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Don Fromm of Oak Ridge Archery in Kasota. Photo by John Cross

Taking it outside

Outdoor recreation fuels many businesses Also in this issue • Prairie Automation • Lola – An American Bistro • Doug Faust, Fine Impressions

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F E A T U R E S November 2015 • Volume 8, Issue 2

Minnesotans love their outdoor sports and recreation and businesses from ski hills to archery ranges and power sports dealers help them enjoy it.

Lacey Lueth has developed a dedicated following at her Lola - An American Bistro in New Ulm and is now taking to the road with her food truck.

Fine Impressions has seen dramatic changes from the digital onslaught, but Doug Faust sees a bright future for the greeting card industry.

Denis Schoemaker of Prairie Automation developed a business next to his dad’s on the family farm that makes custom made parts.

MN Valley Business • November 2015 • 5

■ November 2015 • VOLUME 8, ISSUE 2 PUBLISHER John Elchert EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Adam Birr Heidi Sampson Pete Steiner PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail mankatomag@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street., Mankato MN 56001.

■ Local Business memos/ Company news................................7 ■ Business and Industry trends.........9 ■ Minnesota Business updates....... 10 ■ Business Commentary................. 12 ■ Construction, real estate trends.. 29 ■ Agriculture Outlook...................... 30 ■ Agribusiness trends..................... 31 ■ Job trends..................................... 32 ■ Retail trends................................. 33 ■ Greater Mankato Growth.............. 34 ■ Greater Mankato Growth Member Activities ....................... 38

From the editor

By Joe Spear

Mankato and the Great Outdoors

ore and more, people are beginning to associate the Mankato area with the Great Outdoors. This month’s cover story details some surprising offerings local businesses have with regard to “Great Outdoors and Great Business.” It seems businesses have not been slow to realize the potential outdoors product and service market. When Gov. Mark Dayton and a healthy entourage of state executives descended on Mankato Oct. 9 for the Governor’s Pheasant Opener, there were realizations in the room of a several hundred people that the Mankato area had taken another step toward a premier outdoor activity playground. Department of Natural Resources Commissioner Tom Landwehr showered praises on the Mankato area’s natural amenities and the enthusiasm of the pheasant hunters and others in the room to make it even bigger and better. There are 9,000 acres of pheasant hunting grounds within the Mankato area, several speakers noted. Landowners are donating more land all the time for pheasant hunting and wildlife habitat. Lt. Gov. Tina Smith made mention of Minneopa State Park and its newly arrived heard of bison as a real asset to the Mankato area outdoor and natural resources scene. Dayton echoed those sentiments and noted that Minnesota State University hockey operating at its renovated facilities (courtesy of the Legislature and Dayton) was also a big draw to the sports and recreation crowd. Dayton, in his No. 1 Maverick hockey jersey, dropped the first puck. So there was no shortage of attention to the region’s outdoor and recreational assets by executives at the state level. This month’s cover story details just how many different businesses, some flying under the radar, are benefitting from the outdoor culture. Local businesses have seen the potential years before state leaders probably did. Oak Ridge Archery in Kasota started out in a garage 20 years ago, but owner

6 • November 2015 • MN Valley Business

Don Fromm has seen steady growth in his business, where now he operates leagues five days a week, and has 50 to 60 young archers in training at given times. Master archer Fromm, 64, competes across the country and is one of about four pro shops in the state, with two in Rochester and one in the Twin Cities. Nestled in the scenic Kasota countryside, he hosts and indoor range as well as an outdoor range. He hosts a number of tournaments at the indoor range and has customers who are not only hunters, but archery tournament competitors. “When you can shoot 60 yards indoors, you really don’t need to go outdoors. And people don’t like the mosquitoes and heat,” Fromm says. Fromm has become somewhat of an expert in laser-tuning bows. “People send me bows from all over the country,” he says. Mount Kato has been a staple of the Mankato area outdoor recreation offerings for three quarters of a century. And it continues to evolve to meet changing markets for snowboarding, skiing and mountain biking. But Mount Kato manager John Nelson notes skiing can be a spectator sport as well. With a bar and restaurant on site, Nelson says: “A lot of people just come out and watch people come down the slopes.” Families have been a focus of the Mount Kato market, especially for less intense downhill activities like tubing. “Tubing started our really strong and has just stayed strong. Often you get families and they don’t all want to ski or do snowboarding, and they can tube,” Nelson says. The outdoor recreation market hits a broad demographic when it comes to age and preference and that bodes well for business. We all want to appreciate the natural beauty of the area for as long as we can. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow him on Twitter @jfspear.

Local Business People/Company News

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Dr Matson honored

The Orthopaedic and Fracture Clinic announced that Dr. Paul Matson recently received the U of M Medical School’s Distinguished Alumni Award. Dr. Matson joined OFC in 1988. Five University of Minnesota Medical School alumni were honored for their contributions to the medical profession at the Medical School Alumni Awards Banquet. Matson, an orthopaedic surgeon, graduated from the Medical School in 1981. After graduating and completing his internship, Matson served as a medical missionary in Cameroon, West Africa. Since then, Matson has made several trips to Bethany Crippled Children’s Center and Kijabe Medical Center in Kenya, treating patients and educating local surgeons and health care workers. ■■■

Kunkel earns diploma

Mike Kunkel, of Community Bank in Mankato, was awarded a diploma from the Graduate School of Banking at the University of Wisconsin-Madison. The School, sponsored by state bankers associations, was established in 1945 to provide bankers with an opportunity for advanced study and research in banking, economics and leadership. Instruction at the school takes place during two-week resident Mike Kunkel sessions for three consecutive summers, along with comprehensive study between summer resident sessions.

U.S. Bank hires two

U.S. Bank in Mankato has named Brandon Thiesse as wealth management advisor. Thiesse joins U.S. Bank’s private client group with more than 13 years of experience in professional sales and financial Brandon Thiesse Jolene Wall management. Thiesse is responsible for collaborating and developing the wealth management area for the region including the Mankato, Owatonna and La Crosse markets. The bank also named Jolene Wall as private banking relationship manager. Wall joins U.S. Bank with more than nine years of banking experience. Wall received her bachelor’s degree in financial economics from the College of St. Catherine and a master’s degree in leadership from Augsburg College. ■■■

Meyer completes academy

Christina Meyer, of Community Insurance in Mankato, recently completed the Commercial Lines Academy with Grinnell Mutual Reinsurance. Meyer was also the first female named to the Fairmont Farmers Mutual Insurance Co. board of directors.

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Loosbrock promoted at U.S. Bank

U.S. Bank promoted Todd Loosbrock to regional president of the southern Minnesota/La Crosse, Wisconsin region. Loosbrock has been with U.S. Bank for 17 years, most recently as president of the Mankato U.S. Bank. He will remain at the Mankato office.

Todd Loosbrock

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Warling joins Clifton

Kimberly Warling joined CliftonLarsonAllen as a senior in the commercial services industry. She brings more than10 years of experience with an emphasis in tax. She is a graduate of the St. Cloud State University with degrees in accounting and business economics. ■■■

Christina Meyer

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Vikings promote two

The Minnesota Vikings promoted Mankato native Kate Shibilski to vice president of finance and controller. In addition, former Minnesota State University hockey player Chad Kate Shibilski Chad Lundeen Lundeen was promoted to vice president of operations and facilities. Both are playing a key role in the transition to U.S. Bank Stadium for the 2016 season ■■■

SMIF honored

Southern Minnesota Initiative Foundation was awarded the 2015 Minnesota Small Business Administration

MN Valley Business • November 2015 • 7

Community/Rural Lender of the Year Award. SMIF received the award based on its 14 years of providing small businesses in the 20-county region with both capital and technical assistance; ther strong partnerships with the South Central Region and SE Minnesota Small Business Development Centers; collaboration with area banks and three years as a SCORE Chapter. Tim Penny is SMIF president and CEO. ■■■

Olson hired at ISG

ISG hired Tiffany Olson as marketing director. She leads ISG’s strategic marketing and public relations activities to promote the firm brand while developing marketing strategies that help achieve growth initiatives. She holds a MBA with a concentration in marketing from the University of Massachusetts (Amherst) and a B.S. in marketing from Minnesota State University Moorhead

energy efficient and sustainable, and is funded and administered through the Minnesota Department of Commerce. ■■■

Walker transfers to Mankato

Consolidated Communications, formerly Enventis, announced that Ryan Walker, director field operations and network operations, has transferred to the Mankato office from the company’s headquarters in Mattoon, Illinois. He will lead the operations teams in Minnesota, North Dakota and Iowa, including network operations and field operations, and technicians directly serving our residential and Ryan Walker business customers. He has more than 21 years of service with Consolidated Communications.

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Holiday Inn Express sold

Partners Henry Byl and Randy Vreugdenhil, who have built a portfolio of five hotels in Iowa, have made their first move into Minnesota with the $4.52 million purchase of the 88-room Holiday Inn Express in Mankato.

Poppler joins Thriveon

Michael Poppler has joined Thriveon as a systems engineer. He is a recent graduate of St. Cloud University with a B.S. Degree in Information Technology and Security. Thriveon is a family owned Information and Technology company based in New Ulm.

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Firm joins Eide Bailly

Beckman & Kunkin, a certified public accounting firm that’s been serving the Scottsdale and Phoenix area for more than 25 years, has joined Eide Bailly. Beckman & Kunkin shareholders Howard Beckman and Adam Kunkin, along with their team continue to operate from their Scottsdale location under the Eide Bailly name. This will raise Eide Bailly’s Arizona staff count to 72, and clients in the region now will be served from two locations in the Phoenix metro area.

Michael Poppler

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CCS honored in Waseca

Cinch Connectivity Solutions has been named the 2015 Business of the Year by the Waseca Chamber of Commerce. CCS was recognized as an active employer in the Waseca community for over 75 years. CCS was part of the original E.F. Johnson business which began manufacturing radio components in 1923. After a series of acquisitions, in 1996 Jordan Industries purchased the Johnson Components division of E.F. Johnson and then sold Johnson Components in 2000 to Emerson Electric. Bel Fuse, Inc., Cinch Connectivity Solutions’ parent company acquired the business in 2014. ■■■

ISG project honored

ISG received the Best of B3 Guidelines Award for the Austin National Guard Armory Renovation project. The B3 (Buildings, Benchmarks and Beyond) system provides tools and programs designed to help make buildings more

8 • November 2015 • MN Valley Business

To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line. Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.

■

Business and Industry Trends

Economy

State paychecks growing

Minnesota’s wage and salary workers cashed in on a record high aggregate paycheck of $145.6 billion last year. That estimate comes from the U.S. Bureau of Economic Analysis, the same group that produces such closely watched national statistics as the U.S. gross domestic product, personal income and retail sales. The estimates are based primarily on quarterly unemployment insurance reports that are filed by employers with state unemployment agencies, including DEED. Minnesota employers report wages and salaries for each employee to DEED’s Unemployment Insurance Program. DEED, in turn, aggregates the data and publishes the numbers as part of the Quarterly Census of Employment and Wages program. Total wage and salary income reached a record high in Minnesota last year, increasing 4.2 percent from 2013. While wage growth is always a welcome development, last year’s jump isn’t all that remarkable as Minnesota’s aggregated paycheck has increased in 78 out of the last 85 years before accounting for inflation. In most years total nominal wage income climbs in Minnesota from employment gains. But more significant are pay raises and higher bonuses. The pay raises of the 2.7 million Minnesotans holding jobs last year were a lot more crucial to total wage and salary income growth than the wages earned from the 40,000 new jobs added. Minnesota’s aggregate nominal paycheck has climbed for five consecutive years since dropping 4.8 percent in 2009. That decline was the first since 1940.

Energy

Fuel oil use to drop

Health and environmental concerns related to the high sulfur content of residual fuel oil have led to new policies and regulations that have significantly lowered expectations for future fuel oil use globally, according to the Energy Information Administration. As the demand for fuel oil declines, the need for the refining upgrades to convert residual material to lighter, cleaner products will increase. As its name implies, RFO is one of several residuals that remain after lighter material, like gasoline and distillate, are distilled out of crude oil. RFO contains a large amount of contaminants, including sulfur, nitrogen, and heavy metals. Throughout the world, RFO is used in many sectors, including marine transportation, power generation, commercial furnaces and boilers, and various industrial processes. Because few refineries are capable of removing sulfur from RFO, compliance will likely be achieved using two approaches: using fuels with lower sulfur content such as marine gasoil or intermediate fuel oil, or removing sulfur post-combustion, using scrubbers or other technologies to remove sulfur from the exhaust.

Heating costs falling

The average U.S. household expenditures for natural gas, heating oil, and propane during the upcoming winter heating season will be 10 percent, 25 percent, and 18 percent lower, respectively, than last winter, because of lower fuel prices and lower heating demand. Forecast lower heating demand and relatively unchanged prices contribute to electricity expenditures that are 3 percent lower than last winter

Oil markets volatile

North Sea Brent crude oil prices averaged $48/barrel in September, a $1 increase from August. However, volatility remained high during September. EIA forecasts that Brent crude oil prices will average $54 in 2015 and $59 in 2016. Forecast West Texas Intermediate crude oil prices average $4 lower than the Brent price in 2015 and $5 lower in 2016.

Crude output falling

U.S. crude oil production declined by 120,000 barrels per day in September compared with August. Crude oil production is forecast to decrease through mid-2016 before growth resumes late in 2016. Projected U.S. crude oil production averages 9.2 million b/d in 2015 and 8.9 million b/d in 2016.

Lots of natural gas

Natural gas working inventories were 3,538 billion cubic feet in late September. This level was 15 percent higher than a year ago and 4 percent higher than the previous five-year average. Projections are that inventories at the end of October would be the highest end-of-October level on record. Nearly half of all U.S. households heat with natural gas.

Renewable power down

Total renewables used in the electric power sector will decrease by 2.7 percent in 2015. Conventional hydropower generation is forecast to decrease by 9.7 percent, and nonhydropower renewable power generation is forecast to increase by 4.0 percent. The 2015 decrease in hydropower generation reflects the effects of the California drought. Forecast generation from hydropower in the electric power sector increases by 7.3 percent in 2016. There should be continued growth in utility-scale solar power generation, which is projected to average 89 gigawatthours per day in 2016.

MN Valley Business • November 2015 • 9

Minnesota Business Updates

■

■ Hy-Vee honored by EPA The Environmental Protection Agency announced that Hy-Vee has been awarded two GreenChill program awards for its stores’ efforts to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change. Hy-Vee is being recognized with the achievement awards for its progress in this sustainability area over the past year. “Hy-Vee’s commitment to lowering its refrigerant emissions across its stores proves the company is serious about its role in protecting the ozone layer and climate,” said Tom Land, manager of EPA’s GreenChill Partnership. Hy-Vee has been awarded the 2014 Superior Goal Achievement award, which goes to each partner that achieves its annual GreenChill refrigerant emissions reduction goal. Additionally, Hy-Vee has received the Exceptional Goal Achievement award, which is more difficult to earn. This award recognizes those who go above and beyond their emissions reduction goal. GreenChill is an EPA partnership with food retailers that helps them transition to environmentally friendlier refrigerants; reduce the amount of refrigerant used by stores and eliminate leaks; and to adopt green refrigeration technologies and environmental best practices.

■ Fastenal settles suit Winona-based Fastenal has agreed to pay $1.2 million in back wages and hire more minorities and women to settle a discrimination case. The U.S. Department of Labor found that the company, a federal government contractor, discriminated against 171 job applicants in Indianapolis and Atlanta. The applicants were seeking warehouse positions at two of the company’s distribution facilities. Under the agreement, Fastenal committed to hire 154 African-American and 17 female applicants who were declined jobs and pay $1,253,611 in back wages and interest to the 7,398 African American and 1,055 female applicants who were named in the class-action complaint against the company. Fastenal did not admit liability.The violations occurred while Fastenal received more than $35 million in government contracts for its products.

■ Target takes on Amazon Target pioneered the concept of designer partnerships at the big box level. In 2011, the bullseye brand launched its limited edition Missoni for Target fashion line to great fanfare - in fact, demand for its one-of-a-kind products was so great that it caused Target’s website to crash, according to

Motley Fool. The Italian luxury brand was one of the first uber highend fashion labels to collaborate with the discount retailer. Yet Target has since gone on to introduce dozens of 10 • November 2015 • MN Valley Business

successful limited edition collections with major designers, including Jason Wu, Altuzarra, Lilly Pulitzer, and Toms. It’s never been more important for Target to differentiate itself from competitors -- particularly Amazon, as the online retailer has made a name for itself when it comes to the convergence of fashion, convenience, and affordability. Target’s designer partnerships and signature categories promise to set it apart. As the world’s largest e-tailer, many consumers find that Amazon is more convenient than trudging to the neighborhood Target location. Additionally, Amazon has been aggressively investing in fashion and apparel initiatives. If Target hopes to better compete with Amazon, exclusive partnerships with top designers are its best bet. By offering differentiated products that consumers can’t get on Amazon.com, Target could significantly boost its same-store sales growth. Target’s designer partnerships typically include anywhere from 50 to 250 exclusive products, and range from household items to apparel and accessories

■ 3M sells library division 3M announced that it has completed the sale of assets of its North American Library Systems business to One Equity Partners Capital Advisors. 3M also announced that it has entered into agreements for OEP to purchase the assets of its remaining global Library Systems business. 3M Library Systems business delivers circulation management solutions to library customers with onpremise hardware and software, maintenance and service, and an emerging cloud-based digital lending platform. For 40 years, the business has delivered library security products, automated materials handling systems, and selfservice technologies, both digital and library-based. The business posted global sales over the last 12 months of approximately $100 million. “After a thorough strategic review, we have decided to exit the Library Systems business, and focus on our core businesses such as reflective traffic safety and vehicle identification solutions, and our public security identification and monitoring portfolio,” said John Riccardi, vice president and general manager.

■ Fastenal announces dividend The Fastenal Co. of Winona reported its board of directors declared a dividend of $0.28 per share to be paid in cash on November 24, 2015 to shareholders of record at the close of business on October 27, 2015. Fastenal began paying annual dividends in 1991, semiannual dividends in 2003, and then expanded to quarterly dividends in 2011. The board of directors intends to continue paying quarterly dividends, provided that any future determination as to payment of dividends will depend upon the financial condition and results of operations of the Company and such other factors as are deemed relevant by the board of directors, such as income tax rates related to dividends.

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■

Business Commentary

By Adam Birr

Corn Growers Association helping research cover crops

t took a lot of experimenting before Bryan Biegler finally found success with cover crops on his farm near Lake Wilson in southwest Minnesota. “We’re just now finding our spot with cover crops,” Biegler said. “We’re experimenting with different equipment and seeing what works for us.” When it comes to cover crops, there are a lot of Minnesota farmers out there like Biegler. They see the soil fertility and water quality benefits cover crops provide, but struggle to make them work in Minnesota’s cold climate and short growing season.

Farmer-funded research

The Minnesota Corn Growers Association is working to change that. Using funds from Minnesota’s corn checkoff, MCGA invests in research that seeks to make cover crops a more realistic and feasible option for all Minnesota corn farmers. Corn farmers have invested heavily in recent years to expand and improve on the many conservation practices available to protect water quality and soil fertility. When it comes to cover crops, we’re working to determine which regions and under what conditions and cropping systems they’re most effective.

What are cover crops?

Cover crops are planted in fields to protect the soil post-harvest. Generally, cover crops are most effective when planted after small grains and canning crops that are harvested earlier in the season. MCGA research is examining ways to improve cover-crop use in fields where traditional row crops such as corn or soybeans are planted. “We want to make sure farmers are using cover crops on lands where they’re most effective,” said Paul Meints, MCGA Research Director. “And if a cover crop isn’t feasible, our research helps farmers better understand alternative conservation practices that can achieve results similar to cover crops.” The benefits of cover crops include increasing organic matter in the soil, potential for reducing the amount of commercial fertilizer needed for the following year’s crop, significantly cutting soil erosion from wind and rain, increasing a field’s natural fertility, and suppressing weeds and insects. Examples of cover crops include perennials like alfalfa or fall planted materials like oats, winter peas, radish or rye. In Minnesota, fall planted cover crops are typically planted late in the growing season, often after the corn or soybean field has been harvested. Some farmers attempt to plant cover crops by flying on seed into standing crops, but establishment is heavily dependent on weather and rainfall. Whether Mother

12 • November 2015 • MN Valley Business

Nature cooperates enough to get a cover crop established or not, the costs farmers incur to plant a cover crop remain. Cover crops are more widely used in southern states because of their warmer fall temperatures. Minnesota farmers are often still harvesting after a killing frost. That’s why it’s challenging to make cover crops work up here. Timing is also important because farmers don’t want the newly established cover crop to interfere with fall harvest of the standing crop. Because farmers have only a short amount of time to establish cover crops before Minnesota’s cold winter kicks in and the snow starts flying, using cover crops is much more complicated than it appears.

Future of cover crops

MCGA has supported several field plots throughout the state where researchers gather data on cover crops. On-farm demonstration sites and experimentation also helps determine what works and what doesn’t work. As research efforts progress and data is collected, the path for making cover crops more successful in Minnesota will become clearer. “We’re seeing advancements in technology and new programs that are moving cover crops in a more mainstream direction here in Minnesota,” said Jodi DeJong-Hughes, a U of M Regional Extension Educator who works on several soil health and water quality projects in partnership with MCGA. “Farmers are developing a better understanding of the benefits of cover crops, but feasibility remains an issue. That’s why continued research is so important. Minnesota’s farmland is diverse. We need to keep working to find what works best in certain regions, whether that’s cover crops or alternative conservation practices.” Nearly 60 participants gathered on Biegler’s farm for a National Corn Growers Association Soil Health Partnership field day in September. The farmers and agency officials in the audience learned more about Biegler’s efforts to make cover crops work on his farm, and the soil health benefits he’s enjoyed because of cover crops. “Nothing in farming is easy, including cover crops,” Biegler said. “But farmers have shown over the years that when they invest time and money into something, progress is made. We’re making progress on cover crops and I think we’re moving in the right direction.” MV Adam Birr is executive director and CEO of the Minnesota Corn Growers Assocition, based in Shakopee.

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John Nelson is gearing up for another busy season at Mount Kato ski hill.

Great Outdoors Great for Business By Tim Krohn | Photos by John Cross 14 â&#x20AC;˘ November 2015 â&#x20AC;˘ MN Valley Business

Mount Kato features eight chairlifts for skiers and snowboarders.

f you live in southern Minnesota, it’s nearly impossible not to be involved in some type outdoor recreation. Be it cross-country skiing or ice fishing in the winter or hopping on an ATV, heading to a lake or taking to the field to hunt in the summer, the outdoors is an important part of the culture. And it supports an extensive sector of business. Don Fromm, who owns and operates Oak Ridge Archery in Kasota, has seen his business grow steadily over the years. “I started it in the garage 20 years ago and in few months moved to bigger building and had to add on in a few more years for an indoor range,” Fromm said. At Mount Kato, John Nelson is gearing up for another snow season and the crowds that come to ski, snowboard or tube. And, said Nelson, the whole thing becomes a spectator sport as well. “We have a cafeteria and a bar and grill – The Lift – that’s always popular. A lot of people just come out and watch people come down the slopes.” One of the biggest growth areas in outdoor recreation in recent years has been all-terrain vehicles and other recreations units, particularly the two-seat vehicles. “ATV sales have probably peaked a little,” said Kyle Brende, general manager of Snell PowerSports & Equipment. “Now a lot more people are going with the side-by-side vehicles. That’s just exploded in the past three years.”

More than just skiing

Mount Kato has a long history in Mankato and its ownership and offerings have evolved over the decades. Harvey and Dolly Andersen started Ski Haven south of Mankato more than 75 years ago. Nelson has been with Mount Kato for 10 years and has seen the increased interest in snowboarding and tubing. “Tubing started our really strong and has just stayed strong. It’s typically for folks looking for something else to do. Often you get families and they don’t all want to ski or do snow boarding, and they can tube.” The tubing hill has four to five lanes for tubers and Mount Kato recently installed conveyor lifts to bring people up the hill. “They’re conveyor lifts that you stand on — a rubber belt with a carpet-like texture,” Nelson said. “They’ve been really great. You used to have a handle pull attached to the tube and you sat down and it pulled you up.” Snowboarders have “terrain parks” to enjoy — areas built out of snow, boxes and rails. “The young crowd usually likes those, usually snowboarders, but sometimes skiers too.” While more activities are available at Mount Kato, the 19 ski trails and eight chairlifts are still the center of attention. Mount Kato makes the majority of its snow, usually starting during the first prolonged cold spell in early to mid November. “We always have to make snow to ensure we have a good base. Extra snow is just icing on the cake.” Water is pumped into a large holding pond atop the hill

Cover Story

MN Valley Business • November 2015 • 15

Oak Ridge Archery at Kasota features a 60-yard indoor range. and pumped through nucleation nozzles that mist it, freezing instantly when it hits the air. They try to open on Thanksgiving weekend and stay open through March. Nelson said that while snowboarding grew rapidly, it has leveled off or fallen some as more people switch to skiing. “Skiing is a little easier to learn more quickly. When both feet are attached to one board (on snowboards), it takes a while to learn how to maneuver and there are more falls. “When you’re facing downhill with two skis on, you have more maneuverability.” Mount Kato offers a a variety of classes for snowboarding and skiing for kids and adults. Thursday nights feature race leagues for those 18 and older and they host a junior race league on Saturdays. “There’s teams from all over Minnesota. Each hill has their own team and we all travel around to each other’s hills,” Nelson said. They also host a variety of specials. “We try to make it more affordable for more people.” Even when the snow isn’t falling — or being made — Mount Kato stays active with mountain biking. “The fall is always busy when the temperature gets cooler. And the spring is busy — we have a big race in early June that draws 350 racers.” In the late fall 400 high school racers come for a championship race that features a track of more than 3 miles. “They start by climbing the beginners ski run and that’s a lot of work, then they go through the woods and the tight turns and down the hill. It’s interesting to watch.” Visitors also will find the chalet has been freshened up this year with new paint and carpeting added. They feature music on Saturday afternoons.

16 • November 2015 • MN Valley Business

Right on target

Fromm, 64, is a master archer who’s been shooting since he was 5 years old. He’s competed across the country and stacked up shelves full of awards. For fellow enthusiasts, his Oak Ridge Archery, tucked in a scenic area on the edge of Kasota, is a hidden paradise. It is one of only a few pro-shops in the state with two in the Rochester area and one in the Twin Cities. He started with an outdoor 3D range with a variety of targets but said more and more shooters are favoring the long indoor range. “When you can shoot 60 yards indoors, you really don’t need to go outdoors. And people don’t like the mosquitoes and heat.” Fromm sells bows and archery equipment and has become known around the country for his skill in lasertuning bows to shoot at their peak. “People send me bows from all over the country.” He’s seen an amazing technological transformation in the equipment over the years. “When I first started, it was just recurve wooden bow, then recurve fiberglass.” The creation of compound bows — with pulleys that make it easier to pull and hold the string — revolutionized the sport and opened it to far more people. The compound bows create a “let-off,” which is the amount of mechanical relaxation the bow achieves at fulldraw as a percentage of the bow’s strength at full draw. “The first compounds had a 50 percent let-off, now they’re up to 80 percent let-off. And they’re quiet now, 2 to 4 decibels. They’ve changed dramatically the last eight or nine years.” Fromm carries entry-level bows for hundreds of dollars, but many of the higher-end units cost near $1,000 to

Snell PowerSports & Equipment carries everything from pontoons to ATVs. $1,800 or more. Arrows, too, have become lighter, stronger and more accurate with the advent of new materials and technology. About 80 percent of his customers are hunters and about 20 percent are usually hunters but also shoot in competitions. He runs leagues five days a week and holds classes for kids and adults. “We run 50 to 60 kids at a time. We teach them how to score on paper, how 3D targets work. Safety is No. 1 above everything. I have six or seven people helping here with the kids.” He also hosts a variety of tournaments at the indoor range.

Not your father’s ATV

Brende oversees a playground of motorized toys for adults at Snell Powersports. Started a few years ago by Todd Snell, who owns the Snell car dealership, the business focuses on a wide variety of machines. “We carry everything from ATVs and pontoon boats to lawn mowers and three-wheel motorcycles.” Brende said the biggest seller remains the four-wheel ATVs, machines that have gotten more dependable, bigger and more powerful over the years. “But the side-by-sides are growing fast. The side-by-side is a small two- to six- person four-wheel drive off-road vehicle, also called UTV (utility-task vehicle) or ROV (recreational off-highway vehicle). “People from their early 20s to the upper 70s buy them. We get a lot of farmers who buy them and a lot of recreational guys. They’ll haul them up to the cabin or go trail riding up north or in South Dakota or Wisconsin.” He said many people like them not only because they can haul things with them, but because a spouse can ride

along or they can buckle their child in next to them. “There are some four-seaters, but we don’t sell too many. They just get a little too big. They’re the size of a small pickup, so they’re harder to haul around.” While ATVs have taken over in popularity, snowmobile sales are still strong he said. “Surprisingly, the last couple of years have been good for us. There are still a lot of die-hards who will trailer their snowmobiles and travel out west. A lot of people go to northern Colorado, Wyoming, the Yellowstone area.” In the spring and summer, Snell Powersports focuses on jet ski, pontoon, motorcycle and mower sales and service. They sell Can-Am Spyder three-wheel motorcycles. “The three-wheel is really catching on. It’s primarily older riders who are taking their wives along and we sell quite a few to women who don’t feel as comfortable on two wheels but want to ride.” Their lawnmower lines feature commercial and consumer mowers. “We try to carry the professional-grade mowers, not what the big-box stores are selling.” Commercial mower customers include farmers and people with acreage as well as landscaping and lawn care companies. “A key with the mowers is the service and quick turnaround and pickup and delivery we offer. Especially this year when the lawns wouldn’t stop growing.” They have 15 employees, including five technicians. “We carry so many brands so we have guys who specialize in each thing. Everything changes often so there’s a lot of training — four times a year — on what’s new and what’s changing,” Brende said “It’s getting just like vehicles where you can’t diagnose them without a computer. There’s not a lot of old-school testing of them, you just can’t do it.” MV

MN Valley Business • November 2015 • 17

Lacey Lueth, owner of Lola – An American Bistro in New Ulm.

A bustling bistro Lola’s finds a niche in New Ulm

By Heidi Sampson | Photos by Pat Christman

acey Lueth, owner of Lola – An American Bistro in New Ulm, started working in the food service industry at the age of 14. After high school, she completed the culinary program at South Central College in North Mankato. For a few years following graduation, Lueth worked at Neighbors – An Italian Bistro. However, even though she enjoyed the work and the atmosphere she couldn’t shake the feeling that it was time to think about

starting her own business or to simply settle into working for someone else. She preferred the former idea to the later. Seeking a change, she began looking for a building in New Ulm. At that time, the Larkspur Market, a venue that specialized in high-end retail items for the home, with the back half of the store consisting of deli items was looking to sell. Lueth fell in love with the Larkspur’s gigantic building, the antique

Profile

18 • November 2015 • MN Valley Business

Lola’s features a big, airy interior in a historic downtown New Ulm building. decorative tin ceiling tiles, the inner brick walls and the oblong spacious flooring the building offered. With three floors of similar size, it was the perfect setup for what she had in mind and would allow for future growth. In February of 2009, she opened Lola – An American Bistro, named after her eight-year-old daughter, Lola. Lueth decided not to do a similar retail format in the front half of her store, but rather decided to focus in on the menu and food items available to customers as her niche. “I’ve remodeled throughout the years some,” said Lueth. “We’ve re-done the kitchen and some remodeling up front but I’d say it’s been more aesthetic work. There used to be a mural all over the back wall. Except, that wasn’t something that was my particular style, so we painted it all white. We do have artwork for sale from local artists. I guess I’d say it’s kind of a hodgepodge arrangement of items, but that is kind of my style.”

The Bistro

Lola – An American Bistro provides various kinds of coffee, espresso, cappuccinos and other drinks. They boast hand-made bakery items that are made fresh every morning such as, scones, muffins, cookies, Scotcharoos, a vanilla bean Creme Brulee, and torte’s to name a few. On the breakfast menu, customers will find specialties such as Drunken Apple Cinnamon French Toast, homemade buttermilk pancakes, a couple of different kinds of hashes as well as a scrambled egg, sage sausage patty and tomato chutney sandwich. At lunch, patrons will find a variety of pasta items, fresh salads, a Pork Banh Mi, potpies, and their grass-fed burger. “We try to provide our customers with a wide variety of foods,” she said. “The potpies are a local favorite, especially in the winter. However, customers will eat potpies in the summer when it’s 95 degrees out.

“I like to travel to different places and from my travels I bring back different food ideas. I believe that my food menu is kind of eclectic and yet, it frequently changes so that regular customers are able to find something new here too.” With Lola – An American Bistro’s success under her belt, Lueth obtained a catering contract with the New Ulm Event Center, which means she now caters all events taking place at that location as well. During the summer months weddings can be back-to-back on both Friday and Saturday evenings. A new edition to the Bistro’s food service is a food truck capable of taking their cuisine on the road to various town functions, festivals or farmers markets. The food truck was purchased at the end of July. One of their first trial runs with the food truck consisted of attending the local farmers market. After arriving at the market, the food truck purchased fresh food from the farmers and then proceeded to create a food creation that could be sold to farmer’s market goers. Lueth believes that the food truck opens up a whole new realm of possibilities, such as offering food at town functions, catering a business’ lunch hour, or even providing late snacks at a wedding. Her plan is to expand upon the truck’s capabilities throughout this next year while also maintaining balance. With the edition of the food truck, Lola – An American Bistro boasts 32 employees, most of which are part-time. However, that is a remarkable difference from the original 12 employees Lacey started out with a mere seven years ago. “We’ve grown over the years from when we first started,” she said. “At first we just hoped someone would come into the business to knowing we are going to be busy every day. Our growth has been tremendous. It’s due to the loyalty of my employees, as well as our customers. We’ve MN Valley Business • November 2015 • 19

The recent addition of a food truck allows for visits to area events and festivals. been very fortunate. Sometime I drive up and it’s like this massive building and I think, ‘what did you do?’ ” she said. “But I love it. We have a fast–paced environment that is always changing. We are small enough to change on the fly with our food menu items. We try to focus more on farmraised chicken, all natural grass-fed beef. Fresh produce but from a CSA. Try to buy local as much as possible.” MV

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20 • November 2015 • MN Valley Business

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MN Valley Business • November 2015 • 21

VP Doug Faust of Fine Impressions

22 • November 2015 • MN Valley Business

Season’s Greetings! And then some Fine Impressions goes full speed

By Pete Steiner Photos by Pat Christman

he greeting card business may have been hit as hard as any by the social media revolution. But a North Mankato executive remains upbeat about the industry’s future. Doug Faust is vicepresident of sales and marketing for Fine Impressions, a Taylor Corp subsidiary. Having moved into a new 20-thousand-square-foot space adjacent to Taylor’s Carlson Craft last June, the Fine Impressions work force was going full-bore in mid-October to complete the Christmas rush. Chances are, if the greeting card you receive this season wasn’t produced by Hallmark or American Greetings, it might have come off one of the dozens of presses at Fine Impressions in upper North Mankato. The smell of ink drifts over from the adjacent Carlson Craft as you enter Fine Impressions’ production floor. The constant clatter of presses has many workers wearing earplugs. Fine Impressions takes over once the cards are designed, many of them in-house by artists for Taylor’s Occasions Group. Faust leads a visitor past numerous machines with orders that are being processed – at least 20 different orders on this day alone. Orders can range anywhere from 1,000 to 50,000 cards. “A large part of what we do,” Faust explains, “is ‘Business to Business’ greetings,” and so a big corporate customer will place an order for cards to be sent to clients. In all, the company will print 24 million cards this year, although that’s just one percent of the total in this $8 billion U.S. industry.

“clam-shell” process, with two “halves” pulling together forcefully to heat and emboss or foil stamp a fancy card. Ever gotten a card with a raised, sparkling silver star, or one with the glittering gold of three Wise Men? That could have been done by a Kluge (KLOO-gee). One fancy card, after being cut to size, may go through several stampings or embossings before it’s boxed up and put on a shelf. Faust says high-end cards, in the $6-$8 range are a growing trend, especially for special people on special occasions. As MarketWatchdot-com’s Quentin Fottrell puts it, some occasions still DEMAND a traditional greeting card: Mother’s Day, Sympathy cards, a loved one’s birthday, and above all, he says, DO NOT TWEET anniversary greetings to your spouse!

Spotlight

••••

One production line over, newer, larger NSF Thermo Presses are running an order. And so are some “Heidelberg” foil-stamping machines: Fine Impressions still keeps half-adozen of these 80-year-old machines for jobs requiring a lighter touch. The scheduling department decides which press gets which job, then sends the order to the production manager. The key, Faust says, as in most manufacturing businesses, is to balance inventories to maintain “just enough.” On the production floor, one operator may be running three or four machines at a time. Each press operator is responsible for their own •••• production quality standards, and each has a Cards that first require small ruler, which they apply One of the greeting cards made by Fine Impressions. four-color printing come to the test run. If a color or over from Taylor’s Corporate a stamping is even oneGraphics. Specialty imprinting for finished cards will be thirty-second of an inch off the artist’s template, the metal done later by Carlson Craft, adjacent down a long corridor. die has to be painstakingly reset. Set-up is the biggest cost Fine Impressions specializes in custom finishing, foil in the process. “This business is about relationships,” stamping, embossing, and laser-cutting. The work is Faust said. “You send a card because you CARE. But the accomplished using several types of machines. “Kluges” press operator cared first. They really care about what are veteran machines that use what can be described as a they do.”

MN Valley Business • November 2015 • 23

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The greater industry has recognized that fact, bestowing on Fine Impressions, 15 industry awards for quality work over the last four years. •••• “We are the largest supplier [of cards] to stores like Macy’s, the BonTon Group (Herberger’s) and others,” Faust says. But a lot their product also goes to “Mom and Pop specialty shops.” Right now, it’s mostly Christmas cards, although there’s one very large order being printed this day of thousands of customer satisfaction/coupon cards to be shipped to a major pizza chain. Way in the back of the production floor are two large laser cutters that can do filigreed poinsettias on Christmas cards. Today, the laser cutting beams dance across card stock, cutting intricate designs on personalized invitations to a tasting at a California winery. A month from now, most of the production orders will switch over to wedding invitations or graduation cards, although Christmas cards are produced year-round. Faust is proud of his group’s work longevity – the 100 employees’ average length of service is more than 14 years. While he prefers someone with a “craftsman” aptitude, he adheres to the general Taylor Corp philosophy: “We hire good people. We can teach them the job.”

under 11,000 now, according to NPR, about half of what it was five years ago. But card sales have stabilized at about 6.5 billion annually; that’s about 22 cards a year for each U.S. citizen. There’s hope that just as music lovers have re-embraced vinyl, people will turn from social media to more tangible means of _expression, especially for those very special occasions. Huffington Post cites one New York specialty store where card sales have increased every year for the past five years – especially those high-end cards. At a recent industry convention where everyone from Hallmark to small specialty printers exchanged sales and production tips, Faust said one exercise had groups collaborate to write a song about greeting cards. Here is his verse: “87 posts on your Facebook page, Tweets and e-mails, too; Nothing very personal ‘bout the electronic age, So you know what I am gonna do!” He turns philosophical: “Facebook has also RENEWED connections, [and if it’s] on a deeper level, I’m doing more than just posting on their Facebook page…. We survived the Great Recession. I’m bullish about where we’re at, excited to be doing what we’re doing.” MV

•••• The greeting card industry has struggled under the assault of digital media. Giant Hallmark’s workforce is

MN Valley Business • November 2015 • 25

Denis Schoemaker and his wife Linda Tinsley run Prairie Automation on Schoemaker’s family farm southwest of Lake Washington with Grant Robertson, Mike Petersen and Rick Brennhofer.

Precise and custom made Prairie Automation grew on family farm By Heidi Sampson Photos by Pat Christman

enis Schoemaker grew up on the family farm southwest of Lake Washington, which is also the location of his home and business, Prairie Automation. Daryl Schoemaker, Denis’s father, was born on that same family farm, having only had one address his entire life. In the 1970s, Daryl started a machine shop on the farm called Mankato Metric Machinery. However, his interests were more along the lines of fabrication and farm repair, which were not really the same interests as those of Denis. Denis recalls spending his childhood working in his dad’s shop on his mini bikes

and go-carts, as the seeds for his own future were being planted. Before starting Prairie Automation, Denis worked in Mankato with the Taylor Corporation for 16 years. Initially he worked in the machine shop at Taylor, but as time went on they built an engineering shop around him. Schoemaker designed and built all of their custom equipment that Taylor couldn’t buy on the market. “They were one-off types of machines,” Schoemaker said. “After 16 years there, I finally got the bravery to try it on my own.” In 2003 he left the Taylor Corp. to build his own shop on the family farm right beside his

Feature

26 • November 2015 • MN Valley Business

Prairie Automation creates one-of-a-kind pieces, doing everything from initial designs to final production. father’s business. Shortly after, Prairie Automation was in full swing. “For a while, we had two businesses on location,” he said. “As time went on we slowly evolved into only Prairie Automation. My father still lives on site. Technically, he has retired but he still has a few key jobs that he likes to do to keep himself busy. He also likes to see what we have going on with our new automation projects.”

Creating Automation

Prairie Automation is a small company, with five employees. Schoemaker does all of the mechanical design. His other employees handle things like programing the PLC, computer controls, assembly, and machining. Sometimes, trying to find the right jobs to keep everybody with just the right amount of work can be tough to negotiate, but a challenge Schoemaker enjoys. “We did experience a downturn during the recession,” he said. “However, we were fortunate to land a couple of key jobs that kept us going during that time. We also have a really good customer base. So although there has been a lot of growing pains and a lot of long hours dealing with little sleep, it’s all been worth it. It takes a long to get that customer base built.” Besides the custom automation projects, Prairie Automation also participates in a lot of job-shop machining projects. That keeps the shop busy when they are inbetween their big machine builds or custom automation designs. Job-shop machining is when someone comes in

and needs something particular done to a part they may already have, or may have a need for a particular part created for a particular job. “We do big automation robot vision inspection, which is the biggest thing now that we do. Automation robot vision inspection involves using vision cameras to inspect parts for quality control - so the robot is looking for flaws in the molding of parts for some assembly work.” All of Prairie Automation’s projects are one-offs of custom designs. However, they are still looking for that one project where they can build one particular machine that people will want and end up building five or six of those a year. They would then fill the time in between with builds for custom stuff but they haven’t found that key component yet. Instead Prairie Automation starts the design phase all over with every project that comes through the door. How long does it take to do a project? That all depends upon the size of the project. Typically they have smaller projects that they can turn around in one or two days. If they are working on a bigger robotics vision system, it might be 14-18 weeks before it is ready for delivery. “A lot customers come to us saying we need this to be assembled,” Schoemaker said. “They might say they have a row of people doing this particular project by hand. We ask how many people they have doing it, what parts they are constructing and how the totality of their line comes together. From there we build their project from the ground up or what we sometimes call, the inside out – starting with what we know and building out from there.”

MN Valley Business • November 2015 • 27

Since Prairie Automation is smaller in size they try to keep most of their business in Minnesota, or at most the five state areas. This is due to programing, repairs and upkeep of the products in which their staff is also involved with. “We are kind of dead in the water without that person here to work on the next project,” Schoemaker said. “Sometimes our customers sell our machines and they end up spread out farther than we anticipated. For instance, we have one machine in New Mexico and one in South Carolina right now.” In the future he would like to grow the business to be able to back up each of his five key players. Since he lives right next to his business, he doesn’t want a huge industrial complex outside his front door either, so balance would be optimal. “I also think part of our success if that our customers like us being small. They can come in and talk right to us versus going through someone else and maybe never getting a chance to talk to the creator of the project.” Despite the challenges, Schoemaker said he likes building unique things from scratch. “This is rewarding work. We build a piece of equipment, program it and see the product actually come to life.

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28 • November 2015 • MN Valley Business

Construction/Real Estate Residential building permits Mankato

(in thousands)

- 2014 - 2015 $16,214

18000 13500

$4,421

Source: City of Mankato Information based on Multiple Listing Service and may not reflect all sales

- 2014 - 2015 220

275

Includes single family homes attached and detached, and town homes and condos

Housing starts: Mankato/North Mankato - 2014 - 2015 40

175

220

165

14 12

110

55 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2014 - 2015

Commercial building permits North Mankato

- 2014 - 2015 (in thousands)

4000 3000 2000

$1,301 $5,027

5.5 5.0

4.0%

4.5 4.0 3.5

3.9% M

Source: Freddie Mac

Foreclosures: 2014 Year End

— 2014 — 2015

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

$165 $316

1000

Source: City of Mankato

3.0

$2,502

Source: City of North Mankato

Existing home sales: Mankato region

80000 70000 60000 50000 40000 30000 20000 10000 0

3000

1000

4500

- 2014 - 2015 (in thousands) $1,236

2000

9000

Residential building permits North Mankato

County

2013

2014

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

101 19 27 70 25 43 39 36 24

72 21 21 47 28 24 22 27 7

-29% +11% -22% -33% +12% -44% -44% -25% -71%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • November 2015 • 29

■

Agricultural Outlook

By Kent Thiesse

Balancing high rental rates and low prices

ost land rental rates in South Central Minnesota increased from 40-50 percent or more from 2010 to 2014, according to farm business management land rental data compiled by the University of Minnesota. Average rental rates for 2015 were steady to slightly lower in many areas, compared to 2014; however, many land rental rates were above breakeven levels for many crop producers. Farm operators and landlords are now beginning the process of negotiating land rental contracts for 2016, and are trying to arrive at equitable rental rates. The commodity prices for corn and soybeans dropped significantly in the past couple of years, due to higher levels of U.S. corn and soybean production in 2014 and 2015, and the associated large increases in the U.S. grain supplies. USDA recently released the final national market year average crop prices for the 2014-2015 year, which were $3.70 per bushel for corn and $10.10 per bushel for soybeans. The prices in other recent years for corn were $4.46 per bushel in 2013-14, $6.89 in 2012-13, and $6.22 in 2011-12. Recent soybean prices were $13.00 per bushel in 2013-14, $14.40 in 2012-13, and $12.50 in 2011-12. USDA is currently estimating the 2015-16 average prices near $3.80 for corn and $9.15 for soybeans. Current cash corn prices are near $3.30-$3.40 per bushel at most locations in the Upper Midwest, while cash soybean prices are near $8-$8.50 per bushel. Forward pricing opportunities for the Fall of 2016 for next year’s corn and soybean crop are very near the current cash grain prices. Many farm operators could face a substantial loss per acre at the current projected commodity prices for corn and soybeans in 2016, if the 2016 land rental rates are not adjusted to lower levels. Crop input costs for seed, fertilizer, chemicals, fuel, and crop drying are not likely to decline significantly for the 2016 crop year. Based on Southern Minnesota farm business management records, the average total direct costs in 2014 for seed, fertilizer, chemicals, fuel, etc., excluding land rents, on cash rental corn acres was just over $500 per acre. Fertilizer costs, and some other expenses, declined slightly for 2015; however average direct expenses for corn are probably still in a range of $450-$500 per acre for many farm operators. The average direct expenses in 2014 for soybeans in Southern Minnesota, excluding land rent, were approximately $220 per acre. Average soybean direct expenses for 2015 are likely to be similar to 2014 expense levels. In addition, the 2014 records showed an average of $115 per acre on cash rented corn acres, and $71 per acre for soybeans, for costs of farm machinery, hired labor, property insurance, and other overhead expenses. Based on the records, the average crop yields for 2014 across southern Minnesota were about 164 bushels per acre for corn and 47 bushels per acre for soybeans. At those yield levels, along with the average direct and overhead expenses listed earlier, and an average land

30 • November 2015 • MN Valley Business

rental rate near $245 per acre, the breakeven price to cover the cost of production about $5.28 per bushel for corn and $11.33 per bushel for soybeans. If 2014 crop insurance payments are included, as well as some return to the farm operator for labor and management, the “true” breakeven prices for 2014 were $4.62 per bushel for corn and $10.85 per bushel for soybeans. Of course, there can be a big difference in crop yields and crop expenses from farm-to-farm that can cause the breakeven price to either increase or decrease from the average calculations. Breakeven crop prices for corn and soybeans in 2015 may be slightly lower than the 2014 levels for many farms, due to the exceptional yields in 2015. However, as we plan ahead for 2016, with more normal yields and fairly steady crop expenses, breakeven price levels are likely to be higher than current 2016 price projections in many instances. University of Minnesota Extension puts out an updated summary of “Cropland Rental Rates for Minnesota Counties” each year. The annual summary is comprised of cash rental rates paid by farm operators in the previous years, based on actual farm business management records from across Minnesota. The most recent summary released in July listed the average cash rental rates for 2010-2014 for counties in south central Minnesota. COUNTY

AVERAGE RENTAL RATE ($$$ Per Acre) 2010 2011 2012 2013 2014

Blue Earth County Brown County Faribault County Le Sueur County Martin County Nicollet County Waseca County Watonwan County

$174 $154 $173 $169 $181 $169 $160 $165

$194 $173 $194 $179 $210 $197 $175 $177

$222 $207 $221 $233 $254 $233 $216 $218

$229 $208 $243 $261 $274 $251 $237 $256

$240 $211 $243 $267 $272 $263 $236 $239

Land rental rates for 2014 in most of the counties listed ranged from about $150 per acre to well over $300 per acre. Average land rental rates were nearly steady from 2013 to 2014, but increased by an average of 10.7 percent per year from 2010-2014. The land rental rates in the U of M summary include both rental agreements between family members, as well as non-family members. Rental rates on agreements between family members tend to be somewhat lower than the average rental rates. An alternative to the continuation of high cash rental rates for 2016 may be for producers and landlords to consider a “flexible cash lease” rental agreement, which allows the final cash rental rate to vary as crop yields and market prices vary, or as gross revenue per acre exceeds established targets. There are many variations to setting up a flexible lease agreement between a landlord and farm operator. It is important to farm operators to keep the “base rental rate’ at a level that at least allows them to

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2014 — 2015 8

12 8

Iowa-Minnesota hog prices

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2014 — 2015 140

$9.27

$3.18

Source: USDA

$24.82

110

Minimum prices, class 1 milk Dollars per hundredweight

— 2014 — 2015 30

125

95 80 65 50

$11.44

(dollars per bushel)

— 2014 — 2015 20 $3.28

Soybean prices — southern Minnesota

Source: USDA

$107.46

$77.10

$17.10 J

Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

breakeven on their crop input costs and land rental expense. The big key, regardless of the type of flexible lease agreement, is that both the landlord and tenant fully understand the rental agreement, and the calculations that are used to determine the final rental rate. It is extremely important that all aspects of a flexible land rental lease agreement be spelled out in detail in a written rental contract, which is signed by all parties. Successful “flexible cash lease” agreements, as well as normal land rental agreements, have always involved

Source: USDA. Based on federal milk orders.

cooperation, trust, and good communication between the farm operator and the landlord. In many cases, landlords have been reluctant to lower land rental rates, due to the high commodity prices that existed from 2010-2013, and the good to excellent crop yields in 2015, as well as strong demand for rented crop land in recent years. However, it appears that crop economics have changed significantly from levels that existed in recent years, and that at normal crop yield levels and expected crop expenses, it will be difficult for farm operators to

C. Sankey

achieve breakeven levels in 2016. This could temper the strong demand for rented land at higher land rental rates. Serious and honest negotiation between farm operators and landlords will be required to arrive at equitable rental rates for 2016. MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

Planning for success? From appraisals to farm management to real estate transactions—you can count on the professionals at Upper Midwest Management to help you make sound decisions. Give us a call at 507-359-2004 or visit www.ummc.co to learn more today.

Read us online! New Ulm • Olivia • New Hope • Faribault

www.ummc.co

MN Valley Business • November 2015 • 31

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major September Industry ‘14 ‘15 Construction Manufacturing Retail Services Total*

73 167 37 143 420

Percent change ‘14-’15

82 332 28 111 553

Major Industry

+12.3% +98.3% -24.3% -22.4% +33.7%

September ‘14 ‘15

Construction Manufacturing Retail Services Total*

2,406 1,784 1,097 4,214 9,501

Percent change ‘14-’15

2,201 2,959 824 3,510 9,494

-8.5% +65.5% -24.9% -16.7% -0.1%

Services consist of administration, educational, health care and social assistance, food and other miscellaneous services. *Categories don’t equal total because some categories not listed.

Local non-farm jobs

Minnesota Local non-farm jobs

- 2014 - 2015

Nine-county Mankato region

127,125 126,120

133000

2000

111000

1000

Local number of unemployed

- 2014 - 2015

Nine-county Mankato region

200000

8000

150000

4,750 4,368

- 2014 - 2015

114,720 104,250

100000

4000

50000

2000 0

Minnesota number of unemployed

10000

6000

2,887 2,913

3000

122000

100000

- 2014 - 2015

(in thousands)

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) August

2014

2015

3.1% 55,317 1,765

2.8% 55,931 1,639

Source: Minnesota Department of Employment and Economic Development

32 • November 2015 • MN Valley Business

County/area Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

August 2014 3.0% 3.5% 3.8% 3.7% 3.9% 2.6% 3.6% 3.9% 4.1% 3.6% 3.6% 6.3%

August 2015 3.3% 3.5% 4.0% 3.9% 4.0% 2.8% 3.6% 4.1% 4.1% 3.3% 3.5% 5.2% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2014 - 2015

1,111 1,057

1200

(In thousands)

500

800

400

600

300

400

200

100 J

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato $47,450 $26,563

60000

- 2014 - 2015 $47,450 $26,563

22000 J

$2.47

3 2

$2.87

1 M

Gas prices-Minnesota — 2014 — 2015 $2.92

4 3 2

$2.48

1 F

Source: City of Mankato

— 2014 — 2015

Gas prices-Mankato

44000

Source: City of Mankato

66000

10000

88000

20000

Source: Sales tax figures, City of Mankato

110000

30000

- 2014 - 2015

40000

$413 $461

Mankato food and beverage tax

50000

- 2014 - 2015

600

1000

Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

Sales tax collections Mankato

Stocks of local interest

Sept. 11

Oct. 13

Percent change

Archer Daniels

$42.82

$44.92

+5.0%

Ameriprise

$109.72

$107.99

-1.6%

Best Buy

$37.99

$37.03

-2.5%

Crown Cork & Seal

$49.03

$50.53

+3.1%

Consolidated Comm.

$19.10

$19.66

+2.9%

Fastenal

$38.67

$37.95

-1.7%

General Growth

$24.95

$26.87

+7.7%

General Mills

$58.47

$56.58

-3.2%

Hutchinson Technology

$1.37

$1.82

+32.8%

Itron

$28.30

$34.38

+21.5%

Johnson Outdoors

$22.71

$21.49

-5.4%

$141.26

$149.11

+5.6%

Target

$77.88

$78.97

+1.4%

U.S. Bancorp

$41.06

$41.40

+1.0%

Wells Financial

$30.50

$33.00

+8.2%

1.74

$1.75

+0.6%

$33.16

$35.90

+8.3%

Winland Xcel

Source: GasBuddy.com C. Sankey

MN Valley Business • November 2015 • 33

#5 BEST SMALL CITY IN AMERICA

2015 List of Best Small Cities in America from nerdwallet.com. #liveworkplaymankato

HOME TO ONE OF THE

COOLEST

Sibley Park ranks #9 on NewsCastic’s 2015 list of coolest playgrounds in MN. #liveworkplaymankato

2014 ranking from The American Institute for Economic Research. #liveworkplaymankato

PLAYGROUNDS in MINNESOTA

HOME TO ONE OF THE

HOME TO THE

Greater Mankato Growth

WINERY Chankaska Creek Ranch & Winery on the 2015 Star Tribune Best of List. #liveworkplaymankato

COOLEST COOLEST URBAN URBAN SPACES IN SPACES IN AMERICA AMERICA HOME TO ONE OFTHE

BEST MINNESOTA

#19 IN THE # NATION FOR IN TOPWINERY COLLEGE MINNESOTA TOWNS

GREATER MANKATO

THE WAY TO GROW

See what it’s like to #liveworkplaymankato by watching our video, Way to Grow on YouTube.

CityArt Walking Sculpture Tour ranked #3 in nation according to Thrillist in 2014. #liveworkplaymankato

#liveworkplaymankato For more awards and accolades visit greatermankato.com/awardsaccolades or search #liveworkplaymankato from your favorite web browser.

34 November 2015 • MN Valley Business 1 •• JANUARY 2013 • MN Valley Business

Extraordinary things are happening right here that make this region a vibrant place to live, work and play. So go ahead, follow along and add to the conversation across social media on why you love to #liveworkplaymankato.com.

What’s your Greater Mankato story? By Amy Linde, Director of Marketing & Communications, Greater Mankato Growth

hen you think of your home, what comes to mind? Your house, neighborhood, family and friends? What about your experiences or your place of employment? Chances are what makes your home is more than just a building.

Once one starts looking at possibly relocating there are many questions to think about other than just landing that perfect job. For example, many people put in countless hours of research on schools, health care, recreation, parks, volunteer opportunities as well as the arts and culture scene. They ask themselves, is this a

Greater Mankato residents and visitors should consider sharing their story. They make this place what it is, they make it different than any other community. From their welcoming persona to their work ethic, they are open and willing to engage in the community, to make it a better place. We are certainly not a perfect community but that’s what makes us thrive and remain open to improving all the time. There are many great awards and accolades popping up for us all the time but you know what? Greater Mankato gets these recognitions because we allow engagement and feedback, we tend to embrace ideas and move the bar forward, and we all do it together.

As residents, our everyday experience is certainly extraordinary to someone who has never been here. We don’t always recognize this, it can be really hard to pinpoint, understand or communicate for us. Isn’t that the Minnesotan way in which we were raised? Be humble and not to boisterous. But today, Greater Mankato knows itself better than it has in the past. The people of the community and visitors to Greater Mankato repeatedly hark accolades of this community and their experience here. We could go on for days about what it’s like to live, work and play in Greater Mankato. But nothing tells the story better than each of your photos and stories about your experiences and favorite places here.You all have the ability to tell the Greater Mankato story. Share yours today on social media using the hashtag #liveworkplaymankato.

MN Valley Business • November 2015 • 35

Greater Mankato Growth

Whether you are a lifetime Greater Mankato resident or have chosen to move here, there are probably a few things that swayed your decision. Was it for a career? Was it for schooling or a loved one? When people make a decision to either stay put or move several factors go into their final decision, it’s usually not only for their dream job (yes, that is important as well).

community I will feel at home in? Is it somewhere I will enjoy life outside of work or school? Moving or choosing to stay in a community is no easy decision, it comes with lists of pros and cons and ultimately a choice is made that suits each individuals long term goals best.

Congratulations 2015 Business Award Honorees Register Online to attend the November 17 event

Greater Mankato Growth, Inc., which includes Greater Mankato,Visit Mankato and City Center Partnership, is proud to announce this year’s 2015 Greater Mankato Business Awards & Hall of Fame Honorees. The Greater Mankato Business Awards & Hall of Fame, Portraits of Success, will be held on November 17, 2015. Members of Greater Mankato Growth are cordially invited to join in celebrating the accomplishments and successes of this year’s award honorees. The event starts at 5:30 pm with social hour, dinner is served at 6:30 pm and the program begins at 7:00 pm. Registration is required for the event and closes on November 11, 2015. To learn more and register visit: greatermankato.com/business-awards-hall-fame.

Greater Mankato Growth Honorees Hall of Fame: Community Bank and Tailwind Group Distinguished Business Award: Greg’s Champion Auto Entrepreneurial Business Award: Freedom Home Care, LLC Brian Fazio Business Education Partnership Award: South Central College & CliftonLarsonAllen Hap Halligan Leadership Award: Eric Oleson Young Professional of the Year: Elizabeth Harstad

Visit Mankato Honorees

Greater Mankato Growth

Bring It Home Award: Minnesota Vikings 50th Training Camp Hospitality Award: Peter Olson, Children’s Museum of Southern Minnesota

City Center Partnership Honorees Renovation Over $3,000,000: Children’s Museum of Southern Minnesota Building - Children’s Museum of Southern Minnesota and City of Mankato New Construction over $5,000,000: Profinium Place - Tailwind Group and Mid Rise Holdings CityArt “People’s Choice” Award: To be revealed at event Presented by:

36 November 2015• •MN MN Valley Business 1 •• JANUARY 2013 Valley Business

Delegates Travel to Columbia, Missouri A delegation of 80 business and community leaders will travel to Columbia, Missouri November 8-11, 2015 for this year’s Greater Mankato InterCity Leadership Visit (ICLV), an initiative of Greater Mankato Growth, to study innovative ideas and best practices that may be adapted to the Greater Mankato region. Of particular interest will be the way Columbia has addressed top priorities and goals identified by the Envision 2020 community visioning plan that includes focuses on business and economic development, workforce development and education, healthcare, downtown revitalization and development and sports facilities. The Greater Mankato Leadership Delegation was last called together four years ago in 2011 for a visit to Charlottesville,Virginia. Preceding that experience was a visit to Fort Collins, Colorado in 2006 and a visit to Bellingham, Washington in 2005. This first ICLV visit helped shape the beginnings of Envision 2020 in Greater Mankato. For more information on this year’s ICLV trip or the history of the program visit greatermankato.com/leadership-delegation or follow the trip on social media using #gmgiclv.

5:00 - 7:00 pm November 3 December 1

Blethen, Gage & Krause Gislason & Hunter

2015 Business After Hours Sponsored by:

November 11 December 16

Consolidated Communications Wells Federal Bank

2015 Business Before Hours Sponsored by:

September Business Before Hours Hosted by Vista Prairie at Monarch Meadows

Business After and Business Before Hours gives representatives from GMG member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each other’s businesses. For more information on these and other member events, visit greatermankato.com/events.

MN Valley Business • November 2015 • 37

Greater Mankato Growth

September Business After Hours hosted by Mayo Clinic Health System - Eastridge

7:30 - 9:00 am

NEW LOCATION

Greater Mankato Growth

Growth in Greater Mankato

RIBBON CUTTING

GROUNDBREAKING Abdo, Eick & Meyers, LLP 100 Warren Street, Suite 600 Mankato, MN

Anchor Bank 101 North Second Street Mankato, MN

NEW LOCATION

RIBBON CUTTING - RENOVATION

RIBBON CUTTING - NAME CHANGE

Blethen, Gage & Krause, PLLP 100 Warren Street, Suite 400 Mankato, MN

Buffalo Wild Wings 301 Saint Andrews Drive Mankato, MN

Consolidated Communications 221 East Hickory Street Mankato, MN

NEW BUSINESS

75TH ANNIVERSARY CELEBRATION

NEW LOCATION

Moonshiner Patio Bar 526 South Front Street Mankato, MN

NAPA Auto Parts of Mankato 2000 North Riverfront Drive Mankato, MN

TurningPoint Management, Inc 100 Warren Street, Suite 202 Mankato, MN

Cavaliers

Connect Real Estate Group 1040 South Victory Drive Mankato, MN connectmankato.com

Cavalier Calls on the Newest Greater Mankato Growth Members

Mankato Acupuncture Clinic, LLC 530 North Riverfront Drive, Suite 130 Mankato, MN mankatoacupuncture.com

38 November 2015• •MN MN Valley Business 1 •• JANUARY 2013 Valley Business

Mills Fleet Farm 1850 Premier Drive Mankato, MN fleetfarm.com

ions

Verizon Wireless Expansion to Bring in Millions in Economic Impact to Greater Mankato By: Kathryn Reeder, Brand Manager,Visit Mankato

he Verizon Wireless Center, part of the City Center Convention Campus, is currently undergoing a $31 million expansion which will have profound impact on the Greater Mankato community and open doors of opportunity for bigger and better event hosting beginning in 2016. The expansion is especially important to Visit Mankato staff members Danielle Duffey and Chris Willaert. Duffey, Convention Sales Director and Willaert, Sports Commission Director, have been talking up the expansion to meeting and sports planners and are both anxiously awaiting its completion. “The anticipated economic impact of the expansion is $50 million annually and with it brings the creation of 10 new jobs at the Civic Center and 450 construction jobs,” said Willaert. “Projects like the expansion is what excites meeting and sports planners about destinations.” Duffey works with meeting planners nationwide to book conventions in Mankato, while Willaert works with National Sport Associations to book sports tournaments in the community. The new auditorium in the Civic Center will seat up to 2,500 people, allowing for a Maverick Hockey game and a headliner concert in the same evening. The new auditorium provides for a more intimate atmosphere and can accommodate for events of all types. Retractable first floor seating will allow for a flat floor space for tradeshows and expos. A portable stage, rigging, lighting, audio visual equipment and acoustics will support a variety of events. A first and second floor lobby will accommodate pre-function uses and concessions. The existing facilities will also undergo renovation and receive a facelift. “I am excited about the first and second floor lobby. It will be a great pitch for meeting planners when it comes to pre-function uses and networking atmospheres,” said Duffey.

To watch a video featuring a flyover of the new expansion, go to meetinmankato.com. The Verizon Wireless Civic Center Expansion is set to be complete in 2016 and will be a wonderful asset to the community in many ways. Do you have questions for the Visit Mankato staff members directly working with this project? Contact them at the information below: Danielle Duffey,Visit Mankato Convention Sales Director | dduffey@visitmankatomn.com | 507.385.6662 Chris Willaert,Visit Mankato Sports Commission Director | cwillaert@visitmankatomn.com | 507.385.6663

MN Valley Business • November 2015 • 39

Greater Mankato Growth

In addition to pre-function space, the expansion will feature additional breakout rooms. With the increase in breakout rooms, this allows Mankato to attract and accommodate larger conventions that we had not been able to bid on in the past.

» C OME JUDGE

for Yourself.

GOLFERS FROM AROUND THE WORLD COME TO CHALLENGE THE JUDGE and the two other golf courses in Prattville at RTJ Capitol Hill. Bring your clubs and come take on Judge hole number 1, voted the favorite hole on the Trail. Complete your day in luxury at the Marriott and enjoy dining, firepits and guest rooms overlooking the Senator golf course. With the Marriott’s 20,000 square feet of meeting space, 96 guest rooms and luxurious Presidential Cottage combined with three world-class golf courses, business and pleasure can definitely interact in Prattville.

THE ROBERT TRENT JONES GOLF TRAIL AT CAPITOL HILL is home of the Yokohama Tire LPGA Classic on the Senator Course September 18 to 24, 2014. The Marriott Prattville is part of the Resort Collection on Alabama’s Robert Trent Jones Golf Trail. Visit www.rtjgolf.com or call 800.949.4444 to learn more.