Mnvalley 10 17 by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley October 2017

Sam Ziegler, director of GreenSeam. Photo by Pat Christman

Ag Epicenter Area’s agribusiness dominance growing Also in this issue • MISFIT PRODUCE AT HY-VEE • LENNY HINIKER’S UPHOLSTERY SERVICES CO. • COMMUNITY SUPPORTED AGRICULTURE

The Free Press MEDIA

PAID ADVERTISEMENT

EIDE LIKE I’D LIKE TO KNOW MORE ABOU T

PLANTING THE SEED—TAX PLANNING FOR FARMERS “Don’t judge each day by the harvest you reap, but by the seeds you plant.” - Robert Louis Stevenson

As we at Eide Bailly reflect on our 100 years of business, we recognize that your ag operation also has a history to write. It’s more than a job— it’s your life. There’s lots of factors that go into achieving your longterm goals, and year-end tax planning is a key strategy to set up your business for success.

Planning for Success

By analyzing your current tax situation before the year comes to a close, we can make recommendations to utilize tax planning opportunities— planting the seed, so to speak, to make better informed decisions to minimize your tax liability and keep your business running at its optimal level. Special services such as pre-harvest planning, entity structure, cost segregation deductions, and general accounting tips and tricks are just a few of the ways to keep your business growing.

Tactics for 2017

With most of the major commodity markets being lower, we may want to use this year to relieve some of the buildup in grain income deferrals and prepaid expenses from previous years. Also, future considerations will weigh heavily on attempting to target your ideal 2017 taxable income. Therefore, knowing your inventory levels and where your marketing plan is will be a good early indicator of 2018 income and help to target your final 2017 income.

Focus on What’s Important

When we work with our ag producer clients, we identify and address issues while positioning you for success. You can focus on your work while we watch out for opportunities, pinpoint areas of risk, and work to minimize your tax burden. We’ll work with you to reach your goals, from planting to harvest and everything in between. Our team of ag tax professionals understand that you’ve built your operation with hard work and passion, and we’re here to help you succeed further.

By: Eric Plath, Tax Manager Eric Plath is tax manager at Eide Bailly who helps individual and corporate ag operations navigate the complexities of the tax world. He is a frequent participant in MN Soybean Association and MN Pork Producer Association events as well as the annual FarmFest show.

Contact at 507.386.6288 or eplath@eidebailly.com.

PAID ADVERTISEMENT

Establishing a strong “corporate veil” to shield business owners and assets By Matthew Berger

obligations of officers or managers, directors or governors, and shareholders or members; (b) specify the timing, location, and notice requirements for meetings and procedures for actions by the entity; and (c) impose restrictions (if any) on the admission of new members or transfer of shares or membership interests. 2. Identify and Satisfy Unique Legal and Regulatory Requirements. Agricultural operations are increasingly subject to unique legal and regulatory requirements that do not apply to many other businesses. For example, Minnesota has enacted a corporate farm law that limits the types of business entities that may engage in farming or own agricultural land. Entities engaged in these activities must file a corporate farm report with the Minnesota Department of Agriculture each year. Further, livestock farming operations may be required to obtain construction or operating permits from the Minnesota Pollution Control Agency, counties, and townships where facilities are located, and farms (whether crop or livestock operations) that use significant amounts of water may require a water appropriation permit from the Minnesota Department of Natural Resources. If a new entity is formed, these permits may need to be transferred from the prior owner to the new entity. 3. Maintain Business Records and Follow Business Formalities. Once the business

any businesses, including many farm businesses, organize and operate their businesses through separate business entities (e.g., corporations or limited liability companies). When properly structured, these entities can provide numerous management, succession, and liability protection benefits for farmers and other business owners. But merely creating a generic corporation or limited liability company is not enough to ensure that these benefits will be available when needed. Instead, business owners should obtain professional advice to ensure that the entity is properly formed and tailored to the unique needs of the business and that all on-going requirements for the business are properly maintained. The following summarizes key factors that farmers and owners of agricultural businesses should consider in organizing their business operations. 1. Formation and Initial Organization of the Business. Although corporations and limited liability companies are formed by filing Articles of Incorporation or Articles of Organization, respectively, with the Minnesota Secretary of State, these documents are generally not sufficient for the proper operation of the business. Rather, the business entity and its owners should also create and adopt businessspecific Bylaws or an Operating Agreement that, among other things, (a) define the rights, responsibilities, and

entity is formed, owners must follow the management procedures that they have established in their Bylaws or Operating Agreement. The entity should maintain a corporate record book that is updated to include important documents (such as the Articles of Incorporation or Organization and the Bylaws or Operating Agreement). The persons charged with management of the business must follow the procedures established for the entity and hold regular meetings (for which minutes should be prepared and kept in the record book) or adopt written resolutions to document important business decisions. 4. Maintain Separate Financial Records and Accounts. The finances of a business entity must be maintained separately from the personal finances of its owners and officers. Thus, a business entity should maintain separate bank accounts and avoid intermingling personal funds and paying personal expenses of the owners and officers. The owners must also ensure that the entity is appropriately capitalized for its business operations and liabilities. 5. File Annual Renewals. A business entity is required to file an annual renewal every year with the Minnesota Secretary of State. If an entity fails to do so, it may be administratively dissolved. These steps are important to ensure that business owners reap the full benefits available from forming business entities and cannot be ignored.

Gislason & Hunter LLP is well recognized throughout the Nation for our knowledge and experience in the agriculture industry. Our attorneys represent and advise a broad spectrum of national, regional and local agribusiness clients – including livestock producers, packers, input suppliers, agricultural lenders, and individual farmers – in all aspects of their operations. For over 75 years Gislason & Hunter LLP has been instrumental in the development of integrated agricultural production systems, and has extensive experience in environmental and land use cases. With more than 40 attorneys and a large support staff, Gislason & Hunter has become a leader in agricultural law.

We don’t just practice agriculture – we live it.

DIRT

Fairne ss

for those

Integr it

Exper tise

Sprin g

Comm on

S ense

rld feed the wo

Hard Work

to who work

2014

y Faces of The Man

Our Land

Publishers of DIRT, the agricultural magazine for those who work to feed the world.

MN Valley Business • OCTOBER 2017 • 1

Fall in

Love with our Printing

MN LIC #8761

Your MN Land Resource:

Qualified land professionals to help you reach your goals: real estate, appraisal, auction, farm management, consulting 1031 exchange, investment

Call Terri Jensen, ALC (Accredited Land Consultant), Broker/Realtor®Auctioneer, Appraiser 507-382-0908 Mobile • tjensen@ummc.co

EXPERIENCE With over 120 years of experience, our Agricultural Team has successfully represented thousands of southern Minnesota producers, processors and businesses dealing with agricultural law issues.

L I T I G AT I O N • B U S I N E S S •

Call or visit blethenlaw.com today to learn more about how we can make a difference for you. FARM • PERSONAL

SOLUTIONS

LITIGATION • B USINES S • FARM • PE R SONAL

1750 Northway Drive • North Mankato, MN 56003 www.corpgraph.com

800-729-7575

Our Employment Law attorneys are dedicated to providing our clients with comprehensive strategies for dealing with the complex and ever changing relationship between employers and employees. Employers large and small put their trust in Blethen, Gage & Krause. Let us provide the sound legal advice and effective solutions that will meet your legal needs. Call or visit blethenlaw.com today to learn more about how we can make a difference for you.

blethenlaw.com Mankato, Minnesota

F E A T U R E S October 2017 • Volume 10, Issue 1

A wide array of businesses that serve the agricultural sector are banded together in GreenSeam, an effort to bring more attention and investments to the region.

Hy-Vee stores in Mankato help keep tons of produce out of the landfill. Their Misfit produce section sells items that don’t look perfect but are still fresh and nutritious.

Community supported agriculture programs help small farms thrive, and they benefit the community. But they also add new challenges for those who start a CSA.

Lenny Hiniker’s Upholstery Services Co. used to serve a wide variety of customers, but upholstery needs today often focus on preserving important family heirlooms.

MN Valley Business • OCTOBER 2017 • 3

■

OCTOBER 2017 • VOLUME 10, ISSUE 1 PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Tim Penny Amanda Dyslin James Figy PHOTOGRAPHERS Pat Christman Jackson Forderer COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Phil Seibel MANAGER ADVERTISING Jordan Greer-Friesz Sales Josh Zimmerman Marianne Carlson Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Justin Niles DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6364, or e-mail advertising@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.....................................5 ■ Business Commentary.........................8 ■ Business and Industry trends..........24 ■ Retail trends.....................................25 ■ Agriculture Outlook..........................26 ■ Agribusiness trends..........................27 ■ Construction, real estate trends.....28 ■ Gas trends........................................29 ■ Stocks...............................................29 ■ Minnesota Business updates............30 ■ Job trends.........................................30 ■ Schmidt Foundation.........................32 ■ Greater Mankato Growth..................38 ■ Greater Mankato Growth Member Activities ............................39

From the editor

By Joe Spear

Taking cornfields for granted

t’s easy to drive less than a mile past Mankato city limits in any direction and be in farm countr y. Fields of corn and soybeans envelop the MankatoNorth Mankato metropolitan statistical area. They’re easy to take for granted as a part of the normal landscape. We sometimes don’t realize the sizable economic engine those fields represent regionally and worldwide. Our cover stor y on the GreenSeam project in the Mankato area brings that economic boon into focus. The GreenSeam region was developed and designated a few years ago by Greater Mankato Growth as a way to highlight and bring attention to the vast agriculture and agribusiness resources found in the Mankato region, southern Minnesota and northern Iowa. The goal is to make the GreenSeam region a hub for agribusiness whether that be research, production, ag services or finance. In essence the aim is to create the Silicon Valley of agriculture. Established as an idea in 2013 and rolled out as a brand in 2016, GreenSeam is picking up steam. One of the goals is to help local agribusiness expand but also attract new businesses. Agri-Business Insurance Ser vices of Mankato is one company trying to help existing agribusiness and farmers grow and expand. The firm provides risk management services to farmers but also works with farmers to use new technologies to help them limit costs. “We’re using precision technology to report planted acres and harvested production. We’re talking to drone companies about how to go out and analyze growing season risks and looking at developing new products in the future,” said Travis Stewart of Agri-Business Insurance. This year organizers established a number of weekend

4 • OCTOBER 2017 • MN Valley Business

“agritainment” events calling it “Gather in the GreenSeam.” The idea is to not only make the region rich in agribusiness and the economic benefits that come with that, but also help leverage the agriculture assets of “God’s Countr y” into creating an interesting and fun place to live. Agriculture has long been an asset that has flown under the radar of traditional economic development. The inventory of assets is impressive. Greater Mankato Growth reports the GreenSeam area of southern Minnesota and northern Iowa boasts $15 billion in annual sales and includes 1,000 agriculture-related businesses. There are companies like Aglytix of Mankato, a small firm that has been recognized by industry experts for its developing library of things like crop stress data. Founded by Jerry Johnson with 15 employees in an office on Riverfront Drive, Aglytix was recently recognized by Bill Schmarzo, the chief technology officer of the Big Data Practice of EMC Global Services, and a guru of sorts for analyzing the data business. He recently wrote about Aglytix suggesting its small to big approach in agricultural data was the way to be successful. In the article Schmarzo wrote: “Aglytix has focused on one use case at a time to build out its suite of lean farming analytics. For example: quantifying the impact of crop stress. Crop stress decreases yield by inhibiting crop growth and decreasing the maximum potential crop yield. Crop stress is caused by factors such as diseases, insects, drought, and salinity and excesses of trace elements in the soil.” Johnson says the company began using drone technology to gather information on farming and farm field conditions. From there it is building a library with over 200 indicators of farm field

health. The Aglytix stor y lends credibility to the idea that the Mankato region can fashion, support and grow the GreenSeam idea. It may be counterintuitive, but agriculture research may lead to solutions to society’s bigger environmental problems like water quality and land use. Growth for the GreenSeam may actually be a given, as the GreenSeam website notes: “World population growth multiplied by the increase in incomes worldwide equals greater demand for better diets.” There are other agricultural entrepreneurs out there who are flying under the radar. An effort like GreenSeam will hopefully lure them out of their basements to collaborate in the larger economic ecosystem that stems from agriculture. That ecosystem may be taken for granted but in reality is a sleeping giant. Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

Local Business People/ Company News

■

Indian Island Best in Show

Indian Island Winery won Best in Show for red wines at the 2017 International Cold Climate Wine Competition held at the Minnesota Landscape Arboretum. The winery won for its 2015 Marquette. Their Marquette wines are described as lighter and more aromatic than many of their peers. Indian Island won best of show for their Marquette in the 2010 competition as well. The competition is open to any winery using non-Vinifera, coldhardy grape varieties to make wine. ■■■

Ecumen a Best Workplace

Ecumen Pathstone Living, along with other Ecumen communities, has been named one of Minnesota’s Best Places to Work by the Minneapolis/Saint

Paul Business Journal for the tenth time. The award is based on rankings from an independently conducted employee survey in a variety of categories such as work environment, communication, leadership, teamwork, innovation, and employee development. Ecumen was honored in the largecompany category along with organizations such as U. S. Bancorp, Ameriprise Financial ■■■

Bohlke earns diploma

Christina B o h l k e , president of BankVista in Mankato, was awarded a diploma at commencement exercises of the Graduate School of Banking at Christina Bohlke the University of Wisconsin-Madison. The School, sponsored by state bankers associations from across the central United States, as well as the University of WisconsinMadison, was established in 1945 to provide bankers with an opportunity for advanced study and research in banking, economics and leadership. Instruction at the Graduate School of Banking takes place during two-week resident sessions for three consecutive summers, along with comprehensive study between summer resident sessions. ■■■

Senior facilities sold

BUSINESS BANKING

Heartland Senior Living, a local non-profit community corporation, has agreed to purchase three southern Minnesota senior care providers from current owner ElderCare of Minnesota. Parker Oaks Retirement Community in Winnebago, Parkview Care Center in Wells and Truman Senior Living in

MN Valley Business • OCTOBER 2017 • 5

» G R E AT G OL F,

great meetings.

GOLF DIGEST EXECUTIVES KNOW GREAT GOLF and have named Renaissance Ross Bridge Golf Resort

»» Play where the champions play

& Spa and Auburn Marriott Opelika Hotel at Grand National two of their newest Editors' Choice Winners, along

on Alabama's Robert Trent Jones

with Pebble Beach, The Greenbrier, Pinehurst and 65 other North American locations. When you need to step

Golf Trail. To book your next outing,

away from the office for a great golf getaway or an off-site meeting, plan your visit to Alabama’s Robert Trent Jones Golf Trail. The best part about the Trail is you don’t have to break the bank to play world-class golf. »»

rtjgolf.com to learn more.

6 • OCTOBER 2017 • MN Valley Business

call 800.949.4444 today and visit

Truman are included in the agreement. Heartland Senior Living has been working on the acquisition since its inception in 2014. The organization received financing approval from the U.S. Department of Agriculture, allowing the acquisition to move forward. Heartland has immediate plans for renovations at all three locations with new construction to follow. The three facilities currently employ 179. ■■■

The School, sponsored by state bankers associations from across the central United States, as well as the University of WisconsinMadison, was established in 1945 to provide bankers with an opportunity for advanced study and research in banking, economics and leadership. Instruction at the Graduate School of Banking takes place during two-week resident sessions for three consecutive summers, along with comprehensive study between summer resident sessions. ■■■

Boelter, Beadell earn diplomas

Eric Boelter and Robert Beadell were awarded diplomas at commencement exercises of the Graduate School of Banking at the University of WisconsinMadison. Both work at Community Bank Mankato. Boelter is vice president of commercial lending /branch manager and Beadell is AVP of commercial lending and assistant branch manager.

Pederson promoted at U.S. Bank

U.S. Bank has promoted Carrie Pederson to branch manager at its Mankato and Amboy offices. In her new position, Pederson is responsible for leading the branch staff and managing all sales and customer ser vice activities at the branch. Pederson began her career at U.S. Bank in 2008 as a teller coordinator and promoted to sales and service manager in

2011. ■■■

Thompson joins Swanson

Jennifer Thompson

S w a n s o n Hinsch & Co. CPA’s has added J e n n i f e r Thompson, CPA. She has 21 years of public accounting experience and 16 years as chief financial officer o f

manufacturing. She was awarded the 2004 National “Stevie Award” for Top Finance Executive at the American Business Awards. That same year she was recognized as one of the Top Women in Finance by Minnesota’s Finance & Commerce magazine.

Join the F am ily !

Community Bank is independent, family owned, and fully committed to staying that way. As the landscape of banking changes, we remain committed to our core values of serving our customers and the community in a warm and friendly hometown fashion.

With Community Bank, it’s like having a banker in the family.

Join the family!

Mankato • Amboy • Vernon Center www.cbfg.net MN Valley Business • OCTOBER 2017 • 7

■

Business Commentary

By Tim Penny

Mentoring, support vital for immigrant business community

n late July the Somali American Cultural Society of Owatonna was vandalized with spray paint and had a fire lit in front of its building. I was saddened by this senseless act of vandalism against SASCO which has been a reliable and valued Southern Minnesota Initiative Foundation grantee and client. Several years ago, SASCO was founded by Ibrahim Hussein to serve the job search needs of Owatonna-area Somali refugees, as well as provide after-school homework assistance to Somali children. Let me tell you more about Ibrahim Hussein. Hussein had to leave Somalia at the age of 6 when civil war broke out in his country. Since coming to Minnesota in 2007, he has been nothing but a force for good in this community. Hussein was a teacher in Kenya, where he lived in the world’s largest refugee camp, but since he didn’t have the qualifications to teach in American, he became a Somali liaison for the schools instead. He is in his last year at my alma mater, Winona State University, for his teaching degree, and is currently student teaching at McKinley Elementary School in Owatonna. “I’ve been here for 10 years,” says Hussein. “I love this community.” As I mentioned above, Hussein started SACSO to help students with homework and other Somali residents with various cultural barriers. Hussein also supports the Veterans Association in

Ibrahim Hussein (right) and other Sunrise Grill (Owatonna) employees. Owatonna and is a member of the local Human Rights Commission. On behalf of a SMIF recommendation, Ibrahim Hussein was selected for a 2012 Virginia McKnight Binger Award for Human Service by The McKnight Foundation. In 2016, he followed his entrepreneurial spirit and helped to open Sunrise Grill in Owatonna, a restaurant that now employs three people. Accordingly, in addition to the grant from SMIF to help start SACSO, as a new business entrepreneur, he was eligible to

8 • OCTOBER 2017 • MN Valley Business

become a SMIF Prosperity Initiative client. Hussein received help putting together a business plan for Sunrise Grill from his Prosperity Initiative coach. The Prosperity Initiative was launched in 2015 to create an entrepreneurial ecosystem for minority entrepreneurs in SMIF’s 20-county region. The Prosperity Initiative was funded by a 2-year grant from the Minnesota Department of Employment and Economic Development (DEED), and was launched by SMIF because we know that our region’s

demographics are changing. From 2000-2015, the number of people of color in SMIF’s region doubled from 45,561 to 90,179 (Minnesota Compass). In addition, a 2015 Kauffman Foundation report found that 28.5% of new entrepreneurs in the U.S. were immigrants. With Minnesota’s aging demographics, if our region’s small towns want to thrive, we will need new entrepreneurs, including the highly-entrepreneurial immigrant populations. While immigrants have proven themselves to be hard-working and entrepreneurial across our region, from communities like St. James to Winona, and Faribault to Austin, they often face more barriers to success. In fall 2015, the Organizational Effectiveness Research Group at Minnesota State University, Mankato survey of immigrant entrepreneurs indicated that 91 percent of respondents would “benefit from additional resources to help their company grow and develop,” while 68 percent felt “a lack of support and mentorship to help them move their business to the next level.” Other barriers include a lack of access to alternative financing, systems disadvantages (i.e.: credit history), lack of community support and resources, and cultural and language barriers. To address these needs, SMIF is now recruiting for a second cohort of Prosperity Initiative clients with grants from The McKnight Foundation and Profinium. Ten more minority businesses will be selected for one-on-one business coaching and peer networking. Email Pam Bishop (pamb@smifoundation. org) for more information. Inclusiveness in our communities and in our economies is a goal of the Prosperity Initiative

Agricultural Land Sales & Auctions • Farm Investments Consultations & Management • Hunting & Recreational • Appraisals THE LAND REPORT, the magazine of the American Landowner, has named Wingert Realty & Land Services, Inc. “America’s Best Brokerages” 2010-2016 and “Top Auction Houses” 2011-2016 in the U.S.A.!

1-800-730-LAND (5263) • www.WingertRealty.com 1160 Victory Dr. S., Suite 6 • Mankato, MN 56001

MEMBER FDIC

Tim Penny is president and CEO of SMIF. timp@smifoundation.org or 507-455-3215.

MN Valley Business • OCTOBER 2017 • 9

Sam Ziegler is director of GreenSeam, which aims to grow existing agribusinesses in the region and draw new companies.

Growing GreenSeam Area strengthens its ag reputation By Tim Krohn | Photos by Pat Christman

am Ziegler has a dream of people from across the countr y and even overseas talking about southern Minnesota and northern Iowa when they think about the epicenter of the agribusiness economy. “If you think of finance, you think of Wall Street. We want people in agribusiness to think of GreenSeam.” Ziegler is director of GreenSeam, an effort launched last year by Greater Mankato Growth and a group of

ag-related companies and groups that want to help existing agribusiness expand and to attract new companies. The region already has a wide variety of businesses that depend on or cater to agriculture. Beyond the highly productive farm operations, everything from manufacturing plants to ethanol production and technology companies to professional services make up the ag economy.

Cover Story

10 • OCTOBER 2017 • MN Valley Business

One of those professional ser vice providers is Travis Stewar t of Agri-Business Insurance Services in Mankato. His firm provides risk management services for farmers, something of growing importance in the current period of depressed crop prices. But he’s also looking at ways to use new technologies to help farmers limit costs and reduce risk. “We’re using precision technology to report planted acres and harvested production. We’re talking to drone companies about how to go out and analyze growing season risks and looking at developing new products in the future,” Stewart said. “It all gives more details on a farm operation to tailor their insurance to their needs and maybe save them money.” While area corn and soybean crops were looking strong going into fall harvest, with near-record production expected again this year, the hope for a big harvest is offset by low corn and soybean prices. While farm income is being squeezed, farmers’ balance sheets are generally strong thanks to years of record crop prices a few years ago and a lower debt to asset level. Terri Jensen, a Realtor specializing in land sales, said the low crop prices of recent years have done little to drive down the price of farmland. “The highest values were in 2011 and 2012. Since then premium quality land has held its own, but non-premium quality land has fallen,” she said. “In Minnesota, from 2014 to 2016 land prices fell 3.3 percent. But from 2016 to now we’ve seen a 1.1 percent increase.” While private agribusinesses generate tens of billions of dollars in economic activity in the region, not-for-profit research institutions provide the knowledge, training and research that helps propel the ag economy. One of the oldest and largest is the University of Minnesota Southern Research and Outreach Center in Waseca, where research has become more specialized and diverse.

Top photo: Troy Root gives cattle a measured amount of feed in the U of M Research Center’s barn. Bottom photo: Forrest Izuno is professor and head of the U of M Center. Forrest Izuno, professor and head of the center, said in many ways the center does the type of work it’s always done. “But as science develops, there’s more and more you have to do to help the ag industry.” He said research at the 104-yearold institution used to focus almost entirely on boosting production in the near term. “We still do that, but there’s a whole lot of other research areas that might not help farm productivity next year but is looking five to 10 years down the road or longer.”

Gather in the GreenSeam

Ziegler said that while drawing new companies to the region is important, growing existing businesses in vital. “Eighty percent of an economy

grows from within and 20 percent is new. So how do we help our existing businesses grow?” Growing agribusiness means big money. Ag is the largest part of the area’s economy, generating $35 billion to $36 billion a year. He said the top need for virtually every business is finding enough qualified employees. “We launched the GreenSeam Talent Exchange to help in that.” The online portal matches job seekers to companies and is a partnership with the Minnesota Chamber of Commerce and RealTime Talent. “I didn’t realize how concerning it was and how short we are of workers in our region. We have one of the highest labor force participation rates in the nation and one of the lowest unemployment rates in the

MN Valley Business • OCTOBER 2017 • 11

Committed to

ingenious water quality solutions that will continue to protect + Serve Minnesota for years to come

As ISG’s 40+ years of expertise continues to evolve, so does the firm’s steadfast roots and conservation efforts that shape the Midwest and communities served. Improving drainage for crop production while managing water quality and environmental requirements is our focus. Innovative practices and expert leadership in local, regional, and international organizations showcase our commitment. Protecting the environment Enhancing + repairing ditch systems Continuing the legacy

ARCHITECTURE + ENGINEERING + ENVIRONMENTAL + PLANNING

www.is-grp.com

nation.” He said they want to work more with colleges and universities to get the word out to students that jobs in agribusiness are diverse and can be highly paid. “A lot of their opportunities are in agriculture but students don’t realize that.” Ziegler said the larger goal of GreenSeam is to get more national attention for the region as the place to be for agribusiness. “We have all this manufacturing, technology and agriculture. We want people to say, ‘If we need information and expertise, we need to be part of GreenSeam.’ We want people, when they’re traveling the world, to say, ‘Hey have you ever been in the GreenSeam?’ They don’t have to know the exact valley or location, they just will know the area.” GreenSeam is also helping host the Rural Legislative Forum this year on Dec. 19 at the Verizon Center in Mankato. “It’s been held for 35 years but this is the first time we’re focusing on a national discussion,” Ziegler said.

At Community Insurance we have the ability to compare insurance from multiple companies to get you the best coverage at a great price. Combine that with our insurance knowledge and friendly group of agents, and we say that’s a winning deal.

Let us protect what is important to you!

Call our office today to connect with our local knowledgeable staff so we can protect the things that matter most in your life.

WHERE YOUR POLICY COMES WITH AN AGENT

MANKATO 507.385.4485 AMBOY 507.674.3355 I VERNON CENTER 507.549.3679

www.cimankato.com 12 • OCTOBER 2017 • MN Valley Business

They’ve invited U.S. Ag Secretary Sonny Perdue to speak as well as the CEO of Archer Daniels Midland. Locally, GreenSeam is getting more recognition thanks to this fall’s new “Gather in the GreenSeam” events. The effort is promoting a number of fall festivals and events under the GreenSeam name.

Research Center

The U of M research center started in 1913 as a demonstration farm and experiment center where much of the work was focused on increasing crop production. Izuno, who came to the center in 2001 from the University of Florida, said faculty at the center and from the Twin Cities campus still do a lot of crop and livestock production. “We have the on-site faculty who address researchable issues that are very germane to the region but could have implications statewide and nationwide and worldwide.” The center also has a core of nonfaculty scientists “They work heavily on research to help farmers get the most out of their crops in the next year. The faculty will oversee that research, but they also look further into the future,” Izuno said. Some of that research for the future includes crop sensors. “We’re looking at remote sensing that could identify crop issues far enough in advance to treat smaller areas rather than having to treat whole fields. There’s a lot of potential out there for that.” Beyond the crop research, livestock is a big part of the center. “We have lots of animals. An 800-sow research unit and about 1,200 dairy calves that go through here each year,” he said. “We always look at added value crop or animal systems. On the surface you’re going to produce corn, beans and hogs for market. There are many other potential sources of revenue one-off,” Izuno said. “If you’re producing soybeans, one of the things we’re working on is making soy diesel using new technologies. We’re looking at

Travis Stewart of Agri-Business Insurance Services in Mankato. alternative crops that will fit in and offer financial value and environmental value.” The center is also looking at reclaiming biogas and reclaiming other nutrients and reusing them so they don’t end up somewhere else in the environment.

Heating & Cooling

And Izuno said research is increasingly focused on providing consumers what they want and educating consumers on modern farming practices. “The consumer needs to understand what goes into farm production. Everyone has their

Building Automation

Security

TOTAL

BUILDING CONTROL SOLUTIONS

Exceeding expectations & gaining trust through exceptional value and performance!

Partners of SCHNEIDER ELECTRIC®

Mankato: 507-345-4828 | Rochester: 507-289-4874

www.paape.com

MN Valley Business • OCTOBER 2017 • 13

opinions, but we’d like to have those opinions be informed opinions. We help do that.”

Agri-Business Insurance

Congratulations Matt! We’re proud of you! Matt Michaletz CIC, Vice President of Commercial Operations at Kato Insurance Agency, has been selected by Insurance Business America Magazine as one of the top 55 “Young Guns” in the Nation! Please contact Matt for expert advice and recommendations with regard to all of your Business Insurance requirements. Kato Insurance Agency, Inc. 100 Warren Street, Suite 204 Mankato, MN

507-387-4081

mmichaletz@katoins.com 14 • OCTOBER 2017 • MN Valley Business

Stewart took over the Greg Wheelock Crop Insurance business and merged the Mankato office with Agri-business Insurance Ser vices, a major insurance provider in the Midwest. He said hot topics in agriculture right now include the beginning of discussions on the next Farm Bill, new technology for farming and better risk management. “Organics and non-traditional crops are a big topic right now, too. There’s a high demand for those and a majority are being imported in rather than grown here.” He said farmers and insurance companies are keeping an eye on how the Farm Bill is crafted. “There’s talk of capping or cutting crop insurance subsidies. There’s concern about that in every Farm Bill.” The Farm Bill provides subsidies to farmers to help cover part of their cost for crop insurance. There appears to be added pressure this time around to reduce the overall taxpayer cost of the Farm Bill, and insurance subsidies are a bigticket item in the bill. Stewart believes the crop insurance program will survive. “There seems to be a pretty unified message of ‘do no harm to crop insurance.’ “It’s a good balance between a public and a private relationship. And as we see more of these sustainable farming operations coming in, you need to have that balance in the risk.” Risk management is the key to Stewart’s services. “We look at private crop and hail insurance, federal insurance. We look at products that allow farmers to buy higher levels of insurance. That’s more popular as commodity prices are tight. A lot of lenders are requiring them to carry higher liability coverage to protect their bank loans.” He said new technologies are also offering ways to manage risk like never before.

“With drones, a farmer can fly over a field and walk to a problem area. There’s a lot of benefits to technology. We’re just beginning to unearth what the future opportunities could be.”

Land prices staying high

Jensen, an accredited land consultant and member of the Land Institute, said that while far mland prices often fell when crop prices dropped in the past, they’re holding up now. “People still want or need to buy land. Terri Jensen There’s people who need to increase their operation because they have kids coming in,” she said. Investors also make up 20 to 25 percent of the farmland sales market. “They have money they want to put into land because it’s considered a safe haven. You’ll get a good return and you can see it and touch it.” Average land values in Minnesota are just under $5,000 per acre. But in the rich farmland of south-central Minnesota prices are considerably higher. During the peak of land values in 2012 some land was selling for $10,000 an acre or more in the region. Jensen said that while there is strong demand for farmland, there isn’t enough of it available. “We do not have inventory to meet demand. The number of land sales has dropped every year since 2012.” MV

The most durable, easiest to clean carpet on the planet.™ Now featuring All Pet Protection & Warranty covering all pets, all accidents, all the time.

RICKWAY CARPET 123 Any Street

Retailer Name & Logo Any town, GA 00000 507.625.3089

1107 Crosswebsite.com St. | North Mankato

Hours 0:00 am to 0:00 pm

Mon.-Thurs. 9am-8pm; Fri. 9am-6pm; Sat. 9am-4pm; Closed Sun.

www.rickwaycarpet.net

$0.00sq.ft

MN Valley Business • OCTOBER 2017 • 15

Hilltop Hy-Vee produce manager Dan Hanson holds some of the misfit produce for sale at the store.

Ugly produce Beautiful on the pocketbook By Amanda Dyslin Photos by Pat Christman

ure, the apples were small. If you brought one over to its more sizable brethren, the little guy might have lacked some confidence. But Ann Judkins didn’t need massive apples on this particular day. Nor did she need them at regular HyVee retail prices. “I bought them for my granddaughters,” Judkins said, because smaller apples are perfect for smaller teeth and appetites. And smaller prices are perfect for Judkins, who is a thrifty shopper who also frequents Aldi for its low-priced produce. On this day, though, she was buying her produce in a special section offered at both Hy-Vee locations in Mankato: the Misfits

produce section. Yes, “misfits,” meaning fresh fruits and vegetables that just didn’t quite make the beauty pageant cut. These unassuming pieces of fruit and vegetables might have a blemish or two. They might be too small or even too large, if you can believe that. Either way, they were at some point weeded out as not making Grade A status, said Dan Hanson, Hilltop Hy-Vee’s produce manager. But instead of sending the perfectly good produce into landfills, it becomes part of Robinson Fresh produce company’s Misfit line, which is delivered to and sold by grocers at reduced prices. (Headquartered in Eden Prairie, Robinson Fresh is one of the world’s largest produce companies.)

Cover Spotlight

16 • OCTOBER 2017 • MN Valley Business

Misfit produce “It’s a great thing because you’re throwing away excellent product that you can pass on to the consumer. Nothing’s wrong with it,” Hanson said. “It’s sad to see how much you throw away. Everyone always shops with their eyes, and there are many people out there that would kill for that.” Since Hy-Vee Inc. partnered with Robinson Fresh on the Misfit program in January, Hanson said all Hy-Vee stores combined have saved 1.5 million pounds of produce from landfills by selling the products. Besides the positive vibes of helping to reduce food waste, the benefit to the customer is an average savings of 30 percent. “That fluctuates all the time, too, just depending,” Hanson said. “Take, for instance, lemons. There are six in a bag, and right now they’re $1.29. (For non-Misfit lemons), they’re 88 cents each.” Annmarie Carlson Drake recently bought some of those lemons. Aldi was closed for construction, so she said she went to Hy-Vee expecting to pay more. But the Misfit section saved the day on lemon savings,

which she said have been pricey this summer. The Misfits also didn’t look or taste any different to her. “They’re just like any other lemons. They’re a little smaller, but they’re not really discolored. Maybe a few dings,” she said. “I don’t see any other difference.” It’s hard to predict what Misfit produce will be available on any given day, Hanson said. Trucks come every day, and the Misfit produce that is shipped depends on what is in season and what is available. “One week we might get 10 cases of lemons, one lime and one orange might be available,” Hanson said. Hanson said the response to the section has been pretty good so far, but it can take time to change people’s expectations. “People shop with their eyes. They think, ‘Oh, what’s wrong with this?’ It’s about teaching them it’s not bad. It’s a good product. It’s just the perception,” Hanson said. “Changing ever yone’s perception always takes a little while. Everybody got so used to looking at a cucumber

that looks like this.” Hanson said common perceived “deficiencies” of the Misfit produce are that the products are misshapen and might have a couple of nicks. Size is another big issue. “With limes, we might have a couple that may be huge and five that are super small,” he said. “This winter, actually, we had mandarins that looked nicer than the regular ones. They were too large. They just didn’t size out right, so the (Misfit) quality was better for two months.” Judkins, an artist, said she’s shopped for green peppers, limes and apples in that section, and she never holds it against the produce if it looks a little different. “The misshapen ones are interesting, so they’re not exactly ugly,” Judkins said generously. “Some of the limes have brown on them – not a rotten type brown – but yeah, they were ugly.” MV

MN Valley Business • OCTOBER 2017 • 17

Daniel Zimmerli of Cedar Crate Farms in Kasota shows off the chicken coop that his fiancée, Lara Graves, started. Zimmerli plans to offer eggs next year as an add-on to the CSA.

Farm fresh

Local growers bet the farm on CSAs

By James Figy | Photos by James Figy

hen Janice Guldan loaded a card table and buckets of kohlrabi into the family station wagon in the early ’90s, she just wanted try her luck at the Mankato farmers market — a notion her husband, Denny, thought was crazy. Now, nearly 100 subscribers pay Guldan Family Farm $400 upfront to receive produce each week over the growing season, according to their son, CSA supervisor Tim Guldan. Community supported agriculture programs help small farms thrive, and they benefit the community. But they also add work in areas where farmers might have limited experience, including administration and outreach. CSAs shares are generally packages of in-season fruits and vegetables, although offer provide meat or eggs, and others run year-round. Unlike the Guldans’ 25-acre operation, most CSA farms in the state cultivate six acres or fewer, according to Ryan Pesch, agriculture extension educator for the University of Minnesota. They’re small but mighty, he said, if they develop “the ability to juggle many things.”

Eating what’s fresh

Eating in-season means receiving lots of one veggie at once — loads of lettuce in May, zucchinis galore come July — and depending on what’s ripe, it could be unfamiliar. So Jean Braatz of My MN Farmer in Montgomery adds a step. Besides farming with her husband, Dean, and their seven children, she sends a newsletter with recipes using items from each week’s share. It requires a commitment to eat what’s fresh for the Braatzs’ 150 subscribers. “We as a culture are so accustomed to getting what we want ... delivered to our door the next day (that) it is hard to get used to getting a box of ‘whatever is ripe and delicious’ weekly instead of picking out exactly what we want,” she said. Guldan also sends recipes, and Dan Zimmerli of Kasota-based Cedar Crate Farms has a Facebook page where members share recipe links and photos of what they’ve made with CSA goods. Zimmerli, who grew up farming with his dad and works in IT at Gustavus Adolphus College, allows his 28 members to swap up

Profile

18 • OCTOBER 2017 • MN Valley Business

Tim Guldan sells produce at the Mankato farmer’s market, where CSA members also pick up their shares. to five items online. “Most people choose to swap at least one thing,” he said.

Benefitting communities

Due to labor and overhead costs, CSAs don’t necessarily rake in money, but they help farmers start the year in the black, said Pesch, who runs a CSA in Fergus Falls. That can be crucial when margins are slim, and the USDA estimates large producers will take a loss in 2017 for the fourth year while family farms might see modest profit increases. Starting in the black, Guldan said, means farmers market sales are bonus. If one gets rained out, they’ve still met their sales goal through the CSA. Plus, if they have too much of one item, they can sell it rather than overwhelming subscribers. “The two work really well together hand in hand,” he said. “To do one without the other can be a struggle.” Areas with CSAs also see economic benefits because small farmers reinvest their income in local retailers at a higher rate than large outfits, according to a 2017 study co-authored by Pesch. “Every $1 million in output for small farms produces an additional $608,000 for the local economy, whereas conventional agriculture contributes $375,450 per million,” the study states.

As CSA popularity has increased, so have the competitors. Some grocery stores offer grab-bag CSAs using whatever’s in stock, and with the meal box boom, companies like Blue Apron promise fresh, local produce. But those veggies travel thousands of miles, Zimmerli said. Pesch called the labels on these programs marketing gimmicks at odds with the original idea. In the 1980s, two upstate New York farms grew the first CSAs from the principles of biodynamic agriculture — a philosophy of organic growing that emphasizes reconnecting people to nature. “The model is about building stronger relationships between producers and consumers — and not making us just consumers, but treating us as human beings,” he said. Keeping with this philosophy, Braatz, Guldan and Zimmerli invite CSA subscribers to tour their farms. “We have farm days where members and farm supporters can pet baby bunnies, chicks, piglets, calves, lambs and kittens,” Braatz said. “…We love all of the people who support our dream to grow healthy food.” Though harvest is nearly over, those interested can register for CSAs around the beginning of the year. Each season the farmers hope, in more ways than one, to keep growing. MV

influence IT’S WHAT SEPARATES US FROM THE PACK Unmatched drive, proven history of results and commitment to the highest level of performance is what we stand for.

/COMMERCIAL TO THE CORE/ CBCFISHERGROUP.COM

MN Valley Business • OCTOBER 2017 • 19

Lenny Hiniker cuts bar stool covers out of Brazilian cowhide for a hunting lodge in South Dakota at his business Upholstery Service Company. Hiniker said he has been in business for over 40 years.

Renewing the past Upholstery business serves nostalgia market By Amanda Dyslin Photos by Jackson Forderer

midst the displays of fabric samples, faded and stripped furniture and piles of foam, a beautiful brown leather club chair with hammered-nail trim sat covered in plastic, awaiting Marcia Mason’s arrival to Lenny Hiniker’s upholstery shop in South Bend Township. The piece looked brand new, but underneath the freshened upholstery and padding, the bones were part of decades of Mason family memories. The chair had belonged to Marcia’s husband’s father, the late Honorable Milton D. Mason, a district judge in Mankato. “It was his favorite chair,” Marcia said. “For all my children, that’s their image of him, just sitting in that chair. He absolutely loved it. It just supported his back, and he just felt comfortable in it.” Marcia brought the piece to Hiniker, owner of Upholstery Service Co., for the same reason a lot of people do: sentimental value. You can’t go to a retail furniture store and simply replace a piece that holds decades

of memories, which is why Hiniker still has plenty of work backed up in a profession that far fewer people are entering into these days. “I hate to see that no one is there working with him to learn what he does,” said Marcia, who had the club chair reupholstered for her daughter. “We’ve fallen into an era of just buying cheap.”

Feature

20 • OCTOBER 2017 • MN Valley Business

Learning the trade

Hiniker’s beginnings as an upholsterer started after graduating from Mankato High School in 1972. Partly inspired by his memory of a sofa that his parents had reupholstered as a kid, Hiniker started fixing up furniture himself for his apartment when he was a young bachelor. “Taking something old and making it new was kind of the motivator,” he said. “I picked up furniture off the curb and got ideas. I read books on upholstery. I was self-taught, but I didn’t have it mastered yet. I could get the job done, but it was just a hobby.”

After getting married and having a son, the Hinikers took a vacation to Nevada to visit his wife’s family in 1977, and he stopped at Statewide Upholstery shop on a whim. Hiniker told the guys inside about his hobby back home, they recognized his Midwestern work ethic, and the Hinikers ended up moving to Reno for a year while Hiniker worked in the large shop and learned various techniques and skills of the trade. “We had a huge warehouse of work to do. It was a ver y organized, big shop,” said Hiniker, 64. “They did everything. I hit the ground running. They knew I didn’t have a lot of experience, but that I was interested in it, and that was important. That became one of the criteria for me hiring people later on, just if they were interested in it. It’s hard to find those people.” After a year, Hiniker took another job in Cañon City, Colo., working for a brother of a friend who needed the help in a small shop. They worked on both car upholstery and furniture, and Hiniker was able to learn a lot from the owner over the course of two years. The Hinikers eventually missed Minnesota too much to stay and moved back home to Mankato. Hiniker opened his own shop, first in his parents’ basement and then in the basement of the home he built for his family. Upholstery Service Co. was officially founded in 1981. “The work just poured in,” said Hiniker, who moved his shop to South Bend Township after a couple of years. “I was getting more work to do than I had time to do it. Acquaintances started to come out and work for me.” Hiniker was working on auto upholstery and doing furniture. He completed the small business management program through South Central College, and at the business’ peak he had six employees on the payroll. His two sons and daughter even came through the shop and worked for a while. “When I first started in the business, reupholstering was an alternative to buying new furniture. You saw the furniture

Lenny Hiniker (right) shows Marcia Mason a chair he reupholstered for her at Hiniker’s business Upholstery Service Company. “This is just perfect, it’s just gorgeous,” said Mason when she picked up the chair. store as your competitor,” he said. “That’s not the way that it is now. If it’s just a couch you want, you can buy a couch cheaper at a store. Some people own a couch for five years, chuck it and get a new one.” A piece like Marcia’s – which Hiniker completely refurbished by taking the frame apart, regluing every joint, replacing the padding and reupholstering it – costs $700. Most chairs that don’t require as much work will run $500. “With couches, it’s a lot harder to stay under $1,000 to do completely what needs to be

done,” Hiniker said, adding that it’s not unusual for a heavy-duty, quality sofa to run between $2,000 and $2,500 to refurbish. “This couch here is a sturdy Flexsteel couch. It will last forever. There used to be a saying in upholstery – recover your investment.”

Changing tides As the course of the business changed to antiques and nostalgia pieces, and Hiniker’s employees moved on to other jobs, he didn’t replace them. Now, he says, he’s one man at the shop doing the work of six men – a fact which has

MN Valley Business • OCTOBER 2017 • 21

ABIS has the Insight, Service, and Experience to meet all of your Crop, Farm, and Ag Business Insurance needs. ABIS works hard to build a package of solutions that are right for you. Commercial Agri-Business Farm & Ranch Crop Insurance INSIGHT | SERVICE | EXPERIENCE You Can Count On!

1230 South Victory Drive | Mankato, MN 56001 www.abisonline.com 1-800-767-7110 | Mankato@cropinsurance.com www.cropinsurance.com ABIS is an Equal Opportunity Provider

22 • OCTOBER 2017 • MN Valley Business

One of Lenny Hiniker’s favorite reupholstered pieces is a French provincial couch made from hand tufted leather. “That was a very difficult piece,” Hiniker recalled. The couch was made from three different hides of leather. Submitted photo not changed the quality of his work. Hiniker has always been a perfectionist, he said. Now he specializes in furniture and sends auto upholstery clients to another place in town.

COMMERCIAL • INDUSTRIAL • RESIDENTIAL

507.387.7499 Check us out on www.malterermechanical.com www.malterermechanical.com

Marcia uses the words “master craftsman” when describing Hiniker’s meticulous work. She’s been a client almost since he started in the business, she said, remembering when her children were playing cops and robbers and poked a rifle through her sofa. “I’ve had just a lot of things that he has redone for our family, and they are all done so beautifully,” she said. “When he did things, they were done from the inside out. He’d reglue them and take care of them, put in new webbing, and then he had such a flair for design.” With Marcia’s chair, Hiniker found an unexposed piece of leather so he could match the color. He was given the freedom to pick the leather, and just like with most clients, he didn’t feel pressure to totally recreate the chair that lives in the Mason family’s memories. “Usually they’re in such bad shape that anything’s going to be an improvement,” Hiniker said. Hiniker’s not sure he’ll ever retire, but he has backed off the larger commercial work. As a one-man shop, he’s got plenty of smaller projects as it is. “Some jobs are getting pretty far out there, but people really hang in there for me. They wait for me,” Hiniker said. “The creative juices aren’t flowing like they used to, but then sometimes it’ll click, and things will get going again. The business always required that you’ve got to be creative, but you’ve got to be selfmotivated, too.” MV

Forward thinking,

Mankato minded.

Keith Balster Vice President of Lending keith.balster@bankvista.com 507.344.3511 NMLS#: 705772

bankvista.com

2016 Minnesota SBA Lender of the Year Medium Market

Member FDIC Equal Housing Lender

1501 Adams St | Mankato, MN 56001 | (507) 387-2265

MN Valley Business • OCTOBER 2017 • 23

■

Business and Industry Trends Economy Midwest survey shows growth

There’s no room for cutting corners when it comes to protecting your farm inventories and equipment. That’s why choosing a Butler® building system makes so much sense. From functional clear span interiors to a proven weathertight roof system, you can count on superior performance – at a price you can afford. Call us, your local Butler Builder®, to learn more.

A monthly survey of business supply managers suggests business conditions improved in August and that more economic growth lies ahead for nine Midwest and Plains states, according to a report released Friday. The Mid-America Business Conditions Index rose to 57.5 in August from 56.1 in July, the report said. The June figure was 62.3. Minnesota’s overall index dropped to a still healthy 61.8 last month from July’s 63.2. Index components were new orders at 57.5, production or sales at 66.2, deliver y lead time at 61.0, inventories at 60.7 and employment at 63.8. “The state is adding manufacturing jobs at an annual pace of approximately 1 percent and growing nonmanufacturing employment at a rate exceeding 2 percent. Our surveys over the past several months indicate this positive trend will continue for the remainder of 2017,” said Creighton University economist Ernie Goss, who oversees the survey. Sur vey organizers say any score above 50 suggests growth in that factor. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Real GDP up 3%

24 • OCTOBER 2017 • MN Valley Business

Real gross domestic product increased at an annual rate of 3 percent in the second quarter of 2017, according to the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent. Real gross domestic income increased 2.9 percent in the second quarter, compared with an increase of 2.7 percent in the first. The increase in real GDP in the

second quarter reflected positive contributions from personal consumer expenditures, nonresidential fixed investment, exports, federal government spending, and private inventory investment that were partly offset by negative contributions from residential fixed investment and state and local government spending.

Retail/Consumer Spending

Energy

Vehicle Sales Mankato — Number of vehicles sold

Oman sets oil record

1500

Oman set a new record with annual total oil production in 2016 exceeding 1 million barrels per day. Oman’s petroleum and other liquids production ranks seventh among the Middle Eastern countries. Oman is the largest oil producer in the Middle East that is not a member of the Organization of the Petroleum Exporting Countries (OPEC). Like many countries in the Middle East, Oman is highly reliant on its hydrocarbons sector. The Oman Ministry of Finance stated that finances have been severely affected by the decline in oil prices since mid2014. In 2016, Oman’s oil and natural gas revenues were 67 percent lower than in 2014, despite achieving record production. Oil revenue accounted for 27 percent of Oman’s gross domestic product in 2016, a decrease from 34 percent in 2015 and 46 percent in 2014.

U.S. oil output up

U.S. crude oil production averaged an estimated 8.9 million barrels per day in 2016 and is forecast to average 9.3 million b/d in 2017. Forecasts crude oil production should average 9.9 million b/d in 2018, which would mark the highest annual average production in U.S. history, surpassing the previous record of 9.6 million b/d set in 1970.

Natural gas output up

U.S. dry natural gas production is forecast to average 73.5 billion cubic feet per day (Bcf/d) in 2017, a 1.2 Bcf/d increase from the 2016 level. Natural gas production in 2018 is forecast to be 3.9 Bcf/d above the 2017 level.

Wind, solar increasing

Wind electricity generating capacity at the end of 2016 was 81 gigawatts (GW). EIA expects wind capacity additions will bring total wind capacity to 88 GW by the end of 2017 and to 102 GW by the end of 2018. Total utility-scale solar electricity generating capacity at the end of 2016 was 22 GW. Solar capacity additions will bring total utility-scale solar capacity to 29 GW by the end of 2017 and to 32 GW by the end of 2018. After declining 1.7 percent in 2016, energy-related carbon dioxide (CO2) emissions are projected to decrease 0.3 percent in 2017 and then to increase 2 percent in 2018.

- 2016 - 2017 1,101 766

1200 900 600 300 0

Source: Sales tax figures, City of Mankato

Sales tax collections Mankato (In thousands)

- 2016 - 2017 $429

600

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

$416

500 400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato - 2016 - 2017 70000

$27,978

52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2016 - 2017 175000 140000

$63,500

105000

$61,214

70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • OCTOBER 2017 • 25

■

Agricultural Outlook

By Kent Thiesse

U.S. farm income levels remain low

ometimes Headlines and statistics can be a bit misleading or even send the wrong message. Such was the case when the most recent United States Department of Agriculture Farm Income forecast was released, with a headline proclaiming an upturn in farm profits for 2017. While the statement may be somewhat true it is being portrayed by many that we have somehow turned the corner on the downturn in the farm economy. As we dig further into the data, we see that this is probably not the case, and that a large portion of the farming sector continues to deal with very tight profit margins and low farm profitability. In the latest forecast released in late August, the USDA Economic Research Service is projecting U.S. Net Farm Income to increase by $1.9 billion (3.1 percent) in 2017, as compared to 2016. The total Net Farm Income for U.S. farmers in 2017 is estimated at $63.4 billion, which compares to Net Farm Income levels of $61.5 billion in 2016, $80.7 billion in 2015, $92.6 billion in 2014, and the record level of $123.8 billion in 2013. The projected 2017 U.S. Net Farm Income level would still represent a 5-year decline (2013 to 2017) of 49 percent from the peak year in 2013. The 2017 Net Farm Income projection would be the second lowest since 2010, trailing only the 2016 level. The USDA ERS is also projecting the total Net Cash Income to increase by about 12.1 percent in 2017, as compared to 2016 levels. The 2017 Net Cash Income for U.S. farmers is estimated at $100.4 billion, which compares to Net Cash Income levels of $89.2 billion in 2016, $108.5 billion in 2015, 131.5 billion in 2014, and the record level of $135.6 billion in 2013. The projected increase in the estimated 2017 Net Cash Income is primarily associated with improved livestock profit levels in most enterprises in the past year, and higher amounts of crop inventories to be sold in 2017, following the record U.S. crop yields in 2016. The Net Cash Income is based solely on the estimated earnings generated from crop and livestock sales likely to occur during 2017, minus the expected cash expenses during the year. On the other hand, Net Farm Income is adjusted for values of farm inventories, and other farm balance sheet adjustments. Net Cash Income measures the solvency of a farm business, or the ability to pay bills and make payments on debt, while Net Farm Income measures the increase in wealth from crop and livestock production. When adjusted for inflation, the total Net Farm Income and the total Net Cash Income for U.S. farmers in both 2011 and 2013 reached the highest levels since mid-

26 • OCTOBER 2017 • MN Valley Business

1970’s, before the sharp declines in the past few years. Somewhat surprising to many, USDA ERS increased the 2017 U.S. Net Farm Income estimates in the August 30 estimate by $1.1 billion (1.8 percent), as compared to the previous USDA estimate earlier this year in February. Many thought that the continued low commodity prices for corn, soybeans and other crops would lead to steady or declining 2017 farm income projections. However, improved profitability in the livestock sector was cited for the enhancement in the most recent Net Farm Income projections, as compared to six months earlier. USDA is estimating cash receipts from livestock production to increase by 8.4 percent in 2017, while cash receipts from crop production are only expected to increase by 0.3 percent during the year. USDA also cited increased receipts for many fruit and vegetable crops as a factor for the improved Net Farm Income. Another interesting highlight was the estimated median income level of U.S. farm households. The median 2017 household income for farm families is estimated at $76,831 for 2017, which is nearly the same as the 2016 level, and is about 6 percent lower than the 2014 household income level. In recent years, more than half of the U.S. farm households have lost money on their farming operations each year, with an estimated average loss of ($1,325) for 2017. This loss in available household income from the farm operation is compensated for by an estimated average of $67,969 in off-farm household income by farm families. During these times of reduced Farm household income in recent years, many farm families have also been challenged by rapidly rising health insurance and health care costs.

Highlights from the report n Total gross farm receipts are expected to be approximately $358 billion in 2017. Total crop receipts in 2017 are expected to be $180 billion in 2017, compared to $220.9 billion in 2013, and a record $231.6 billion in 2012. n Total livestock receipts in 2017 are projected to increase to $177.5 billion, and will make up nearly half of the total U.S. farm receipts; however, the current estimated total receipts are still well below the level of nearly $213 billion for livestock receipts in 2014, n Corn receipts are expected to decline by $0.3 billion in 2017, even coming off the record U.S. corn yield in 2016, and have declined nearly 40 percent in the past 5 years since 2012.

n Wheat receipts have shown a similar decline to corn in the past 5 years, but wheat receipts are expected to be nearly steady from 2016 to 2017, with lower production offsetting higher prices. n Soybean receipts have also declined considerably from 3 or 4 years ago, but are expected to increase by 6.3 percent from 2016 to 2017, due to increased production and improved prices. n Total milk and dairy receipts declined about 30 percent from 2014 to 2016, but are expected to improve 11.2 percent in 2017, due increased average milk production and improved milk prices. n After a sharp decline in cattle prices and total receipts in 2016, the projected receipts from cattle and calves is expected to increase by 5.7 percent in 2017, primarily due to higher inventories. n 2017 hog receipts are expected to increase by a strong 14.6 percent from 2016 to 2017, due to fairly solid increases in both hog numbers and market prices. n Government farm program payments are expected to remain fairly steady in 2017, near $13.5 billion, reflecting the continued lower levels of crop prices this year. 8 farm sector expenses for 2017 are expected to n Total increase slightly from a year earlier, after declining by 6more than $40 billion in 2015 and 2016. n Crop input costs for fertilizer is expected to decline by 4nearly 10 percent in 2017, while input costs for seed and pesticides are expected to be steady, and farm 2 expenses for fuel, labor, and interest are expected to increase. n The0 cost of feeder livestock in 2017 is expected to J for F the M first A time M Jsince J 2014; A however, S O N total D increase feed costs for the year are expected to decline compared to a year earlier.

Summar y 8

Corn prices — southern Minnesota

(dollars per bushel)

— 2016 — 2017

20 16

$2.93

2 0

$2.73

Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2016 — 2017 208 100 166 85 12 4 70

$9.01

8 55 2 $8.93 4 40 0 0 J F M A M J J A S O N D 25 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA

Iowa-Minnesota hog prices

20 100 25 16 85 22 $60.68 12 70 19 8 55 16 4 $60.16 40 13 0 J F M A M J J A S O N D 25 10 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA

Milk prices

Minimum prices, class 1 milk Dollars per hundredweight

— 2016 — 2017 25 22

$17.56

19 16

$15.34 J

20 25 16 22 12 19 8 16 4 13 0 J 10

185 pound carcass, negotiated price, weighted average

— 2016 — 2017

The USDA ERS Farm Income Forecast gives an 100 picture of trends in U.S. Net Farm Income, overall 6 based85 on likely crop and livestock receipts, and estimated farm expenses for a given year. The report 4 also provides an overview of changes in asset value, 70 farm debt trends, and the equity position of the U.S, 2 Farm55sector. Obviously, there will be a wide variation in farm income levels across the U.S. in 2017, as well 40 0 as within J individual F M A States, M J depending J A S Oon N crop D conditions and market prices, crop and livestock 25 F MandAlocal M economic J J conditions. A S O Many N D enterpriseJ mixes, of these same variations in 2017 farm income levels will likely also exist in Southern Minnesota. There is expected to be a wide variation in 2017 crop yields 100the region this year, along with vast differences across in the market prices that producers receive for their 85 livestock production. Some farm operators crop and may be 70able to show a small profit for 2017, while other producers in the area may show a large financial loss for the55year.

Agriculture/ Agribusiness

Source: USDA. Based on federal milk orders. Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

MN Valley Business • OCTOBER 2017 • 27

25 22 19 16 13 10

Construction/Real Estate Residential building permits Mankato

Commercial building permits Mankato

18000

12000

- 2016 - 2017 (in thousands)

10000

13500

$5,646 $3,800

9000

4000 2000

Source: City of Mankato

Information based on Multiple Listing Service and may not reflect all sales

- 2016 - 2017 (in thousands) 240 204

240

Median home sale price: Mankato region - 2016 - 2017 (in thousands)

250

300

Source: City of Mankato

Existing home sales: Mankato region

$175,000

$169,900

200 150

180

2017

100

120

2016

0.0 0.2 0.4 0.6 0.8 1.0

0 O

Source: Realtors Association of Southern Minnesota

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

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

Housing starts: Mankato/North Mankato

— 2016 — 2017

- 2016 - 2017

5.5

5.0

4.5

3.7%

4.0

3.5 3.0

$1,261

6000

4500

$762

8000

3.4% J A

Source: Freddie Mac

Source: Cities of Mankato/North Mankato

Real Knowledge. Real Experience. Real Dedication. Real Results.

One big little firm.

100 Warren Street, Suite 708, Mankato, MN 56001

507-625-4606

www.lidcomm.com

Bolton-Menk.com

28 • OCTOBER 2017 • MN Valley Business

Tim Lidstrom Karla Jo Olson Dan Robinson CCIM/Broker

Broker

Agent

We Know Commercial Real Estate

Gas Prices

Gas prices-Mankato

— 2016 — 2017

54 43 $2.54

32 21 10 0

S $2.05 O N

Gas prices-Minnesota

— 2016 — 2017

5 54 $2.50

43 32 21 10

$2.17

C. Sankey

Source: GasBuddy.com

Stocks of local interest Archer Daniels Ameriprise Best Buy Crown Cork & Seal Consolidated Comm. Fastenal General Growth General Mills Hutchinson Technology Itron Johnson Outdoors 3M Target U.S. Bancorp Wells Financial Winland Xcel

Aug. 15

Sept. 8

$42.05 $144.79 $58.97 $58.35 $19.00

$42.41

$42.76 $21.10 $57.31 $4.00 $73.05 $61.31 $207.18 $54.35 $52.98 $50.20 $1.27 $48.73

$131.51 $55.46 $57.80 $18.51 $41.35 $21.25 $54.53 $4.00 $70.85 $63.54 $202.28 $58.75 $50.07 $51.88 $1.23 $49.88

Percent change +0.9% -9.2% -6.0% -0.9% -2.6% -3.3% -0.7% -3.5% 0.00% -3.0% +3.6% -2.4% +8.1% -5.5% +3.3% -3.0% +2.4% C. Sankey

MN Valley Business • OCTOBER 2017 • 29

Minnesota Business Updates

■

based firm that owns Caribou, Einstein and a number of other brands familiar to American diners and coffee lovers. Caribou and Einstein moved closer to one another last month following the appointment of a single chief executive over both companies. Not counting this deal, JAB has spent more than $40 billion acquiring carb and coffee purveyors such as Panera Bread, Peet’s Coffee and Tea, Stumptown Coffee Roasters, Intelligentsia Coffee and the retail brand Keurig Green Mountain.

■ H.B. Fuller’s $1.6B deal H.B. Fuller Co. agreed to buy Royal Adhesives & Sealants in a $1.6 billion deal that unites two of the nation’s leading makers of commercial and industrial adhesives. According to the Star Tribune, the deal will add a $650 million business to Vadnais Heights-based H.B. Fuller, driving its annual revenue to approximately $3 billion. “Royal’s complementary offerings will expand our presence in North America, Europe and China, and add new technology and capabilities,” Jim Owens, H.B. Fuller’s chief executive, said in a statement. He said the company identified $35 million in costs that can be removed after the two companies combine. Royal is based in South Bend, Ind. The company has 19 factories in five countries and about 1,500 employees.

■ Best Buy’s good/bad news Best Buy, the No.1 U.S. electronics retailer, reported better-than-expected quarterly earnings and sales, helped by strong demand for smartphones, connected home and wearable

devices. Best Buy shares had rallied after the earnings beat. But they reversed earlier gains after CEO Hubert Joly said on the earnings call that same-store sale, which were in the mid-single digits and topped forecasts, did not represent a “new normal”. Best Buy’s sales at established stores rose 5.4 percent in the second quarter ended July 29, besting analysts’ average expectation for a 2.1 percent increase, according to Consensus Metrix.

■ Caribou buys Bruegger’s Caribou Coffee is buying Bruegger’s Bagels, the latest twist for a rapidly expanding corporate family that already includes the Einstein Bros. bagel chain. The owner of Bruegger’s, Dallas-based Le Duff America, announced it agreed to sell the 270-unit chain to Brooklyn Center-based Caribou. Terms weren’t disclosed. It’s the latest deal by JAB Holding Co., the Luxembourg-

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major July Industry 2016 2017 Construction Manufacturing Retail Services Total*

100 172 46 125 443

Local non-farm jobs Percent change ‘16-’17

86 133 24 120 363

125,622

126,669

133000 122000

2100 1400

111000

700 100000

Minnesota initial unemployment claims

Minnesota Local non-farm jobs

Major Industry 133000 133000

2016

2017

Percent change ‘16-’17

Construction 122000 122000 Manufacturing Retail 111000 Services 111000 Total*

2,144 3,268 931 3,675 10,018

2,337 2,106 623 3,603 8,669

+9.0% -35.6% -33.1% -2.0% -13.5%

Services consist of administration, educational, health care and social 100000 assistance, food andJ otherF miscellaneous services. M A M J J A S O 100000 J don’t F equal M total A because M Jsome Jcategories A not S listed. O N *Categories

30 • OCTOBER 2017 • MN Valley Business

3500 2800

-14.0% -22.7% -47.8% -4.0% -18.0%

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.

July

- 2016 - 2017

Nine-county Mankato region

2,930

2,987

2000 1400 1400

700 D

- 2016 - 2017

(in thousands)

8000 3500 3500 6000 2800 2800 4000 2100 2100

700 0 J F M A M J J A S O N D 0 J F M A M J J A S O N D J F M A M J J A S O N D

200000 150000 100000 50000 0

Like other retailers, the company is grappling with a consumer shift towards online shopping and further away from physical stores. Best Buy in fact benefitted from this challenging environment in the second quarter as some of its competitors closed stores. The company said it now expects full-year revenue to rise about 4 percent, compared to an earlier forecast of a 2.5 percent increase.

■ FDA OKs 3M blankets

■ Cargill, union violated rights A Cargill meatpacking plant in Colorado and the employee union that represented its workers violated Muslim workers’ civil rights in a dispute over prayer breaks, a federal agency that enforces U.S. antidiscrimination laws in the workplace has determined. The Denver Post said the U.S. Equal Employment Opportunity Commission invited Cargill Meatpacking Solutions and Teamsters Local No. 455 to participate in mediation to resolve the discrimination complaint at the plant in Fort Morgan. A resolution could involve paying the workers lost wages, restoring their benefits, returning them to their jobs, and awarding the workers money to punish the company and the union. 133000 The EEOC ruled in favor of 130 employees who filed 3500 133000 complaints against Wayzata-based Cargill and in favor of 20 122000 workers who filed complaints against the 2800 122000 Teamsters. 2100 111000

111000

The Food and Drug Administration on Wednesday recommended that hospitals and doctors continue using 3M’s forced-air warming blankets in surgery, despite thousands of lawsuits that allege the devices increase the risk of serious surgical infections, according to the Star Tribune. The Bair Hugger Forced Air Warming Device, manufactured by Maplewood-based 3M Co., is a widely used system that is supposed to promote post-surgical healing and cut down on infections by maintaining a 133000 body temperature in surgery. patient’s More than 2,000 people have sued 3M, claiming the company has covered up evidence that the device 122000 actually increases infection risk by spreading contaminants with blown air and waste heat. The concerns have apparently spooked some hospitals 111000 so much they have stopped using the system. The FDA said the agency has concluded from all the available evidence 100000 that hospitals and patients should continue to J F M A M J J A S O N D use the system in cases where it is “clinically warranted,” such as during joint replacement surgery.

3500 8000 2800 6000 2100

1400 700

100000

100000 J F

J M

M J

J A

J S

Local number of unemployed

4000 2100 1400 2000

S N

O D

8000

4,858

6000

4,314

0 F F

J F M A M M A M J J M A M J J

J A A

J S S

A S O N O N D O N D

200000

113,915

150000

106,122

100000 50000 D

700 0

4000 1400

100000

700 2000

50000

0 0 J F JM

F M A M AJ FA M

M MJ

J JA

J JS

A AO

S N S

O D O

N N

D D

(includes all of Blue Earth and Nicollet Counties) 200000 150000

July

100000

0 F

J M

F M A A M J

M J

J A

2016

2017

3.3% 56,013 1,914

3.0% 57,000 1,763

J S

A O

S N

O D

Unemployment rates Counties, state, nation County/area

- 2016 - 2017

1400

150000

Unemployment rate Number of non-farm jobs 50000 50000 Number of unemployed

100000

2000

2100

Mankato/North Mankato Metropolitan statistical area

150000

4000

700 0 J 0 J

D 0

200000

Minnesota number of unemployed

- 2016 - 2017

Nine-county Mankato region 8000 3500 6000 2800

A O

2800

200000

Employment/Unemployment

F M A A M J

3500

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

July 2016

July 2017

3.5% 3.9% 4.1% 3.9% 4.4% 2.9% 3.8% 4.1% 5.5% 3.6% 3.8% 5.1%

3.1% 3.3% 3.8% 3.6% 3.5% 2.8% 3.0% 3.5% 4.3% 3.3% 3.4% 4.6%

Source: Minnesota Department of Employment and Economic Development C. Sankey

initial •unemployment MNMinnesota Valley Business OCTOBER 2017 claims • 31

Sponsored by the Carl & Verna Schmidt Foundation

Associated Press

nvestors who own energy stocks have seen more than their share of swings in recent years. After a two-year slide, the sector rebounded in 2016 as crude oil prices stabilized above $50 a barrel to lead all other sectors in the Standard & Poor’s 500 index. But so far this year, the sector is the S& P 500’s biggest decliner, down 17.1 percent. The slump comes as the price of U.S. crude oil has declined nearly 10 percent this year to $48.41 a barrel. Just three years ago, it topped $100 a barrel. While energy companies in the S& P 500 ceased being a drag on the index’s overall earnings this year, many investors remain weary over an oil supply glut that continues weighing down crude prices. Even so, Derek Rollingson, portfolio manager for the ICONEnergy Fund, makes the case for investing in energy stocks, noting that companies are becoming more efficient and stand to benefit from developing countries’ growing energy needs. Answers have been edited for length and clarity:

How should investors think about the performance of an energy sector fund like yours, given the turbulent swings in the sector we’ve seen in recent years?

The past few years have been tough as an energy fund manager. Fortunately, as an active manager, I have being able to adjust the portfolio to help reduce the volatility of the ICON Energy Fund. When you compare our performance relative to our peers it shows that historically we have been able to moderate that volatility. However, going forward the bottom line is that past turbulence has made energy companies better and leaner and I’m excited about the opportunities that are currently available in the energy sector.

32 • OCTOBER 2017 • MN Valley Business

Investing in the roller coaster energy sector funds Is it your sense that a global oil supply glut is what’s primarily weighing on energy stocks?

Pricing mechanics in oil, since mid-2014, have been focused on supply exceeding demand, which led to a buildup in oil By Alex Veiga inventories. Recently, however, that has begun to change. Recent data has showed inventories declining. If this trend continues again, it is another positive for both oil pricing and energy stocks.

Do oil prices have to climb further before shares in energy sector companies recover from their steep slump?

While higher commodity pricing would be an obvious boon for energy stocks, investors should not underestimate the power of higher production in a lower margin environment as a good path to improved earnings. I have heard this referred to in the energy sector as the “New Abundant,” where lower margins can be offset by increased volume.

What’s your outlook on developing economies increasing their demand for oil in the next few years?

Emerging markets have shown notable improvement over the last year or so. This has been reflected in their strong stock performance year to date. Growth in these developing markets is key to growth in energy demand. A focus on increasing demand increases the optimism for oil pricing and is yet another strong argument for establishing a long-term position in the energy sector. MV

Sponsored by the Carl & Verna Schmidt Foundation

Better than expected, barely good enough: Profits and stocks By Stan Choe | Associated Press

ere’s how much hope and expectation has been built into the stock market: Big companies are healthy and making fatter profits than Wall Street expected, yet it’s barely enough to keep the market from falling. Consider Home Depot, which gave an earnings report on Tuesday that was seemingly fantastic. The retailer made more in profit from May through July than any other quarter in its history, and its 14 percent rise in earnings per share was stronger than analysts expected. Home Depot at the same time raised its profit forecast for this year and reported higher revenue than Wall Street forecast, all of which should be kibble for investors ravenously looking for growth. Even still, Home Depot’s stock slid 2.7 percent after the report. That reaction hasn’t been too far off the norm recently, as companies have lined up to report how much they earned during the spring. Companies in the Standard & Poor’s 500 index are on pace to report one of their strongest quarters in years. Earnings per share were likely up more than 10 percent from a year earlier, better than the 7 percent that analysts had penciled in when the quarter ended, according to FactSet. Despite those gains, S& P 500 index funds are nearly exactly where they were before the heart of earnings reporting season began in mid-July. “Equity markets have greeted positive earnings reports largely with indifference,” strategists at BlackRock wrote in a recent report. “Investor sentiment shows more signs of fatigue than euphoria, even as stock markets have repeatedly reached new heights this year.” Usually, when a company reports better earnings than analysts expected, it sends the stock higher, at least for a day. Since 2006, such companies have

typically done 1.14 percentage points better than the S& P 500 the day following its release, according to Goldman Sachs. But through mid-August of this reporting season, the performance edge has been virtually nil at 0.03 percentage points. That’s the lowest level in at least a decade. When a company has reported better-than-expected earnings but fallen short of forecasts for revenue, its stock has tended to do worse than the rest of the S& P 500, according to BlackRock. And when a company has missed on both measures? Much worse. At first blush, such a reaction may be surprising. Stock prices can move up and down for many reasons in the short term: whatever the president is tweeting about, what central banks in far-flung corners of the world are doing or the latest change some hedge fund has made to its trading algorithm. But over the long term, stock prices tend to track closely with corporate profits. When companies are making more money, investors are willing to pay more for each of their shares. This time may be different because stock prices had already climbed so much in anticipation of higher profits ahead. Even when profits were falling early last year, the S& P 500 index was still holding steady or rising. One of the main ways analysts use to measure whether stocks are expensive is to compare their price to corporate profits. The S& P 500 is now trading at 20.7 times how much its companies have earned over the last 12 months, according to FactSet. That’s more expensive than its median price-earnings ratio of 15.6 over the last decade. MV

MN Valley Business • OCTOBER 2017 • 33

MANKATO

MARATHON:

SOMETHING FOR EVERYONE

By Katie Adelman, Marketing and Communications Coordinator

un. Walk. Volunteer. Cheer. Mankato Marathon weekend has something for everyone, as the saying goes. In more ways than simply playing host, the community of Greater Mankato has embraced the Marathon from the start, for it was a group of local runners who inspired its inception. This system of public support is one of the reasons runners from far and wide migrate back to Mankato every October. Cheer Teams. Sport Psych Team. Course support. Pacer guides. The Greater Mankato community provides support for every runner.

The Mankato Marathon, presented by Mayo Clinic Health System, continues to rise in status in the eyes of runners, as evidenced by the accolades that have poured in. To name just a couple: •

Greater Mankato Growth

•

In May 2016, Runner’s Goal named the Mankato Marathon’s half marathon as its number one Choice for Half Marathons in Minnesota. In its 2014 list, FlipKey by Trip Advisor ranked the Mankato Marathon as the top marathon to travel for in Minnesota.

Another trend-setting and acclaimed feature of the Mankato Marathon is the Sport Psych Team. This group of trained professionals, including sport psychology consultants, psychologists, sport psychologists, counselors and graduate students, provides participants with mental strategies and tips to help runners reach their full potential while on the course.

34 • OCTOBER 2017 • MN Valley Business

s Coordinator

Perhaps the most visual (and loudly-heard) community support comes from the Mankato Marathon Cheer Teams. Strategically placed along the half and full marathon courses are several cheer zones. Cheer Teams are meant to motivate and to inspire runners with cheers, music and encouraging words to help them to the finish line. Any group, business or organization can assemble to form one of these Cheer Teams. Because Sibley Park is one of the more mentally difficult course areas to get through, we are excited to announce this year’s addition of new Cheer Teams placed throughout the park. Service Leadership Program groups of Aktion Club and the Loyola, Mankato West and Mankato East Key Clubs will provide motivation for Mankato Marathon runners through Sibley Park. As a best practice, the Orthopaedic & Fracture Clinic Speaker Series at the Mankato Marathon showcases the expertise of those who know running. Where the distinction from other races lies is the running community provides feedback of what high-caliber speakers to pursue. This year, Heather Kampf, the most highly decorated University of Minnesota women’s track athlete, will be the OFC Speaker Series keynote speaker. Heather is a 2005 graduate of Rosemount High School, where she received the Minnesota Class AA state title in the 800 meters and the 400 meters. At the University of Minnesota, she was the only runner to compete in every NCAA Championship in cross country, indoor and outdoor track. She was a nine-

time All American, the NCAA Indoor Champion in 2006 in the 800 meters and contributed to the Gophers’ six Big Ten Conference Team Titles between 2006-2009. Heather has competed in the 2008, 2012, and 2016 U.S. Olympic Trials and is a four-time U.S. Champion in the Road Mile (2012, 2014, 2015, 2016), to earn herself the nickname of “Queen of the Road Mile”. In 2014, Heather qualified for the World Indoor Championships in Sopot, Poland, where she was a finalist in the 1500m. Most recently, she placed 2 nd in the 2-mile, and 3 rd in the mile at the 2017 U.S. Indoor Track and Field Championships. In addition to her professional running career, she works parttime at Mill City Running in northeast Minneapolis, coaches Apple Valley Girls Cross Country, and offers private coaching to individual runners. The Scheels Sport & Health Expo is open Oct. 21 for everybody to enjoy. A wide range of exhibitors and vendors offer varying services to athletes and shopping for everyone. Kids can burn off energy in the Kidz Zone, complete with indoor rock wall, inflatables, bowling, face painting and Knocker Ball. Mankato Marathon weekend is more than for the runners. It’s a chance to display the Greater Mankato’s encouragement for this event. That community support, in addition to the external reviews, is a source of pride for those who “Run. Walk. Volunteer. Cheer.” in the Mankato Marathon. The Mankato Marathon is October 21-22. Learn more at mankatomarathon.com.

SATURDAY, OCT. 21

SUNDAY, OCT. 22

11 am - 6 pm 12:30 - 3:15 pm

7:30 am 8 am

1 pm 1:10 pm 1:30 pm 2:45 pm 3 pm 4 pm

Scheels Sports & Health Expo Orthopaedic & Fracture Clinic Speaker Series Toddler Trot Diaper Dash My Bold Walk KidsK (ages 7-12) KidsK (ages 6 and under) Pork Power 5K

8 am - 2:30 pm

Profinium 10K Half Marathon, Relay Marathon and Full Marathon Post Race Festivities

MN Valley Business • OCTOBER 2017 • 35

Greater Mankato Growth

Mankato Marathon Schedule of Events

YOU’RE INVITED

RURAL LEGISLATIVE FORUM Tuesday, December 19, 2017 4 - 9 pm| Verizon Center This premier annual reception and dinner event where USDA Secretary Sonny Perdue* joins key public leaders with a wide-range of attendees from the agriculture sector – from producers, to manufacturing, to professional services, to education and research – in candid conversations about key issues facing the rural economy and potential solutions. Learn more or sign up for sponsorship opportunities at greenseam.org/events *Invited

LOOK • INVEST • APPLY In order to continue building on existing ag business prominence, we need to maximize a growing economic marketplace – you can help us do that by reading our inaugural stakeholders report, applying to our board of governors and/or investing in the further development of agribusiness in the GreenSeam region. For more information and to apply at greenseam.org/about

Greater Mankato Growth

TELL US YOUR STORY Greater Mankato Growth, Inc. will be celebrating 150 years of service to our area business community in September 2018. We want to build an accurate account of local business history and need your help to do so. We have historical information from many resources, but we'd like you to share your first-hand historical account! Fill out the brief survey and be entered for a chance to win one of four prizes at greatermankato.com/150 Thank you to our partners:

The Free Press MEDIA

36 • OCTOBER 2017 • MN Valley Business

FRONT STREET, MANKATO IN 1909

to the Leadership Institute Class of 2017-2018 Program Sponsors:

Adelman Bach Beadell Bergeleen Bleck Brauman Ceminsky Dahline Davis Deike Drysdale Enter Ericksen Frantsen Grosland Hanson Hawkins Hudspith Jaycox Johnson Johnson Knudtson Kragh Kreutzer Long McCann Mehia Meschke Montemurno Musser Naumann

Visit Mankato MEI Community Bank Oleson + Hobbie Architects CliftonLarsonAllen Walmart Distribution Center Coughlan Companies Mankato Area Public Schools AEM Workforce Solutions Kato Engineering ISG Carlson Craft Minnesota Valley FCU MRCI MEI MTU Onsite Energy Schwickert’s Mankato Area Public Schools Dotson Iron Castings Fine Impressions Mayo Clinic Health System Blethen Gage & Krause YWCA Mankato House of Hope, Inc. Consolidated Communications City of North Mankato Wealth Enhancement Group ISG Kato Engineering MEI Consolidated Communications

Alyssa Bridget Debra Danica Tony Devon Ashley Rachel Jen Greg Molly Marti Karen Dean

Nelson Norland Salmon Schmidt Smith Soule Sprenger Tanquist Theneman Vandermause Westman Wolter Young Zimmerli

Blethen Gage & Krause Greater Mankato Growth South Central College Compeer Financial Navitor Specialty Products Eide Bailly AmericInn Hotel & Conference Center Minnesota State University, Mankato Partners for Affordable Housing Bethany Lutheran College City of Mankato Mankato Clinic South Central College Gislason & Hunter

Greater Mankato Growth

Katie Joe Bob Jessica Adam Kurt Danielle Jeff Leah Tyler Lesa Darcy Joann Abby Dave Jeff Ashley Eric Josh Tonya Christine Tammy Erin Arlene Kara Kevin Danielle Cody Justin Coralyn Josh

MN Valley Business • OCTOBER 2017 • 37

NEW BUSINESS

GROUNDBREAKING

Blue Skye Farms 18675 Old Hwy 66, Good Thunder

Bluestem Commons 3009 Bluestem Trail, Mankato

RIBBON CUTTING

Interim Healthcare 709 South Front Street, Suite 3, Mankato

McDonald’s 150 West Lind Court, Mankato

The Social Butterfly 424 North Riverfront Drive, Mankato

Growth in Greater Mankato

Cavalier Calls on the Newest Greater Mankato Growth Members

Cavaliers

Greater Mankato Growth

APX Construction Group 1820 Willow Street, Mankato apxconstructiongroup.com

Midwest Benefits Solutions LLC 125 North Main Street, Blue Earth legalshield.com/hub/midwest69

Dunkin’ Donuts 1705 Madison Avenue, Mankato dunkindonuts.com

Von Automation Training Solutions 401 Page Avenue, North Mankato

38 • OCTOBER 2017 • MN Valley Business

Midtown Tavern 524 North Riverfront Drive, Mankato facebook.com/midtowntav/

Wagon Wheel Cafe 609 South Front Street, Mankato facebook.com/Wagonwheelcafe

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

MRCI - East Park Mayo Clinic Heath System Courtyard by Marriott Hotel & Event Center

7:30 - 9:00 am October 18 November 15 December 20

True Facade Pictures Old Main Village Laurels Peak Rehabilitation Center

2017 Business Before Hours Sponsored by:

August Business After Hours hosted by Snell Motors

August Business Before Hours hosted by Blethen, Gage & Krause

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.

PATHFINDER AWARD NOMINATIONS Martin Luther King, Jr. Community Celebration

Submit your nominations today!

embers of the public are encouraged to visit each sculpture and cast a vote for their favorite – the People’s Choice Award. The winner is purchased by the CityArt program for display in the City Center.

The Young Pathfinder Award recognizes the commitment and courage displayed by area young people to achieve fair and equal treatment for all and peaceful resolution to conflicts. The Business Pathfinder Award, presented by GMG, recognizes businesses that strive for equal treatment and nonviolence in the workplace. Event to be held January 15, 2018. Find out more at: mankatodiversity.org

2016 Winner Stand For The Flag - Lee Leuning & Sherri Treeby

Ballots are available in marked boxes along the Walking Sculpture Tour route; they may also be picked up at the Visitor’s Center in Mankato Place Mall and at Twin Rivers Council for the Arts. Vote online at citycentermankato.com/ sculpturevote. Voting closes on October 31, 2017 and the winner will be announced at the Greater Mankato Business Awards and Hall of Fame on November 14.

MN Valley Business • OCTOBER 2017 • 39

Greater Mankato Growth

The Pathfinder Award recognizes individuals or organizations that, in the spirit of Dr. King, are initiators or action takers in the struggle for equal treatment, human rights and nonviolence.

Vote for People’s Choice

Now seeking chamber of commerce project applications for 2017-18

» C OME JU DGE

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 offers three magnificent 18-hole championship golf courses. 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.

CENTER FOR

INNOVATION & ENTREPRENEURSHIP COLLEGE OF BUSINESS

he College of Business already offers a minor in entrepreneurship and innovation. Meanwhile, the goal of giving students real-world experience in their own business startups recently took a major step. That step was made in June with the opening of The Center for Innovation and Entrepreneurship, a 4,000-square foot expanse of well-equipped space in the Hubbard Building along North Riverfront Drive in Mankato. The off-campus location in the city’s heavily trafficked Old Town area is space donated for three years by the building’s owner, developer Curt Fisher. Fisher said he was eager to foster more entrepreneurial activity and, as a result, more business occupants.

A Mankato delegation comprised of 80 leaders from business, government and nonprofit sectors traveled to Columbia, Mo., home of the University of Missouri, in November 2015, to examine that community’s initiatives, goals and successes as a way to help

The location also fits well with the center’s aim to give students an energetic and encouraging space to learn and grow as business people. It’s set up so that students who are pursuing their own business ideas are doing so not only alongside other students, and thereby creating a camaraderie and energy, but with others in the Mankato area who have expertise, experience and connections. Beginning with the director, Yvonne Cariveau.

sold a majority of that business and joined the college as the director of the Center for Innovation and Entrepreneurship. She continues to teach the college’s capstone class in entrepreneurship. College of Business Dean Brenda Flannery said it’s rewarding to watch this latest achievement in entrepreneurship at the college. “For me this is really personal,” Flannery said. “When I was hired here 20 years ago, I was hired to teach the entrepreneurship course. We had one course.”

Shortly afterward, Flannery—inspired by travels as a visiting faculty member—initiated the idea of an entrepreneurship fair on campus, one in which students put together An ideal director for such a place a business plan and pitched it to would have the background of an the pros. When Flannery went on academic – a Ph.D., say – as well sabbatical, Shane Bowyer kept as solid experience as a business entrepreneurship activities afloat, and owner. Icing on the cake would when Flannery returned and became be a familiarity with Minnesota dean of the college, she used that State Mankato and, in a perfect capital to do more – creating a minor, world, teaching experience in facilitating the creation of the United entrepreneurship. Prairie Bank Integrated Business Experience (in which students start Cariveau’s bachelor’s degree is and run a business) and fundraising from Minnesota State Mankato. She to launch the CIE, including funding received her Ph.D. in marketing from the director position, graduate the University of Minnesota’s Carlson assistant position, entrepreneurship Business School. In the 1990s she scholarships and the Integrated started Internet Connections, one Business Experience program. of Mankato’s first internet service providers, and later formed the “So, there is a history here and it’s development and design firm been a journey. Now we feel we’ve VoyageurWeb. Cariveau recently taken off” Flannery said.

MN Valley Business • OCTOBER 2017 • To learn more about the Center for Innovation & Entrepreneurship visit cob.mnsu.edu/cie.

Minnesota State University, Mankato College of Business

“We thank the Fishers for making this move possible,” said Richard Davenport, president of Minnesota State Mankato, in a 2017 University news release. “We’ve had conversations with local business leaders for many years about such a move, but there was even more interest in making this happen after the Greater Mankato Growth ‘InterCity Leadership Visit’ to Columbia, Missouri, just over a year ago.”

generate new ideas for Mankato. Davenport said the University’s presence downtown would provide students “real-world experiences and project-based learning conducted in partnership with business, while also creating opportunities for internships and research.”

Keep your employees healthy

Mayo Clinic Health System Occupational Medicine offers the services you need to help keep your employees healthy and safe. • DOT physicals • Injury care

• Medical surveillance • Pre-employment exams

Call 507-594-7370 to learn more.

mayoclinichealthsystem.org

MN Valley Business OCT 2017

MN Valley Business • OCTOBER 2017 • 42