the same fate.

“When we started the business, things were moving along pretty well. Then everything fell apart in the oil industry,” recalls Dick Farmer, who serves as co-president of the company with brother Don Farmer.

Unlike most, the Farmers viewed the uncertain times as an opportunity to expand and were well-positioned for the eventual turnaround.

Twenty years later, a completely different kind of threat bore down on Galveston and Farmer’s Copper—Hurricane Rita. Fears of widespread damage from the storm brought the first forced evacuation of the city, an order obeyed by all of Farmer’s employees save one, Greg Harrington.

The company’s executive vice president of operations rode out the storm in the 200,000-square-foot warehouse. On the Monday after the weekend storm pounded the island, Farmer’s was back open for business, taking orders and sending out deliveries. “We were whipped but we were working,” Harrington says.

Farmer’s Copper was founded in 1980, 60 years after the first generation of the family opened Farmer’s Marine Copper Works, which eventually became Farmer’s Alloy Fabricating.

The needs of Farmer’s Fabricating gave root to Farmer’s Copper. “We had to buy copper plate, brass plate or any of the alloys from a metal service center in Houston. They didn’t stock it, so they had to order it from the mills,” recalls Bruce Farmer Sr., the company’s CEO. “We did a lot of ship work at the time, and the ship is only going to be in port for a few days. We had to have material here.”

The company began stocking material at its fabrication shop, purchasing it directly from the mills. Soon, other local businesses heard of the growing red metals inventory and contacted the Farmers about acquiring some for their just-in-time needs.

“That’s how we got into the metals distribution business. Otherwise we would have been perfectly happy in the fabricating business,” Bruce Farmer says.

The company purchased a 200,000-square-foot facility in Galveston that once served as a cotton warehouse. Initially, Farmer’s used just a fraction of the space, leasing out the remainder of the building. But the business steadily grew, even after the market was shaken by the collapse of the local oil industry.

“Business was going to hell in a handbag,” Bruce Farmer recalls. “Everybody said, ‘I’m not going to stock so much.’ Instead, we raised our inventory, because I felt somebody was going to need this material. That’s why we grew in the ‘80s, because of a commitment to inventory.”

The company also began looking to expand its customer base outside Texas, and outside the traditional end-use markets. With the local market in flux, the company focused on expanding its distributor sales program. Today, sales to other service centers represent a sizable portion of Farmer’s business. Dick Farmer estimates that 30 to 35 percent of the company’s revenues come from other distributors located around the country.

In fact, the trend toward increased mill minimums has made the master distributor function a bigger link in the red metals supply chain. When Farmer’s first launched its distributor program, mills typically required minimum orders of 500 or 1,000 pounds. Today, the figure is up to 10,000 pounds on some orders. Given copper and brass prices that have tripled in the past few years, many companies no longer have the financial wherewithal to buy in mill quantities.

“A lot of the smaller distributors around the country are not able to handle those quantities,” Bruce Farmer says. “We try to take care of them all.”

Despite the record prices, Farmer’s has maintained its commitment to inventory. “Everybody does it [sells to other distributors] to a certain extent, but because of our extensive inventories, we probably do more than most. We’re kind of a one-stop, one-shop facility, where you can buy plate, bar, pipe, tube and fittings.”

Today, Farmer’s fully utilizes every inch of the former cotton warehouse, and it purchased a nearby 56,000-square-foot building to help house its $7 million worth of inventory. Its stock includes copper and brass sheet, plate, bar, tubing, pipe, fittings and flanges, plus aluminum and stainless sheet, plate and bar. The Galveston warehouse also stocks iron bar and carbon steel.

Services include bar sawing (four horizontal band saws capable of up to 13-inch diameter cuts and three vertical band saws up to 24-inch diameter cuts), plate sawing (two carbide plate saws and three vertical band plate saws) and shearing (including one plate shear that handles material up to one-half-inch thick by 12 feet and one sheet shear that handles material up to one-eighth-inch thick by 10 feet). The company also operates two circle plate saws and two abrasive water jets.

In January, Farmer’s invested $400,000 in the purchase of a new Schelling precision plate cutting saw, which can cut up to 8-inch material, 14 feet in length, at tolerances to plus-minus 0.5000ths of an inch on any of the nonferrous alloys. The purchases were made to provide more automated equipment and more accurate cutting, Bruce Farmer says.

Farmer’s also added a DoAll saw that cuts material up to 25 inches in diameter and an automatic HE&M high-production saw that cuts up to 15 inches in diameter.

In March, Farmer’s also moved its San Antonio branch to a larger 20,000-square-foot warehouse. It had been leasing an 8,000-square-foot building.
The San Antonio branch is operated by Keith Farmer, one of six Farmers involved in the Farmer’s Copper side of the business. An additional five cousins work in Farmer’s Copper’s sister facilities, which include Great Western Metals in Houston and a pipe plant in Texas City.

Though all of the company’s facilities are in Texas, Farmer’s market is the world. It buys most of its metals domestically, though it sources some hard-to-get alloys overseas. Farmer’s sells its products to customers in 46 of the 50 states. It also has customers in Saudi Arabia, China, Mexico and other destinations. It ships from the nearby Port of Houston, which unlike its Gulf Coast compatriot in New Orleans, was relatively unaffected by last year’s devastating hurricanes.

Farmer’s Copper didn’t escape the storms unscathed, however. Hurricane Rita did more than $100,000 damage to the roof of its main warehouse in Galveston. Detailed planning, good fortune and dedication likely prevented more damage from the storm.

Many of the employees stayed until the last minute, putting saws on blocks to guard against flooding and shifting trucks between buildings to protect part of the fleet in case one of the warehouses was damaged.

Harrington was there for the duration, hoping the warehouse’s 13-inch exterior walls and 17-inch interior walls were protection against the storm. They were, but not without some scares.

“There was so much wind coming through the building, the carpet in the hallways upstairs looked like a ski slope with moguls. The wind came up from underneath the floor and pushed the ceiling panels out,” Harrington recalls. “We lost a big section of roof over Dick Farmer’s office. Water was just pouring in. I took a saw and cut a hole in the floor so the water would drain down to the warehouse instead of flooding the whole second flood. It’s just the little things that happen in a hurricane.”

By Sunday, many of the employees returned to help clean up the warehouse, including two women from the sales department.

“You really saw the dedication of the employees during the hurricane scare,” Harrington says. “They stayed until the last minute and came back as soon as they could.”

Company officials credit advance preparation for minimizing the effects of the storm. Having already endured one damaging hurricane and other flood threats, the business had planned for the unexpected.

“It wasn’t my first rodeo,” Harrington says. “The last real storm in Galveston was in 1983. We had a lot of damage. We had taken precautions, but we didn’t have enough experience to know what was going to happen. Now we’re as prepared as we can be.”

Their experience makes them a model for the business community of the island, as Harrington is heading up a Galveston Chamber of Commerce task force on hurricane preparedness. He has also shared his company’s crisis plan with other metals businesses.

“Anybody who’s been through one of these things knows your neighbors are going to help you. It’s more than nice to share, it’s the right thing to do.” n