Roots of Change: Nebraska's New Agriculture (Our Sustainable Future)

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Author: Mary Ridder

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KDAJB:>CI=:H:G>:H Our Sustainable Future Series Editors Charles A. Francis University of Nebraska–Lincoln Cornelia Flora Iowa State University Paul A. Olson University of Nebraska–Lincoln


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Roots of Change Nebraska’s New Agriculture

Mary Ridder JC>K:GH>IND;C:7G6H@6EG:HH


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© by the Board of Regents of the University of Nebraska All rights reserved Manufactured in the United States of America f Library of Congress Cataloging-in-Publication Data Ridder, Mary. Roots of change: Nebraska’s new agriculture / Mary Ridder. p. cm. — (Our sustainable future; v. 18) isbn-13: 978-0-8032-9013-6 (pbk.: alk. paper) isbn-10: 0-8032-9013-6 (pbk.: alk. paper) 1. Agriculture, Cooperative—Nebraska. I. Title. II. Series. hd1491.u6n27 2007 334'.68309782—dc22 2006019381 Set in Minion. Designed by R. W. Boeche.


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Contents List of Illustrations . . . . . . . . . . . . . . . . . . . . . vi Acknowledgments. . . . . . . . . . . . . . . . . . . . . . vii Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . .

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products or agricultural commodities that are physically segregated in a manner that enhances their value. Many groups, coalitions, alliances, and agencies are assisting new value-added businesses and cooperatives in Nebraska. Some of these organizations are operating as creatively as the ncdc, which is helping to form new-style, innovative cooperatives and value-added agricultural enterprises through a virtual, Web-based office. Utilizing a remarkable partnership with more than two-dozen rural development and educational entities, both public and private, ncdc—in its first year alone—not only assisted Mueller’s proposed hay-marketing cooperative but also helped a winery, a birdseed growers group, an aquaculture cooperative, a year-round farmers’ market, and more than a dozen other associations, ventures, cooperatives, and alliances that are bringing new economic opportunities to rural Nebraska. In order to channel as many resource dollars as possible to producers, ncdc uses co-employed staff members. Lynn Lutgen, an agricultural marketing specialist at the University of Nebraska– Lincoln, is the ncdc’s current executive director. Jim Crandall of Holdrege is the ncdc’s associate director and its cooperative development specialist, a position originally funded by usda Rural Development, the unl Cooperative Extension program, the Rural Development Commission in North Platte, and the Center for Applied Rural Innovation at unl. Elaine Klaege is the ncdc’s cooperative development specialist. In the months following the creation of ncdc, the center identified prospective members for various value-added ventures. After the completion of feasibility studies, select cooperatives like the “aquaculture cooperative” or the “pork-marketing group” shed their generic designations to become the Nebraska Sandhills Yellow Perch Cooperative and Nebraska Farmers Choice, respectively. One way to learn about the diversity of Nebraska is to drive the many highways and blacktop roads of this huge agricultural state. Another approach is to sit down over a cup of coffee and ask


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an entrepreneur how a particular wine cooperative, community grocery store, or a business that makes soap from sheep’s milk got started. What could the managers of value-added businesses tell us about their trials and tribulations, their smashing successes, and their fundamental needs that would help more Nebraskans take up the value-added mindset and run with it all the way to the bank? As for trials and tribulations, these cooperatives and entrepreneurs have faced many. They need better access to legal counsel with solid cooperative experience. Cooperative law is outdated and ill-suited to the challenges facing modern cooperatives. Each entrepreneur must feel his or her way through a frustrating maze of legal issues, feasibility and business plans, and market studies every time a cooperative is initiated. Moreover, they also face a shortage of knowledgeable resource personnel at the university and in state government, of individuals who are experienced in value-added and diversified product fields. Non-traditional agricultural entrepreneurs in Nebraska need expert advice at the state level to guide them to cutting-edge production and marketing information. Unfortunately, value-added businesses are often treated as second-class enterprises in a state economy dominated by commodity production. Trade missions to major export markets work for a few businesses, but value-added producers need more creative approaches to market development. The need to develop valueadded alternatives to the commodity export market was never more apparent than when the first bse, or “mad cow,” scare was raised in Canada and in the northwestern United States. The shortage of marketing dollars is always a looming challenge for newer cooperatives and value-added businesses. Grants may be available to study the feasibility of a prospective business or to create a business plan, but by the time a new value-added business is ready for promotion, the grant well has often run dry. Despite these obstacles to developing value-added businesses, there are many successes. This book is filled with examples of re-


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markable people who have learned to work together for the good of a group, a community, a region, and even an entire state. The communities featured in Roots of Change have been enhanced and transformed through the creation of new businesses with new jobs: Arthur’s community grocery store, Anselmo’s sheep dairy and soap operation, Axtell’s ethanol plant, or Ainsworth’s wood products showroom. Small communities in Nebraska are enjoying new business growth thanks to the value-added philosophy of “one-person-at-a-time, one-business-at-a-time.” Success, too, is found among newer growth industries in Nebraska thanks to the hard work and vision of entrepreneurs in the areas of viticulture and aquaculture. There’s new hope for traditional agriculture, too, thanks to the non-traditional thinking of some enterprising farmers. Those who raise hogs and cattle or soybeans and corn can find new opportunities for growth through cooperative marketing and alternative uses for commodity crops. Common roots shared by successful cooperatives include funding, leadership, labor, and patience. Groups adept at seeking grants are getting ahead of the game, as are those that develop a diverse and strong leadership body. Labor issues are paramount for cooperatives. Successful groups plan ahead in order to have the resources to hire managers and marketers at critical moments of business growth. A group that depends on labor from its own members needs to create realistic work schedules and guidelines. Moreover, cooperative members from different backgrounds must be able to work together when facing difficult challenges in often uncharted territory. What, finally, can Nebraska do to help grow value-added opportunities? The first step requires a paradigm shift by the state of Nebraska to a value-added mindset—a necessary start to addressing the needs of a changing agricultural landscape. Next, value-added groups and businesses need assistance pulling together financial resources to get off the ground and operating before their energy, and the opportunity, evaporates. The state and other agencies need to go beyond merely providing informa-


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tion on grants and loans and start offering technical assistance in managing complex financial and marketing decisions. What sizable business, after all, has one person or a small steering committee solely responsible for marketing, financial, management, production, and labor decisions? Nebraska could require the use of locally produced food products in tax-funded entities, including our state colleges and public school cafeteria programs. Our state could assist in establishing year-round markets throughout Nebraska, building on a powerful community-enhancing resource and at the same time promoting profitable grower markets. In sum, we need to offer hope to rural communities. Hope for the producer who no longer sees the point in growing, harvesting, and shipping his or her product to a distant processor and experiencing only a shrinking profit each year. Hope for the small and the not-so-small communities that are losing residents and tax dollars, schools, and businesses. And hope for our state, often embroiled in revenue shortages that may prove to be a long-term burden if the people who populate our farms, ranches, and communities cannot realize profits in their businesses. Although some of the business owners profiled in the following stories have since moved on to other ventures, their tremendous spirit and the knowledge they graciously lend to us remains steadfast. Value added means more money in the hands of those who stand the most risk and who do the most work to bring their agricultural products to the consumer. Value added offers hope for the future prosperity of this state and her agricultural producers, and to the sustainability of its rural communities.


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1

grow Nebraska

The success of value-added products depends on the ability of communities or businesses in rural areas to develop markets for entrepreneurs who may or may not be physically located near a sufficient customer base. Since the Holbrook-based Grassroots Resources Opportunities for Winners—or grow Nebraska— has encouraged value-added businesses by promoting unique Nebraska products through its marketing and training programs for Nebraska entrepreneurs. It all started when grow Nebraska founder and ceo Janell Anderson Ehrke pitched products from eight Nebraska businesses to Don Macke, then director of the Nebraska Rural Development Commission. Realizing that the needs of Nebraska entrepreneurs were not being addressed, Anderson Ehrke and Macke assembled a team of consultants to meet with business owners and employees in south-central Nebraska, in an effort to gain an understanding of their unique businesses. Armed with a $, U.S. Department of Agriculture (usda) Rural Enterprise grant, Anderson Ehrke financed a feasibility study and business plan. She then arranged for fifty Nebraskabased, value-added businesses to be juried by larger, established businesses. From that point on, grow Nebraska really started to grow. Today, grow Nebraska represents a variety of artisans and


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receiving supplemental feed, the ewes are moved to the dairy barn for feeding and milking. An East Friesian ram purchased from a Canadian sheep farm in added both milk production and length of lactation to the ewe lambs sired by him. Today the Curtises’ ewes are bred to either a percent Lacaune ram or to one of their two purebred East Friesian rams. The family’s sheep produce approximately two thousand pounds of milk per week for six months each year. Roughly thirty-five thousand pounds are sold through the Wisconsin cooperative. About ten thousand pounds are kept back for the six months when the sheep are not milking. Another ten thousand pounds of milk are used for soap and lotion production. Stored milk is kept in a walk-in freezer near the dairy barn. Four days a week, Kim and her part-time employees make up to eight batches of soap per day. Two of the batches average bars each and the others average bars each, totaling about , bars each week. Every spare nook and cranny in the Curtis home speaks of the soap and lotion trade. A kitchen in the basement serves as the manufacturing room. Other corners—in the basement, on the main floor, and on the second floor—are the workspaces used for pouring soap into molds. The Curtises find space for an office in the storage room. They also have a curing room where the humidity is controlled during the one-month curing period for each bar and a shipping room where they store materials and wrap and decorate the bars of soap. The Curtises set a new goal to reclaim their home and expand their workspace, and in they broke ground for an on-site building dedicated to the manufacture and shipment of their products. The building is connected to the dairy barn and shares the walk-in freezer. They worked on the new building as time and funds allowed, with every expense paid from cash generated by the business. Shepherd’s Dairy has six part-time employees and a waiting list of others who want to work there. Three of the employees help


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to make the soap, while the other three trim and wrap soap bars. The workers come to the Curtis home every Monday to pick up bars of soap and fabric wraps to assemble during the week. At the same time they drop off their completed bars and record their work hours. The Curtises developed a Web site—www.shepherdsdairy. com—in . Stories have appeared in the media chronicling the growth of the business, including an article in the Omaha World-Herald in November that brought new business to Shepherd’s Dairy. Thanks to the World-Herald story and a series of photographs, an island resort off the coast of Florida requested special bed-and-breakfast-size soaps for their villas. Shepherd’s Dairy also received four hundred e-mails, seventy letters, countless phone calls, and nearly six hundred hits on its Web site immediately after the story appeared in the paper. Shepherd’s Dairy is developing and launching new products including a liquid soaps line, candles, and bath salts and teas. The candles, bath salts, and bath teas are produced by an employee selling under the Shepherd’s Dairy name. And there’s more growth ahead, according to Kim. “There are still a lot of areas in the country that have not heard of a sheep milk–based soap that conditions dry skin. I will continue to advertise in magazines that go to store and museum owners and will go to some wholesale markets.” The dairy owners give tours, utilize their Web site, send out brochures, and speak at value-added seminars and for small groups. Kim and Larry believe firmly that marketing and product presentation are the keys to their success. “We have a great product and just need to get it out for stores to see,” she said. “Your product needs to look professional, not homemade. Then publicity is the big thing. Get the word out that you have a product that is superior to others and meets a specific need.”


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3

Wolf Den Market

In the only grocery store in Arthur, Nebraska, closed its doors, leaving residents in this ranching community with the prospect of a seventy-five-mile round-trip to Ogallala every time they needed groceries. So when a cooperative grocery store opened for business in Arthur three years later, it had no shortage of dedicated volunteers from the residents who call Arthur home. Housed in a renovated stucco residence in this west-central Sandhills community, Wolf Den Market is a legal marketing cooperative put together by students at Arthur High School and some dedicated adult volunteers. The market was inspired by a visit to the local school board by Arthur residents Virginia Sizer and Joy Marshall, who expressed a desire to see a business entrepreneurial class added to the school’s curriculum. Their efforts led to the creation of a business class and the formation of a school club that explored the idea of a community grocery store. Business teacher Scott Trimble and his students studied different forms of business organization, and they traveled to Minnesota to visit a student-conceived and student-operated grocery store. They noticed that as its first class of students graduated and moved on, the Minnesota store struggled to find other students with a similar commitment to carry on the business. They agreed that the only type of business model that made


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sense for Arthur was a community marketing cooperative. “Painting and putting up shelves is one thing,” Trimble said. “Long-term sustainability is the hardest part.” The developers reasoned that if more people had a stake in the business through memberships, there would be better support over a longer period of time. “It’s a joint project,” said former board member Jacki McConkey. “It isn’t like a person opening a grocery store and operating it. It makes [the community] feel like they own a part of it [and] are a part of it. By having a cooperative, everyone [has] ownership of it.” Trimble, McConkey, and the others took several steps to form a non-profit marketing cooperative. They sought funding for the business classes already underway at the high school and ended up securing a total of $, in grant funding for additional business education and capital expenses. They collected another $, in contributions from interested persons and secured many in-kind gifts, including labor. Students assisted in a telephone survey as well as with small group discussions at community meetings. The group sought legal assistance to form the Wolf Den marketing cooperative and reached a distribution agreement with Dredla’s Grocery of Hyannis. According to Sizer, when the group signed the agreement with Dredla’s Grocery a minimum $, order was necessary for a distributor to deliver products to Dredla’s door. By the time Wolf Den opened, however, that figure was closer to $,—a requirement that would be difficult for Wolf Den’s operators to meet. Steve and Debbie Clark, owners of Dredla’s, helped to make the plan work. Wolf Den Market agreed to pay Dredla’s percent above wholesale prices for the right to place orders twice weekly with Dredla’s grocery distributor. Wolf Den also agreed to pay freight for its order to Hyannis and organized volunteers to transport the food shipments from Hyannis to Arthur. The group identified a business site, obtained free used shelving from a Wal-Mart in North Platte, and created a permanent


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board of directors. The board included junior members from the high school to encourage continued involvement of young people in the business. Dredla’s compiled Wolf Den’s first order and assisted in the set-up of the store. After the first six weeks in business, the store took in $, in sales, and monthly sales now average $,. According to store manager Rita Bowland, the business plan called for daily sales of $ to insure adequate cash flow. Wolf Den Market currently averages $ per day in sales and has never been in the red, despite obtaining loans to purchase a freezer, an ice machine, and a cooler. A van was purchased in for volunteers to use to pick up food shipments from Dredla’s. The store’s monthly expenses include rent, electricity, trash service, product orders, and wages for the part-time manager and parttime employee. Aside from a few advertisements placed in the local weekly newspaper at the beginning of the store’s operation, Wolf Den Market did not need a lot of advertising. Bowland also wrote a few articles for the local newspaper about products available at the store. But the attention of the regional, state, and national press was an unexpected challenge for the community. Articles about Wolf Den Market appeared not only in state newspapers such as the North Platte Telegraph and the Omaha World-Herald but also in national publications including the Wall Street Journal and People magazine. One of the biggest challenges for the developers of the Wolf Den project was simply knowing when to take each step in the start-up process and following through on those steps. It was also critical for them to evaluate the store’s most important needs and create a plan to pay for services like legal advice in a timely fashion. Wolf Den board members had difficulty obtaining information about marketing cooperatives from legal sources, particularly on the state level. According to McConkey, cooperative laws were written during the s and have changed little since then. She said that it was complicated to set up the business legally,


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especially when it came to determining what kind of non-profit corporation the business would become. Also, board members learned that it was important to know how the various grant awards could be spent so that all financial needs were covered. Those who award grants are often very specific about how the funding can and cannot be used. While there was money available, for example, to fund school business workshops in different schools, this money couldn’t be used to purchase capital equipment or as a cushion for business expenses until the sales kicked in. “Sometimes you have funding but can’t use it for what you need,” Sizer said. “Get a realistic idea of how you can spend your grant money early on.” From the market’s conception all the way to delivery of the first order of groceries by volunteers, approximately ninety adults and children have been involved in the Wolf Den cooperative. A majority of the volunteers who helped prepare the building for occupation were sixty-five and older, and the volunteers who now deliver the groceries are all at least seventy years of age. Six volunteers help with deliveries and stock shelves on an on-going basis. Milk is a marketing tool for the Wolf Den, Bowland said. Milk prices are kept as low as possible so that people who drop in to pick up a gallon of this needed item are enticed to look through the store. One wall of the store houses rental videos provided by a local family. Although the community may no longer be able to support a privately-owned grocery store or afford to have food delivered by a distributor to the Wolf Den site, the store nevertheless has created jobs and other economic benefits for Arthur residents, whether they are young people buying snacks prior to boarding the school bus on game day or local families providing for daily needs. The store also serves an important social function as a gathering place where customers can exchange news while shopping. Joanne Kondy moved back to Arthur with her husband in


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after several years of living elsewhere and volunteered to help with the grocery store project. “[The store has] really been a boon to Arthur. It’s well-stocked with almost anything you’d want,” Kondy said. “I would assume in other small communities it would work. Usually in small communities people have to depend on each other, especially if you’re far from other towns. Sometimes things get a little hectic, and sometimes food doesn’t get on the van. But then you find someone who’s going to Hyannis . . .” There isn’t another grocery store like it in Nebraska, according to Bowland, and despite having faced hundreds of questions, she said that the risk has been worth it. “It’s something the community needed,” Bowland stated. “People appreciate it.” Said organizer Sizer, “The grocery store was planned to be a laboratory . . . to serve a need in the community and bring the younger population together with the adults in the community.” Wolf Den Market is doing all of that, and more.


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4

Year-Round Market Cooperative

Those who market their produce at seasonal farmers’ markets often wish they could find a year-round venue for produce and other farm products. John Ellis, owner of Libby Creek Farms west of York, tested these waters by developing a thirty-member marketing cooperative that sold products through grocery markets and gift stores as well as at farmers’ markets and convenience stores. He also established a presence for the cooperative’s product line in Lincoln’s farmers’ market, and he helped to open the doors on the first year-round farmers’ market in Nebraska, in Lincoln’s Haymarket district. Libby Creek Farms has three important components in place for aiding these cooperative ventures: a marketing building where produce can be displayed, demonstrated, and sold; an evolving incubator kitchen where cooperative members can test and develop value-added products; and a small-scale flourmill, where the fruits of Ellis’s value-added goals first began to flourish. “I’m approaching ‘ag’ crops differently,” Ellis said. He has experienced the model of a traditional one-thousand-acre crop farm with fluctuating and generally poor commodity prices as the end result, and he knows that there is a better way to live, to market, and to profit. He proved it a few years ago by taking a $ bushel


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of wheat and milling it into $ worth of flour. That $ worth of wheat, made into a dozen loaves of bread by each of his customers, opened Ellis’s eyes to a better way of both producing and marketing. For more than five years Ellis has been organizing fellow producers into a marketing cooperative with the goal of crossmarketing and economizing on sales labor. Libby Creek has cooperatively marketed for producers in the Lincoln, Omaha, and York areas, selling items such as jellies, fresh vegetables, soy meal, honey, shortbread and bread mixes, cornmeal, kettle corn, popcorn, whole-grain wheat flours, cereals, hot sauce, and salsa. Along the way Ellis learned that he did not have the necessary labor to continue servicing the thirty retail outlets where he and his fellow producers sold their food products. In order to make it work financially, he would need a larger volume of sales, and thus the idea of creating the state’s first year-round market was born. At the Haymarket Farmers’ Market, between five thousand and ten thousand shoppers gather on any given Saturday between : a.m. and noon. Seeing the tremendous weekly turn out, Ellis decided that an indoor, year-round farmers’ market was needed and could work. He helped to form a limited liability corporation called Year-Round Market. The yrm rented four thousand square feet in a Haymarket warehouse and set about contacting producers who were interested in selling products throughout the year. Ellis, who works part-time for the Nebraska Sustainable Agriculture Society, said that a Nebraska Department of Agriculture grant helped to finance the start-up of the yearround market. The Agricultural Opportunities and ValueAdded Partnerships Grant, appropriated by the Nebraska State Legislature through lb , awarded the yrm $, for feasibility, business, and marketing planning. The group, operating under the business trade name Centerville Farmers’ Market, opened the year-round market in . The space was larger than what they needed in the beginning, but


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it did provide a great opportunity for growth and expansion of their original concept. Produce marketing cooperatives, Ellis believes, need to meet a critical mass of both produce and consumers. His goal was to use the yrm as a model of a retail farmers’ market that was available to many different communities. This approach would allow more producers to sell their foods and allow for more cross-marketing. The Centerville Farmers’ Market had ten owners who were also board members. Ellis said that securities laws limit the number of members in a limited liability company to a total of fifteen. The yrm originally asked $, for membership in the llc, which also entitled those members to a year’s right to market in the yrm. After Centerville went into operation, the membership rate was increased to $, for every new owner and member. Vendors paid percent of their sales to support the costs of the market as well as a shelf fee each year. The vendor fee was $ for dry shelf space, $ for refrigerated space, and $ for freezer space. Ellis said that some vendors who sold their products quickly through Centerville had the shelf fee waived and still paid at least percent on the wholesale price for their products. The goal is to get the volume of sales high enough so that sales support the expenses of the llc. The cooperative projected the break-even point at nine to twelve months after full product lines were established, and its prediction was pretty much on target. Centerville opened for business on May , , with one vendor and one product: Bumble Bee Farms from Platte Center sold their greenhouse tomatoes wholesale. By July Centerville had twenty vendors marketing products. Six months later the inventory increased to products from fifty different companies. An antique shop sublet space from Centerville, adding a shop-within-a-shop flavor to the year-round market. Centerville offered a wide range of produce and other items. Meats of all kinds—beef, chicken, pork, ostrich, elk, bison, lamb— were sold fresh and frozen. Eggs, milk, and other dairy products


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were offered, as were seasonal fruits and vegetables. All manner of value-added and winter products were also available, including jellies and jams, breads, apple cider, hydroponic tomatoes (pollinated by bumble bees), winter cucumbers, alfalfa sprouts, pastas, popcorns, soup ingredients, natural decorative items, flours, organic sugar, Indian corn, squashes, gourds, flowers, native grasses, peppers, mushrooms, and more. Centerville made daily sales to downtown Lincoln residents, workers, and tourists. Primary vendors were mostly within a ninety-minute drive of Lincoln. A Kansas dairy producer transported his products miles, while a meat cooperative in central Nebraska delivered its products to Lincoln on its regular delivery route. The yrm also contracted with the Lincoln Action Program in a successful usda Community Food Project called the Partnership for Food Security. In exchange for contracted dollar support to Centerville Market, the market contributed excess food products to a free food program. The yrm also served as a site for Lincoln Action’s micro-enterprise businesses to market their wares, including jewelry, lotions, wood products, blown glass, and imported Irish products. An important goal of the yrm was to put the consumer and producer on a first name basis and an eye-level relationship. Ellis said that producers were encouraged to come to the market from time-to-time to meet buyers and answer questions. Vendors would visit during high traffic times, when shoppers could sample their products, talk with the producers, and make a connection. “Those are the products that we’ve seen the best sale response from,” Ellis noted. Ellis explained that Centerville’s intent was to help promote and sell an individual vendor’s products. “We could have come up with one label to sell all the products together. Some co-ops around the country are doing that,” he said. “It might make it simpler for handling, but . . . we [wanted] to highlight different stories, different features of all companies. [With] the big corpo-


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rates, the more efficient and consistent they can be, the more they can sell. From one city to the next, you see the same stores, the same products. I’d like to see different things, unique things.” According to another yrm owner, Dave Vetter, “there are a lot of people out there who are looking to make a reconnection to the land.” Vetter is chairman of Grain Place Foods Inc., a family-owned organic grains and meats business at Marquette. Dave, his father Don, and his brother-in-law Mike Herman work together on their -acre farm, raising grains, grass, and finished beef. Don Vetter began organic farming in . Vetter said that year-round farmers’ markets like Centerville could become hubs of activity built around food and community. Fellow yrm owner Lila Brock of Bumblebee Farms agreed. She and her husband Richard operate a greenhouse and garden vegetable business from their home near Platte Center. They were among the most active vendors in terms of the amount of product they sold through Centerville. “We also sell to grocery stores, but there we don’t ever meet the customers, or talk with them personally,” Brock said. “At Centerville we let the consumers get to know more about us and our business. They put a face with the product.”


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5

Ash Hollow Market

When the town’s only grocery store burned to the ground in November , the residents of Lewellen lost an important piece of their community. The store’s owners had purchased the Lewellen Market just a year earlier. After dividing the insurance proceeds from the fire with the previous owners, they were unable to finance, rebuild, and restock the market. Efforts by community leaders to attract a new, private owner failed. The community’s residents might have settled for the option of driving twelve miles west to Oshkosh or twenty-nine miles southeast to Ogallala for their grocery needs, but because Lewellen had an active grocery store before the fire, its businesses and residents were committed to supporting another one. The community is also located on a busy section of Highway , placing Lewellen only a few miles west of Lake McConaughy and the hundreds of thousands of tourists who frequent the lake each year. A committee consisting of seven area residents began efforts to build a new store in March , this time organizing as a cooperative. Two-thirds of the village’s eighty households joined the cooperative, as did people from the surrounding area and from ten states outside of Nebraska, according to former cooperative board chairman and retired attorney Larry Greenwald. This sup-


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port gave the cooperative two hundred and fifteen members, a sizable number for a town of three hundred. A share of membership was set at $. Partial shares were available for a minimum of $ to those who could not afford more. Members who partially paid shared in the rights of membership, and their dividends were used to cover their membership fee at a full share amount. With a budget of $,, the Ash Hollow Cooperative—so named after the first natural spring to offer clear, fresh water to pioneers heading west in wagon trains—planned to construct, equip, stock, and operate a full-service grocery store either in the community or, more likely, on the edge of the community at the intersection of Highways and . In addition to grocery store staples, Ash Hollow Cooperative planned to offer a variety of foods, such as salmon and trout, hormone-free beef, and organic wheat, which would have come from producers in Garden County. The cooperative discussed the possibility of starting an adjacent farmers’ market where local producers could sell fresh fruits and vegetables as well as honey, firewood, and birdseed. Other market opportunities included a concept for a “country village” where non-food items such as locally produced dolls, llama yarn, soaps, ceramics, and leaded glass plates could be sold. Ash Hollow Market was an important project for several reasons. It represented a key economic component of a community that had a café, bank, barber and beauty shop, hardware store, elementary school, and assisted living complex. The proposed market was also critical to the farmers and ranchers who were already traveling twenty to thirty miles to shop in Lewellen. And, with the median age of its residents at fifty-seven years, Lewellen had many citizens who no longer could drive a car, according to former board member and former village mayor Barbara Webster. Potential jobs were also a critical factor in a community that over the years saw a decline in the working age population. Based


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on similarly sized grocery stores and the number of jobs at the previous store, the Ash Hollow Cooperative board estimated that it would require at least three full-time and two part-time employees at the outset. A fourth full-time job would be added within a couple years of operation, along with additional part-time jobs that would be designated for students in the farmers’ market. The cooperative secured a commitment to manage the store by a former employee of a Safeway store in neighboring Chappell. Other employees would come from the local community, including some who had worked at the previous grocery market. Aside from the jobs and their economic effect on the community, Ash Hollow Cooperative would also provide a communications center for the area. The committee planned to install a message board to help local businesses promote their goods and services to the store customers. An early challenge facing the cooperative was the economic status of the county. Garden County is in the heart of ranch country, where a small population, spread over a large area, carefully spends its hard-earned dollars. According to the Nebraska Department of Labor’s Workforce Development statistics, Garden County’s median family income is $, less than the state’s median income of $,, and the community of Llewellyn’s median income is even below the county’s figure of $,. Any economic benefit experienced by Ash Hollow Cooperative would feed back into the shareholders and those who participated in the farmers’ market. The board determined that an economic development and charitable fund would have to be established once the market became profitable. The cooperative collected a total of $, in membership fees and received another $, in pledges. It received $, from fund raising events and another $, in individual donations. Individuals gave in-kind contributions including help with legal advice, market research, store design, membership activities, structural engineering, architectural work, and store planning. A business in Hastings, Nebraska, pledged a $, in-kind


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donation of store equipment, and the Nebraska Department of Economic Development committed $,, pending other funding and support by the town. The cooperative also looked into a small business loan with a highly favorable twenty-fiveyear term and a floating rate of approximately percent. Cooperative members visited more than a dozen grocery stores to determine various location, size, and design issues and conducted two surveys of Lewellen-area residents early in this process. They examined several prospective store sites, including a three-acre site at the junction of Highways and . This site was provisionally secured and soil samples were taken. The group also considered a second site on Main Street. Members discussed forming a farmers’ market committee that would publicize marketing opportunities and educate rural producers. The market’s primary product supplier, Affiliated Foods of Norfolk, Nebraska, also offered training seminars on market activities. All of the cooperative’s background work, research, meetings, and discussions culminated in the November local election, when a plan to authorize a city sales tax to raise $, over a six-year period for the market failed by three votes. Greenwald said that the tax dollars would have been an important component to financing the operations of the store. For a few days he considered quitting his work with the cooperative, but he concluded that the grocery store was too important to the viability of Lewellen to give up. Greenwald, Webster, board president Jack Beard, and other board members decided to forge ahead and find the dollars needed to bring Ash Hollow Cooperative to fruition. But the original board was growing tired. “It was an incredible amount of work,” Webster admitted. “We had done everything and came up against local opposition.” So Webster, who had decided to step down as Lewellen mayor, joined the rest of the cooperative board in resigning from their positions at Ash Hollow Cooperative. At the first meeting of the new board of directors,


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the cooperative was dissolved and membership funds were returned to cooperative members. “Our population is two hundred and sixty now,” Webster said. “There’s probably percent of the homes in town for sale. The biggest problem we have now is labor. Our median age is fifty-seven, so the critical reason for not going forward with any business now is labor. You can’t support your family on $. an hour.” The hope that the Ash Hollow area would once again be a place where weary travelers could refresh is no more, but the story of the Ash Hollow Cooperative may yet provide valuable lessons for future endeavors in the area.


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6

St. James Marketplace

St. James is an old northeast Nebraska river settlement. It was established in just a short distance from the bend in the Missouri River that separates Nebraska from South Dakota, and Nebraska from Iowa a few miles downriver. The town is located in a scenic area of hillsides, lush valleys, and breathtaking views that reveal themselves suddenly at curves in the road. Lewis and Clark passed near here in August as they navigated up the Missouri River. A member of their expedition, Private George Shannon, became lost four miles north of St. James on Goat Island on August , . He found the main party fifteen days later after surviving on berries and a single rabbit. A historical display about Shannon is just one of the unique aspects of St. James Marketplace. St. James is nestled in a remote area of Nebraska where three Catholic schools were consolidated thirty-five years ago and where small towns just seem to get smaller with each decade. In the Omaha Archdiocese decided to close the Catholic church at St. James. After an auction of its contents, the church building was burned to the ground. The closing of the church—which had served as a landmark in the town, a place where community happened—was yet one more strike against a region already experiencing the agricultural market woes felt for years throughout the U.S.


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Then five women stepped forward. They were determined to take adversity and create something positive out of it. By May the first St. James Marketplace had opened in the parochial elementary school, a site now on the National Register of Historic Places (listed as Saints Philip and James Parochial School). The purchase of this school from the Omaha Archdiocese was completed in early , and at about the same time the five women— Mary Rose Pinkelman, Vicky Koch, Jeanette Pinkelman, Violet Pinkelman, and Louise Guy—formed a non-stock cooperative. St. James Marketplace is the site of a farmers’ market, craft room, tearoom, and a room featuring historical information and literature. The marketplace is currently open Saturdays and Sundays from the first weekend in May through the first weekend in December, but plans are underway to restore the chapel area of the school and make it a community gathering site and a performing arts center. Along the way the five St. James Marketplace founders depended on each other and on assistance from the Center for Rural Affairs, Northeast Nebraska Resource Conservation and Development, the Nebraska Cooperative Development Center, Project Hope, and the local community. They received contributions of time from many volunteers, especially former St. James parishioners. They also received a $, U.S. Department of Agriculture Value-Added Development grant to fund a business plan and a feasibility study and to help pay for legal expenses associated with forming the market. New business relationships have grown out of the earth-deep friendships of these five women. They have learned to work together in new ways—their biggest challenge so far, along with buying the building and committing to its renovation. The group committed to the costs of installing heating and cooling systems, fixing three porch roofs, painting and repairing the building’s interior, and building a state-inspected kitchen all the while knowing that no money would come in return until they opened for business in May .


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St. James Marketplace began in with sixteen vendors and the five core members. Approximately sixty customers visited on a typical weekend that year. In twenty-eight vendors served the needs of ninety to one hundred customers on an average weekend. The women expected thirty-five vendors in but instead secured sixty, and they received well over one hundred visitors and customers each weekend. They served cookies, cheesecake, kolaches, coffee, and raspberry tea in their tearoom and made connections with their customers, who commented that they wished they had preserved their region’s heritage and banded together with the same sense of community as the St. James women. The marketplace offers a farmers’ market consisting of local art, crafts, baked goods, garden produce, meat, and items related to St. James history. Market members take turns working at the marketplace, with their labor going toward their vending fees. In the future the market will host speakers, quilt shows, and play performances in the old chapel area. Located just a half mile north of Highway and the Outlaw Trail Scenic Byway and near the Shannon Trail, St. James Marketplace works with tourism promotion groups to capitalize on travelers visiting Lewis and Clark sites. “We are working hard with the Shannon Trail and the Byway -Outlaw Trail and Heartland Experience,” said founding member Mary Rose Pinkelman. “Shannon Trail and Outlaw Trail work at promoting our area and Lewis and Clark.” The annual meeting of both trail organizations was held at St. James Marketplace in April . The cooperative also takes part in magazine and brochure swaps, rural tours, and joins with local businesses to market the area as a tourist destination. The group’s efforts to attract more tourists were aided when, in December , the St. James Marketplace schoolhouse gained recognition on the National Register of Historic Places. The five women were also able to get St. James back on the official


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Nebraska highway map, making it easier for people to find this growing get-away destination. Another tourist attraction is the market’s Heritage Fest. Originating in , the Heritage Fest is an annual event held the last Sunday in September and features all manner of demonstrations, including candle making, embroidery, ice cream making, cider pressing, and butter churning. The event also features horse and wagon rides, square dancing, and a variety of games, contests, and demonstrations. All told, St. James increases its population a hundredfold during the event and has more than doubled its crowd and sales from the inaugural year. In short, St. James Marketplace is a testament to more than survival. The women who established the marketplace in want to provide a community gathering place, bring value-added profits for their community, and preserve the abundant history of the area. As a result of the cooperative’s success, in a new bed-and-breakfast opened in St. James. The group hopes that the bed-and-breakfast, which is located in the old church rectory next to the marketplace, will be the start of many new enterprises that will make St. James a prominent tourist destination.


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7

Small Farms Cooperative

A cooperative that consisted of eight families in now represents dozens of family farms across Nebraska thanks to its success marketing hormone-free cattle. Small Farms Cooperative members produce and sell grain-fed beef to European markets. After an opportune discussion in , the cooperative now has a contract with a major international meat marketing company and the nervous attention of aggressive corporate exporters who would love to tap into Small Farms’ hormone-free market. Amazingly, more than half of the certified non-hormone producers in the U.S. live in northeast Nebraska and belong to Small Farms Cooperative. The cooperative represents family operations in a region stretching from Hartington to O’Neill and south to Hastings. More than two hundred family operations have inquired about offering certified non-hormone-treated cattle (nhtc) and joining the Small Farms Cooperative, all of them attracted by the premium prices for exported natural beef. One of the main reasons for the cooperative’s formation was the low market price for hogs in the late s. “The founding members felt there was a need for a group to market their naturally raised products,” said member Ron Wortmann of Hartington. The cooperative’s niche is selling natural meat from animals that have received no growth hormones or antibiotics.


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Despite the “mad cow” disease (bse) cases in Saskatchewan and Washington State in , Small Farms Cooperative saw no downturn in orders for their identity-preserved natural meat. More importantly, the flow of nhtc-certified beef from members of Small Farms Cooperative to European customers was not halted, even though nations of the European Union officially banned the import of American beef following the bse discovery in the United States. Small Farms Cooperative members have a livestock inventory of cattle, hogs, buffalo, chickens, and sheep that is currently adequate to supply the targeted markets. Members pay a one-time, $, membership fee. While Wortmann said that the group doesn’t know how many members it will need for the marketing and finances to be optimal, it “will allow current members to expand their production to supply current and future needs as we are growing.” The number of members will not increase, however, until Small Farms is confident it can sell all of the meat the current members produce, said Mike Heavrin of the Center for Rural Affairs in Lyons. Heavrin has been instrumental in helping Small Farms to obtain grants and organize its cooperative. Since Small Farms Cooperative has received nine grants totaling $, to help organize and operate the cooperative: two Sustainable Agriculture Research and Education (sare) grants for $, each; three Nebraska Cooperative Development Center grants totaling $,; two lb Agricultural Opportunities and Value-Added Partnerships Act grants totaling $,; a Nebraska Department of Agriculture Federal-State Marketing Improvement Program (fsmip) grant for $, toward a feasibility study; and a new Farm Bill Value-Added Development grant worth $,. The $, grant is a working capital grant to assist Small Farms in developing a non-hormone-treated-cattle program so that the cooperative can qualify as a supplier to the European Union market and to the American natural-meat market. According to Heavrin, once the cattle program is firmly estab-


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lished, Small Farms will begin marketing specialty natural pork, bison, and poultry products through the cooperative’s emerging beef channel. “The grants have allowed us to keep our heads above water while we are growing and trying to develop markets,” Wortmann said. “It would be nice to have an adequate amount of money so that things could move along faster.” The cooperative still has to go through the struggle seen in most branded beef groups with balancing production with sales. The cooperative and its marketing arm face the challenging assignment of growing pounds of meat produced at the same pace as demand. The $, value-added grant helped Small Farms pay for marketing services, according to Wortmann. The marketing agent position was filled in February when the cooperative contracted with Morgan-Davis International, an Oklahoma-based natural meats export firm. Cooperative member John Smith serves as the cooperative’s nhtc coordinator, keeping the inventory numbers current, inspecting member farms and ranches, and helping new members with nhtc certification. When he receives an order from Sandy Davis of Morgan-Davis International, Smith contacts members to fill it. Smith also coordinates the lengthy and detailed certification process for producers of non-hormone-treated cattle. Prospective producers must write a comprehensive farm manual, have it reviewed by the U.S. Department of Agriculture, host an inspection by the usda’s Agricultural Marketing Service, and fulfill all usda and European requirements for non-hormone livestock certification. All of this is at the expense of the producer. Davis, leader of the cooperative marketing team, said her company first opened the European market in . “We started with one head of Wagyu beef and have grown with the size of our herd and were looking for other cattle.” Her company’s arrangement with Small Farms happened at an ideal moment for both entities. Davis noted that the “[hormone] ban went into place [in Europe]


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in ,” and that “by we had a manual in place that showed how we raised our cattle.” Morgan-Davis has been marketing Small Farms Cooperative meats to Europe on a monthly basis and shipping via ocean or air freight. Some of the cooperative’s meat is also sold on the domestic market, because some cuts are in higher demand than others. All certified non-hormone-treated cattle bound for the European Union are processed in Omaha. One of Small Farms’ biggest advantages, according to Davis, is its ability to trace its products. “We have traceability in place,” she stated. “The usda does a lot of inspections at the plant in Omaha.” Additionally, the European Union has inspected the packing plant, and Small Farms contracts with a third inspector to work on-site. The biggest initial challenge for Small Farms was finding the necessary customer base that was willing to pay for meat that is raised naturally, in a humane manner, with no antibiotics or growth implants, and that is processed in small plants. Now that the cooperative’s marketing emphasis is on the European Union rather than on smaller direct markets, its concern over finding customers is lessening. Small Farms is currently studying the sale of value-added products and plans to add new members to meet the growing demand for processed and source-verified meat products.


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8

Nebraska Farmers Choice

In , with the cash prices for hogs at a modern all-time low and the retail margin growing, a group of southeast Nebraska producers gathered to discuss forming a cooperative that would re-route dollars back to the family farm. Incorporated in , Nebraska Farmers Choice was founded on the belief that adding more value to the product and controlling its marketing and distribution were critical to the survival of family farms. While the average producer already does a great deal of value adding (for example, by feeding corn and soybean meal to hogs), still more is needed to recover profit opportunities. Instead of trying to bring another industry to the area or going to work for someone else and losing potential equity in the community, Nebraska Farmers Choice members decided to take the resources of the region’s communities, combine them with producer experience, and market a quality product through a cooperative. They were no longer interested in letting their quality product travel through the hog commodity chain. “We’re going in the right direction,” commented Tom Howe, Farmers Choice vice-chairperson. “It takes a while to build your cash flow.” At first the group was concerned that their marketing cooperative concept would not work, but after completing the feasibility and


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business plans, they were encouraged and knew that their venture could succeed. During the cooperative’s first year of operation, the board of Nebraska Farmers Choice set a lifetime membership fee of $,. The next year the board asked each member for an additional $ to add to the cash flow. Included in the membership was a labor requirement: each member was to work at least hours per year. In the first thirty months, members averaged closer to hours of work per year. “The feasibility plan (written by abc Consulting of Iowa) showed all the potential markets and different avenues of how to market the product,” said former cooperative president Deb Heidzig. “We could evaluate which would be the most feasible for us.” A Nebraska Department of Agriculture grant of $, paid for the feasibility study, along with an additional $, matching grant from the Nebraska Cooperative Development Center. In January , with the help of a $, Nebraska Department of Agriculture Value-Added grant, the cooperative members purchased a freezer, office equipment, and a trailer with a portable freezer for pork stops, and they also covered marketing expenses. Nebraska Farmers Choice used a $, grant that they had received the previous year from the Nebraska Soybean Board to pay for $, worth of advertising and marketing and $, worth of soy diesel fuel used in the delivery truck. In March the cooperative was awarded a second Nebraska Department of Agriculture Value-Added grant for $,. The staff of Five Rivers Resource Conservation and Development at Tecumseh also helped the cooperative by writing grants, providing meeting facilities, and helping the members find knowledgeable consultants. The group began with a $, operating loan and now utilizes a $, note to build inventory prior to Christmas and other busy sales seasons. The cooperative’s steering committee was initially composed of seven producers in six southeast Nebraska counties. After the feasibility plan was completed, they authorized a business plan by


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the Nebraska Business Development Center at Peru State College. In the business plan, which was updated in , its writers evaluated and calculated the volume, pricing, costs, and structural demands that were necessary to maintain a viable business, Heidzig said. The plan provided both the guide for operating and managing Nebraska Farmers Choice and an outline and timetable to present during the membership drive. Nebraska Farmers Choice started with twenty-nine members. As of early the cooperative had seven members. All of the members who have withdrawn did so because of the labor requirement of the cooperative. “Producers have a full-time job at home,” Heidzig said. “To commit labor above and beyond is an additional challenge.” According to Charlotte Bowen, the cooperative’s current president, all Nebraska Farmers Choice members already operate small family farms. To respond to the challenge of losing members, the cooperative is undergoing some restructuring. “When we very first started,” Heidzig explained, “we had to box all of our own product, store it, and distribute it to our pork stops. Now we send product to storefront freezers, where we do a demonstration and a delivery every so often.” Nebraska Farmers Choice currently markets wholesale through eleven restaurants. Its retail outlets include twelve specialty stores located throughout southeast Nebraska, and it sells at farmers’ markets, festivals, and through direct-home delivery. Products are also sold through Nebraska Gold (direct-shipment corporate gift-giving), Community Connection fund-raising (where groups can sell Farmers Choice products for fund-raising dollars), and at the cooperative’s main office in Auburn. Nebraska Farmers Choice members have the energy and determination to plow ahead. The cooperative represents , head of market hogs or ,, pounds of fresh or frozen and retail or wholesale pork products per year. The group sells hogs on the live market in addition to its retail and wholesale businesses. Members group loads of hogs together in order to have a larger order and bargaining chip at market, thus providing marketing


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flexibility throughout the year to balance with their customer’s demand. The cooperative’s guiding marketing philosophy is to offer top-quality, fresh-from-the-farm pork products that are conveniently processed and packaged for the consumer. Providing a quality product, pricing it at cost plus profit, and staying close to the competition are not easy business objectives for a cooperative operating with member-volunteer help and no marketing employees. Consider nfc’s competition: Omaha Steaks International, Schwans, Pegler Sysco, Lincoln Poultry, and hundreds of supermarkets. Virtually all of these businesses have distributors and sales managers. The cooperative’s next step is to build their volume of sales and then hire a sales manager to line up distributors or brokers who can market their pork products. “The gourmet chefs or those who remember grandma’s house with the fresh, juicy, quality pork . . . are [our] niche [customers],” Heidzig said. Unlike some businesses that simply want to get bigger, Nebraska Farmers Choice has a very good idea of where they break even and what they need to do to be profitable for their membership. The ideal number of members is between seven and fifteen. In order to maintain good cash flow and to provide a healthy return to the members, the cooperative needs to market , pounds of fresh and frozen pork products annually. When asked what resources the group could use, Heidzig suggested that they needed a business consultant to educate and motivate the members. Nebraska Farmers Choice has grown at an impressive rate of percent each year they’ve been in operation, she said, but after a member was killed in a car accident in , “the energy of the members [started] running low.” “The challenges for Nebraska Farmers Choice continue to be the same as what they were from the beginning: capital, labor, value-added markets, pricing, lack of usda processors, and [the need for a] sales manager,” said Bowen. “We are slowly making progress. It’s just much slower than what we had hoped for.”


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9

North Star Neighbors

In a picturesque central Nebraska farm community called North Star, a half-dozen families are tending the emergence of a natural meats cooperative known as North Star Neighbors. The cooperative’s simple goal is to make more money from their agricultural produce using methods that protect the environment. North Star markets naturally raised animals that are given no antibiotics or artificial growth stimulants. Members sell beef, pork, lamb, chicken, eggs, and turkey through farmers’ markets and directly to customers. Founded in with seven participating families and with pastured poultry as the initial product, the cooperative raised equity, purchased equipment, and established distribution routes. Today the group has eleven members representing six families and is working to expand the cooperative to include twenty families. In the cooperative’s first year it sold , chickens off of the farms. The following year it marketed , chickens. By the fall of members decided that they should expand and start offering other meat products. Grants helped the group explore various marketing options. After a year and a half of operation, the cooperative developed a business plan and paid for legal fees with the help of a $, start-up grant from the Nebraska Cooperative Development


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helped to pay the engineering and development costs for the new plant. The cooperative board and its consultants also sought economic development grants from the U.S. Department of Agriculture and the state of Nebraska but discovered that they first needed to secure a processing facility before they could apply for such grants. Producers primarily from northeast Nebraska each paid $ for common stock to join the pork cooperative and purchased additional class A stock at $ per unit for each head committed to the marketing cooperative. The cooperative sold , shares of class A stock, representing the cooperative’s combined , animals, and raised more than $. million. Each share entitled and committed members to the number of hogs they would process through the cooperative each year. In Family Quality Pork bought the Petersburg Locker for $,. The locker had previously processed hogs daily and employed thirty-two personnel. The purchase was the first step in the pork cooperative’s plan to add value to its members’ pork operations. The cooperative renovated the facility during the winter of , adding new smokers, an injector for bacon, a processing room for grinding sausage, and a bacon slicer. The group added new refrigeration during the summer of , and they lease-purchased a roll-stock machine, which seals and dates meat packages. Meanwhile, the cooperative members planned to build a , head-per-day pork processing plant east of Petersburg. Rosendahl said that such a facility could process up to , hogs per year with an annual operating budget of $. million. The new plant was planned as a “skin plant” that would provide savings on water and other utilities. Family Quality Pork contracted rendering with another company to keep odors to a minimum. The cooperative would market the offal-intestines, stomach, heart, and liver for an estimated $, in annual sales. These measures and others also increased the needed size of


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the plant and added an additional $. million in costs; the final, estimated price tag for the plant grew to $ million. The cooperative designed the fully-automated plant so that it would use constructed wetlands for waste treatment. The plant was intended to be the first of four planned pork processing plants in eastern Nebraska. Rosendahl said that the cooperative’s vision was to develop four plants located in different geographical areas for the convenience of cooperative producers. Their plan would not be realized, however, until Family Quality Pork could prove that one plant would work and thus attract new share buyers and lenders. The cooperative also wanted to address concerns of Petersburgarea residents about the plant and conducted two meetings at the outset of their planning process. Forty people attended the first meeting. One week later people showed up. The discussions covered questions about illegal workers in the labor force, the size of the plant, and long-term ownership of the plant. Rosendahl said that the community’s concerns were addressed during the meetings, noting that the business plan called for a high enough wage scale to attract local residents and that the plant size was regulated through county zoning rules. However, area residents wanted assurances that a large corporation wouldn’t take over the plant if it failed. To address this worry, Family Quality Pork obtained a conditional-use zoning permit that allowed plant operation only by the cooperative. One week after the second public meeting, area residents called their own meeting to discuss the project. Of the people in attendance, percent voted in favor of the plant. Three local residents served on a committee to suggest plant sites. Of the eight sites suggested, a site three miles east of Petersburg was optioned. After the zoning board approved a conditional-use permit, the cooperative purchased the eighty-acre site. With community support in hand, the cooperative’s next concern was its competition. According to Rosendahl, up to , hogs are processed daily in eastern Nebraska: , head at Madison;


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, to , at Fremont; , at Crete; and , to , at Sioux City. “Everybody [was] afraid that the ‘big boys’ [would] come in to undercut [the cooperative],” Rosendahl explained. But the cooperative planned to use niche marketing rather than compete in the commodity markets. Even so, bigger challenges lay ahead for Family Quality Pork. The cooperative struggled to find lenders who were willing to let it operate effectively. “Traditional lenders,” Rosendahl said, wanted “us locked into a marketing contract.” That was virtually impossible for a plant that was still on paper. So where would the cooperative locate the balance of funds needed to build the plant? Most likely not in the U.S., Rosendahl said. American lenders simply wouldn’t work with a new start-up plant and take on its associated risks unless its marketing contract was locked in. Contracts couldn’t be obtained until the plant was operational, creating a vicious start-up cycle. In March Family Quality Pork contacted a California company that had worked on its engineering and funding issues and inquired about their international bond-funding contacts. The cooperative then made contact with an international bond funding company that studies approximately two hundred business plans each year but chooses only a handful for bonding. After studying Family Quality Pork’s business plan, the bond company invited cooperative representatives to Central America to discuss financing. The bond company packaged together four projects— including Family Quality Pork—and released the prospectus in October , , giving the bond fund one year to be picked up by potential fund buyers. In addition to the cooperative, the bond company package included a Jamaican telecommunications project, a Jamaican residential real estate development project, and an international hotel chain project in the Bahamas. The eventual fund buyers were most likely European, with the bond fund selling as a total package for $ million. Since the cooperative began as a research project of the Nebraska


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Pork Producers Association back in , cooperative board members have participated in meetings on four continents. Family Quality Pork representatives traveled to Taiwan and Japan with Nebraska governor Mike Johanns and again to Japan with an nppa trade mission. Family Quality Pork also conducted a fact-finding mission in England to investigate small packing opportunities and participated in Nebraska Department of Agriculture Agricultural Export Seminars on both the East and West coasts. The cooperative used all of these research trips as opportunities to find financing for the processing plant project. Family Quality Pork started a Saturday kill at SiouxPreme Pack in Sioux Center, Iowa, in January . Some of that product was brought to the Petersburg value-added plant for smoking and sausage making. The cooperative also slaughtered hogs in Downs, Kansas, and processed the carcasses in Schleswig, Iowa. Problems began to surface in April when live pork prices improved to the point that producers could receive more for their hogs in the open commodity market than they could through their cooperative commitment. According to Rosendahl, some members chose to stop delivering their hogs to Family Quality Pork and instead sold them through traditional markets. This decreased the cooperative’s weekly kill from the necessary , head to approximately , head. Such a drop in processing numbers was devastating for the cooperative and its plans. “When you pull the meat out of the marketplace,” Rosendahl explained, “that development process is all lost. You’ve got no way to pay yourself back for your hogs.” The sixty members who did not sign a recommitment letter to supply their hogs to the cooperative lost voting privileges but remained members, and financial reorganization of the cooperative was initiated. The land outside Petersburg that was the intended site of the new plant has reverted back to its original owner, a member of Family Quality Pork.


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11

Prairie Farms Marketing Alliance

The changing American diet, whether prompted by health concerns or demographic trends, is bringing new and diverse opportunities to American agricultural producers. Goat meat, for example, is a popular food source among many new immigrant populations. Lower in cholesterol, fat, and calories than chicken, it is also the fastest growing consumer meat product for women between the ages of thirty and sixty. During the summer of goat producers in Nebraska and Kansas began working with Susan Helmink, a former diversified agriculture promotion coordinator at the Nebraska Department of Agriculture, to create Prairie Farms Marketing Alliance llc. The cooperative completed a feasibility study with the University of Nebraska–Lincoln’s Food Processing Center and worked with the center on marketing strategies. Prairie Farms built a database to include more than two hundred interested producers from Kansas, Nebraska, Iowa, Colorado, and Missouri, a number that continues to grow. The driving force behind the cooperative, Micki Beaudette of Orleans, said that the alliance could potentially include three hundred members. In October the cooperative received notice that they had been awarded a usda Value-Added grant for $, to study business opportunities in the goat meat market. The funds were used to conduct the feasibility study and to develop a marketing plan.


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Led by its steering committee, the goat cooperative began organizing a multi-state cooperative that could contract with federally inspected slaughter facilities in Nebraska. The cooperative members planned to share the profits from the processing and direct marketing of goat meat. In January the cooperative received a $, grant from the Nebraska Cooperative Development Center for legal and accounting expenses. It also received a $, Initial Assistance grant from the Kansas Cooperative Development Center. One of the biggest challenges for the cooperative in its early stages was the processing cost. A Minnesota goat cooperative had had difficulties keeping processing costs low and prices down, and Prairie Farms’ organizers, aware of the other cooperative’s struggles, worked to streamline their own processing operations. Prairie Farms received a $, grant from the Kansas Rural Center to help pay for educational seminars for producers on risk management and meat goat production. Moreover, cooperative members attended several conferences in Nebraska and Kansas in that featured various specialists discussing topics including animal health, the effects of drought on goat operations, and goat pedigrees. The information gathered by alliance members indicated that there was tremendous potential for the goat market. Figures for goat meat do look promising, particularly in the “ethnic foods” market: sales of foods designated as “ethnic” are projected to reach $ billion by , or percent of the current U.S. market. Target markets, including the growing Latino populations in Nebraska, Kansas, and surrounding states, grew percent between and and percent between and in Nebraska and Iowa alone. Another sign of the market potential of goat meat is the huge increase in goat meat imports, signaling that the demand for goat meat is not being met by U.S. producers. The amount of imported goat meat has risen from million pounds in to . million pounds in , while slaughter goat numbers have doubled to , annually during this same period.


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This tremendous surge in the goat market has brought many interested independent goat producers to the table. Prairie Farms Marketing Alliance plans to contract with a Nebraska processor and utilize an identity-preserved system of marketing. By doing so, the group hopes to increase their customer base and retool current marketing channels by bypassing auction markets and livestock brokers and selling their product through direct marketing. In goat producers sold live goats off of their farms for cents per pound, with an average Boer goat weighing pounds for a $ sale price per head. Producers selling through a market barn or broker service received cents to $. per pound minus $. to $. per animal for yardage, commission, health inspections, and other services, amounting to a sale price of anywhere from $. to $. per head, less transportation costs. Through the processing and marketing arms of Prairie Farms, producers determined that they would pay $ per goat to process the animal through a usda-inspected Nebraska plant, and between $ and $ for cutting and wrapping the meat. The processed goat meat—consisting of loin, tenderloin, boneless sirloin, ground, sausage, and bacon—retailed for anywhere between $. and $. per pound, with a dress weight of percent of live weight, or . pounds. At a rate of $. per pound multiplied by . pounds, a processed, packaged goat could retail for more than $. Producers estimated that they could receive more than $ in additional income by processing goats through a cooperative effort, Beaudette said. The goat producers with Prairie Farms Marketing Alliance are still in the “waiting stage” of development as the cooperative looks for grants and completes paperwork and feasibility studies. “This process takes an inordinate amount of time,” Beaudette said. “As with all government agencies, things tend to take a lot longer than a person ever anticipates.” But with the current health and demographic trends, it may be worth the wait for many of the region’s goat producers.


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12

Nebraska Sandhills Yellow Perch Cooperative

The inhabitants of Nebraska’s Sandhills region are an innovative bunch. They take what most people see as a problem and turn it into an opportunity. Consistently low cattle prices and high taxes have now forced this innovative group to produce an unlikely cash crop: yellow perch. Native to freshwater lakes, yellow perch are now being raised in farm ponds, pasture lakes, gravel pits, and special water tanks across the Sandhills and are being harvested and sold as a value-added product. The idea to raise Sandhills fish was spawned by a Sheridan and Cherry County economic development grant known as the Western Agriculture Economic Stabilities (wages) grant. The grant addressed three potential areas for economic growth in the Sandhills: value-added beef, agricultural and rural tourism, and aquaculture. Cooperative member Tanya Storer said that aquaculture was developed because it worked well as a niche market. “There’s a demand [for yellow perch],” she explained. “We have lakes that are in essence a liability. If there’s something we can produce and there’s a market for it, then wow, [raising yellow perch] makes a lot of sense.” The Storers learned that fishermen in the Great Lakes region had recently suffered a tremendous reduction in yellow perch


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production and were unable to satisfy an increasing demand for the fish. Tanya Storer and her husband, Eric, tested their lakes and found them to be full of fat head minnows and no other species of fish. These were ideal conditions for yellow perch because their food source was present and no enemy species could harm them. Cooperative president Rich Lackaff, whose family has stocked their natural Sandhills lakes with fish over the years, said that the Sandhills lakes should be able to annually produce and support around thirty to forty pounds or more of yellow perch per acre in a mixed fish population. “These lakes still have to have the taxes paid on them and the monetary benefit to the ranch was nil,” Lackaff said. “In fact, they were a liability, having to fence in and around them to keep cattle where you want them. And since we allowed fishing, we also had to deal with the erosion from vehicle trails leading to and around our lakes, as well as having to pull out the occasional stuck pick-up.” Encouraged by the condition of their lakes, the Storers met with Dale Fattig of Brady, who has been involved in aquaculture for more than thirty years. He helped the Storers stock their lakes first with adult perch in February , then with perch eggs a few months later and again in the spring of . When the Storers realized that they couldn’t produce enough fish to be economically viable, they decided to seek a cooperative arrangement with other producers. Janet Magnison of the Old West Network heard about the Storers through Fattig, and she offered to organize a meeting of interested aquaculture producers. About two hundred people interested in aquaculture and yellow perch attended meetings in in Thedford and Bassett. Volunteers formed a steering committee for the newly-formed Nebraska Sandhills Yellow Perch Cooperative and solicited seed money, which they used to apply for a Sustainable Agriculture Research and Education (sare) grant. The cooperative obtained a $, grant from sare to go toward meetings, speakers, and educational efforts. The group was also awarded a $, Nebraska Cooperative


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Development grant to help with legal services including the writing of by-laws and articles of incorporation for the cooperative. A Nebraska Department of Agriculture Value-Added grant in the amount of $, was obtained and was used for capital expenditures. Two semi-trailers were purchased and plumbed for fish shipments. The cooperative purchased fish harvesting equipment with the value-added grant funds. Each member of the cooperative received three traps, two tanks, a dip net, an agitator, and materials for a net pen. Members also purchased graders and scales for the semi-trailers, which served as portable collection facilities. The Nebraska Sandhills Yellow Perch Cooperative solicited memberships at $, per member. Twenty-three members joined the cooperative with one hub of membership located in the Thedford-Whitman-Valentine area and the other group of members primarily located in the Johnstown-Bassett-Ainsworth area. Buyers go to the collection points to pick up an order when a sufficient amount of yellow perch has been harvested. Cooperative members must coordinate fishing schedules and produce enough fish to fulfill the buyers’ demand, according to Storer and past president John Gross of Johnstown. Unfortunately, the cooperative struggled to manage the yellow perch harvesting. “We needed an employee to manage and carry out the board’s direction,” Gross said. “Everyone on the board has a full schedule with a family, job, or business. We were all at some level of success before becoming involved in this endeavor. We either know what needs to be done or think we do but . . . where is the time?” “The whole point of our cooperative is the marketing,” remarked Storer. “The missing link to [successful marketing] is simply the manpower to make [it] happen.” According to its business plan, the cooperative wouldn’t become self-sustaining for another five years, until it could retain five percent of its sales. The cooperative members realized that until then it would be necessary to go outside of the business and obtain financial assistance so that they could provide a salary for a marketing position.


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Assistance did arrive when U.S. Department of Agriculture cooperative development specialist Jeff Jobs received a contract from the Nebraska Cooperative Development Center to help the perch group with incorporation, by-laws, legal assistance, and a business plan. The group experienced another setback, however, when Jobs left Nebraska for an opportunity in Iowa. Storer said that his departure led to a breakdown in the state’s cooperative development efforts. Still, the cooperative members remained optimistic. “In ten years there will be an aquaculture industry in Nebraska,” Gross said. Storer agreed, commenting, “How big and how fast it expands will depend on the amount of government support, or at the very least on the lack of interference. I am convinced [that] there will be a fish industry in Nebraska.” Part of their certainty is based on statistics showing that: • Fish account for the second largest trade deficit in the United States, with oil being the largest deficit. • Worldwide, fisheries provide more than half of all the animal protein consumed by the human race. • Fish constitute a $ billion industry in Mississippi —a state with a thirty-year-old, farmer-owned cat fish cooperative. Storer said that members of the cooperative keep their eye on the market for fish. Catfish weighing between one and two pounds sell for cents a pound. Yellow perch sell between $ and $ per pound, she said. Yellow perch have a lower fat content than most fish, allowing them to freeze better and have a longer shelf life. The cooperative’s processor, K & H Specialty Meats in Stuart, charges cents per fish for processing regardless of fish size. Frozen fillets are stored at no cost at K & H or at the cooperative’s Bassett office. The cooperative can market a variety of products. Lackaff said that he and other members are what he calls “extensive” produc-


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ers, using no supplemental feed and harvesting whatever fish nature provides. He said that at the other end of the spectrum are people like Dale Fattig of Fattig Fish, Bill Hahle of Pleasant Valley Fish Farm, and Gary Hartley of Prairie Hills Fish Farm. Fattig, Hahle, and Hartley are intensive operators who derive most, if not all, of their livelihood from aquaculture. Lackaff believes, like other cooperative members, that each member should play to his or her strengths: some produce eggs and fry, some raise fingerlings, and some feed out perch. For example, John Davenport, the owner of Water’s Edge, prefers to market “skin-off ” flank fillets from fish that are eight inches in size and larger. Davenport could also sell “skin-on” flank fillets from fish that are one and a half pounds and larger. Lackaff noted that there is also a market for skin-on butterfly perch fillets. He said, “ percent of all yellow perch consumed in the U.S. are eaten as butterfly fillets.” As of the cooperative charged $. per pound wholesale and $. per pound retail for butterfly perch fillets and had restaurants up and down Highway interested in their product. In addition to hiring a full-time marketing person, the cooperative needs to address other issues before it can reach its full potential. Members must coordinate harvesting with the yellow perch reproductive cycle; harvesting females with eggs mean fewer yields, and males also have lower yields in late March and through the spawning period. Members must choose how intensively or extensively they are going to harvest fish from their lakes and ponds. The cooperative has to address processing and explore grants that could help with this issue. As of early , Lackaff estimated that there were three hundred thousand four- to five-inch fingerlings on feed in Nebraska, and that most of these were being raised indoors. He said that the market for larger fish is attractive and one the cooperative needs to explore seriously. Although some may consider them a strange sight, the Sandhills ranchers decked out in fishing gear, sitting atop a barge made


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from surplus military pontoons, are a welcome one for those wanting to add value to acres of water. Some members are selling eggs, some are marketing fingerlings used for stocking ponds, and some sell food-size fish for stocking ponds, breeding purposes, or for processing. Despite the many various challenges that the Nebraska Sandhills Yellow Perch Cooperative has faced, Gross said the cooperative has had successes. “We have the co-op up and going, [it’s] legal, and ready to grow. We have restaurants selling our fish, [and] we have a very forward-thinking board that is gaining ground.” Lackaff noted that the cooperative has sold several thousand fish and eggs both in Nebraska and outside of the state, and that many new buyers have been added to the cooperative’s database. Moreover, Valentine Rural High School and Rock County High School have become involved in the area’s aquaculture industry through vocational agriculture classes, with students manufacturing chicken wire traps for the cooperative members. As for the future, cooperative members are one day hoping to build a processing plant. Funding is available for the plant, but before the cooperative can construct the plant, it first needs to build an inventory of yellow perch and market them to willing buyers. Members simply need to get more fish out of the water. “With the closing of Coldwater Fish Farms in Lisco in ,” Lackaff said, “we lost a source of yellow perch in addition to losing our western area processor. This makes it doubly important for our members to get food-size fish out of the water. We need to be able to supply our customers.”


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13

Southeast Nebraska Alternative Crops Association Cooperative An acre of Chardonnel—a hybrid French chardonnay developed at Cornell University—rows of edelweiss, and an acre of LaCrosse grapes with some DeChaunac climbing the hillsides. This isn’t a picture of Napa Valley but of the rolling hills northeast of Nebraska City, Nebraska. It is a scene that is becoming more and more familiar to Nebraskans as the state continues to rapidly develop a grape and wine industry, taking advantage of growing conditions that many experts compare favorably to traditional wine producing regions of the United States including Missouri, Oregon, Washington, and the Finger Lakes region of west-central New York. The Southeast Nebraska Alternative Crops Association cooperative (senaca) has twenty members and an active board of directors for its Arbor Trails Winery. While most of the members have only a few years of grape-growing experience, they have quickly learned from one another and have wasted no time in setting up a winery. senaca describes itself as a group of diverse grape producers drawn together by a mutual desire to improve the profitability and future of their individual grape-growing businesses. This diversity is a strong point in favor of the success of the cooperative in the eyes of Howard McNiff, director of Five Rivers Resource


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and Conservation Development in Tecumseh. “They have so many skills [available] . . . bookkeepers, a contractor, managers,” McNiff said. “Just a wealth of talent in that organization. That’s going to serve them well down the road.” senaca members own the cooperative through their personal financial investment; control it through an elected board of directors and through direct-voting privileges; and benefit from it by sharing net earnings, increasing their market access, and receiving volume discounts on supplies. Growing their membership may be as important as growing good grapes, according to A. O. (Doc) Gigstad. Gigstad is a retired veterinarian from Nebraska City, currently the cooperative’s vice president, and one of the group’s organizing forces. “The more [members] we have,” he said, “the better we can do in the legislature, and the better we can do in marketing.” Their concern with the Nebraska legislature is a legitimate one. The cooperative hopes that the legislature will address and approve a proposed tax on wine coming into Nebraska. In Missouri, for example, imported wines are taxed, which helps to protect the local wine industry. The tax dollars also help to fund the Missouri wine industry. The Nebraska Farm Wineries Act, Gigstad explained, only allows for one satellite outlet besides the winery sales location. This, too, is an issue the cooperative wants addressed because it limits the access that Nebraska producers have to customers. The act also restricts the amount of juice or fruit a winery can import. Because there are no restrictions on wholesale outlets, selling through a farmers’ market is allowed under state statute. Sales through distributors, however, are only profitable once a winery has reached at least the twenty-five-thousand-gallon production level. Missouri is a large wine-producing state, and the cooperative is looking at Missouri’s laws as it works with the Nebraska legislature to make it possible for the industry to succeed in Nebraska. In the s and prior to Prohibition, Nebraska vineyards to-


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taled five thousand acres. Today there are approximately four hundred acres under grapevine production in the state, according to Paul Read, professor of horticulture and viticulture at the University of Nebraska–Lincoln. “It should be remembered that our wineries make wine out of other fruits [apples, plums, cherries, and various berries] and out of honey, mostly produced in Nebraska,” Read said. “Ten years ago we probably didn’t have more than ten acres of commercial grapes.” Now there are more than nine hundred names on the unl viticulture program’s mailing list. For background information, senaca researched the Missouri grape growers groups that represent eighty vineyards and more than forty wineries. The cooperative concluded that the winter hardy grapes growing in the southeast part of Nebraska would produce a strong wine industry, one comparable to that of Missouri. “What they found was that while it is not practical to try to compete with the large, mechanized vineyards and wineries of California or Oregon that sell through large distributors and vineyards, the small to medium-sized Missouri wineries . . . that sell most of their product at an on-site retail outlet would be good models,” said Art Homer, cooperative secretary. “These wineries are the basis of an industry that attracts . million visitors and sells some , gallons of wine per year—a $. million industry.” The cooperative used a specialty crop grant for $, from the Nebraska Department of Agriculture to write a feasibility study and a business plan and to help pay legal fees. The Nebraska Cooperative Development Center awarded the cooperative $, for viticulture consultation, marketing assistance, and education. senaca wants to help local grape and fruit growers capture profits that are currently being missed when they sell their fruit elsewhere. By building a “vine to wine” Nebraska product cooperative, senaca wants to provide its members with a profitable return on their equity investments and, at the same time, promote both the production of high-quality Nebraska fruit wines and the southeast Nebraska wine and tourism industries.


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During the growing season the members are busy with handson production work. They nurture, prune, and train the grape vines to grow along the rows of trellises. The growers practice weed control, harvest by hand, and market their grapes. They add to their vineyards—a half acre or an acre at a time—new varieties that they share with one another or buy from more established vineyards in Nebraska and elsewhere. Winter is an important time of the year for growers. While the plants lie dormant, viticulturists take soil tests, make plans for the following year, and stake and train the vines. In 1999 Gigstad planted his first vines. Today he has 1,700 vines on three and a half acres, all planted in rows twelve feet apart. They add color to the vista of hills and trees surrounding Nebraska City, a city perhaps best known for its apple harvest and for being the home of the National Arbor Day Foundation, Arbor Lodge, and Kimmel Orchard. Grapes can now share the spotlight with apples in Nebraska City, and wine producers can take advantage of the agricultural tourism already established in the area. “We want to be a typical winery, but there is a lot more here in Nebraska City,” Gigstad said. In addition to the winery, Nebraska City offers a convention center, three golf courses, including one designed by Arnold Palmer, and Factory Stores of America, an outlet mall that draws more than 382,000 visitors each year. The senaca steering committee members note that 2.5 million people live within a 150-mile radius of Nebraska City, making it an easy destination for potential customers. To bring in more customers, the cooperative has started working with tourist attractions like Arbor Lodge and Kimmel Orchard, which see more than 160,000 visitors annually. senaca can take advantage of related festival events as well as the history of the region. The Missouri River Basin Lewis and Clark Interpretive Trail and Visitors Center opened in Nebraska City in 2004 and is projected to draw 100,000 tourists each year. But the cooperative ultimately wants its winery to become an important tourist destination in its own right and its wine to become a sought-after product.


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In June 2003 the cooperative purchased the Maple Grove Alternative School building from the Nebraska City School District. The building is an historic Works Progress Administration (wpa) schoolhouse near the crossroads of Highways 2 and 75, where more than 9,000 vehicles pass through each day. It is also just five miles from Interstate 29 in Iowa, where another 11,000 vehicles pass through daily. In April 2003 senaca growers toured seven wineries of various sizes in central Missouri, and later in July they hosted the Arbor Trails Winery membership solicitation meeting to raise the capital needed to build a first-class winery. Sixty people attended the meeting. In August 2003 Arbor Trails Winery officially opened for business with the successful recruitment of twenty members at $5,000 each, and in December the group was awarded a $96,355 usda Value-Added Producer grant. They also received a commitment of financial support from First National Bank and Trust of Syracuse as well as a loan from Otoe County’s revolving loan fund. An important factor in the successful emergence of the cooperative was patience. “This process of setting up a cooperative just takes forever, it seems,” McNiff said. “It’s not for the impatient. Coops can take anywhere from a year to five years for setup because you have so many hoops . . . to jump through. You’re doing all this by committee and it’s difficult for that person who’s an independent businessperson to understand [why] it’s taking so long.” Grapes can help small farmers stay on the land, and they also offer an opportunity for people who want to farm but have little land to do so. “We have a lot of zoning going on here and a lot of people who want to have ten or twenty acres,” McNiff noted. “So what do you do with ten acres?” The biggest hurdle so far for the cooperative has been organizing the group so that everything is done correctly. Taking the time to do things right has been frustrating at times for group members, but they are committed to producing a product that they can be proud of. While some of the board members have their own


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businesses and are accustomed to making their own decisions, the group is learning to work together and capitalize on the individual strengths that different members bring to the cooperative. senaca’s business plan calls for initially hiring two employees: a vintner, who is both the wine maker and manager of the winery; and an office employee who will also work in retail sales. The cooperative doesn’t have a membership goal, though they are limited to fifty members by Nebraska law. senaca sought people who shared the cooperative’s vision of providing a high-quality product in an industry where hands-on work is the norm. What does senaca need most? Arbor Trails Winery needs legislative support. According to Art Homer, the legislature batted down the first attempt to tax wine distributors in Nebraska thanks in part to lobbying by Nebraska alcohol distributors. “We want to mirror our laws and our method of operation, so to speak, to [practices in] the state of Missouri,” said cooperative president Al Peterson of Plattsmouth. Missouri taxes each bottle of imported wine one cent and uses the funds to help growers improve the industry. In contrast, each Nebraska winery pays a production fee per gallon of wine produced, but this money goes to the state’s coffers, not to the wineries. senaca board members agree that the Nebraska wine industry must have legislative support if the vineyards and wineries of Nebraska are to develop into a full-fledged industry. With the growth of the Nebraska Winery and Grape Growers— members joined in just six years—many wine growers will closely follow how the legislature manages the wine industry. The Nebraska wine industry’s importance to the state economy is perhaps best articulated by Read: “An acre of grapes may be worth, in gross value, a hundred or more acres of some of our commodity crops,” Read said. “It’s a risky business, but it is a potentially high-value, value-added crop.” Arbor Trails Winery opened on May , , during Nebraska City’s Arbor Day celebration, with cooperative members expecting to market , gallons of wine in the winery’s first year of operation.


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14

Nebraska Farmers’ Market Association

Farmers’ markets had many homes in Lincoln until , when one finally settled in the city’s historic Haymarket district. The location was particularly appropriate because the Haymarket has been home to many wholesale and retail food businesses over the years. The Lincoln Haymarket Farmers’ Market has always been a producer’s market, said Billene Nemec of Prague, who began managing the market in . “Only the producers of homegrown, in-season products could sell at the market,” she said. “There was to be no jobbing—buying and reselling—at the market.” In market organizers considered it a good day if twelve vendors were selling their produce at the farmers’ market. Over the next fifteen years this outdoor venue would grow to showcase up to vendors each week, with as many as ten thousand shoppers arriving at the market every Saturday morning. The reasons for vendor participation have changed over the years. Initially, selling at the market was something hobby farmer vendors did for some extra spending money, but soon it attracted small family farmers who wanted to boost their income from conventional farming. These farmers are taking part today because they see real profit potential in a well-organized farmers’ market.


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Most of the producers report that the earnings they receive from sales at the Haymarket Farmers’ Market are an essential part of the family income. Producers profit not only from the items they sell but also from the opportunity to develop their entrepreneurial skills and discover new ways of thinking and planning. A farmers’ market is a gathering of community, Nemec believes, and this community of farmers comes together in an entrepreneurial effort to bring their finest products to consumers who, in turn, are willing to reward the farmers for their labors. The Nebraska Farmers’ Market Association was formed in . Nemec explained the rationale behind the association: “We felt there was a need for markets to work together in the state and for an organization where we could support and learn from one another.” The association promotes individual farmers’ markets as well as local food producers throughout Nebraska. It serves as a source of information for vendors, for consumers, and for communities that are interested in buying locally produced food and want to know more about the important ways in which farmers’ markets contribute to a community. A Guide to Nebraska Fresh Produce—a comprehensive resource booklet published by the Nebraska Department of Agriculture— lists forty-four communities in Nebraska that host farmers’ markets, with some of these towns supporting more than one market. The booklet also lists producers who sell at roadside stands, at farm or orchard sites, or through wholesale outlets, and gives the names of Community Supported Agriculture (csa) producers organized by fruit or vegetable category, food division inspectors, and weights and measures inspection areas. The booklet offers insight into the growing interest in farmers’ markets. Broken Bow farmers’ market manager Gary Lawrence said that producers in communities that host markets need to be familiar with health regulations, weights and measures, and other issues. The Nebraska Farmers’ Market Association has taken on this educational role for markets throughout the state. At the same time, the Nebraska Fruits and Vegetables Growers Association is


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evolving, and it seems a natural move for the two associations to discuss a possible merger. The Nebraska Farmers’ Market Association received a $ Nebraska Tourism grant in to fund the promotion of markets through publicity fliers. The South Central Nebraska Resource Conservation and Development Council designed and printed the promotional pieces for the association. Along with the Nebraska Fruit and Vegetable Growers Association, the University of Nebraska–Lincoln, and the Nebraska Department of Agriculture, the market association coordinates the Senior Nutrition Coupon Program, which helps Nebraska senior citizens purchase fresh, seasonal foods. The coupons are distributed to low-income senior citizens, who can redeem them at farmers’ markets, farms, or roadside stands where the producer is on-site. Producers taking part in the coupon program must be registered with the Nebraska Department of Agriculture in order to receive and deposit the coupons, according to Nemec. “This program is [meant] to encourage the consumption of more fruits and vegetables by seniors and to support the local fruit and vegetable producers,” she said. In , when the coupon program was only a pilot venture in a few states, Nebraska received $, to operate its own program. Laurie Hodges, unl extension horticulturalist and secretary of the Nebraska Farmers’ Market Association, noted that in the following year $, worth of food coupons were exchanged, with more than three hundred producers accepting the coupons. “Over , seniors participated, with interest in the program exceeding the dollars available for distribution,” she said. “The program was made a part of the Farm Bill.” Nebraska farmers’ markets have different numbers of vendors and different locations (with some markets in small towns and others in urban settings), but they all must follow federal, state, and local codes and regulations. Each market has its own unique blend of sights, sounds, and textures woven together to form a tapestry representing the local community. Farmers’ markets are


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social gathering places where the regulars—vendors and customers alike—are known by first name. Some markets organize entertainment on-site and others provide educational components, but all reflect their community’s personality. The success of the Haymarket Farmers’ Market was integral to the successful development of the Haymarket in general. Once the Haymarket became desirable for businesses and welcoming to consumers, development quickly spread throughout the area. The Haymarket is now a model for urban development and is studied by many community developers. The area owes this success in part to some of the market’s first vendors, such as Kathy Davis, Barb Martin, Shirley Niebelsick, and Jerry Meyer. They are still there, offering support and setting a positive example for newer vendors with their quality products, excellent customer relations, and marketing skills. Vendors can pay an annual or daily fee for their marketing stall, according to vendor relations manager Linda Hubka. The annual rate for a craft stall is $, while sellers of produce and baked goods pay $ per year. An annual rate of $ is assessed for commercial businesses. Only ten to twelve commercial businesses are allowed in the market each week. Food and grower vendors must represent at least forty-five to fifty percent of the total number of vendors at the market. Daily rates for vendors are $ for produce and baked goods, $ for arts and crafts, and $ for commercial spaces. A workshop is conducted each February during which vendors are given the option of signing up for their stall space from the previous season. The Haymarket Farmers’ Market operates for twenty-seven weeks from May to October in a two-block area in front of an historic train station. “I’m there to keep the vendors happy and safe,” Hubka said. “I’ve made some very dear friends down there. For our customers it’s a real feel-good atmosphere.” A robust farmers’ market is a community-driven, producebased social event that brings together enthusiastic consumers


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and the producers who satisfy them. The Mill, a downtown Lincoln coffeehouse and one of the first businesses to open in the renewed Haymarket, has been very supportive of the farmers’ market. The Mill donates roasted coffee on Saturday mornings to market volunteers, who in turn sell the coffee to Mill customers. Revenue from sales goes toward the market’s promotion and development. This intertwining of businesses with the market adds to the sense of community, said Nemec. Concerns about market sales hurting the local grocery stores were unfounded. Farmers’ markets can co-exist with traditional retail markets and even enhance their customer base. Community Supported Agriculture food systems benefit from the educational efforts of the Nebraska Farmers’ Market Association and the Nebraska Fruit and Vegetable Growers Association. The consumer-farmer relationship deepens through csa partnerships. csa is a program in which the consumer signs up with a particular producer and pays, for example, $ for twenty weeks worth of vegetables, herbs, or flowers that are picked-up at the producers farm or at the local farmers’ market during the growing seasons. One such csa, Shadowbrook Farm, signed up sixty customers for a fall csa, ensuring that its consumers have a reliable source of local food through December. Shadowbrook Farm owners Charuth and Kevin Loth of Raymond operate the oldest csa in Nebraska. Another csa based in Raymond—Common Good Farm—is in its seventh season of operation under Everett Lunquist and Ruth Chantry. It is a hands-on place where members can plant, weed, harvest, use the lending library, and attend cooking classes, workshops, and potlucks. Common Good Farm provides ten to twelve pounds of organically grown food weekly to their csa members for twenty-three weeks each year. The csa fee helps the producer share the risk of producing the food with the consumer and also brings the consumer closer to their food source. Producers selling through csas often participate in farmers’ markets as well and recruit members from their


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regular customers at the markets. With an average of $ spent per customer, per day, at a farmers’ market, a knowledgeable farmer can bring home a sustaining income from a well-operated farmers’ market. Over the years the marketing skills of vendors have increased. Nemec sees how today’s vendors “plan for success”: “They bring only quality, in-season produce, have learned the art of marketing, and have become more savvy about the appearance of their displays.” To maximize profits, vendors now sell more produce by weight with certification by the Nebraska Department of Agriculture’s Division of Weights and Measures. “Selling by actual weight rather than by a ‘bunch’, producers often increase their income, as less is given away and the customer is assured of a fair price,” Hodges said. Encouraging customers to purchase locally produced foods was challenging for vendors and market organizers. Buyers had to be convinced to support the labors of those in their community and region. And, with the success the market has had, it has been a struggle to protect the integrity of the farmers’ market model as well as its core principles: that only products produced by the vendor can be sold at the market, and that the market must represent local, sustainable agricultural practices. The market association still needs at least one major resource: funding to properly train and hire dedicated market managers. “The Nebraska Farmers’ Market Association recognizes the need to build communication between urban, rural, and agricultural communities,” stated Nemec. “There is a need to connect these groups as partners and to implement projects and learn from them.” Potential venues for expanding the local foods market include fairs, school cafeterias, and public events, where local produce could replace food brought in from outside of the state. Much of the networking comes about through the meetings of the Nebraska Farmers’ Market Association, according to Nebraska City Farmers’ Market manager Chris Gress. A caterer by trade and owner of Chris’s Cuisine, Gress said that these meetings


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offer market managers an opportunity to share what works and what doesn’t and keep up to date on rules and regulations. “Omaha and Lincoln have county health departments,” explained Gress, “but the [other] farmers’ markets deal with the state’s regulations. . . . The association serves as a source of information on new regulations to its member markets.” Most of the smaller farmers’ markets have between five and eight full-season vendors, Hodges said. A truly sustainable market would probably need twelve to fifteen full-season vendors. The Omaha and Lincoln markets each have dozens of vendors. “Somewhere close to $ million goes through the Lincoln Haymarket Farmers’ Market in a season,” Hodges said, noting that an average customer in the eastern United States spends nearly $ per farmers’ market trip and even more if they are purchasing meat products. In Custer County, for example, Hodges said that if percent of the county’s population, or people, visited the Broken Bow Farmers’ Market on an average Thursday afternoon and make $ worth of purchases for the sixteen-week duration of the market, they will collectively spend $, per week, or nearly $, per season in Broken Bow alone. Taking these assumptions a step further, Hodges said that if each of the six full-season vendors sold to one-sixth of the shoppers, then each vendor would have forty customers each week and an average income of $ per week. Farmers’ markets are nothing new, but they faded in popularity after World War II, when much of fruit and vegetable production moved to Florida and California and to other southern states. Cheap fuel, improved refrigeration, and an expanded highway system also contributed to this shift. Hodges believes that farmers’ markets are back on the rise not only because consumers want to buy healthier products but also because there is something of a backlash against large, multinational food conglomerates. Many consumers want their money to go directly to the producer. Said Hodges, “I really think there’s a fair amount of . . . this need to connect, that . . . buying locally satisfies people.”


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15

Rural Ranchers

Rural Ranchers is a youth program that goes beyond identifying the struggles facing young people today by teaching students to take responsibility when facing life’s challenges. According to sixth grade teacher Dave Berens of Abraham Lincoln School in Hastings, Rural Ranchers is the successful marriage of -h, an elementary school, a nearby fairgrounds, and more than one hundred k– students. The program meets the substantial goal of helping youth “grow up to be better people,” Berens said. Of the students enrolled in Rural Ranchers, percent come from single-parent homes. Latino students make up percent of the youth club, and nearly percent of the students live with grandparents, in foster homes, or in shelters. More than fifteen years ago, local cooperative extension agent Scottie McMillan approached the school’s principal and asked if the two entities could work together to keep kids off the street and teach them responsibility. The principal contacted Berens, who formed the Rural Ranchers. The club purchased three ewes and two bucket calves and housed them at the Adams County Fairgrounds south of the school. A dozen students took turns caring for the animals morning, noon, and night throughout the entire year, including days when the students were not in school. Berens believed that if the kids cared for the animals, then they


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would also care for the property around them and would become more caring adults. Today the club’s mantra includes the three Rs: respect, responsibility, and reputation. Students may join the club and sign up for projects as early as kindergarten, and they are allowed to have livestock projects beginning in sixth grade. Shortly before school lets out in the summer, the students learn which animal is assigned to them for showing at the county fair. The club, which owns horses, sheep, goats, rabbits, ducks, geese, chickens, calves, and cows, holds its own in fair competitions. “Animals are jointly owned by all participating sixth-grade students, and they are responsible for the well-being and care of the animals,” Berens said. At a recent Adams County Fair, the Rural Ranchers exhibited fifty market lambs, ten breeding ewes, thirty goats, forty chickens, forty rabbits, five market steers and heifers, and thirteen pens containing three broilers each. And that was just the livestock. The students took part in other projects including leatherworking, cooking and baking, model building, and woodworking. Each year the students borrow $, from a local bank as seed money for projects. Proceeds from the annual -h auction at the conclusion of the county fair are used to pay back the loan. Teachers use this loan as a financial learning tool as well. Berens and principal Drew Heady—in his fourteenth year as elementary school principal and Nebraska’s Principal of the Year in —agreed that strong support from the fairground’s owner, the Adams County Agricultural Society, makes the club possible. The school administration’s support of Berens and team-teacher Denise Koch is also crucial and allows the teachers to adjust their curriculum to needs in the barns. After all, lambing season is a busy time of year. There are many opportunities for teaching moments between the classroom and the fairgrounds, where chores are completed and life lessons imparted. Eleven- and twelve-year-old students tell visitors that responsibility is very important in the club and in the work in the barns. If someone fails to do his or her job,


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everyone suffers, especially the animals. The students politely greet visitors and introduce themselves, give a tour of the barns and pens, and, as they feed, water, and groom their animals, they treat everything and everyone with respect and responsibility. “This isn’t the answer for everyone,” admitted Berens. “We’ve preached from day one that this is not a playground.” He said the skills the kids learn at the barns are real life skills that they may not get anywhere else. And the barn is a big attraction for the students. Despite having to routinely complete chores throughout the weeks and months, the students are excited when they arrive for work with their barn group. Summer time is when the “rubber really meets the road,” Berens explained. Many of the kids work four days a week at the fairgrounds. The club organized a haying business a few years ago, keeping some of the hay for their animals and selling the rest to horse owners and to the local farm store, Orscheln’s. The store’s manager has supported the efforts of Rural Ranchers for years, particularly through substantial discounts on boots for students to wear while working in muddy pens. The student’s hay business, called the Bale Company, puts up eighty-five acres of hay each summer, primarily in five- to tenacre tracts in and around Hastings. “We try to do this as a service to the community,” Berens said. And Rural Ranchers don’t just hay odd patches of ground here and there. They seed the acreages and develop once-unproductive lots into attractive hay acres. Rural Ranchers has formed partnerships with two alfalfa seed companies—Dekalb and America’s Alfalfa—to obtain alfalfa seed. They have also formed partnerships with businesses and landowners to develop and put up hay through lease fees, free rent, and rent-share agreements. Again, the students are a part of these transactions, bringing the world of business into their classroom in a very real way. The more muscular -h members usually help with the actual haying enterprise, and even so, Bale Company makes room for students of all ages and sizes. Younger students work for an


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hour at a time while older students, some of them in junior high school, may put in several hours in the hayfield, lifting or more bales a day. Berens said that the Rural Ranchers program has been successful because students take ownership in the club. Because many of the projects are innovative, the students are often the first to be involved in a new enterprise. Along with the Bale Company, the Rural Ranchers formed the Garden Company. During the summer of participating students planted more than one hundred tomato plants as well as potatoes, peppers, and other vegetables. They raised the vegetables for themselves, for families who agreed to help with the gardening, and for donation to homeless shelters. After one sixth grade class graduated to seventh grade, the sixth grade class entering the next fall decided to take the excess tomatoes and form the Salsa Company. The students, in their first entrepreneurial experience, determined what they were going to produce, how they were going to produce it, what label they would develop, and how and to whom they would market the salsa. They prepared pints of hot and mild salsa and, through word-of-mouth promotion, sold the pints to teachers, parents, and community members, earning $ per pint. They were there working after school, a dozen students blanching and peeling tomatoes, washing jars, sealing lids, and learning responsibility, respect, and reputation. In another enterprise called the Squirrel Company, students busied themselves gleaning fallen ears of corn from farm fields and then bagging them—at thirteen ears to a bag—to sell in Hastings for $ per bag. And then there’s the Ice Company. A friend of Berens and the Rural Ranchers gave the club a good deal on an ice truck, and since then the club has contracted to deliver ice at a number of Hastings events. The club’s goal is to sell a thousand of the twentypound bags at $. per bag. The students also developed a delivery plan and voucher system for the ice business, putting to


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work forty young minds from the sixth grade on marketing and production problems. Principal Heady said that the program has been successful in moving kids to assume greater levels of responsibility in the school system. A former student of Berens recently conducted a study as part of his elementary education research at Hastings College. Tracking more than one hundred students over a period of three years, the study examined rates of attendance, academic reports, and higher graduation rates of students who were active in Rural Ranchers. The outcome was no surprise to Berens, Koch, and Heady, who had already experienced the results firsthand: although the participating students’ grades were similar to those of the general student body, Rural Ranchers students had better attendance and graduation rates than nonparticipating students. “I believe in my heart that if we can give kids those things [respect, responsibility, and reputation], we’re going to produce productive kids who grow up to be productive adults,” Berens stated. “It’s that whole kind of feeling about being close to the earth, loving something and having them love you back with no strings attached. It doesn’t cost a million dollars, so it’s not a money issue, not an income issue. It’s like starting with a clear board. I always felt that the barns could provide that opportunity.”


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16

Kearney Area Ag Producers Alliance

The experience of the Kearney Area Ag Producers Alliance (kaapa) in developing value-added opportunities demonstrates that when the time isn’t right for one project, another may be waiting in the wings, ready to take flight. In the summer of a group of producers set out to develop value-added opportunities for growers of corn, soybeans, and feed by-products and started kaapa. The producers set up the legal cooperative and adopted an annual membership fee of $. The founders of kaapa recruited one hundred members who were entitled to take part in any marketing prospects the group could develop. For their first project they teamed with Heartland Fibers llc to convert cornstalks into paper pulp. kaapa helped to write the prospectus and sign members on to the Heartland Fibers proposal: a $ million facility that would utilize , acres of cornstalks. While cornstalks had been successfully converted into paper in the laboratory, the plant would have been the first facility to actually manufacture a paper product from cornstalks. But kaapa members were reluctant to enter the project. They wanted to see a small-scale factory actually doing the manufacturing before committing to the large-scale plant. Because of the members’ concerns, kaapa and Heartland Fibers went their separate ways.


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kaapa continued to seek markets for their members’ grain products, taking advantage of the fact that hybrid-verified, identity-preserved grain is part of a growing market in both the United States and abroad. Many users seek out certain varieties of grain with specific characteristics. Some types of corn have higher starches. Other hybrids yield more ethanol. Some buyers want genetically unmodified corn. kaapa can market to these niche demands, adding value to what otherwise would be commodity grain at commodity grain prices. In November the Buffalo County Economic Development Council approached kaapa with an ethanol plant proposal. A company wanted to build an ethanol plant in the Kearney area, where there would be an ample supply of corn as well as energy supplies, transportation links, and nearby cattle feeders who could utilize the byproducts of the distilled grain. Although the proposal did not work out, kaapa decided instead to find its own firm to design and build an ethanol plant. The cooperative hired Fagen Inc. in April , and six months later the firm set out to build a plant fifteen miles south of Kearney, near Axtell. The plant was completed in November , four months ahead of schedule and under the budgeted cost of $ million, which included start-up operating funds. Board member Rod Ganguish delivered the first load of corn to the plant on November , and the first ethanol was produced about two weeks later. The fully operational plant can now produce forty million gallons of ethanol a year in a denatured state. The actual product from the plant is corn alcohol, which is blended with percent gasoline in a denaturing process that makes it non-consumable and compliant with regulations of the Bureau of Alcohol, Tobacco, and Firearms. Making ethanol is a fairly basic process. Corn is ground into a near flour-like consistency. Yeast and enzymes are added to break down the starch into sugars, which are then distilled into ethanol. The kaapa ethanol is shipped via Burlington Northern tanker cars to the front range of the Colorado Rockies or over the


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mountains into California market terminals. Both Colorado and California are ideal markets for corn ethanol because government regulations in those states call for reformulated gasoline. Ethanol is considered reformulated gasoline when blended as percent gasoline and percent ethanol. The president of kaapa Ethanol llc, Paul Kenney of Amherst, said that because of the seasonal nature of ethanol markets, his group uses a national marketer to help to sell their product. By the fall of kaapa had members, with of these belonging to kaapa Ethanol. kaapa Ethanol is now a closed membership entity following the initial sign-up period in early . Members paid $, per share to own interests in kaapa Ethanol and agreed to the following conditions: • Class A stock is for a producer to market , bushels of corn annually to the plant for a period of four years at the set price of $ per bushel. Members can sell more grain, at market price, if the plant needs it. • Class B stock is for the purchase of distillers grain, but the bulk of distillers grain is marketed through Performance Plus, thus saving the expense of installing a dryer at the facility. • Class C stock simply requires a $, investment with no corn delivery requirements. kaapa producers raised nearly $ million. Another $, was raised from the South Central Corn Growers group. Kearney and Franklin County area farmers contributed $, as seed money for the project, and the group received two $, Nebraska Department of Agriculture value-added grants in . The grants helped with development costs associated with information sessions, organizing the limited liability corporation, writing the prospectus for investors, and purchasing and developing the -acre plant site. The amount of money needed for the project—$,,—was obtained through a loan from


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First National Bank of Omaha, with an additional $ million line of credit set up for grain purchases and plant start-up. The money and the time invested in studying and developing the plan were intended to bring profits to investors, which is the ongoing goal of both kaapa and the ethanol plant. Profits from ethanol sales and distillers grain (sold – percent wet for cattle feed rations) are shared by members of kaapa Ethanol. Historically, there is a five- to ten-cent jump in corn prices once an ethanol plant opens for business in an area. “The plant will use fifteen million bushels, so within twenty to thirty miles from the plant we should see higher bids for corn,” said Kenney. “The grinders will need over one million bushels per month.” And higher corn prices, Kenney said, will raise the demand for the distilled feed. The plant’s annual corn needs account for roughly half of the corn produced in Kearney County, helping to drive up the local price for corn. “We’re over capacity as a matter of fact,” Kenney said. “Ours is a million gallon plant and we’re running at million right now.” He expected to be above that figure by the end of the first year of production. Chuck Woodside, the plant’s general manager, was hired away from an ethanol plant in Minnesota in November . Assistant construction project manager Evan Fagen said that the kaapa plant was the eighth ethanol plant his family’s company had built as of . Two are in South Dakota, three in Iowa, one in Wisconsin, and two in Nebraska, including the Kearney facility. Of the sixty-eight ethanol plants operating in the United States, ten are in Nebraska. Trenton and Central City are two of the newer ethanol plants, having started production in the spring of . Meanwhile, the umbrella group, kaapa, continues to seek new markets for its members’ produce. A proposed joint venture with a Mexican company could allow kaapa members to market corn to Mexican buyers. Profits after expenses would be divided between the firm in Mexico and kaapa members. The Nebraska Department of Agriculture awarded grants


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totaling $, to the joint project. The U.S. Department of Agriculture also awarded a $, grant to assist with the development of the U.S.-Mexico corn market. The cooperative used $, from these grants to hire a professional firm to study the feasibility of shipping corn to Mexico and maintaining a highquality product en route. kaapa is also analyzing the Mexican white corn market through contracts with local Mexican farmers. The business plan for kaapa Ethanol calls for a financial return to the producers in the third year of operation. “As v president, I am very proud of our members’ vision of the future and the need to join in value-added ventures,” Kenney said. “We believe this is our first step in that direction.”


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17

Flatwater Biologics

Among the several initiatives aimed at building new ethanol plants in Nebraska in was Flatwater Biologics llc. Doug Samp, a telephone company executive from Benkelman, Nebraska, got the idea of opening an ethanol plant from a cattle feedlot operator. Samp thought he could finance the project with venture capital and Small Business Investor Companies (sbic) funds and hopefully speed up the process of getting his company off the ground. Like other ethanol plant developers in and , Samp wanted to build his plant quickly so that he could qualify for state and federal dollars and tax benefits before they ran out. Samp began studying the possibility of constructing an ethanol plant in January . In February he met with lawyers to discuss forming an llc. Rather than seeking out local corn growers and signing them on as investors, Samp instead decided to gather a steering committee for his limited liability company. Serving on the steering committee were a school superintendent, a car dealership owner, a cattle feeder and corn producer, a former hospital ceo, the executive director of the local Farm Service Agency, and a banker—a group described by Samp as “extremely dynamic and capable.” On April , , Samp entered into a contract with the Nebraska Department of Revenue’s motor fuels division. The


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contract would be fulfilled if the proposed plant could be in production by June . The contract was a result of lb , a bill that guaranteed a tax credit of $. million over a period of eight years from Nebraska’s motor fuels division. Samp also pursued a value-added grant worth nearly $ million from Title of the Farm Bill. The company purchased acres of land south of Max, Nebraska, for the plant site, which was ideally located near a railroad line and necessary energy and water sources. The group’s development plan called for a thirty million gallon, $ million ethanol plant that would utilize the Vogelbusch continuous fermentation process, one of the most efficient methods of taking distilled grains and producing fuel ethanol. Flatwater Biologics planned to employ a labor force of up to thirty-two people, with most of the employees being hired prior to start-up. Samp said that the economic impact of the plant would be substantial. The plant would pay its employees an average wage of $,, and it was estimated that half of the jobs would go to people who already lived in the area. There would be tax benefits to the county, and the presence of the company would also create other jobs in trucking and food and fuel sales. Flatwater Biologics would obtain loans from companies that would also become investors. “Considering the tight timeline we [had] to deal with,” Samp explained, “it [was] much faster to go through a venture capitalist or sbic.” He said this route promised less security and a bigger financial hit than if he had secured numerous investors, but “these factors [had] all been considered in the business plan.” The business contacted C. J. Schneider Engineers of Omaha, a company with experience in every aspect of ethanol plant design, about working on the Flatwater Biologics project. The group also consulted Aker Kvaerner Industrial Builders of Houston, Texas, a company that specializes in large fuel and power-related engineering and construction projects. The proposed Flatwater plant would utilize . million bushels


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of corn annually from within a hundred-mile radius of the plant. Samp noted that million bushels of corn are produced annually in the same region. Area farmers who attended a meeting at the beginning of the process gave their support to the project because they were hoping that the ethanol plant would raise the price of their corn by adding value to their agricultural commodity. “I’m an entrepreneur by heart,” said Samp, who researched the project on the Internet and visited with hundreds of contacts in finance and the ethanol business. While the plant was his largest proposed project to date, he had previous experience starting a business from scratch. Samp also operates a fitness center in Benkelman and manages the long-distance division for his local telephone company. As plans for the Flatwater plant were finalized, Samp and others determined that the ethanol product would be shipped by rail mainly to the Denver market. Samp continued to work to secure funding for the ethanol project through March and monitor whether the Nebraska Legislature would extend the provisions of funding in lb . He also utilized the services of an underwriting firm to solicit an investor group. In the end, the funding for the ethanol plant did not come through. Rather than dismantling his advisory group, however, Samp continues to look for similar projects, possibly in bio-diesel or some other agriculture-related field, and when the opportunity presents itself, he will jump in once more. “I’ve learned that time is a major factor in large projects,” Samp said. “Proper investigative techniques and [the] detailed recording of facts are [a] necessity. Information drives projects, so a thorough feasibility study is crucial to any worthwhile project.” Samp said that he would look at all possible projects on a case-by-case basis, using the cooperative organizational form if a project appears to be feasible. “Equally important,” he said, “is the development of key financial relationships with investor groups.”


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18

Ethanol Power Partners

In January a group of producers from the Imperial area, encouraged by new state incentives, considered investing in a local ethanol plant. Ethanol Power Partners raised more than $, in contributions primarily from producers but also from local businesses. With an additional $, grant from the Nebraska Cooperative Development Center, the group funded a feasibility study and a business plan and paid for legal fees to form a limited liability company. The cooperative also received financial support from the Imperial Public Power District, prompting the group to consider locating the proposed ethanol plant next to a co-generating plant. According to Rick Rigel, the chairperson of the cooperative, Nebraska Legislative Bill put Nebraskans in a better position to build ethanol plants than producers in other states. The added income from the tax incentives was a tremendous boost to state ethanol producers, but the window of opportunity was not open very long, especially with the time it could take potential producers to gauge and nurture investor interest, research and establish the legal entity, and secure funding. The Ethanol Power Partners plan called for a thirty- to fortymillion-gallon ethanol plant utilizing eleven to fifteen million bushels of corn each year. Chase County alone raises twenty


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million bushels of corn, according to Rigel and Kami Balthazor, both employees of the Imperial Public Works Department. Balthazor, the key accounts person for the town utilities, was in a good position to recruit interest in the ethanol venture. The cooperative gave itself sixty days to raise at-risk money for a private placement memorandum, but the members were unable to raise the money needed to carry the project forward. The group then turned to a consultant to help them find a private company that would develop a plant with the involvement of local investors. “The timing was bad,” Rigel said of the original ethanol plant concept. The spring season was a busy time for most members, and the drought of was rearing its ugly head. “You have to have a lot of things go right,” he said. The project had time restrictions that were difficult to overcome, compounding the problems the group was already experiencing with a low cash flow and a depressed regional economy hampered by the drought. “Maybe we should have tried to partner with a bigger company earlier,” Rigel speculated. But such a move would have lessened the opportunity for local investors. If an outside company agrees to build a plant, the engineering firm will likely take percentage ownership, as will the management company. The agreement would leave about percent equity for local investments. “Our main goal was to help local producers,” said Rigel. If the group would have had one more year to qualify for the tax incentive dollars, the cooperative would have had more time to research the proposal and educate investors about it. Now Ethanol Power Partners is considering another product: biomass ethanol produced from corn stalks and wheat straw. The cooperative is looking at the feasibility of producing this kind of ethanol in the Imperial area.


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19

Oregon Trails Ethanol Coalition

Ninety-two investors privately raised $, to help make the Oregon Trails Ethanol Coalition (otec) a reality. In uncertain economic times, their efforts are a healthy testament to the resolve of these Thayer County–area farmers to find added income for their corn commodity. But even before the investors raised those funds, area producers and lenders contributed $, in seed money to get the project off the ground, beginning with a meeting in February . The idea for an ethanol plant in the area originated with Darrel and Rosemary Dageforde of Hebron, who, upon returning home from a visit to their daughter in Missouri, discussed whether an ethanol plant similar to the one where their daughter worked could succeed in the Thayer County area. As president of the Thayer County Economic Development Board, Rosemary Dageforde was keenly aware of the population loss in the county during the past decade and knew that the county needed a financial boost. The plant investors were awarded funding from three grants: two Department of Agriculture Value-Added grants totaling $,, and a $, grant from the Nebraska Cooperative Development Center. otec’s goal was to build a $ million dollar ethanol plant pro-


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ducing forty million gallons of fuel ethanol per year. The otec plant was projected to have thirty-three employees and would grind forty-five thousand bushels of corn per day. The process technology was to be provided by icm of Colwich, Kansas, with engineering and construction provided by Lurgi psi of Memphis, Tennessee. With adequate groundwater supplies and a location close to a gas line, electricity, and rail transportation, otec had all of the necessary components for success. But like all of the other ethanol ventures, they also needed big dollars. During the fall and winter of , the otec board waited for the approval of their prospectus from the Securities and Exchange Commission (sec). During this period, otec was prohibited from conducting public meetings or discussing the project with the media, said otec chairperson Mark Jagels of Davenport. The sec approved the prospectus in January , enabling the board to offer shares in the company for a limited number of days. Jagels and otec director Darrel Dageforde said that their goal was to raise between $ and $ million through the prospectus and to take advantage of lb tax credits, assuming that the plant could be operational by June . Shares were to be sold for $, per unit with a minimum purchase of five units. Subscription funds would be held in an interest-bearing escrow account with Midwest Bank, N.A., of Deshler. An initial community meeting for interested investors took place on February , , at the Davenport Community Center. Fifty additional meetings were conducted over the following two weeks, mostly in towns in the eastern third of Nebraska. The nine-member board formed two presentation groups that each attended between two and five meetings per day. otec hired U.S. Bancorp Piper Jaffray Inc. in January to underwrite the offer and sale of otec membership units. The company was also to provide financial consulting services to otec to help the cooperative obtain the additional debt financing necessary to build the plant.


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Unfortunately, otec did not raise enough equity with its membership drive to build an ethanol plant. Rather than throw in the towel, the otec leaders remained dedicated to the project, opting to work directly with specific investors rather than work through the sec process. “We did not raise enough money with the local meetings to keep it producer-owned,” Jagels commented. “We are protecting the money for the original investors and doing what we can to get them a rate of return on their investment.” otec membership units were open to accredited investors from Nebraska and other states, according to Jagels and the Dagefordes. Membership in otec did not require corn delivery, nor did it make it necessary to purchase distiller’s grain. Depending on the amount of equity raised from outside investors, otec will work with financial institutions to secure the senior debt. Jagels and Dageforde said that it is a big challenge to find financial institutions to secure senior debt, since the number of lenders is shrinking and each bank works with its own specialty industries. Still, Thayer and surrounding counties have the cattle to use up the distiller’s grain. And there is a need for area farmers to realize more profit from their corn commodity. With the assistance of a marketing firm to sell the distiller’s grain and the ethanol, the plant intends to offer “the highest rate of return on the investment that we can,” Jagels said. “We hope it can narrow the basis on corn and bring needed dollars to the farm economy of the region.”


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20

C8+ Organic

Fifty years ago, fifty seed farmers joined together to share seed varieties and market their products. They went through start-up challenges, droughts and wet spells, all the while struggling to better themselves financially in a tough market situation. Today the farmers’ cooperative, nc+, is a seed company with years of research, marketing, and solid experience behind its name. It is the fifth largest seed corn company in Nebraska and the tenth largest in the United States. Yet once again this farmerowned cooperative is going out on a limb to see if it can’t accomplish another giant step in seed production and marketing. The company took a risk by starting a separate organic seed division. According to a former organic seed specialist for nc+, Andrew Vrbka, the company’s board wholeheartedly endorses the new enterprise, even though the entire philosophy of organics seems to be quite a departure from standard seed production. nc+ Organics, however, doesn’t see organic seed production as anything more than a welcome challenge for the company and the seed industry as a whole. nc+ Organics formed in when a few of the seed growers for the main company who were already producing some organic crops asked for an organic seed source. Brad Lauber of Lauber Seed Farm in Geneva, Nebraska, was one of the growers


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who saw a niche market emerging as more and more consumers were seeking organic products. The Laubers have operated a family seed business since . After Lauber and a fellow grower approached nc+ with their idea, Lauber explained, “Everybody seemed to agree that it looked like a new, profitable venture.” Maury Johnson was the quality control manager for nc+ at the time. After researching the idea of organic products, Johnson decided that growing organic seed would be a good niche market for the company. Johnson is now the production manager for nc+ Organics. The first organic seed was offered in . Every year since, Johnson said, nc+ has increased its sales of organic seed. In the company had more than one hundred customers. By more than one thousand customer sales were tracked. This growth trend is expected to continue into the near future. Although nc+ would like to continue seeing this rate of growth, the company knows that sales won’t grow at this rate indefinitely. Farmers in Wisconsin, Minnesota, and Iowa purchase the most organic seed, while farmers in Nebraska and Kansas also purchase seed but in smaller quantities. The largest portion of organic seed is for row crops, with the company selling corn, soybean, sorghum, alfalfa, and red clover seed. One of the benefits of adding the organic division to the company, and one that counters the risk, is that selling organic seed extends the boundaries of the company’s traditional marketing borders. In a marketplace where there is little or no brand recognition, nc+ has been able to establish recognition quickly because no other company produces certified organic seed. Marketing organic seed is also different from traditional marketing because farmers do not know which hybrids work organically in their region. “We’re marketing seeds in New York and Pennsylvania,” Vrbka noted. The company has to listen to seed growers and try to understand how organic seed works for farmers across the country. The biggest obstacle facing nc+ Organics is finding varieties


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that work well in organic circumstances. “Conventional varieties may or may not work well in an organic environment,” Vrbka said. “There are definitely some traits that do no carry over well from conventional [varieties].” The company has found varieties of seed that will work best on organic ground. Many of these seeds have early vigor and grow to be taller plants that canopy more quickly, covering weeds. To get high yields, organic farmers seek varieties that offer early growth, standability, stress tolerance, and natural resistance to insects and disease. Still, organic farmers do not typically try to replicate the high yields of conventional farmers. “Higher yielding varieties are sought after by conventional farmers,” Johnson said, “while organic farmers are concerned with yield but have factors that influence yield different[ly] from conventional farmers. Organic farmers are not producing a ‘commodity,’ especially if they are growing grain for food use.” One of the biggest benefits to the grower is the price of organic seed. In return for dealing with a crop that can be challenging to grow without herbicides or pesticides, the farmer pays less for organic seed. Organic food–grade soybeans sell for $ a bushel, with the grower contracting a base price with nc+ Organics before any seed is planted. A bonus is paid for seed quality. Lauber said that he has a contract in hand with a specific price before he ever puts a seed in the ground. “It’s working out well for me,” Lauber said. “There are a lot of organic growers here in Nebraska.” He said that instead of calling the local elevator, growers might call buyers in Illinois or Arizona. But Lauber’s calls to the half-dozen buyers result in free shipping, with trucking prearranged by the buyer. Organic soybean seed grower Joe Schultes of Dedham, Iowa, said that he has used nc+ organic seed for the past four years and has strictly farmed organically for that same period of time. “I don’t have to fool with chemicals,” he said of his corn, soybeans, wheat, oats, and hay acres. Schultes’s organic corn, soybeans, and wheat also have ready buyers armed with premium prices.


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Although organic seed production can be much lower than conventional seed production, yields from organic seeds can approach conventional yields. Johnson noted that organic seed corn yields are less than conventional seed corn yields by to percent, but organic grain production is probably only to percent less than conventional grain production. Johnson said, “In a very dry year, I wouldn’t be surprised to see organic yields better than conventional [yields].” It takes at least three years before a producer can certify his acres as organic—before traces of pesticides leave and microbes, nutrients, and earthworms appear back in the soil. Vrbka commented, “The best organic farmers are the ones that have been doing it for ten to fifteen years. That’s a whole working system.” Lauber said that it was debatable whether input costs for organic farming were lower because there was a corresponding increase in labor, time, and fuel. “There were some bumps along the way,” Lauber agreed, “but we have figured out in fifteen years how to do it.” Lauber transitioned three quarter-sections between the years and to begin organic production. Both the growers and the customers who purchase the certified grain benefit from the certified organic product. The certification for organic seed is conducted by the certifying agency Quality Assurance International of California. The seed company follows qai’s guidelines from the U.S. Department of Agriculture including a facility inspection, a recordkeeping audit, and the guarantee of no pesticide or chemical usage. The company bags the seed in Grand Junction, Iowa, at a non-gmo (Genetically Modified Organism) facility for nc+. The company’s organic Web site (www.ncorganics.com) contains many links to organic and sustainable Web sites, in addition to valuable information for growers and customers. Perhaps one of the earliest and biggest reasons behind the move toward organic farming and seed production is one not touted by companies very often: sustainability. Vrbka said that


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many organic farmers believe that they are benefiting themselves and the earth by avoiding the use of chemicals. In conventional farming, there is a marked lack of biodiversity in the land. In a healthy system, there are actually fewer destructive insects and weeds. An insect or weed problem is a symptom of an underlying problem that has caused the natural system to fall out of sync. Vrbka, who previously worked in agronomy as a field scout, said that a grass problem in a field indicates a compaction problem. Some no-till methods of farming will solve this issue, but having earthworms in the ground will also help. Organic farms don’t kill off earthworms. Using a cover crop such as alfalfa is also a way to break up compaction problems. Wheat and red clover also are useful in dealing with compaction. Weeds in organic fields are different from those in conventionally farmed fields. Pigweed and lambs quarter are weeds often found only in high fertility, nutrient-dense soils and are therefore typically found in organically farmed locations. Conventionally farmed fields often contain cocklebur, velvetleaf, and sunflower. These weeds are scavenger plants, and their presence may indicate an underlying soil imbalance. While there are field weed differences between conventional and organic seed production, nc+ still comes together in its seed lab with the same goal of the past fifty years: to produce the kinds of plant seeds their customers want and need.


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21

Bloomfield Soy Products

During the fall of soybean farmers in the Bloomfield area were determined to pull themselves out of the downward spiral of commodity pricing. Duane Schlote remembers sitting in a line at the local elevator, waiting to unload a good harvest, knowing that he wouldn’t see a good profit from his product. Fellow producers who were equally discouraged with commodity prices started talking, Schlote said. They researched different types of soybean processing, and, together with representatives of the state’s soybean board, they toured area soybean plants. Among the plants they visited were agp of Sioux City, Iowa, a soybean processor utilizing a chemical crush system, and msp, a Volga, South Dakota processor. At msp the producers were advised to make their soybean meal “stand out” from other products on the market. Then the group learned about a Bruning, Nebraska, soybean processor that used no chemicals in processing and marketed both oil and meal—the kind of processor that the newly-formed Bloomfield Soy Processors llc was interested in building for itself. A large plant processes around , bushels of soybeans per day, while a smaller plant such as the one conceived for Bloomfield Soy Products produces one thousand tons of soy meal per week using , bushels of soybeans per day. Bloomfield Soy Processors


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organized at the start of and held bimonthly meetings. They examined a proposed plant with a price tag ranging up to $ million. The Nebraska Cooperative Development Center awarded them a $, grant for legal fees and another $, grant for a feasibility study and business plan. The ncdc later awarded a grant for $, to assist Bloomfield Soy Products with finding a project manager, obtaining permits, or site testing. By February the group needed $, to submit a prospectus to the Securities and Exchange Commission. Over the next few months Bloomfield Soy applied to the ncdc for more funding and looked for other sources of revenue, applying for a Nebraska Department of Agriculture Value-Added grant of up to $, and another grant through the new federal farm bill. However, money was still needed to complete the business plan and the feasibility study. Fortunately, one valuable resource—good advice—came without a price tag. Bruning Feed & Grain operators were willing to share their experience with the group. They were also willing to share their technology, including a device that extrudes the oil from the soybeans using a non-chemical process that works more slowly than traditional extruding methods. The soy meal by-product is fed to chickens, hogs, beef cattle, and dairy cows. Bruning’s employees noted that there was a growing market for natural products for large and small feeders alike. So far the biggest obstacle to the success of Bloomfield Soy Products has been raising the necessary seed money for start up. Nevertheless, group members are encouraged by the fact that . million bushels of soybeans are raised in Knox County and another . million bushels are raised in neighboring Cedar and Holt counties. The area includes some of the top soybean producing counties in Nebraska. Moreover, cattle, hogs, chickens, turkeys, and dairy cows are also in plentiful supply as end-users of the meal-feed product. The company’s proposed soybean processing plant would benefit area soybean farmers. There would be another place to take their bean harvest, and there would be a ready and close-by


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source of soy meal for their livestock. Without a nearby processing plant, the beans from the Bloomfield area would go to Sioux City or West Point after being sold at area elevators, and soy meal would return to the area from Sioux City or West Point. Another advantage for Bloomfield Soy Products was Bruning Feed & Grain’s unique technology. Bloomfield Soy Products planned to utilize Bruning’s all-natural heat and friction method of processing, which produces a higher protein content in its meal than is found in conventionally extruded soybeans. The Bloomfield Soy Products group also planned to study the feasibility of building a soy diesel refinery and hoped to begin building the plant as early as the summer of . The group’s background paper provided a rationale for building the refinery: “With all the talk of dependency on foreign oil these days, we hope that you can also see that we raise crops that are crucial to the world economy. With ethanol being the first big push in biofuels, we feel that it is only a matter of time [before] soy diesel is the next big push to independency from foreign oil markets. We raise the renewable resources right here in the United States, and we can make a difference.” Bloomfield Soy Products interviewed many different businesses to learn more about biofuels. When the group did not receive a state incentive grant for the refinery, it continued to move ahead on the project, even though, with the sagging economy, “the money isn’t just lying around to be handed out,” Schlote explained. The bsp board looked for a project manager and plant manager, both of whom could have encouraged more investment in the project. The cooperative identified a potential plant site, dealt with zoning issues, and processed paperwork from the Department of Environmental Quality. “A lot of people come into play in a project like this,” said Lisa Schlote, bsp secretary. “You don’t just go out and start building. . . . There are too many hoops to jump through to get to your designated result.” Finally, in the group launched a private fund drive to raise its first $ million to get the project underway. Lacking enough


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interest, the group discontinued its meetings after the date of the equity drive expired. “The concept is moving forward in other places in the state,” Lisa Schlote said, “but not in the northeast corner of the state where we are located.” She concluded that too many large obstacles stood in the group’s way, observing that there was “no money, and not enough support from the state and U.S. governments for the development of the soybean value-added bio-diesel.”


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22

Partners Hay Marketing Cooperative

Having doubled its membership tally since its inception in April , Partners Hay Marketing Cooperative of Kimball is quickly establishing itself as an essential marketing tool for western Nebraska hay producers. The cooperative provides members with hay market price discovery and the assurance that it will obtain the highest sale price possible for hay. The cooperative also offers a cooperative-backed, guaranteed payment to its members for all hay sold. In today’s agricultural marketplace, these are no small items to a producer, said cooperative manager Barry McRea and cooperative president Gene Purdy of Kimball. Price discovery and, at times, setting the market price are huge benefits to members. Only eight years ago Partners was a dream of several Kimball farmers and businesses. They distributed a survey to gauge interest in a cooperative following a February meeting attended by ninety-nine producers and two representatives of the California Alfalfa Cooperative. Partners Economic Development, a local development group, helped the hay marketing group in its planning stages and provided some funding from an earlier Kellogg Foundation grant. The economic development group also helped to secure funding for a community garden, a sheep marketing alliance, a sunflower


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oil plant, and to research alternative uses for wheat straw as an additive in plywood. Over the summer of , while farmers were busy in their fields, the cooperative initiated a feasibility study and used a $, grant from Partners Economic Development group for initial expenses. The hay cooperative also received $, in startup money from the Nebraska Cooperative Development Center and a $, revolving loan from a for-profit investor group, Forward Kimball Industrial. The revolving loan was used for operating capital. Two months after the cooperative was founded, the board hired a full-time manager and developed policies for membership. The cooperative sold lifetime memberships at $ per person, with thirty members belonging to the marketing cooperative by November . Each member signed a marketing agreement outlining marketing and delivery commitments. Their enrolled alfalfa acres varied, with members enrolling or committing a percentage of their acres to the cooperative. The minimum commitment was fifty acres, or tons, of alfalfa. When McRae obtains an order for hay, he contacts members who can best fill the order. A customer may request a certain cutting or quality of alfalfa or hay from a previous producer transaction. The customer pays the marketing cooperative and members then receive their payment less a $ per ton retainer fee. In the cooperative sold $. million worth, or twelve thousand tons, of hay. Total sales in were $. million. The cooperative’s first crop in went primarily to feed yards and ranchers. In its second year, the largest purchasers were dairies. The biggest share of the crop went to ranchers in Wyoming, with the balance going to horse breeders and horse feed stores on the front range of the Colorado Rockies. “The co-op is building [the market] for everybody,” said McRea, “and making [it] available to everyone.” Partners Hay Marketing is gaining approximately fifty new customers each year, with two hundred taking one load per year


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and others purchasing larger amounts, including a dairy that purchased , tons in . The buyers receive more than a top quality product, Purdy noted. They also receive services like quality-testing as well as trucking. The cooperative’s operating costs run about $, per year. The cooperative keeps producers informed of market conditions, McRea said. Calls from hay customers help him to determine whether prices are up, down, or steady. He can communicate this information to members and determine the current price for hay in a way that would be virtually impossible for the members to do on their own. Purdy said that all of the members have individually placed dozens of advertisements costing hundreds of dollars in past years and have received just a few phone calls for the effort. But the cooperative’s advertising efforts are more noticeable in terms of size and kinds of hay represented, and this strategy is paying off for all members. With a full-time manager representing member hay, buyers get the advantage of having an impartial intermediary who actually sees the hay growing in the field, oversees testing for relative feed value, makes the sale, lines up the trucking, and handles the exchange of funds. “Most farmers are not very good at marketing,” said member Bill Mueller of Kimball. “Marketing our own hay . . . if the buyer hasn’t seen it . . . he knows we’re going to be biased in our own favor. So one of the main advantages [of the cooperative] is having an unbiased party . . . that doesn’t necessarily have an interest.” The biggest test of the cooperative may be yet to come. If and when hay prices start dropping again, McRea hopes to have enough loyal customers to sell the hay to, regardless of the price. This won’t happen without difficulties. McRea said that he’s already seen the cooperative endure tough challenges. Drought caused hay production to be cut by half. Lowering the hay supply may initially have raised the price of hay, but it also meant that the cooperative earned half of its earlier income, and eventually


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the market price dropped with the influx of hay from other states at lower prices. The cooperative’s member territory covers eastern Wyoming from Torrington to Pine Bluffs and western Nebraska from Scottsbluff to Kimball. McRea has gone as far north as Chadron to fill an order, however. With his home in Mitchell, he drives through the country every day to and from work. “If I don’t have the hay [a buyer wants], I go out and find it,” he said. The cooperative faced a number of challenges in its early stages, including getting the feasibility study written, securing grant funds that were awarded to the cooperative, and convincing producers to join and support the group. The California hay marketing group shared hard-earned experience and information with Partners, and that alone was a huge assistance in getting the cooperative up and running. Also, not all members are equally committed to the success of the cooperative. Some members sell hay outside of the cooperative if they can get a better deal, and that’s fine as long as they fulfill their commitment to the cooperative. But for the cooperative to continue to serve its members and consistently get the best price, it must remain financially solvent, which takes members who can consistently supply the needed tonnage. The cooperative’s goal was to have forty members representing twenty thousand tons of hay by . The previous year was hard on the group, with the severe drought reducing sales by nearly half from the year before. “Production was off by about percent,” McCrea said. “Hay prices started out at $ and rose quickly to around $. As it turned out, this was the worst thing that could have happened because this attracted a large amount of out of state hay to the areas we sell to.” The influx of hay in turn forced hay prices down, and hay growers resisted selling at lower prices. “As a result,” McRea said, “people in our area still had inventory to sell in the spring with few markets to go to. Because of the way the markets went and


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[with] less production, we did not gain any membership and were not able to sell much non-member hay.” Partners also suffered a huge loss in equity in –, McRea said. At the end of the – year, with less livestock inventory in the country and an abundance of hay, the cooperative was struggling to regain from the previous year’s losses. In the long run, however, the market woes may assist Partners Hay Marketing in signing up new members. “It possibly will help in the long run as many growers are inquiring about the co-op to move large amounts of hay in this poor market,” McRea reasoned. “It’s hard to get people to join a new organization until it has proven itself,” Purdy said. Moreover, working in a committee format on a cooperative board is a far cry from individual hay growers running their own businesses and making their own decisions. Nevertheless, Partners Hay Marketing has an outstanding, diverse board made up of Wyoming and Nebraska hay growers. With connections in the tri-state area, the marketing cooperative is no longer just a Kimball County entity. Its price influence is being felt in a much larger region. “We think we influenced the market up enough to pay our per ton charge,” said Mueller, “especially when we had a shortage.” “We keep gaining new customers in new areas,” McRea stated. “This year we have opened new markets in Wisconsin and Pennsylvania.” Banding together to market hay isn’t Partners Hay Marketing’s only project, however. McRea said that the cooperative is re-baling hay from big bales into small square bales to meet the needs of the horse market. This will allow the organization to service feed stores in the Denver area. “I think our business is on the verge of really flying,” McRea commented. A few more members and acres should provide the optimum size the cooperative needs to show profitability to its members and still maintain flexibility in its management.


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23

Heartland Natural Fibers

From the stacks of freshly washed wool to the various spinning wheels in the store, Heartland Natural Fibers of Arlington was a living, breathing embodiment of a cooperative dedicated to adding value to its product while building clientele through product marketing, school networking, and community classes. The brainchild of veteran sheep shearer Kris Toman, the cooperative was founded in January as a non-stock agricultural cooperative registered in the state of Nebraska. After twenty years of shearing several hundred thousand sheep in Nebraska, Iowa, Kansas, South Dakota, Missouri, and Minnesota, Toman had seen her share of the wooly creatures. She put her experience to work at Heartland, a one-of-a-kind Nebraska business. The business quickly thrived, and in just two years the twentyfive-member cooperative was operating a street front store that featured a large workshop for skirting, washing, tumbling, carding, and storing wool. Machines that hadn’t been used in years were coaxed back to life to help manufacture the products, while Toman designed new machines to accommodate innovative methods of the growing venture. But by the third year, Heartland Natural Fibers had to close the doors on its studio, store, and cooperative. The demise of Heartland may be traced to the nature of its memberships, with


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the cooperative offering two types: one for working members and one for non-working members. Working members could process wool and fiber using the cooperative’s picking, carding, spinning, and weaving equipment. These members also received a percent discount on retail items and an allocation of the cooperative’s net profits. “The cost for a working membership was $ per year,” Toman said. “A working member was required to work six hours per quarter or twentyfour hours per year for the cooperative or studio.” The work could include processing customer fiber, producing products for the cooperative to sell, tending the store, or teaching a class. For $ per year, non-working members were also entitled to a percent discount on retail items, and they also received an allocation of the cooperative’s net profits. Two Nebraska Department of Agriculture Value-Added grants totaling $, assisted the setup of the cooperative, which sought sources of wool from sheep and other breeds including Angora, Oxford, Shetland, South Down, Merino, Cotswold, Ramboulet, Polypay, Alpaca, and Llama. The machinery used to process this wool can be either a big help or a big challenge for a new venture. The cooperative purchased a used, forty-five-footlong carding machine weighing several tons. It was supposed to be in working order, but over the course of two years, cooperative members could only get it working for a few minutes at a time. They ultimately lost the uphill battle to repair it. Toman believed that the cooperative’s success would depend in part on raising consumers’ awareness of natural fibers and introducing the product to young people. Schools interested in weaving and spinning demonstrations were offered afternoon workshops or a semester of weekly classes. Heartland volunteers offered hands-on learning opportunities to students in the areas of spinning, weaving, felting, and dyeing. Toman said the reception from the students was outstanding. Heartland Natural Fibers manufactured and marketed wool


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pillows to nursing homes and to the general public. Toman said that the wool pillows have proven to be very therapeutic for arthritis patients. The cooperative manufactured horse blankets to fill special orders, and cooperative members also consigned products through the Arlington store like woolen hats, scarves, sweaters, yarn, veterinary and livestock show supplies, and spinning and weaving supplies. The group created a price list for various services to home spinners and weavers including washing, picking, carding, and custom hand spinning. In addition to their work in the schools, the cooperative offered adult classes in spinning, knitting, weaving, and felting. These classes were particularly important in creating community interest in the creative process of wool products. The classes were kept small and affordable: attendees paid $ for three classes and $ for each additional class. Toman encouraged her students to get a feel for the wool before they began the spinning process. The students would draft the wool—gently pulling on the fibers to thin the wool and ready it for spinning—while Toman discussed differences in sheep breeds, the creative act of spinning, and how each spinning wheel has its own “music.” Heartland Natural Fibers published a regular newsletter that kept the cooperative in touch with members and class participants. The newsletter carried news of innovative products and methods as well as ideas for promoting fiber products. The cooperative’s Web site complemented the newsletter as another communications tool. Despite all of these efforts, the cooperative closed its doors in September . “At one time, we had twenty-five or thirty members,” said former cooperative member Carole Craft. “Although many of these were working members, only a few came in to work, and those were on an irregular basis. We didn’t have enough donated time from the members.” The cooperative members attempted to address this labor


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shortage by hiring two part-time employees, but after one employee left, Toman and Craft had difficulty replacing her. Heartland Natural Fibers sold most of its equipment, keeping a large loom, an electric wool picker, and several washing machines. The huge carding machine was dismantled and sold for scrap iron.


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24

Niobrara Valley Wood Products

From a stand of trees and logging to a sawmill and crafting finished wood products, Niobrara Valley Wood Products has made quite a journey in little more than a decade. “They have come a long, long way,” said Gene Lehnert, program coordinator for the North Central Resource Conservation and Development Council in Bassett. “Twelve years ago this industry didn’t even exist here. We have started from absolutely bottom, from scratch, in establishing what we have now.” What Niobrara Valley Wood Products llc (nvwp) has established is a joint marketing venture made up of twelve members from a twelve-county region in south-central South Dakota and north-central Nebraska, roughly the same territory served by Nebraska’s North Central and South Dakota’s Randall resource conservation and development councils (RC&Ds). The cooperative took advantage of a value-added agricultural opportunity found in the north-central region of Nebraska along Highway and along mirror counties on the South Dakota border. Standing to gain from this marketing group were landowners who owned harvestable stands of ponderosa pine and eastern red cedar; foresters who advised landowners on sustaining and improving wood resources; loggers who harvested the trees; and


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sawmills and wood product manufacturers who added economic value to the wood products. In the group’s plan was simply to join together to market wood products in order to generate an important secondary income to area households. As the small manufacturers soon realized, they would need to bring more pieces of the puzzle together. By Niobrara Valley Wood Products had formed as a networking group to create income through value-added wood products. With no infrastructure in place, the RC&D and Niobrara Valley Wood Products worked to find opportunities to market valueadded products. In order to move forward financially, the cooperative formed a limited liability company in , with members sharing the equity and benefits as well as the exposure and risks. As an llc, the members risked only the amount of their personal investment in the venture. The transformation to an organized group paid off, said former Niobrara Valley Wood Products marketing specialist Sheila Chance. Chance came on board in July when she moved to Bassett from Omaha. She had worked in advertising and marketing positions and knew how to put buyer and seller together. Chance quickly learned about rural Nebraska and the lumber business. Her marketing knowledge paid off, as the wood products group soon obtained contracts. The cooperative focused on selling value-added wood products such as paneling, flooring, siding, posts, and rails for homes and businesses. They also marketed the wood products for furniture, custom-made birdhouses, and decorative items. A lumberyard in South Dakota, appropriately named Woodstock, serves as the company’s distributor, managing the logistics and transportation for small orders. The challenge of raising funds for marketing is perhaps the biggest battle the group continues to wage. “We’ve got tons of mulch to market,” Chance said. But given the distances to critical markets, mulch and wood shavings can be a tough sell. The quality


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of the lumber is a major sales point, but when shipping is tacked onto the quoted prices, the deal is more difficult to close. One of the cooperative’s major achievements was the completion of its first speculative modular cabin in the summer of . Allen Baragar Construction of Ainsworth, a member of nvwp, built the fourteen- by twenty-foot one-room cabin, which features an extended roofline over an outdoor deck. The interior cabin walls, the ceiling, and the flooring are all pine. The interior trim and exterior siding are composed of cedar. The cabin was sold unfinished for $, three days after its completion. A similar cabin was completed in January , and plans were made to build larger cabins for a growing list of prospective buyers. “Niobrara Valley can build anything,” stated Baragar, who added that some new customers are asking nvwp to customize their existing cabins. In a neighbor located a half mile from nvwp’s member sawmills built a house with nvwp lumber products; the home now serves as a model for interested buyers. “The owner just loves this house,” Lehnert said. “Everything worked out really well for her.” The mill, owned by the Sawle family, was later relocated for better access to Highway . “What I’ve been most impressed with,” Chance said, “is they [nvwp] turn obstacles into challenges and into successes.” Nevertheless, the wood products group gets only so far before the marketing dollars run out. “Money is hard to come by here,” she admitted. Lehnert agreed. “Number one, our customers are not here. Our customers are in Omaha, Lincoln, Denver, Kansas City. . . . The disposable income is much greater in those areas than here.” He said it takes three to five years to develop enough cash flow for a group like Niobrara Valley Wood Products to stabilize its budget and hire a manager and a marketing specialist. Chance’s job was funded by grants that ran out in September , prompting the cooperative to explore the development of a dual manager and marketer position. Niobrara Valley Wood Products continues to look for other


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uses for its lumber products and ways to expand its business, researching ideas like using wood to generate electricity for nvwp and distilling cedar oil for use in cosmetics. But rather than simply selling cedar oil to a manufacturer, nvwp is interested in developing its own value-added products from this resource. With a $, Nebraska Cooperative Development Center grant, the cooperative partially funded a feasibility study, completed in December , on bi-product utilization for generation of electricity and distilling cedar oil. The company is also studying wildfire and fuel reduction plans. With these new projects ahead, the business plan of nvwp calls for the creation of one hundred new jobs by . Lehnert said that nvwp is seeking profitability by finding the right niche or product. Members have finally agreed that the cabins offer the greatest profit potential for the company. “[The cabins] are larger items that utilize more product. It will help them [secure the] cash flow [more quickly].” Landowners once looked out on their pastures and hillsides and saw stands of cedar and pine trees as obstacles to good grazing land, but they can now envision a valuable agricultural resource thanks to the efforts of Niobrara Valley Wood Products.


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25

Ritz’s Restaurant

With a friendly atmosphere and great customer service, Ritz’s Restaurant may appear to be like any other small town restaurant, but this Ord eatery is unique because its owners, Eric and Lara, raise all of the beef and chicken that is served in the restaurant. Opened in in a former drive-in restaurant, Ritz’s is the result of a couple’s determination to be successful. Eric and Lara cook, wash dishes, serve daily specials, and work alongside their wait staff seven days a week. They also raise , chickens each year, jointly processing them with , chickens raised by other family members. Eric’s brother, Bryce Ritz, supplies pork to the restaurant. Bryce began selling pork at Lincoln’s Haymarket Farmers’ Market in , and for a time Eric and Lara sold chickens at farmers’ markets in Lincoln, Holdrege, and Broken Bow and to a loyal following of customers. Then they began a catering business in . Before they even opened the restaurant, Eric and Lara were already busy, with children to raise, acres to farm, cattle to calve, feed, and market, and chickens to process and sell. But the Ritzes sought something few farm families enjoy—control over the market for their products. This led them to take the step from producer to caterer, and from catering on to the actual operation


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of a weekend restaurant at the Dempster House, located at the site of the Comstock Windmill Festival north of Comstock. After eight months of weekend restaurant experience, they felt ready to take the next big step and open their own place. At their restaurant the Ritzes can better utilize their quality meats, retaining more of the consumer dollar while enjoying customer compliments. In terms of pounds of product, the Ritzes sell , pounds of meat monthly at the restaurant. “The biggest enjoyment I get [is from] the comments: ‘You can’t get chicken like that anywhere.’ . . . ‘That’s the best beef I’ve ever had,’” Eric said. “The pork roast? I season it and throw it in the oven and cook it. That’s it. I just have a great product to work with.” Each week he cooks forty to fifty chickens, and this meat seems to impress his customers the most. “We get more comments on the chicken than on anything,” he said. “For beef, you can go to the grocery store and you still have a shot at getting good beef. When it comes to poultry and pork, you can’t get good meat in the grocery store anymore.” Customers offer similar positive comments about Bryce Ritz’s pork and buy four hundred pounds of it each month. At the Dempster House Eric learned the importance of finding a market to move animals proportionally. “When we were up there, it was pretty much a steak atmosphere,” Eric said. “It really forced me to go out and look for other markets. Before we opened up in Ord, for about six months we were selling our hamburger to the Library Lounge in Grand Island.” Eric said that the lounge was very pleased with the quality of his ground beef. In fact, once he opened Ritz’s, he couldn’t keep up with their needs. So when they opened the restaurant in Ord, Eric and Lara were ready to address the issue of moving their beef proportionally. “That’s why we have a noon special,” he said. For his Italian special, he uses thirty pounds of ground beef. Other days he makes pork or beef roast, while broasted chicken remains one of the most popular noon specials. After six months in business the Ritzes had sold more roasts


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and ground beef than they had steaks at their Ord restaurant, a testament to the quality of different menu items at Ritz’s. Eric said that many of their customers at the Dempster House were from Ord, their present location, so their first customers at Ritz’s knew the quality of their steak. But customers still had to get used to the idea of a new restaurant in a building that for over thirty years was not associated with steaks. “It’s starting to come around,” he said. The restaurant also taught the Ritzes the importance of service in selling their product. “You can have the best product in the world,” Eric commented, “but if you don’t have service, it’s still not going to sell.” Service was one aspect of the restaurant that Eric and Lara knew would be paramount from the start. “There were a lot of things that we remedied really quickly,” Eric noted, such as adjusting menus in response to customer taste. And they paid close attention to what their customers were saying. They still do. Once or twice a week, especially on Sundays, Eric waits tables and cleans dishes so that he can spend the entire day visiting with customers. He prefers to spend his time around the dining room because he knows how important it is to his customers and because he wants to keep up on customer feedback. As producers of crops, cattle, and chicken, the Ritzes have experienced the frustration of raising good products only to see them merchandised as commodities. It is a system that does not necessarily reward quality. As restaurant owners, they know that each ring of the cash register indicates that a customer appreciates the quality of their products. In addition to meats, the restaurant serves homegrown produce when it is in season. If the Ritzes don’t grow the produce in their own garden, they make an effort to purchase it through a local farmers’ market, Lara said. Taking “homegrown” a step further, they bake the pies and rolls served at Ritz’s from scratch. They prepare all of the salads in the buffet. The eggs come from either the Ritz farm or from other local producers. It’s difficult to


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find any food at the restaurant that can’t be traced to its origin, a point of pride for the Ritzes. “I’m not in the restaurant business just to be in the restaurant business,” Eric said. “I’m in the business to market our products and have control over our market. With the chicken, we’ve accomplished that already. We’ll sell chickens whether we run the restaurant or not.” He said that more educational resources and finances should be available to rural entrepreneurs, including information on legal issues such as sales taxes and liability insurance and on setting up a limited liability company. He stated that entrepreneurs would benefit from user-friendly loan programs that aren’t a headache to complete. “So far we’ve been very pleased,” Eric commented regarding the success of the restaurant. “We’ve learned a lot, too. We’re adapting what’s working and what’s not.” And they’re staying very busy.


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26

Uncle Buck’s Lodge

Steeped in history, surrounded by rich hunting habitat, and alive with down-home family charm, Uncle Buck’s Lodge is a successful agritourism business whose roots reach back one hundred years. At the beginning of the twentieth century, the north-central Nebraska region was known as a hunter’s paradise to those searching for game birds for their customers in Chicago. “Greatgrandfather came to this country at the turn of the century as a market hunter, hunting prairie chicken and grouse,” explained Delten Rhoades. He and his wife, Tracy, own and operate Uncle Buck’s Lodge along with his sister and brother-in-law, Tracy and Justin Bradley, and their parents, Marilyn and Walt Rhoades. “He’d ship them to Chicago by train to the markets,” Rhoades continued. “When they had a wagon load, they would head to Ainsworth to the train station. Within a month, they’d have a check in the mail. Market hunting was a big business.” Delten’s grandfather also enjoyed hunting, often hosting friends at the ranch and never charging for the privilege. In Delten began raising game birds, and by he realized that his family would have to charge a fee to make hunting opportunities more feasible. From that point on the hunting business really took off. Delten started advertising hunting trips, with the first advertisement appearing in Nebraskaland magazine. The family


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outlays for herbicides and pesticides. We manage those situations with crop rotations. And we plant everything in narrow strips like the Chinese have been doing for four thousand years.” Larson double-crops the barley and harvests it the first part of July. Then he lightly tills the soil, rebuilds the row ridges, and sows turnips that are harvested as a forage crop. Next he harvests his popcorn and soybeans and strings up polywire electric fences in order to graze these residual stands. The cattle graze on corn, soybean stubble, and turnip leaves. According to Larson, one acre of turnips is worth five acres of the best pasture grass that you can find, in terms of the carrying capacity of grazing cattle. Larson’s pasture ground is now leased out to a neighbor and is in an intensive grazing system. Larson’s seventy acres of pasture and wasteland are fenced into twenty-eight paddocks serviced by a mile of water lines. Because the water source is on a portable water tank—set atop an old wagon moved from paddock to paddock—the cattle never have far to walk to get to water. Larson also uses the cows as his personal mowing equipment, placing high-tensile fences within a few feet of rows of trees and shrubbery and allowing the cattle to graze up to the plants. This agri-forestry project is being closely monitored by the National Agri-Forestry Center in Lincoln. Larson grows his diverse crops on twelve-foot strips, planting, cultivating, and harvesting at various times throughout the growing season. The schedule makes farm work a bit less intense and gives him more time to experiment with other crops. During the winter Larson keeps busy with home projects and hobbies, and he is also in demand as a speaker both in the United States and abroad. He has spoken to groups interested in his experience with organic farming and alternative crop production. Many of the producers he speaks to are particularly interested in integrated crop and livestock systems for small farms. Always in the forefront of Larson’s mind, however, is his goal of having time to be with family and friends, time to do something other than sit on a tractor day-in, day-out for weeks and months


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at a time. He’s always looking for a crop that has buyers seeking him out, and not the other way around. “I get calls all year long for certified organic crops. I never have to find a market,” he said. The National Organic Directory, published from through by the Community Alliance with Farm Families (caff), has been a valuable resource for Larson. This directory, considered the “blue book” of organic farming resource information, connects buyers and sellers throughout the United States. A buyer looking for food-grade products can find certified growers, and sellers can often set their own price for their products. Larson nets $ to $ per acre, while commodity grain farmers average $ to $ per acre. Larson and these commodity farmers probably share a similar standard of living, but Larson only has acres to steward. He is not the only farmer who has chosen this kind of farming, either. Larson has developed a network of producers who work in sustainable and organic farming and who share his aspirations. “The community I live in is a community of interests and not necessarily a physical landscape.” Larson said that Nebraska needs to increase marketing assistance for producers and assist in the promotion and development of products from small-scale producers. “We can grow approximately $ million worth of produce in-season in Nebraska, and we don’t do it,” he stated. “The question is why? The infrastructure is in place. . . . The consumer is the one [with] the power to ultimately make that change happen.”


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Resource Information

Ag Marketing Resource Center http://www.agmrc.com National Web resource for producers interested in value-added agriculture. Appropriate Technology Transfer for Rural Areas (attra) http://www.attra.ncat.org .. A national sustainable agriculture information service providing free technical assistance and research to farmers, ranchers, market gardeners, extension agents, agricultural organizations, researchers, educators, and agribusiness in commercial agriculture. Center for Applied Rural Innovation (cari) http://cari.unl.edu .. Lincoln, Nebraska Supports entrepreneurial development for agricultural and nonagricultural businesses through technology training, leadership development, sustainable agricultural research and publications, and survey research.


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Center for Rural Affairs (cfra) www.cfra.org/ .. Lyons, Nebraska Focuses on entrepreneurship, economic development, legal issues, high-value markets, beginning farming, and rural schools. Tom Osborne Resource Guide www.4h.unl.edu/cyberfair Lincoln, Nebraska Entrepreneurship handbook and resource guide. Existing Business Retention and Expansion Program .. Lincoln, Nebraska Helps communities to stimulate local economic development and growth by assisting existing businesses. Grassroots Resources Opportunities for Winners (grow) Nebraska http://www.growneb.com/ .GROWNEB Holbrook, Nebraska Offers an entrepreneurial program covering promotion, marketing, and education for developers and producers of products made or designed in Nebraska.


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Industrial Agricultural Products Center http://agproducts.unl.edu .. Lincoln, Nebraska Works with the private sector to develop environmentally friendly products and technologies, using raw materials produced in agriculture. Lincoln Action Program http://www.lincoln-action.org .. Lincoln, Nebraska Provides micro-enterprise training, technical business assistance, and assistance with start-up funds. Specific training is available in the fields of childcare and cleaning services. Nebraska Arts Council http://www.nebraskaartscouncil.org/ .. or .. Lincoln, Nebraska Promotes the arts and cultivates arts resources. Nebraska Business Development Centers http://www.nbdc.unomaha.edu .. Omaha, Nebraska Offices in Kearney, Lincoln, Norfolk, Omaha, Grand Island, North Platte, Scottsbluff and Wayne. Provide consulting services for business plan assistance, market feasibility studies, and business counseling.


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Nebraska Center for Entrepreneurship http://www.cba.unl.edu/outreach/ent/ .. Lincoln, Nebraska Sponsors conferences, competitions, and community outreach programs to create growth and competition in local businesses. Nebraska Cooperative Development Center (ncdc) http://ncdc.unl.edu/ .. or .. Lincoln, Nebraska Provides access to local, state, and national resources; dedicated to keeping people in rural areas by helping them work together to increase their income, and to help facilitate value-added agricultural opportunities. Nebraska Department of Agriculture http://www.agr.state.ne.us/pub/apd/coop/coopguide.htm .. or .. Lincoln, Nebraska Offers agricultural promotion and cooperative development resource guide. Nebraska Department of Economic Development (ded) http://www.neded.org/ .. or .. Lincoln, Nebraska Operates a value-added and cooperative Web site for grant and business plan writers, researchers, and marketing and licensure information. Services include marketing, job training, school-to-work resources, minority business assistance, international trade and investment, tourism, and film.


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Nebraska Development Network http://www.state.ne.us/home/NDN/ Lincoln, Nebraska Multiple resources and training opportunities. Nebraska Economic Development Districts http://www.nedcoloans.org/ .. Lincoln, Nebraska District offices throughout the state Assists in small business planning, grant writing, economic development, and transportation. Nebraska Enhancing, Developing, and Growing Entrepreneurs (edge) http://nebraskaedge.unl.edu/ .. or .. Lincoln, Nebraska Umbrella organization for rural entrepreneurial training programs hosted by local communities, organizations, and associations throughout the state that provide the necessary skills to create and run successful ventures. Nebraska Food Processing Center http://fpc.unl.edu .. Lincoln, Nebraska Focuses on new product and business development, market research, laboratory services, food entrepreneur assistance program, and food safety and allergy programs.


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Nebraska Online www.nol.org .. or .. Lincoln, Nebraska Electronic information for entrepreneurs. Nebraska Resource Conservation and Development councils (RC&D’s) http://www.ne.nrcs.usda.gov/partnerships/rcd/ index_rcd.html .. Lincoln, Nebraska Promote leadership by helping communities work together to create new opportunities for citizens in both rural resources and economic development. Nebraska Rural Development Commission (rdc) http://rdc.neded.org .. North Platte, Nebraska Stimulates rural development innovation and fosters information transfer to, from, and within rural Nebraska. Encourages and supports continuity, coordination, and cooperation among national, state, multi-community, and local rural development initiatives and service providers.


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Nebraska Small Business Administration (sba) http://www.sba.gov/ne/ .. Omaha, Nebraska Provides counseling, training, financing as well as a small business resource guide to help business owners and entrepreneurs wishing to expand, relocate, or start-up, solve problems, locate key public and private organizations and individuals. neon—Nebraska Enterprise Opportunity Network http://neon.neded.org/ .. Lincoln, Nebraska Micro-enterprise business resources from across Nebraska. Service Corps of Retired Executives (score) http://www.score.org/findscore/localinks.html .. Ext. Kearney, Nebraska .. Lincoln, Nebraska .. Norfolk, Nebraska .. Omaha, Nebraska Retired executives who volunteer to assist in the training and development of small business ventures and personnel. Sustainable Agriculture Research and Education (sare)— North Central Region http://www.sare.org/ncrsare .. or .. Lincoln, Nebraska Offers education, networking, and information for farmers and ranchers, researchers, educators, public and private institutions, nonprofit groups, and others exploring sustainable agriculture in twelve states.


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University of Nebraska Cooperative Extension http://www.extension.unl.edu/about.htm .. Lincoln, Nebraska Education, information, and programming throughout Nebraska. usda Rural Development/Nebraska http://www.rurdev.usda.gov/ne/ .. Lincoln, Nebraska Offers free technical assistance regarding feasibility studies, business structure, organization of potential members, strategic planning, development and implementation of business plan, producer and marketing surveys, research, and development of cooperative legal documents. Women’s Business Development Center http://www.cfra.org/reap/womens_business_center.htm .. Lyons, Nebraska Helps rural women in Nebraska through training in business plans and e-commerce, one-on-one technical assistance, business plan counseling, and networking opportunities. Grant and Loan Information Center for Rural Affairs (cfra) http://www.cfra.org/reap/resources.htm .. Lyons, Nebraska Links and resources list. cfra assists cooperatives and value-added start-ups in grant writing.


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grow Nebraska http://www.growneb.com/growbusiness/growloan.php .GROWNEB Holbrook, Nebraska Quick grow Loan Program. National Endowment for the Arts www.nea.gov/ .. Washington dc Arts-related grants. Nebraska Arts Council http://www.nebraskaartscouncil.org/ .. or .. Lincoln, Nebraska Provides grants for art education, activities, events, and projects. Nebraska Cooperative Development Center (ncdc) http://ncdc.unl.edu/ .. or .. Lincoln, Nebraska Offers grants towards research, feasibility and business plans, resources. Nebraska Department of Economic Development (ded) http://www.neded.org/ .. or .. Lincoln, Nebraska Offers Community Development Block Grants (cdbg) for research, comprehensive plans, and studies.


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Nebraska Department of Agriculture http://www.agr.state.ne.us .. or .. Lincoln, Nebraska Offers grants for marketing, producers, and specialty crops. Nebraska Department of Tourism http://www.visitnebraska.org .NEBRASKA Lincoln, Nebraska Offers grants for tourism promotional efforts across the state. Nebraska Economic Development Corporation www.nedcoloans.org/ .. Lincoln, Nebraska Specific emphasis on promoting and assisting the growth and development of business concerns. The principal objective is to foster increased employment opportunities and the expansion of businesses through small business loans. Nebraska Investment Finance Authority (nifa) http://www.nifa.org ..NIFA or .. Lincoln, Nebraska Provides a broad range of financial resources for agricultural, residential, manufacturing, medical, and community development endeavors and provides technical assistance for activities related to these areas.


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Nebraska Microenterprise Partnership Fund http://www.nebbiz.org .. Oakland, Nebraska Grants and evergreen or interest-only loans to Nebraska’s small businesses. Nebraska Small Business Administration (sba) http://www.sba.gov/ne/ .. Omaha, Nebraska Counseling, training, and financing for business entrepreneurs. Rural Enterprise Assistance Project (reap) www.cfra.org/reap .. Lyons, Nebraska Committed to strengthening rural communities through small, self-employed business development and business loans. Sustainable Agriculture Research and Education (sare)— North Central Region www.sare.org/ncrsare .. Lincoln, Nebraska Competitive grants to farmers and ranchers, researchers, educators, public and private institutions, nonprofit groups, and others exploring sustainable agriculture in twelve states.


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usda Rural Development/Nebraska http://www.rurdev.usda.gov/ne/ .. Lincoln, Nebraska Development, rural enterprise, and opportunity loans and grants, cooperative development grants, value-added producer grants. Value-Added Producer Grant Program (vapg) www.rurdev.usda.gov/rbs/coops/vadg.htm .., ext. Lincoln, Nebraska Competitive grants program administered by Rural Business Cooperative Service at usda to help producers move into value-added agricultural enterprises. Women’s Business Development Center http://www.cfra.org/reap/womens_business_center.htm .. Lyons, Nebraska Secures micro-loans for self-employed women across rural Nebraska; a project of the Center for Rural Affairs. There are other local, regional, state, and national grants from economic development groups, foundations, and agricultural commodity boards not listed here. Search your local library or the Web for more information.


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In the Our Sustainable Future series volume 1 Ogallala: Water for a Dry Land John Opie volume 2 Building Soils for Better Crops: Organic Matter Management Fred Magdoff volume 3 Agricultural Research Alternatives William Lockeretz and Molly D. Anderson volume 4 Crop Improvement for Sustainable Agriculture Edited by M. Brett Callaway and Charles A. Francis volume 5 Future Harvest: Pesticide-Free Farming Jim Bender volume 6 A Conspiracy of Optimism: Management of the National Forests since World War Two Paul W. Hirt


volume 7 Green Plans: Greenprint for Sustainability Huey D. Johnson volume 8 Making Nature, Shaping Culture: Plant Biodiversity in Global Context Lawrence Busch, William B. Lacy, Jeffrey Burkhardt, Douglas Hemken, Jubel Moraga-Rojel, Timothy Koponen, and José de Souza Silva volume 9 Economic Thresholds for Integrated Pest Management Edited by Leon G. Higley and Larry P. Pedigo volume 10 Ecology and Economics of the Great Plains Daniel S. Licht volume 11 Uphill against Water: The Great Dakota Water War Peter Carrels

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volume 12 Changing the Way America Farms: Knowledge and Community in the Sustainable Agriculture Movement Neva Hassanein

volume 16 The Curse of American Agricultural Abundance: A Sustainable Solution Willard W. Cochrane

volume 13 Ogallala: Water for a Dry Land, second edition John Opie

volume 17 Good Growing: Why Organic Farming Works Leslie A. Duram

volume 14 Willard Cochrane and the American Family Farm Richard A. Levins

volume 18 Roots of Change: Nebraska’s New Agriculture Mary Ridder

volume 15 Raising a Stink: The Struggle over Factory Hog Farms in Nebraska Carolyn Johnsen


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. Two sheep cozy up to the camera at Shepherd’s Dairy east of Anselmo. Photo courtesy of the author.

. Nebraska’s first year-round market is located in Lincoln. Photo courtesy of the author.


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. St. James Marketplace in northeast Nebraska is a signal to travelers that they’ve reached a rich, historic region. The former Catholic elementary school houses a tearoom, historical room, craft room, and a farmer’s market, plus Main Bow Meats cooperative beef and pork. Photo courtesy of the author.

. Southeast Nebraska Alternative Crops cooperative board member Doc Gigstad with his fouryear-old grape stand northeast of Nebraska City. One of his grape varieties was a cutting from the James Arthur vineyard at Raymond. Photo courtesy of the author.


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. At The Mill in Lincoln’s Haymarket one can find a huge wall mural made from vendor-donated seeds and from coffee beans. The mural represents the community connections that are made through the direct marketing inherent in farmers’ markets. Photo courtesy of the author.

. @66E6 and @66E6 Ethanol AA8, headquartered in Kearney, are largescale, value-added agricultural ventures. Their joint purpose is to increase the market price of their crops and give members the opportunity to share in the profits of the ethanol and future businesses. Photo courtesy of @66E6 Ethanol AA8


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. A load of small, square bales is ready for shipment to the front range of the Colorado Rockies, where breeders, boarders, and lovers of horses will pay top dollar for high-quality hay. Photo courtesy of Partners Hay Marketing Cooperative.

. Uncle Buck’s Lodge is owned by the Rhoades family, ranchers from Brewster who opened the business in . The lodge caters to hunters and travelers and boasts a restaurant, bar, dance floor, conference services, and lodging. Photo courtesy of the author.


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. Farming strips of different crops is one method that sustainable farmers like Tom Larson of St. Edward use to control pests and weeds and to better manage available moisture. Photo courtesy of Tom Larson.

. Just as there are nearly an infinite number of crossroads throughout rural America, so too are there nearly endless opportunities in valueadded agriculture. Photo courtesy of the author.


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