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CREATING A CULTURE THAT ATTRACTS THE BEST TALENT Finding and attracting key talent for an organization is a constantly evolving venture. Shifts in technology, the job market and workers require the ability to learn and adapt to meet an organization’s talent needs. Recent trends have shown an increased focus on finding companies with an authentic culture that offers flexibility and training/growth opportunities. But how do you build that culture, and showcase that culture? Here are some tips to get you started. Create a Promise, and Deliver on It Every Day You need to work hard to ensure your core values are front and center as soon as a candidate starts the recruitment process, and continues to their final days before retirement. At Eide Bailly, we make a promise to our staff that they can expect an environment that is truly caring and supportive, one where they play an active role in their career, and one where they have the opportunity to make an impact. We showcase our culture through our website and social media so any candidate or staff member can regularly find stories, photos and comments from employees talking about their experiences at Eide Bailly.

strong teams regardless of location and encourage the flexibility telecommuting and modified work schedules can provide. We have instituted initiatives such as our telecommuting and flex work schedule policies with great success. Let Your Staff Grow Help your employees grow through building skills for their present and future roles. They can then bring back the knowledge they have gained for the benefit of not only themselves, but for their team and clients as well. While training has always been a core part of our program at Eide Bailly, we wanted to address the desire employees have to learn new areas of business and build skills they may not typically use in their current role. To do this, we created a rotational program called the EB Xchange, which allows qualified individuals the opportunity to apply for a rotation in a specialty area of our business. By researching and understanding emerging employment trends, you can incorporate employee and job seeker priorities around culture, flexibility and growth opportunities to recruit more effectively.

Offer Flexibility Technological advances have allowed for more flexibility in when, where and how people can work. Focus on building

By: Ben Ellingson, Partner Ben Ellingson is the partner-in-charge of Eide Bailly’s Mankato office, where he oversees the service, culture and development of 70 professionals. Contact at 507.304.6911 or bellingson@eidebailly.com

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Paperwork for Terminated Employees - The Big Three

innesota law requires employers to provide a few things to terminated employees, if demanded. Not all employees demand these things, but I recommend you always have these ready to go prior to termination. The first is a truthful, written reason for termination. This is socially awkward. No one likes delivering criticism, and if there’s a personal reason for termination (as opposed to elimination of a position) you’re going to have to say negative things to a person who’s already having a bad day. However, the exercise of drafting this statement is helpful. Most pitfalls for employers come from why the employee was fired. Why is the difference between legal and wrongful termination. Why is the

difference between paying unemployment and not. Why is the difference between winning and losing in court. Taking the time to put your reasons into a few simple paragraphs forces you to think through, scrutinize, and refine your organization’s motives. The second thing is a complete copy of the employee’s personnel record. With both the written reason for termination and the personnel record, have these in a sealed envelope-you don’t want to encourage the employee to examine and argue with the contents during the termination. Finally, terminated employees are entitled to their final paycheck within 24 hours of demand. This is a common “gotcha” for employers. Some employers make a terminated employee wait until pay

day which might be two weeks away. Employers who outsource payroll may have trouble getting a check cut and delivered in 24 hours. The best course is to assume they will ask for it and have it ready. There are penalties associated with failing to deliver any of these in a timely manner. More importantly, an employee who knows enough to know that she is entitled to these is probably savvy enough to go to a lawyer if she’s not getting what she’s entitled to. That lawyer might find other claims like wage and hour or wrongful termination. Keep terminated employees out of a lawyer’s office by having the “Big Three” ready to go in advance of firing.

MN Valley Business • April 2017 • 1

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F E A T U R E S April 2017 • Volume 9, Issue 7

The Mankato region continues to create new jobs across virtually all industry sectors, but employers continue to struggle when trying to find new employees to fill jobs.

Laura Factor fell in love with Mainstream Boutique in New Prague, leading her and Shannon Lang to open a franchise store on Madison Avenue in Mankato.

Francis Kanneh found the college sports recruiting process complex, leading the MSU student to start Under Recruited Preps to help other student athletes.

Jason Langworthy long dreamed of opening his own restaurant and finally realized his dream by opening Maggie J’s Restaurant in Mapleton, bringing on Maggie Vait as manager.

MN Valley Business • April 2017 • 3

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April 2017 • VOLUME 9, ISSUE 7 PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Heidi Sampson Dan Greenwood Nell Musolf PHOTOGRAPHERS Pat Christman Jackson Forderer COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Phil Seibel MANAGER ADVERTISING Jordan Greer Sales Josh Zimmerman Marianne Carlson Theresa Haefner Thomas Frank 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 344-6336, or e-mail mankatomag@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street Mankato MN 56001.

■ Local Business memos/ Company news.....................................6 ■ Business Commentary......................10 ■ 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..................34 ■ Greater Mankato Growth Member Activities ...........................36

From the editor

By Joe Spear

Talent retention may be beyond simple economics

ur elementary economics classes in college suggested a workforce shor tage was a natural phenomenon of basic supply and demand. And the consequences were not all that devastating. When fewer workers are available for jobs, the price (wages) of securing them will go up. But the issue becomes much more complicated for the growing Mankato regional market. In fact, Greater Mankato Growth, the area’s chamber of commerce, has created a task force to deal with what is expected to be a need for nearly 3,000 new jobs in a matter of four years. To make this happen, GMG estimates we will need nearly 2,000 new households and population growth of 4,700 in a very short period of time, by the time of the next presidential election. The group has set up specific strategies and eventual action plans to market the livability of the community, to assess the allimportant cost of living and workplace demographics, to create pipelines of talent between education and business, and to come up with innovative ways to develop and retain talent. Business and community leaders have formed groups to attack each of these issues. The cynic could go back to Adam Smith’s invisible hand theory of economics and suggest that we should let the market work. When there is a labor shortage, wages and salaries will rise, and more and more people will be drawn to the region. But we also learned in economics 202, that there are these things called substitution effects. If they’re not getting paid enough here, local workers or potential workers will seek work elsewhere. People will take their

4 • April 2017 • MN Valley Business

labor to where they can get the highest price. But that’s not the end of the economic equation. For that, we musts consult the ancient Italians. Simple economics may work, or it may not, given the “Ceteris Paribus” of the situation. That’s the Latin word for the phrase “all other things being equal.” Importantly, our professor in economics classes told us there is almost never a case where “all other things are equal.” In other words, one could move to the Twin Cities from Mankato if only for higher wages, if other things, like quality of life, access to good schools, ease of getting across town in 5 minutes, were equal to Mankato. We know that is not the case. One can take a little hit in the big city/regional center wage gap if many other significant things might outweigh it. Having lived both in the Twin Cities and Mankato -- now more than two-thirds of my life in Mankato -- I can say, we still have many amenities one cannot find in the Twin Cities. The workplace commute comes to mind. I know of people who commute 40 minutes to an hour in gridlocked traffic to go to work in the metro area. If you drive fast enough, you can get from Mankato to the western suburbs in that amount of time. You can get to the Mall of America in that amount of time. So we still have a lot of things going for us in the old realm of ceteris paribus. But we shouldn’t rest on our laurels too long. The Twin Cities business leaders have the same problems we do, and they are constantly moving the needle on Twin Cities’ livability. They have talent and recruitment programs. They have been working on their commuting problem with

fabulous and efficient light rail lines. They have been working on their quality of life factor with not two new professional sports stadiums, but three. They’re revamping shopping and entertainment districts. In short, they have the bright lights, big city and they’re expanding. We’ve got to figure out how to make “short commute, small town-feel” sound enticing.

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Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

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Local Business People/Company News

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Correction Mark Murphy Jr. with US Bank

A news item published in the M a r c h Minnesota Valley Business magazine about Mark Murphy joining Pioneer B a n k misidentified Mark Murphy Jr. him in a picture. The picture was of Mark Murphy Jr., of U.S. Bank. Also, Mark Murphy referenced in the news brief about Pioneer Bank does not work there. The two are not related ■■■

Nesbit Agencies honored

Ross Nesbit Agencies was honored by West Bend Mutual Insurance Co. as the 2016 Agency

of the Year. The agency earned top status in the company’s 2016 incentive program, Partners In Excellence. Partners In Excellence is a program that measures five areas of agency performance including profitability, growth, and partnership with West Bend. About 1,300 independent insurance agencies that represent West Bend across the Midwest participated in the program. Accepting the award was Ross Nesbit, owner and president. ■■■

Jelokov joins Farrish

Farrish Johnson Law Office has added attorney Yuri Jelokov. Jelokov focuses his practice in the areas of workers’ compensation law, Social Security disability law and vaccine claims. After obtaining his law degree from William Mitchell College of Law in St. Paul, he spent several

years practicing in Bemidji. He is a native of Tallinn, Estonia. ■■■

Freedom Home certified

Freedom Home Care has received the Certified – Trusted Provider distinction from Home Care Pulse. Certified – Trusted Providers have contracted with Home Care Pulse to gather and report feedback from their clients by conducting live random phone interviews with a percentage of their clients each month. Because Home Care Pulse is an independent third-party company, they are able to collect honest and unbiased feedback, without outside influence. Clients rate their provider’s services in areas such as timeliness of caregivers, ser vices being provided as promised, compassion of caregivers and overall quality of care. Clients are also given the

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opportunity to provide feedback for their provider. ■■■

Priebe earns distinction

John Priebe, of the Minnesota Business Center of Principal Financial Group, has earned membership in the Million Dollar Round Table in addition to qualifying for John Priebe the company’s President’s Circle. Priebe is a 12 year qualifier of the Round Table. Membership is attained by life insurance advisors who meet the organization’s annual production requirement, and are members of their local life underwriters association. The President Circle is an exclusive level of distinction given by the company recognizing advisors for their sales of products.

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Stranik joins Midwest Dental

Gary Stranik is a new dentist at Midwest in Mankato. Stranik is a graduate of the University of Northern Colorado and received his dental degree from University of Colorado School of Dentistry. He most recently owned and operated his own private dental practice in Mankato for more than 30 years. Midwest Dental also recently remodeled its office. ■■■

Schmidt Siding honored

Schmidt Siding & Window Co. has received a Green Diamond Award, given to home improvement companies with exceptional records of customer service. This is the second consecutive year Schmidt’s has earned the award, which was presented by Renewal by Andersen. The distinction is given to Renewal by Andersen affiliates

with a 95 percent or better customer satisfaction and recommendation rating. Schmidt’s is one of the 15 locations that received the award out of 125 eligible locations. ■■■

Vosburg honored by Consolidated

Consolidated Communications employee DeeDra Vosburg received the company’s Community Service Award for her work in making a difference in the community. Vosburg, a product manager at Consolidated Communications in Mankato, volunteers her time with Feeding Our Communities Partners, MAYBA and the YMCA. Consolidated Communications will make a $500 contribution to Feeding Our Communities Partners in support of Vosburg’s volunteer work.

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MN Valley Business • April 2017 • 7

Hewitt honored by UPS

Steve Hewitt of North Mankato was one of 24 UPS drivers in Minnesota inducted into the Circle of Honor, The Circle of Honor honors UPS drivers who have achieved 25 or more years of accident-free driving. Minnesota boasts 157 active Circle of Honor drivers with a combined 4,525 years of accidentfree driving. Globally, the most seasoned UPS Circle of Honor driver is Thomas Camp of Livonia, Mich., with 54 years of driving without an accident. ■■■

Interim HealthCare opens

Interim HealthCare opened a regional office in Mankato. The office provides certified, personalized in home care and skilled nursing home care that enables the elderly, disabled and chronically ill to live in their home while received the customized healthcare services they need. The office serves 12 area counties. The Mankato office is a franchise owned office that is part of a national network of more than 300 franchise offices. The company employs more than 75,000 people. The Mankato office is at 709 South Front Street.

the Greater Mankato community. Her professional background includes having served as an Administrative Assistant for the COO and CFO of the Bristol, Tennessee Regional Medical Center, as well as for the VP of Academic and Student Affairs at St. Ambrose University in Iowa. Additionally, she has more than eight years in print media in Minnesota and California as an Owner/Editor and Editor/Page Designer. ■■■

Profinium elects board members

Profinium, a Minnesota banking company, elected three new board members, including Steve Sorenson of Madelia. Sorenson joins the Profinium Board of Directors and will contribute his expertise in finance and agriculture. Sorenson has spent his career working for agricultural based companies including NuWay Cooperative and Associated Milk Producers as well as growth oriented, closely held companies including Kurt Manufacturing Company, Coughlan Companies, and Jordan Sands. Sorenson recently started working for Krahmer Inc. as COO/CFO of all farm operations. ■■■

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Burger honored by Christensen

Danielle Burger was one of 24 recipients of the Christensen Farms Award of Excellence. Chirstensen is one of the largest, family-owned pork producers in the nation, marketing approximately 3 million hogs annual. It is headquartered in Sleepy Eye and operates throughout the Midwest. ■■■

Jameson joins GMG

Susan Jameson has joined Greater Mankato Growth as the new administrative assistant, following the retirement of Sharlene Vrtacnik. She and her family are new to

Thriveon a ‘best place to work’

Thriveon, which has a New Ulm office, is on the list of Minnesota’s 100 Best Companies To Work For in 2017 by Minnesota Business Magazine. The award recognizes Minnesota’s top companies as determined by the attitudes of employees on work environment, benefits and overall happiness at work. Minnesota based staff at each nominated company voluntarily complete an online questionnaire that collects anonymous responses, uncovering the feelings that employees have about their satisfaction with their employer. This is the third time and second consecutive year that Thriveon has earned a place on this list.

8 • April 2017 • MN Valley Business

Reuter joins MRCI WorkSource

Tami Reuter has been hired as chief business and marketing officer at MRCI WorkSource. Reuter has overall responsibility for the marketing of MRCI WorkSource throughout Minnesota, as well as the procurement of business partnerships, and development at the non-profit organization. She will lead teams throughout MRCI WorkSource which serves over 3,000 people in Minnesota and has facilities in Mankato, Rosemount, Shakopee, Chaska, New Ulm, Fairmont, and Kasoda. For the past six years, Reuter was the executive director of the South Central College, North Mankato Campus Foundation. Prior to that she was the vice president-operations for Junior Achievement of the Upper Midwest. Reuter has also worked at the Greater Mankato Area United Way. ■■■

Lime Valley honored

Lime Valley Adver tising received six Service Industry Adver tising Awards for communication excellence this year. This is the 13th year that the SIAA has recognized Lime Valley. The SIAA is a national competition that honors service industr y providers for their contribution to marketing and advertising. Lime Valley received awards for the following: ■ Gold Award — Visit Mankato, “Building Momentum” Lenticular Postcard ■ Gold Award — Minnesota Pork Board, Dietician Tearsheets ■ Bronze Award — Greater Mankato Growth, GreenSeam Website ■ Merit Award — City of Mankato, Annual Budget Report ■ Merit Award — Martin Luther College, Advent Devotions Booklet ■ Merit Award — Martin Luther College, InFocus Magazine

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Business Commentary

By Tim Penny

Fertilizing the promising local food economy

here’s a misconception that just because it’s late winter, farmers aren’t busy. However, the off-season is when farmers are busy doing bookwork, making machinery repairs, selling and buying seed and laying the groundwork for a successful spring. Just like a farmer, the Southern Minnesota Initiative Foundation has been working hard to bring a range of supports to its 20-county region’s smallest local food growers, makers and producers. Due to the strong presence of partners in our region that assist conventional farmers and food producers, such as AgStar, USDA and community banks, the foundation has focused its agriculture supports on valueadded ag and support for small farmers that might “fall between the cracks.”

Farming of any sort is still a high-risk and hard-work undertaking, yet newer and smaller farmers often face the biggest challenges. Getting loans is harder for farmers without traditional collateral or those growing crops like perennials, which require more “patient capital.” Despite potential higher per-acre income, turning a profit can be more difficult with steeper input costs, lack of subsidies and market fluctuations. According to the 2012 USDA Ag Census, farmers earning between $10,000 and $250,000 only make 10 percent of their income on farming and therefore heavily depend on outside income streams. However, the foundation knows that the local food economy is going to continue to be a big economic driver for our

10 • April 2017 • MN Valley Business

region. Consumers want to know not only where their food comes from, but who is producing it, as demonstrated by a 67 percent increase in farmers markets from 2008 to 2013 (USDA Agricultural Marketing Service, 2013). Nearly 40,000 schools now source food from local farmers, ranchers, and food businesses (USDA Farm to School Census, 2013). Our proximity to the Twin Cities positions us well to source things like organic produce, microbrews and free-range eggs to metro restaurants and food coops. At the third annual Feast! Local Food Festival in Rochester, public attendance grew by 30 percent this year to nearly 1,600 (which does not include exhibitors, buyers and volunteers). Small farmers, especially those working in the hilly fields of southeastern Minnesota’s driftless region, are the ones rising to meet this market demand. Jay Walljasper, in a 2015 report commissioned by The McKnight Foundation, sites that while our region is a “small portion of Minnesota’s overall farmland, the region accounts for roughly 40 percent of the state’s orchards, 25 percent of cattle, and 90 percent of spring wheat.” In order for local foods (and brews) to scale sustainably, there needs to be a connective tissue supporting everyone involved, including farmers, producers, growers, buyers, consumers, resource providers, and funders. This is largely the role of the FEAST Local Foods Network, which SMIF and several partners created in 2013. As the network grows, new resources are becoming available.

In order for local foods (and brews) to scale sustainably, there needs to be a connective tissue supporting everyone involved, including farmers, producers, growers, buyers, consumers, resource providers, and funders. To address the lack of access to capital, the FEAST Local Foods Network launched a Grow a Farmer campaign in 2016 to raise $100,000 for a revolving loan fund for small-scale, sustainable farmers. With over 300 donors contributing, the Grow a Farmer Fund is now accepting applications. To help small farmers feel less isolated, SMIF has two local foods peer networks that meet monthly to learn from each other and selected speakers. To help farmers and food entrepreneurs implement small business best practices, from accounting to marketing, the Network just launched the Feast! Smart Start Initiative, which will provide a training conference and one-onone business coaching. For farmers, especially those with no heirs or family interested in continuing to farm, wondering what happens to their land after they pass, SMIF has a farmland retention program. Landowners can donate their land to the Foundation (or local community foundation) to ensure the land stays in production and that their community - and our region continues to benefit from one of its greatest assets: farm land. The most important part of a healthy local food system, in my opinion, is that people continue to care where their food comes from and support their neighbors who supply it. I’m looking forward to a fruitful harvest! Tim Penny is president and CEO of SMIF. timp@smifoundation.org or 507-455-3215.

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Barry Platt works as the Verans’ Employment Representative of Southern Minnesota at the Minnesota Workforce Center located on the main floor of Mankato Place.

Help Wanted

Jobs grow steadily but worker shortage persists By Tim Krohn | Photos by Pat Christman and Jackson Forderer

he greater Mankato region continues to steadily add jobs. The Mankato-North Mankato Metropolitan Statistical Area saw year-over-year job gains each month of 2016. “We’re still seeing an across-theboard job creation,” said Jonathan Zierdt, president and CEO of Greater Mankato Growth. We’re not seeing any sector that has plateaued or is going down. Construction jobs had slipped some for several

months last year but ticked up some recently. And Zierdt said he sees good growth in new startups. “We shouldn’t ignore the small businesses that are popping up. They create a job here or there, or two or three jobs.” Zierdt said the areas ag sector also remains strong. “In agribusiness, we all know producers are struggling right now, but there are a lot of other (agribusinesses) with a lot of tech and innovation.”

Cover Story

12 • April 2017 • MN Valley Business

The main lobby of the Minnesota Workforce Center located on the main floor in Mankato Place. The center has services for veterans and hard of hearing people. Perry Aasness, executive director of the Minnesota employees. AgriGrowth Council, which represents the agriculture “Our demand occupations really in need of and food systems industry, said the Mankato area employees are the healthcare, transportation and benefits from a big and diverse ag sector, even if low manufacturing. There’s also an upward trend for crop prices are hurting farmers. people in the IT field – that field’s growing.” “You’re the hotbed of opportunity in Mankato,” Aasness said. Talent shortage GMG started a regional partnership, called The latest Job Vacancy Survey, done by the DEED, GreenSeam, to bring together agribusiness partners shows the job vacancy rate in the nine-county region is to better promote the often high-tech jobs in the 4.1 percent, higher than the state rate of 3.6 percent. industry and to attract more potential employees to Some of the areas with the highest number of the area. unfilled positions locally include: construction (24 While job creation and the potential for more is percent), personal care services (8 percent), food strong in the region, employers are continuing to services (6 percent), architecture and engineering (6 struggle with recruiting and retaining workers with percent) and health care (5 percent). the skills needed, a trend that threatens future The shortage of workers to fill available jobs is not economic growth in the area. unique to the Mankato region, but is hitting all the “My sense is it’s continued to be a problem, it’s not state as baby boomers retire in large numbers. “It’s a huge issue in the food and agriculture sector,” getting better. Employers are still struggling to get the Aasness said. talent they’re looking for,” Zierdt said. He said a survey they did of members last year Randy Long, business services specialist with the showed that the talent shortage could stifle economic Mankato Workforce Council, said he continues to hear expansion. from businesses about a lack of employees. “As companies look to expand or move to Minnesota, “In the last few years we’ve seen a shortage of workers and it hasn’t gotten any better. I get a lot of their ability to attract talent is a key consideration on calls from businesses and we brainstorm on recruiting whether they’ll expand or not,” he said. and doing other things. “Some of the larger agribusiness companies are The Workforce Council is part of the state becoming much more intentional at recruiting youth because they see their potential as long term,” he said. Department of Employment and Economic Long said part of the reason the talent supply is so Development. Reggie Worlds, field operations area manager for short in this region is because so many people are already participating in the labor market. the Workforce Council, said certain sectors are Mankato and North Mankato are No. 1 in the nation particularly being squeezed when it comes to finding

MN Valley Business • April 2017 • 13

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when it comes to labor force participation, with a 73 percent participation level, second only to Fairbanks, Alaska. “I cite that number a lot, (when people ask why more people aren’t applying for jobs),” Long said. He said the area’s low unemployment rate adds to that shortage. “Nicollet County has the 2nd to 5th lowest unemployment rate in the state in recent years. And Blue Earth County is not far behind.” Worlds said that right now, for every job opening in the region there is just one job seeker. “Which is quite different than the trend over the years. It was 9.5 people per job vacancy during the recession.” Aasness said agribusiness has an added challenge in recruiting young workers. “One of the stigmas of ag is when students or parents think of ag they think of farming, and there’s nothing wrong with farming, but these companies are a high tech industry with good paying jobs. (Employees) have the ability to do a lot of things, even globally.” He said the shortage of workers in agribusiness comes at a time when there are concerns that federal immigration policies will reduce the immigrant workforce. “As a sector we’re relying more and more on immigrant workers, whether it’s on dairy farms of processing plants. We’ve been an advocate for some comprehensive immigration reform.”

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Businesses, industry groups and chambers of commerce are facing the worker shortage a number of ways, including offering more flexible work schedules, upping pay and benefits, recruiting more intensely and looking for ways to draw potential workers to move to the area. GMG has launched a Talent Task Force which has been analyzing the extent of the talent shortage and setting priorities for attracting and retaining employees. A study found that the region will need about 2,800 more

Jonathan Zierdt workers in the Mankato area in order to keep up with growth. Zierdt said the task force is now boring deeper into the numbers. “One thing I hear from a lot of people is what makes up those 2,800 jobs, are they 100 engineers and 136 healthcare related? We’ve never been able to break that down but one of our strategic initiatives is to learn that.” One thing they do know is that the highest number of workers

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needed are likely in the manufacturing and production sectors. “But just as important, while there are less of them, are the openings in things like engineering firms, accounting firms and healthcare. And for every new physician that creates maybe seven other positions that work with them.” The Talent group is also looking at how Mankato’s wages and benefits compare to other communities. “Are we able to keep people or are we losing people because of that.” Zierdt said participation in the talent effort has been strong, with 150 volunteers involved early on. “That’s probably the best evidence you can get that this is a major issue for employers.” The group is now assembling a Talent Steering Committee to oversee the work of five strategic committees. Worlds said the Workforce Council offers a variety of resources to help match up people with jobs and to help businesses in recruiting. “We assist people in finding jobs, identifying what skills they have, doing interest assessments and hopefully pointing them down a career path that is beneficial to them.” They also provide training such as creative job search classes where they provide information to people on how to interview, how to strengthen their resume, and putting them through mock

Annual Average Weekly Wage

Want ads posted at the Minnesota Workforce Center located on the main floor of Mankato Place. The center works to connect employers with potential employees. interviews with local employers. “For employers we provide labor market information, information on salaries, retention information. Helping businesses retain employers and use best practices from other businesses,” Worlds said. Aasness said businesses are also turning to better tools to recr uit employees. The AgriGrowth Council recently partnered with RealTime Talent to launch an AgriGrowth Job Exchange. It uses technology with sophisticated algorithms to connect employers to candidates. “It’s a connector between private businesses, education and others. There are questions to fill out by both sides. It’s almost like a speed-dating thing to connect employers and potential employees.” Long said one big advantage the area has is its colleges and universities. “With the colleges there are a lot of resources and it’s just accessing those resources.” And Worlds said the quality of life in the Mankato area gives it an edge in attracting employees. “This is a great place to live, it’s af fordable. We do have transportation and affordable housing issues to work on, but generally this area and its leadership is really focused on making it a great place to live.” MV

$1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2005

2006

2007

2008

Source: DEED Labor Market Information Office Quarterly Census of Employment and Wages (QCEW)

2009

2010

2011

2012

2013

2014

2015

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MN Valley Business • April 2017 • 17

Laura Factor, left, and Shannon Lang are co-owners of Mainstream Boutique, a woman’s clothing and jewelry store located in Mankato Heights. The store opened in February of 2015.

Fashion for all ages Mainstream Boutique finds success in Mankato

By Nell Musolf Photos by Jackson Forderer

few years ago whenever Mankato resident Laura Factor wanted to do a little clothes shopping, she found herself turning to online shopping more and more to find items that were more interesting and unique than what she was seeing in stores. “I was having a hard time finding unique, quality clothing for women in my age bracket,” Factor said. “Most of my shopping was done online. I thought if I was having a tough time finding things I liked, there were probably many other women like me in Mankato who also wanted a different

kind of shopping experience.” That thought led Factor and Shannon Lang, to open Mainstream Boutique, 1901 Madison Avenue, in 2015. Mainstream Boutique is part of a chain of clothing franchises started by founder Marie DeNicola in Minnesota in 1991. There are now 22 Mainstream Boutique stores throughout the United States. The corporate website attributes the growth of the boutiques to the franchise owners and their commitment to customer service and selling quality items.

Cover Spotlight

18 • April 2017 • MN Valley Business

Factor first experienced shopping at the Mainstream Boutique in New Prague. It was there she met Lang who was then co-owner of the New Prague boutique. “Shannon was a co-owner of the Mainstream Boutique in New Prague. I loved her store and always thought Mankato could use the same type of store. When my youngest child started kindergarten, Shannon and I started talking seriously about the idea of opening a store in Mankato. In 2015, Shannon sold her half of the New Prague business to her co-owner and dove into this Mankato adventure with me,” Factor said. The duo’s first year in Mankato quickly surpassed their initial expectations. “It’s been a fun and wild ride,” Factor said. “The first three days

we were open we sold out over three-quarters of our store, stock we thought would last us a few weeks.” In addition to doing brisk sales the business partners have enjoyed getting to know the women who shop at their store and their families. “We now call many of them friends,” Factor said. Lang said getting to know customers and becoming friends with them is one of her favorite aspects of owning the boutique. “I would say the thing I enjoy the most about being part of Mainstream is the relationships we build with the customers,” Lang said. Mainstream Boutique is a multigenerational boutique that caters to women from their 20s and up. Although taste preferences typically vary from one generation

to another, Mainstream Boutique has been able to fulfill the wants and needs of women of all ages. Factor said it isn’t unusual for entire families of women, including daughters, mothers and grandmothers, to come into the store on a shopping expedition and leave with a bag full of purchases for each of them. “That tells us we are doing our job correctly with what we are selling,” Factor said. The store features unique clothing and accessory items. Clothing sizes range from extra small to 3x in some styles. Mainstream Boutique produces and sells its own line of denim, tops and jewelry under the label “Mac and Me.” Accessories include bracelets, necklaces, scarves, hats and handbags. Factor said, “Customers can’t get enough of the denim especially. Mac and Me denim is super comfortable and a flattering fit for all sizes.” A common fear for many women is showing up at an event wearing the same dress or outfit another attendee has on. Shoppers at the Mainstream Boutique don’t have that worry. “We usually order six of each style in dresses and tops,” Factor said. “Women love that when they find a top or dress, they don’t have to worry about showing up at work or a wedding in the same dress as someone else.” Factor and Lang chose the store’s location on Madison because they wanted a central location in an area where women already liked to shop. “Shannon and I both spent a lot of time at Caribou Coffee, Panera and TJ Maxx,” Factor said. “The first time we toured the space we ended up renting, we both had our coffee and sat on the floor with the sun streaming in through the window and the vibe felt right.” Mainstream Boutique currently has six employees on staff. For now, Factor and Lang plan to stay with the course they have chartered for their business and themselves as they continue to serve Mankato customers, one unique item at a time. MV

MN Valley Business • April 2017 • 19

MSU student Francis Kanneh started Under Recruited Preps, an online business aimed at helping student athletes navigate the sports recruitment system.

Helping reach goals

MSU entrepreneur starts sports recruitment business By Dan Greenwood | Photos by Jackson Forderer

t wasn’t too long ago that Francis Kanneh had achieved a lifelong dream of playing for a Division 1 football team at Southern University in Louisiana. Now the recent Minnesota State University transfer student is working to help other athletes realize their dreams. Kanneh is finishing up a business degree here and has an online business that helps high school students navigate through the tricky and often misunderstood recruiting process. Every year college and university coaches seek out the most talented athletes to play on their teams in exchange for full-ride scholarships. That’s exactly what happened to Kanneh, but not without a lot of confusion and struggle. A few years ago, he moved from Alabama to Minnesota for his sophomore year of high school and

that’s when he came to realize how many athletes, including himself, are left in the dark about what’s expected. “In high school I didn’t know anything about the recruitment process, so that really hurt me,” Kanneh said.” “I wish I would have known what I knew my freshman year, that I did my senior year.” Much of that derives from not knowing where to start, or what colleges expect of students’ testing scores and grade point averages. Kanneh says he ultimately lived his dream of playing college football on a full-ride scholarship, but knew he could help other students get the scholarships they deserve if they only knew where to look. The day he signed his scholarship to play at Southern, he knew

Profile

20 • April 2017 • MN Valley Business

then and there that when the contract expired he would launch a business to help others. In 2015, he founded Under Recr uited Preps (underrecruitedprep.com), a business that now boasts 6,000 student clients. But the beginnings where beyond humble, with a negative balance in his bank account. He says a strong work ethic and the willingness to work longer hours than competitors gave him an advantage. “I looked at my competition and they started business from 8 o’clock until 6pm. I said ok, ‘you wake up at 8 o’clock, I’m going to wake up at 4 o’clock.’” That would not be an easy feat as a full time college student. Kanneh works on his business every morning from 5-9am. Then he goes to class from 2-8 p.m. followed by two hours of studying and two hours of reading business ar ticles and the website entrepreneur.com until midnight. That leaves him about five hours of sleep a night. It left little room for his social life, but he says it’s worth it. “I love helping kids reach their goals,” Kanneh said. “I want to help kids and also motivate them that if I could do it, you could do it too.” It doesn’t hurt that he was exposed to entrepreneurship at a younger age, with family members getting creative about how to earn money and be your own boss. His first business was at the age of nine. He would be a matchmaker of sorts for awkward boys and girls who might have a crush on each other but were too scared to talk. He did the talking for them for a small fee. Nowadays he’s reinvented the concept to match up college recruiters with student athletes. But Kanneh says a lot of the job is simply providing these students with knowledge of what’s expected of them. The recruiting process can begin during the first year of high school and even earlier. “Some athletes don’t know you need a 2.3 (grade point average) if you want to play football,” Kanneh said. That means students need to be conscious of their grades early on and could be disqualified from

A screenshot from Kanneh’s underrecruitedpreps.com site.

“I love helping kids reach their goals,” Kanneh said. “I want to help kids and also motivate them that if I could do it, you could do it too.”

Kanneh is shown here while he played Division I football at Southern University in Louisiana. Submitted photo

a scholarship if they mess up their freshman year. “You have to let them know before you get left out in the recruiting process,” Kanneh said. While Kanneh did a lot of research and read a lot of books about the industry, being a recent high school graduate and college student also goes hand-in-hand with using social media. There he saw an opening and an advantage. “I feel like the older recruiting services are not as tech savvy yet,” Kanneh said. “Instagram, Twitter and Snap Chat weren’t here 20 years ago. That’s what gave me an advantage, knowing how to use social media to get my product out there.” That’s when his clientele really started to multiply. He also tries to emphasize that while Division 1 is often glamorized, the majority of scholarships come from Division 2 and Division 3 schools. “I hope to shed light that just because you’re not a top guy according to somebody that you still have an opportunity,” Kanneh said. “At the end of the day it’s about getting an education while playing a sport you love.” MV

MN Valley Business • April 2017 • 21

Manager Maggie Vait and owner Jason Langworthy at Maggie J’s in Mapleton.

Feeling at home

Maggie J’s embraced by community By Heidi Sampson Photos by Pat Christman

or Jason Langworthy, the opening of Maggie J’s Restaurant and Bar of Mapleton in 2015 was a long held dream that finally became a reality. As a native of Mapleton, Langworthy expanded his horizons by attending a culinary arts school. He also worked for eight years at the Owatonna Country Club until 1998. He left the restaurant industry opting to assist his Dad as a painting contractor. Although,

22 • April 2017 • MN Valley Business

the idea of opening his own restaurant continued to emerge over the years as he patiently waited for the time to be right. Maggie Vait, originally from Fairmont, had been living with her husband Billy in the Mapleton area for the past 11 years. During her time in Mapleton, she became friends of Langworthy and his wife, Karen. In 2015 Langworthy approached Vait asking if she’d want to go into business with him. By

Feature

this time, Token BBQ had closed. They had the perfect location to put their dreams in motion with Jason and Karen owning the new restaurant and Vait becoming the manager, each would be bringing their own unique skill set to the business. After taking possession of the building they immediately set about remodeling the location to fit their needs. “I’ve always wanted to open a restaurant,” Langworthy said. “I enjoy cooking, so I do all of the kitchen stuff while Maggie handles the rest. I think we have a great working relationship with each of us working toward our strengths.”

Fresh cut steaks, unique burgers

At Maggie J’s, Langworthy cuts all of the steaks, constructs homemade soups from scratch and creates unique burgers for their customer base. They even have a number of pastas and wing sauces, all which are made on site and from scratch. Recently Maggie J’s launched a new menu. But, for those who love Maggie J’s burgers, they will continue to find a wide range of options, such as the Peanut Butter Bacon Burger, which is exactly as it sounds. Langworthy’s favorite is the Reuburger, which is a burger with a Reuben. It’s a six ounce burger topped with sauerkraut, corned beef, Swiss cheese, and Thousand Island dressing. For those interested in a spicy burger, Maggie J’s carries the Jalapeno Bacon Burger, topped with grilled jalapenos, bacon, and pepper jack cheese. For those interested in a Mapleton favorite, there’s the Protein Burger, a bacon cheeseburger topped with a fried egg. New to the menu, is the Miss Piggy Burger, which is a burger topped with pulled pork, two slices of thick bacon, Swiss cheese and BBQ sauce. “People feel at home, here,” said Vait. “We didn’t want a cafeteria style establishment so we placed booths in. Our main focus has been to cater to our local communities. We wanted to get those who live here, to come to Maggie J’s rather than driving

The owners renovated the former Token BBQ space to create a rich interior at Maggie J’s. into Mankato. However, we also love to entertain customers who come from around the area as well, I think they will find our environment welcoming as well.” Part of Maggie J’s continued success, has been in their avid participation in community fundraisers. They hold sporting team fundraisers from time to time for Maple River, giving 20 percent of all proceeds and all tips earned go toward the program. They also have a back room capable of catering to a party of 35-40. “We are very fortunate that we’ve been supported by our community,” Langworthy said. “At first, it was kind of nerve racking, opening the location and not being certain if this would be

something the community would see value in. I think what’s dif ferent from previous restaurants, is that they were more of a specialty restaurant. Maggie J’s offers something for ever yone. We offer different choices, specials and options to continue to give our customers new and better choices.” MV HOURS: Monday - Wednesday 7 a.m. – 2 p.m. Thursday 7 a.m. – 9 p.m. Friday & Saturday 7 a.m. - 11p.m. Sunday 9 a.m. – 2 p.m. *In June through August they are open until 9 p.m. on Tuesdays and Wednesdays.

MN Valley Business • April 2017 • 23

Business and Industry Trends ■

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Economy

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State exports strong

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Led by medical instruments, machinery, electrical equipment and vehicle components, exports reached $5 billion for the fourth quarter to match results in the same quarter of 2015, state officials said. Minnesota was hit with challenges throughout last year, including the strong U.S. dollar, a recovering iron industry and a decline in demand from key trading partners, according to a report in the Star Tribune. Still, the quarter showed a recovery from lower exports year over year in the first three quarters of the year. The exports of medical instruments, machinery, electrical equipment and vehicles/ components contributed $2.7 billion in trade, even as international sales for all four declined somewhat in the final months of 2016. Also growing during the quarter were Minnesota dairy products (up 74 percent to $31 million), goods made of base metals ($30 million, up 46 percent), baked goods ($30 million, up 45 percent) and dyes and inks ($25 million, up 53 percent). From a geographic standpoint, strong orders from China, South Korea and the United Kingdom offset trade declines with Canada and Mexico for the quarter ended Dec. 31.

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U.S. crude oil production averaged an estimated 8.9 million barrels per day in 2016. Production is forecast to average 9.2 million barrels per day in 2017 and 9.7 million in 2018.

Oil market ‘balanced’

Retail/Consumer Spending

Global petroleum and liquid fuels inventories increased by an estimated 0.5 million barrels per day in 2016. The Energy Information Administration expects a relatively balanced oil market in the next two years, with inventory builds averaging 0.1 million barrels per day in 2017 and 0.2 million barrels per day in 2018.

Vehicle Sales Mankato — Number of vehicles sold

Gas tops out in July

1500

U.S. monthly average regular gasoline retail prices are expected to increase from $2.30/gallon in February to $2.51 in July before falling to $2.24 by December. U.S. regular gasoline retail prices are forecast to average $2.40 in 2017 and $2.44 in 2018.

Natural gas costs up

The share of U.S. total utility-scale electricity generation from natural gas is expected to fall from an average of 34 percent in 2016 to 32 percent this year as a result of higher expected natural gas prices. The natural gas share of generation is then expected to rise slightly to 33 percent in 2018. Coal’s forecast generation share rises from 30 percent in 2016 to average 31 percent in 2017 before falling back to 30 percent in 2018.

Renewables increase

- 2015 - 2016 701 874

1200 900 600 300 0

Source: Sales tax figures, City of Mankato

Sales tax collections Mankato (In thousands)

- 2015 - 2016

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

$427 $425

600 500 400

Nonhydropower renewables are forecast to provide 9 percent of electricity generation in 2017 and 10 percent in 2018. The generation share of hydropower is forecast to be relatively unchanged from 2017 to 2018 at 7 percent, and the nuclear share of electricity generation declines slightly from almost 20 percent in 2017 to 19 percent in 2018.

300

Wind power grows

Lodging tax collections Mankato/North Mankato

200 100 0

52500

Solar fastest growing

35000

CO2 output to rise

After declining by 1.9 percent in 2016, energyrelated carbon dioxide (CO2) emissions are projected to decrease by 0.2 percent in 2017 and then increase by 1.6 percent in 2018. Energy related CO2 emissions are sensitive to changes in weather, economic growth, and energy prices.

Source: Sales tax figures, City of Mankato

Wind energy capacity at the end of 2016 was 81 gigawatts (GW). EIA expects capacity additions in the forecast will bring total wind capacity to 95 GW by the end of 2018 On a percentage basis, solar power is expected to be the fastest growing renewable energy source in the forecast period, with total utility-scale capacity increasing by 44 percent from the end of 2016 to 31 GW at the end of 2018. With that level of growth, solar is expected to account for 1.4 percent of total utilityscale electricity generation in 2018.

- 2015 - 2016 70000

$56,559 $52,400

17500 0

Source: City of Mankato

Mankato food and beverage tax - 2015 - 2016 175000 140000

$58,935

105000

$57,100

70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • April 2017 • 25

■

Agricultural Outlook

By Kent Thiesse

Minnesota has a large agricultural footprint

n mid-March we celebrated “National Ag Week” across the United States. This provides a good opportunity to reflect on all the traditions and advancements that help make the Minnesota agriculture industry truly remarkable. Since early statehood, the agriculture industry has been one of the cornerstones of Minnesota’s economy and lifestyles.

Following is a “Snapshot View” of Minnesota’s Overall Agriculture Industr y: • Minnesota had a total of 73,300 farms in 2016, which compares to 80,992 farms in 2007. Minnesota ranked 9th in total farm numbers, with the top five states being Texas, Missouri, Iowa, Oklahoma, and California. • In 2012, 88 percent of Minnesota’s farms were family or individually owned, 6 percent are partnerships, 4 percent are corporations, and 2 percent are under some other structure. • There are approximately 26 million acres of land in production in Minnesota, with over 6,200 farms being above 1,000 acres. The average farm size in Minnesota is about 350 acres. • The Minnesota agriculture industry had total receipts of nearly $19 billion in 2014, which ranked 5th in the U.S. total receipts, trailing only California, Iowa, Texas, and Nebraska. Minnesota crop sales totaled about $10 billion, ranking 5th in the U.S., behind California, Iowa, Illinois, and Nebraska. Minnesota ranked 8th in livestock sales, with total sales of nearly $9 billion, and with Texas, Iowa, and California being the leading states in livestock receipts. • Minnesota ranks 1st nationally in sugar beet, sweet corn, and green pea production, and usually ranks 3rd or 4th in corn, soybean, and spring wheat production. Minnesota also ranks second nationally in wild rice production, and 3rd in the production of edible beans. • Minnesota ranks 1st in the U.S. in turkey production, usually ranks 2nd or 3rd in hog production, 3rd or 4th in overall red meat production, 6th in cheese production, and 8th in milk production. • In 2014, the State’s hog production totaled $2.85 billion in cash receipts, which was an increase of 24 percent from the 2010 receipt level. Minnesota had about 465,000 dairy cows in 2013, which generated

26 • April 2017 • MN Valley Business

approximately $1.84 billion in cash receipts. In 2013, the State’s beef industry generated $1.67 billion in cash receipts, while the poultry industry provided about $1.21 billion. • Minnesota is also the home to several major agriculture and food processing plants, including General Mills, Land O’Lakes, Cargill, CHS, Hormel, and Schwan’s. • Minnesota also has several major soybean processing plants, including ADM in Mankato, and CHS in Mankato and Fairmont, as well as sugar beet processing plants n Renville and Moorhead. The State is also the home to a large dairy processing industry, including AMPI in New Ulm, First District Assn. in Litchfield, Dairy Farmers of America in Winthrop and Zumbrota, Bongards at Norwood Young America, Kraft Foods and Kemps. • Minnesota’s ag exports were valued at nearly $8 billion in 2014, which is nearly double the total exports of machinery, which is the next highest export total. Minnesota ranked 4th nationally in the value of agricultural exports, with the top export products being soybeans (32 percent), corn (13 percent), feed and pork (both at 11 percent), with exports of wheat, dairy products, and beef growing rapidly. The State’s main ag export markets are China, Mexico and Canada. • Minnesota ranks 5th in the U.S. in ethanol production, with 21 ethanol plants producing over 1.1 billion gallons of ethanol per year, which includes several ethanol plants in South Central Minnesota. The State also has three biodiesel plants producing nearly 65 million gallons per year of renewable energy.

Highlights from Minnesota’s record-setting 2016 crop year: The USDA National Agricultural Statistics Service (NASS) recently released the 2016 estimated average county yields for corn, soybeans, and other crops. The NASS yields reveal just how remarkable the 2016 crop year was in most of Minnesota and other Upper Midwest States. Many States featured record corn and soybean yields in 2016, as well as the highest ever crop yields in many counties. The 2016 County yields for all crops in Minnesota and all other States are available on the NASS web site at: http://www.nass. usda.gov/. NASS is estimating the 2016 corn yield in Minnesota at the record level of 193 bushels per acre, which

exceeded the previous State record corn yield of 188 bushels per acre in 2015. Other recent statewide corn yields were 156 bushels per acre in 2014, 159 bushels per acre in 2013, and 165 bushels per acre in 2012. The 2016 average soybean yield in Minnesota is also estimated to be at a record level of 52.5 bushels per acre, which bested the previous State record soybean yield of 50 bushels per acre in 2015. The statewide soybean yields in other recent years were 41.5 bushels per acre in 2014 and 42 bushels per acre in 2013. Based on the NASS data, Minnesota had a total 2016 corn production of nearly 1.54 billion bushels, compared to 1.43 billion bushels in 2015, and 1.18 billion bushels in 2014. The eleven counties in Minnesota’s South Central Crop Reporting District produced over 331 million bushels of corn last year. Renville County produced the most corn in 2016 at 51.6 million bushels, followed by Martin County at 49 million bushels, Redwood County at 47.2 million bushels, and Faribault County at 44.4 million bushels. Fifteen counties in Minnesota had 2016 average corn yields that exceeded 200 bushels per acre, based on the NASS data. Nicollet County had the highest average corn yield at 209.4 bushels per acre, followed in the top five counties by Faribault County at 208.5 bushels per acre, Martin County at 207.6 bushel per acre, Stevens County in West Central Minnesota at 205.2 bushels per acre, and Waseca County at 204.6 bushels per acre. Other counties that exceeded 200 bushels per acre yield in 2016 were Cottonwood, Dodge, Lincoln, Lyon, Murray, Redwood, Rock, Sibley, Steele, and Yellow Medicine. Most other counties in West Central Minnesota and the southern one-third of Minnesota, as well as some counties in Central Minnesota had 2015 corn yields between 185 and 199 bushels per acre. Many counties in Northwest Minnesota were in the 160 to 180 bushel per acre range. It should be pointed out that some major corn producing counties in Southern Minnesota had lower yields in 2016, as compared to 2015, primarily due to excessive rainfall during the early part of the growing season. Counties that had year-toyear reduced corn yields on 8 bushels per acre or more included Blue Earth, Freeborn, Goodhue, Rice, and Watonwan. Minnesota produced 393.7 million bushels of soybeans in 2016, compared to 377.5 million bushels in 2015 and 301.7 million bushels in 2014. The top five soybean producing counties in 2016 all exceeded a total production above 10 million bushels, led by Polk County with 13.2 million bushels. Other counties in the top five for soybean production were Redwood County at 11.4 million bushels, Renville County at 11.1 million bushels, Marshall County at 10.6 million bushels, and Faribault at 10.4 million bushels. It is interesting to note that both Polk and Marshall County are in the Northwest Crop Reporting District. Nine counties in Minnesota had a 2016 average soybean yield that exceeded 60 bushels per acre, based on the NASS yield data. Faribault County had the highest average soybean yield at 64.1 bushels per acre, followed by Olmsted and Rock Counties, both at 61.9 bushels per acre, and Nicollet and Wabasha Counties, both at 61.7 bushels per acre. Other counties with average 2016 soybean yields exceeding 60 bushels

Agriculture/ Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2016 — 2017

$3.18

6 4 2

$3.09

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2016 — 2017

20 16

$8.19

12 8

$9.19

4 0

Source: USDA

Iowa-Minnesota hog prices

185 pound carcass, negotiated price, weighted average

— 2016 — 2017

100 85

$67.86

70 55

$64.19

40 25

Source: USDA

Milk prices

Minimum prices, class 1 milk Dollars per hundredweight

— 2016 — 2017 25 22

$18.53

19 16

$15.76

13 10

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 • April 2017 • 27

Construction/Real Estate Residential building permits Mankato

Residential building permits North Mankato

- 2015 - 2016 (in thousands)

18000

4000

13500

$452 $542

3000

$1,109 $5,226

9000

2000

4500

1000

Source: City of Mankato

Source: City of North Mankato

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

Existing home sales: Mankato region - 2015 - 2016

Median home sale price: Mankato region - 2015 - 2016 (in thousands)

250

300

143

240

$143,000

200

132

$145,350

150

180

100

120

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

— 2015 — 2016

- 2015 - 2016

5.5

5.0 4.5

4.1%

4.0 3.5

4.0%

3.0

Source: Freddie Mac

Commercial building permits Mankato

Commercial building permits North Mankato

- 2015 - 2016 (in thousands)

18000

4000

$2,227

13500

3000

$1,119

9000

$202 $1,211

2000

4500 0

Source: Cities of Mankato/North Mankato

1000 J

Source: City of Mankato

28 • April 2017 • MN Valley Business

Source: City of North Mankato

D C. Sankey

Gas Prices Gas prices-Mankato

— 2016 — 2017

5 4 $2.25

3 2 1 0

$1.95

Gas prices-Minnesota

— 2016 — 2017

5 4 3

per acre included Waseca, Martin, Goodhue, and Winona counties. Most other counties in the southern one-third of Minnesota, as well as several counties in Central and West Central Minnesota had 2016 soybean yields above 55 bushels per acre. The Central Crop Reporting District averaged 53.9 bushels per acre, while the West Central District averaged 52.1 bushels per acre and the Northwest District averaged 40.5 bushels per acre. (NOTE --- Facts in this article are from USDA NASS and the Minnesota Department of Agriculture.) Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@ minnstarbank.com

$2.25

2 1 0

$1.98

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

D C. Sankey

Source: GasBuddy.com

Feb. 8

March 14

Percent change

$43.59

$44.61 $130.60 $44.34

+2.3% +7.3% +2.2%

$53.76 $22.92 $50.90 $22.98 $60.29 $4.00 $59.15 $34.93 $191.12 $54.84 $54.81 $40.00 $1.60 $43.20

+1.3% -9.8% +2.6% -7.8% -2.8% 0.0% -6.0% +9.8% +8.1% -13.8% +3.9% 0.0% -0.6%

$121.68 $43.42 $53.09 $25.41 $49.63 $24.92 $62.00 $4.00 $62.92 $31.80 $176.74 $63.61 $52.76 $40.00 $1.61 $41.99

+2.8% C. Sankey

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MN Valley Business • April 2017 • 29

Minnesota Business Updates

■

■ Vanity closes all stores The mall-based women’s apparel chain Vanity is closing all 137 of its stores, including one in River Hills Mall in Mankato and over a dozen other Minnesota locations. Vanity Shop of Grand Forks Inc., which specializes in fashion for young women, announced that it would shutter its stores across 27 states. Vanity has Twin Cities shops at Burnsville Center, Maplewood Mall and Northtow Mall in Blaine. The other 10 Minnesota locations are in areas like St. Cloud, Rochester, Mankato and Willmar. Vanity filed for Chapter 11 bankruptcy on March 1 in the U.S. Bankruptcy Court for the District of North Dakota. The company has contracted with Tiger Capital Group to conduct liquidation sales at its stores. Tiger also will liquidate store fixtures and equipment, as well as furniture, fixtures and equipment from the company’s distribution centers.

■ General Mills boosts Kernza A sweet, nutty-tasting new grain called Kernza is getting a big boost from food giant General Mills, which is intrigued by the potentially big environmental benefits of

the drought-resistant crop with long roots that doesn’t need to be replanted every year. General Mills announced partnerships with The Land Institute and the University of Minnesota to help commercialize Kernza, a wild relative of wheat, and to incorporate the grain into cereals and snacks under its Cascadian Farm organic brand. The company hopes to put those products on grocery store shelves early next year. It’s also urging other food companies to help create a market for Kernza. “It’s rare that you find something like this that, if you work at it, has so many environmental benefits associated with it. So that’s one of the reasons we’re excited about this,” Jerry Lynch, chief sustainability officer for Golden Valley-based General Mills, told The Associated Press.

■ ADM on ‘Most Admired” list For the ninth year in a row, Archer Daniels Midland Company was named one of the world’s most admired companies in the food production industry by Fortune magazine. Fortune’s annual list of the “World’s Most Admired Companies” ranked companies in 51 major industries for 2017. A total of 680 companies from 28 countries were

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major November Industry ‘15 ‘16 Construction Manufacturing Retail Services Total*

640 473 63 2,996 1,475

Local non-farm jobs Percent change ‘14-’15

738 261 46 2,921 1,337

+15.3% -45.0% -27.0% -2.5% -9.4%

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.

Minnesota initial unemployment claims Major Industry Construction Manufacturing Retail Services Total*

November ‘15 ‘16 12,355 5,871 1,443 6,707 26,376

-1.7% -22.0% +2.7% -7.2% -7.3%

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.

30 • April 2017 • MN Valley Business

129,315

133000 122000 111000 100000

Minnesota Local non-farm jobs

Percent change ‘14-’15

12,141 4,599 1,482 6,220 24,442

- 2015 - 2016

Nine-county Mankato region

- 2015 - 2016

(in thousands)

2,924

3000 2000 1000 0

evaluated by 3,800 executives, directors and securities analysts. Survey respondents were asked to rate companies in their industry on nine criteria: innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value, quality of products and services, and global competitiveness.

■ Health systems merging Two Twin Cities health systems are merging. Fairview and HealthEast announced that they will combine. The tie-up continues a national trend of hospital consolidation. “Bringing Fairview and HealthEast together will create a world-class health system committed to serving our communities and the region,” James Hereford, Fairview president and CEO told Minnesota Public Radio. “Our organizations are stronger together. By joining forces, we can expand clinical services and combine our expertise to serve patients where they live and work, giving them access to the widest range of care choices available.” The combined operations will have a footprint that spans much of the Twin Cities, as well as greater Minnesota. HealthEast serves the east metro and Fairview operates in the south, west and north areas of the Twin Cities as well as northern Minnesota.

■ St. Marys to be renovated Mayo Clinic will spend $217 million on expansion and renovation projects at its St. Marys Hospital campus. The work will include adding 150,000 square feet of space to the campus’ Generose building, the Rochsterbased health care provider said in a news release. Mayo Clinic also will complete three floors at the campus’ east tower; relocate cardiac surgery facilities; renovate and expand the St. Marys neonatal and pediatric intensive care units; and update its intensive care unit for cardiovascular disease. Mayo has announced several significant capital expenditures in recent years, including a $1.5 billion investment in its IT infrastructure.

■ Famous Dave’s earnings tumble Famous Dave’s said it lost nearly $2.5 million in 2016, a roughly $2 million improvement over its prior fiscal year due in large part to cuts in operating expenses. Twin Cities Business reported sales at both its company-owned and franchise-operated locations fell year-over-year by 5 percent and 4.7 percent respectively, which resulted in a 13 percent sales drop from last year to $99.2 million. Overall, the Minneapolis-based barbecue restaurant chain’s store count shrank in 2016 after it opened four franchise locations and closed seven. There are currently 176 restaurants that use the Famous Dave’s name – more than three-quarters of which are owned by franchisees.

Employment/Unemployment Local number of unemployed

- 2015 - 2016

Nine-county Mankato region

(includes all of Blue Earth and Nicollet Counties)

8000

4,841

6000

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

4000 2000 0

Mankato/North Mankato Metropolitan statistical area

2015

2016

2.2% 58,862 1,297

2.4% 57,441 1,439

Unemployment rates Counties, state, nation Minnesota number of unemployed

- 2015 - 2016

200000 150000

96,182

100000 50000 0

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

November 2015 2.2% 3.2% 3.6% 3.5% 2.8% 2.8% 3.1% 3.5% 4.1% 2.9% 3.1% 4.8%

November 2016 2.5% 3.2% 3.8% 3.7% 3.2% 3.2% 3.2% 3.3% 4.0% 3.0% 3.2% 4.4%

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

MN Valley Business • April 2017 • 31

Sponsored by the Carl & Verna Schmidt Foundation

An aging, maligned bull market gets some birthday love By The Associated Press

t took a while, but investors are beginning to believe this bull can fly. One of the greatest runs for the stock market in history is marking its eighth anniversary, and this time investors are joining the party. They’re putting more dollars into mutual funds and exchange-traded funds that invest in U.S. stocks, a turnaround from earlier years, even though critics see a long list of reasons for caution. It was on March 9, 2009 that stocks finally hit bottom in the financial crisis, after the Standard & Poor’s 500 index lost 55 percent in 17 months and gutted retirement and other investment accounts. The next day, the S& P 500 perked up by 6.4 percent, and it’s been racing higher ever since thanks to extraordinary stimulus from the Federal Reserve and a recovery in corporate profits, with only a few interruptions in between. A $10,000 investment in the largest U.S. stock mutual fund has turned into nearly $42,000 since the bottom, and this bull market for stocks has already outlasted all but one other since World War II. Only the 1990-2000 run, which ran through the top of the dot-com bubble, lasted longer. The long vault higher for stocks has helped buy-and-hold investors not only recover all their losses from the Great Recession but also to add to them. The S& P 500 set a record earlier this month, which means anyone with the fortitude to hold on through worries about a double-dip recession, the 2011 European debt crisis and a series of other shocks is now sitting on more than ever before. Unfortunately, not everyone held onto their stocks. Through the years, many investors remained leery of the market, with the memory of the financial crisis still too painful. They stuck instead to bonds and other safer confines. In 2015, for example, investors pulled

32 • April 2017 • MN Valley Business

$107 billion more out of U.S. stock mutual funds and ETFs than they put in, according to the Investment Company Institute. In the first 10 months of last year, the trend continued, and investors yanked a net $109 billion out of U.S. stock funds. Then, the election happened. Donald Trump’s surprise White House victory in November raised hopes that corporate tax cuts, By Stan Choe less regulation and other business-friendly policies would jolt the economy out of its slow-growth rut. Stocks surged, with S& P 500 index funds packing roughly a year’s worth of gains into a few months, and investors quickly followed. Since November, investors have plugged more than $60 billion into U.S. stock funds. Slightly less than half of all U.S. households owned stocks in 2013, with much of that concentrated among the highest-income households, according to the most recent data from the Federal Reserve’s survey of consumer finances. Of course, even though the bull market is getting a bit more love, it’s still doubted. Critics say this flow back into the market is happening at a time when stocks are already looking expensive. Prices have risen faster than corporate earnings, which means the market at the least no longer looks cheap. Analysts along Wall Street also say optimism may actually be too high, with expectations overdone for how much Washington can do to help businesses quickly. More elections around the world are also on deck with the potential to upset the global status quo, such as in France. All the while, the Federal Reserve will likely continue to raise interest rates. That has many along Wall Street calling for stocks to pull back at some point this year. MV

Sponsored by the Carl & Verna Schmidt Foundation

What to look for in your fund investments, beyond low fees By Stan Choe

ees are the first thing that investors should consider when looking at a fund investment, and the financial industry has been tripping over itself to cut expenses ever lower. But expenses are hardly the only thing to consider. Keeping expenses low has been in the spotlight, mostly because it’s proven to be one of the best and easiest ways to help your savings grow. A fund with low fees has an automatic head start over higher-cost rivals for returns, and compounded over years the advantage can grow even more powerful. Mindful of this, investors are pouring their money into lower-cost mutual funds and exchange-traded funds. The industry has taken notice, and is racing to cut expenses to draw in increasingly cost-conscious customers. Charles Schwab’s mutual fund that tracks the S& P 500 index charges $3 in fees annually for every $10,000 invested, down from $9, effective Wednesday, for example. A decade ago, investors across all stock mutual funds were paying $86 of every $10,000. With research stacked up to show that having low expenses is one of the best predictors for future performance, it’s tempting to sort a list of funds by expenses and simply pick the cheapest one. But that may not provide the best fit. Here are some other points to consider. Two index funds with similar names and similar expenses should be similar, right? Not if they’re tracking different indexes. Todd Rosenbluth, head of mutual fund and ETF research at CFRA Research, points to two that invest in stocks from developing economies as an example. Vanguard’s FTSE Emerging Markets ETF and the iShares Core MSCI Emerging Markets ETF charge an

identical amount in fees: $14 annually of every $10,000 invested. But their performance has not been identical. In 2014, Vanguard’s ETF was virtually flat, while the iShares ETF lost 3.4 percent. So far this year, the iShares fund has returned a bit more, at 10.3 percent versus 9.9 percent, as of Wednesday. One reason for the difference: all those curved-edge mobile phones people are using. The iShares fund counts Samsung Electronics as its biggest investment, part of the nearly 15 percent of its portfolio that it allocates to South Korean companies. The Vanguard fund, meanwhile, has no South Korean stocks because the index that it tracks considers the country a developed market, not an emerging one. Also, consider how much freedom a fund has. Fidelity’s Total Bond fund and American Funds’ Bond Fund of America are both among the biggest fixed-income funds, and both focus on intermediate-term bonds with similar maturities. Both are also actively managed funds, which means they compare themselves to benchmark indexes but don’t mimic them. But investors who invest in the Fidelity fund should be willing to potentially take on more risk than those in the American Funds offering. That’s because the Fidelity fund can put up to 20 percent of its investments in junk bonds, which offer some of the highest yields but are issued by companies with weak credit ratings. The American Funds offering, meanwhile, typically caps its potential investment in junk bonds at 10 percent. Bond funds also allow their managers to put varying amounts of their investments abroad, including emerging markets. American Funds’ Bond Fund of America can put up to a quarter of its assets outside the United States, for example. MV

MN Valley Business • April 2017 • 33

Greater Mankato Growth 34 • April 2017 • MN Valley Business

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Greater Mankato Growth 36 • April 2017 • MN Valley Business

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