> Rural Minnesota region pulls itself up by food and farming bootstraps


Good Food Economy Digest

Rural Minnesota region pulls itself up by food and farming bootstraps

People building strong places with local and regional food

Good Food: Healthy, green, fair, and affordable


 By Patty Cantrell, Regional Food Solutions LLC

In This Edition

We go to Central Minnesota, where a five-county economic development strategy uses local food sales to tourists and cities to build rural health and wealth.

Take Action

Central Minnesota’s Resilient Region effort is related to the national Partnership for Sustainable Communities. Initial funding from three federal agencies (HUD, DOT, EPA) launched a number of innovative planning efforts. Support for similar investments can help spread the learning and benefits.

“It takes about five years before bigger buyers will say, ‘OK, now we’ll do business with you.’”

Central Minnesota farmer Tom Smude speaks from direct experience.

His sunflower cooking oil business is now in the black, with retail and food service distribution across Minnesota and four neighboring states. Bankers and neighbors thought he was “absolutely nuts” when he turned in 2011 to markets for Minnesota-grown and –made foods. His original plan, to produce bio-fuel from sunflowers, tanked with global oil prices.

The same five years of growth at Smude Sunflower Oil have seen a related economic evolution in the five counties where his farm is based. In fact, the smallest, yet most critical piece of Smude’s startup financing came through Central Minnesota’s recent re-focus on local food and farming for new health and wealth.

Smude Sunflower Oil was an “off the wall” idea that Tom and Jenni Smude pursued anyway with some help from Region Five’s focus on local food and farming businesses. CREDIT: Courtesy Smude Oil and Midwest Sales

Smude Sunflower Oil was an “off the wall” idea that Tom and Jenni Smude pursued anyway with some help from Region Five’s focus on local food and farming businesses.
CREDIT: Courtesy Smude Oil and Midwest Sales

Five years into implementation, Central Minnesota’s Resilient Region strategy, like Smude’s “off the wall” business idea, also is building converts and confidence.

It’s a fairly logical self-help plan, said Cheryal Hills, executive director of the Region Five Development Commission.

The citizen-led Resilient Region plan that Region Five facilitated from 2009 to 2011 focuses on local foods, farming, and the arts as levers, or “economic engines. The goal is to lift up this rural area challenged by out-migration, poverty, and diet-related chronic disease. The strategy is to leverage strong tourism demand in a couple of Region Five’s counties to stimulate commercial and community development the entire region needs.

“The opportunity we have in local foods is to take product from our agricultural communities and sell it to the resorts here and to highly populated areas, where people love it and are more likely to pay for it,” Hills said. “We use those sales as stimulus to make fresh and local food more available, raise disposable incomes in our agricultural communities, and work on a regional scale to address needs and opportunities.”

 

Main Street Lives

Brenda Thomes is the city administrator for Long Prairie (pop. 3,400), in Region Five’s southwestern Todd County. Like many rural communities, Long Prairie’s historic downtown is plagued with vacant buildings. Thomes said a new independent grocery store in one of those storefronts, Mi Pueblito market and café, which Region Five helped finance, is filling a real economic development need.

“If you want to get younger families into an area, you have to not only look at having fast food restaurants, but also farmers markets and places people can walk to for fresh foods and other things they need,” she said. “It also makes it easier for our industries here to attract people to come work for them.”

The combination of local food, farming and the arts is the economic stimulus recipe Region Five is using to promote rural health and wealth. CREDIT: Courtesy of Region Five Development Commission

The combination of local food, farming and the arts is the economic stimulus recipe Region Five is using to promote rural health and wealth.
CREDIT: Courtesy of Region Five Development Commission

Thomes is describing a new trend in economic development called “placemaking,” It’s about retaining, creating, and attracting businesses by making towns and cities more attractive places to live.

Placemaking is also helpful for tourism, said Kris Vonberge, executive director of the Little Falls Convention and Visitors Bureau..

“I call it destination building,” she said.

Vonberge is excited about a group of residents and investors moving forward with plans to locate a new cooperative grocery store in downtown Little Falls that will stock fresh and local foods.

“I want people to spend money in town, and that can happen if it’s more of a full town, with more things to do and buy, like food,” Vonberge said.

 

Business Ecosystem

Mo Durheim, vice president and senior lender at Farmers and Merchants State Bank of Pierz, is encouraged by the co-op grocery store plan in Little Falls.

It’s the type of larger volume opportunity that can give people with local food and farm ideas a chance at real livelihoods, he said.

“These are our friends and neighbors,” Durheim said.  “I’d like to see this (local food and farming sector) evolve where those who have an interest can succeed, where they have an avenue to build something for themselves.”

Region Five is working to support this vision, unanimously supported in Resilient Region planning, by building the business ecosystem in which those livelihoods can grow. A core element is a retailing, distribution, and processing hub called “Sprout.” Region Five has facilitated and supported its growth from an idea in 2009 to a startup group of 15 suppliers in 2012 to more than 60 now.

Sprout serves seven school districts (15,000 students), four hospital systems, and other restaurant, retail and food service accounts in the region. Its 2016 revenue is on target to exceed 2015 by 48 percent, said founding farmer and manager Arlene Jones.

Most of that goes to the growers, she said. “Seventy percent of our total revenue is cost of goods sold, which equates to direct funds back to our growers and their family incomes.”

 

Diversity and Development

The Agua Gorda Cooperative of Hispanic farmers from Long Prairie, MN, started business producing food on community garden plots. The co-op now owns land for a business that is growing in sales both to rural central Minnesota and to the Twin Cities. CREDIT: Courtesy Shared Ground Farmers Cooperative

The Agua Gorda Cooperative of Hispanic farmers from Long Prairie, MN, started business producing food on community garden plots. The co-op now owns land for a business that is growing in sales both to rural central Minnesota and to the Twin Cities.
CREDIT: Courtesy Shared Ground Farmers Cooperative

One set of growers that Sprout buys from is the Agua Gorda Cooperative of Hispanic farmers out of Long Prairie. Agua Gorda’s sales to Sprout are important, said Jaime Villalaz, business development specialist with the statewide Latino Economic Development Center (LEDC) based in St. Paul.

“Sprout pays really good prices, transportation costs are lower, and the warehouse and cold storage space Sprout has are big benefits,” he said. Agua Gorda also plans to use new commercial kitchen space at Sprout’s headquarters in Little Falls to make value-added products like salsa.

Agua Gorda members first started farming on community garden plots at a local church, which expanded to welcome and include them. It was part of civic efforts to build cultural connections in a town that has grown from 1 percent Hispanic population in 1990 to one-third today.

Most came from the same Agua Gorda community in the Mexican state of Michoacán to work at a local meat processing plan. Now many are building businesses in Long Prairie alongside their Anglo neighbors.

The Agua Gorda Cooperative recently purchased a 54-acre parcel on the edge of town next to five certified-organic acres it leases from the city. In addition to Sprout, Agua Gorda supplies a tamale factory in Minneapolis-St. Paul with 45,000 pounds of tomatillos each year. It has also joined the larger Shared Ground Farmers Cooperative, which supplies Twin Cities’ restaurants and cooperative grocery stores.

 

Full Circle

The growth of farm enterprises like Agua Gorda feeds many other parts of the regional food system Region Five is working to build for community and economic stimulus.

Celebrating the opening of the Sprout Growers and Makers Marketplace in Little Falls, MN, are Region Five Development Commission executive director Cheryal Hills (L) and Sprout food hub founding farmer and manager Arlene Jones.  CREDIT Courtesy of Region Five Development Commission

Celebrating the opening of the Sprout Growers and Makers Marketplace in Little Falls, MN, are Region Five Development Commission executive director Cheryal Hills (L) and Sprout food hub founding farmer and manager Arlene Jones. 
CREDIT Courtesy of Region Five Development Commission

Three hospital systems in the area, for example, now provide weekly boxes of local produce to food insecure families on a prescription basis. The hospital systems source the fresh produce through Sprout. The fresh food prescriptions add to the sales picture that is helping new food and farming businesses in the region start and grow.

Another bright spot in the sales picture is Sprout’s new Growers and Makers Marketplace.

The indoor market brings art vendors together with farm and food vendors. Local artists are also part of a team working to develop the market into a community gathering place, said painter Heidi Jeub.

“We want to do something authentic for the community that really brings people in,” she said. Music, classes, and cultural events are already underway.

Many of the families receiving fresh food prescriptions pick up their Rx boxes at the Growers and Makers Marketplace. While there, they learn about nutrition and cooking with on-site classes plus interaction with farmers.

“Peeling carrots with these kids and cooking whole and wholesome food is one of the greatest rewards for all the work it took to get here,” said Sprout manager Arlene Jones.

Five years in, Region Five is meeting many of its Resilient Region objectives. They range from healthier diets to fuel local children’s success in school to fresh paint on neglected Main Street buildings and new options for making a living in farming.

Perhaps even more significant is the faith and motivation that’s growing across the region as successes like Smude Sunflower Oil and the Agua Gorda Cooperative grow. Tom Smude, for example, now has five neighbor farms producing sunflowers for his growing business. Production is up to 800 acres now from a start of 30 acres in 2011.

Brainerd city councilman Chip Borkenhagen said the proof for him is in the community spirit that’s shining stronger than he’s ever seen it. “You can’t quantify it. You can’t financially translate it,” he said. “It’s just something you feel in the air, and goldarnit I’m feeling it!”