MN Valley Business by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley

Nathan Stolt of Tech Connect in Mankato. Photo by Pat Christman

Tech update Pandemic showed cracks in businesses’ IT

July 2020

Also in this issue • EDENVALE NURSERY • MN PRIMITIVE SKILLS AND SURVIVAL SCHOOL • TIM’S WOODCRAFTS

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F E A T U R E S July 2020 • Volume 12, Issue 10

Businesses scrambled to upgrade their technology systems as the coronavirus pandemic and remote working showed systems’ weaknesses.

New owners Tom and Robin Branhan are carrying on the 40-year tradition at Edenvale Nursery, a nursery built up by Jim and Betty Koberoski.

From fire starting to foraging, Mason Grove teaches people a variety of survival skills through his MN Primitive Skills and Survival School.

Tim Hatlestad spent a lifetime honing his skills as a woodworker and now sells his popular outdoor furniture at the Mankato Farmers Market.

MN Valley Business • JULY 2020 • 3

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JULY 2020 • VOLUME 12, ISSUE 10

By Joe Spear

PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Dan Greenwood Katie Roiger Harvey Mackay PHOTOGRAPHERS Pat Christman COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Danny Creel Sales Jordan Greer-Friesz Josh Zimmerman Marianne Carlson Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Christina Sankey DESIGNERS 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.........................7 ■ Business and Industry trends..........18 ■ Retail trends.....................................19 ■ Agriculture Outlook..........................20 ■ Agribusiness trends..........................21 ■ Construction, real estate trends.....22 ■ Gas trends........................................23 ■ Stocks...............................................23 ■ Minnesota Business updates............24 ■ Job trends.........................................24 ■ Schmidt Foundation.........................26 ■ Greater Mankato Growth..................28 ■ Greater Mankato Growth Member Activities ............................29

From the editor

Virus induces changing business thinking

e can learn a lot of things about business from a pandemic. It’s safe to say the COVID-19 pandemic has turned the business world upside down. Our feature story this month details the ways businesses had to upgrade their internet service and technology for employees required to work from home. Firewalls and security were a concern. But some cut corners. And a separate story details an alarming amount of internet desert in and around part of the Mankato area. Some areas outside of Mankato and St. Peter from Janesville to St. Clair have almost no coverage, according to our experts. But hopefully a $20 billion pot of federal money will improve that situation. Internet providers can bid for the money by offering the best service at the lowest prices, a kind of reverse auction. Let’s hope it works. The pandemic is showing us how challenging it is for businesses to have a large number of employees working from home. Here at The Free Press, about 13 of our 16 newsroom employees have been working from home since late March. The three of us in the office each day, of course, find fewer distractions simply because you’re not having those side conversations that typically occur. But for some, working from home can be a challenge because they need that interoffice stimulation to be productive and comfortable. Stir craziness can set in at the home office. At the same time, some conversations just need to be conducted in person, instead of over Slack or some other instant messaging software. Most of the time that can happen by phone, instead of instant message. And that’s

4 • JULY 2020 • MN Valley Business

better, but there’s something about reading a person’s body language when communicating ideas that helps bring agreement on a project. Disapproval and disagreement are also easier to tell looking at someone’s body language. Give and take of a robust discussion on issues also seems more difficult over the phone. And then there’s the issue of the conference call or Zoom meeting. The inability to interrupt each other slows the flow of the conversation. And then when people talk over each other, even accidentally, it seems rude. We find ourselves saying “go ahead.” And then both people go ahead. We’ve had to authorize a referee to direct people to talk. Many hope all these office “strictures” that are particularly difficult for people who are extroverts will go away once we have a COVID-19 vaccine. But several of the adaptations may stay in place, especially if people working from home seem more productive. Still, there will always be that need to “huddle as a team” and get together, look people in the eye and read their expression without a mask on. But bigger questions also loom. Is a physical office building always needed? Maybe the use of shared office spaces would work just as well and save a lot of money and improve the bottom line, something we’re always trying to do. “The office” has long been a hallmark of the standard business overhead cost, but maybe the pandemic can get us to think about new, and less costly, ways to get things done. Maybe restaurants will find how takeout and curbside delivery can be away to diversify their revenue away from it all coming from the sit-down experience. The elaborate tents

some businesses have constructed to serve their “patio customers” may have appeal beyond pandemic rules. Those tents can have a “county fair, beer garden” effect that is conducive to the desire to sit outside in a Minnesota summer and have a cold one. And the environmental impact of the pandemic is something all of us wish we could someone replicate or maintain. Pollution, carbon and smog and are all down. We don’t need to burn as much fossil fuels that create global warming. Perhaps we could come up with a stay-at-home tax credit that would reward those who work from home and save the environment and save on taxes. The pandemic has disrupted business like no other. But disruption of traditional ways of thinking can be a good thing sometimes.

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 ■

Femrite joins True

April Femrite has joined True B u s i n e s s Brokerage. F e m r i t e specializes in the sale and purchase of manufacturing, hospitality, retail and ser vice April Femrite companies. She brings with her many years of experience as a small business owner. Femrite has been a licensed Minnesota Business Broker since 2016 with a Master of Business Administration from Minnesota State University. Femrite has completed her designation as a Certified Business Intermediar y, which less than 10% of business brokers have achieved.

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Business Commentary

By Dean Swanson

Bringing your business back to life

ocal small business CEOs are considering a common question right now. How do I bring my business back to life again? All business owners face daily challenges, and you know from experience that, when unforeseeable events happen, you dig deep, adapt and overcome. That`s what it takes to run a successful business, right? But of course, the current situation is different, in every imaginable way! So, what choices are there for businesses in light of what’s going on right now? You can either wait until things resume to normality — or innovate, react and adapt. Let us consider two helpful things to do just that. 1. Revisit your brand and marketing strategy to establish an online presence that is strong and effective. When considering your online presence, be sure to give consideration to your branding. A professionallooking brand is essential; it’s a representation of your business and plays a critical part in establishing yourself as a trusted, enduring business. Some business owners think that branding is only for the big players. However, nothing could be further from the truth. Every business (no matter the size) should strive to develop a consistent brand strategy. The good news is that creating one is not so hard these days; there are several platforms that help you create a logo and other branded materials like business cards, brand books and branded social posts, which you can use to help inform your strategy. However, your brand and marketing strategy shouldn’t only be about the visuals; it’s also about your voice. Together, they set the tone of your business and help you connect and resonate with your target audience. When taking your business online, think long and hard about how you want your brand to look and sound for your new online audience. 2. Let your community know you are there. If you were asked where most of your business comes from today, what would you say? Many small businesses tell us “word of mouth.” When done correctly, online marketing provides more opportunities to extend the word of mouth that’s already so important to your business. As you know, business is built on relationships. Online marketing also allows you to strengthen existing relationships with current customers and build new ones. As a small business, you have a huge advantage over big businesses because you actually know your customers. Many times you interact with

them in a way big businesses cannot. It’s that intimate knowledge that can keep your business top of mind and give you an edge. Ultimately, we’re talking about engaging with people. The location has changed to a digital format but at the other end of those devices are people. And people do business with businesses they know, like and trust. People are looking for businesses online all the time. Research tells us that 69% of people search for a local business at least one time per month according to BrightLocal’s Local Consumer Review Survey. That means there’s potential for people to find your business when they go looking. Furthermore, businesses that are online are seeing growth. Forty three percent experience significant growth with online sales according to an Insureon poll of more than 2,400 business owners. That means there’s potential to do more business. The sad result is that if people don’t find your business when they go looking online, it begs the question, “Does your business even exist?” It might sound paradoxical due to the unprecedented decrease in pedestrian traffic, but if you`ve never used online marketing or tried free local business listings before, now is the time to start. Google My Business, Google Maps and local online directories such as Golden Pages, are ways you can freely advertise your business online to your community. Using free marketing channels can help you in several ways. A free Google business profile enables you to connect with your customers on Google search and maps automatically — enhancing engagement and giving you a platform to advertise your contact information, possible opening hours, reviews and any offers or services you are providing. Remember the new “word of mouth” is online. Let me close with this question: What do people find when they search online for your business? The more you can do to keep your business top of mind and make it easy for others to talk about you, the more you increase the chances of people recommending or seeking you out when they need what you offer. Beyond being part of the conversation, you must understand what people may find when they go looking for your business specifically by name, or by something your business offers. Dean Swanson is a volunteer certified SCORE mentor and former SCORE chapter chair, district director, and regional vice president for the north west region.

MN Valley Business • JULY 2020 • 7

Nathan Stolt of Tech Connect in Mankato has been helping businesses and employees with issues as more people are working from home.

Pandemic tech Businesses, employees found IT weaknesses By Tim Krohn | Photos by Pat Christman

obust technology systems have long been a key to success for businesses. The coronavirus pandemic has highlighted just how important a good IT system is and laid bare shortcomings in many businesses’ technology. “One of the things businesses ran into right off the bat was they have a remote access solution in place, but it wasn’t set up for the entire staff to be working remotely,” said Wes Gilbert of Mankato Computer Technology.

“Some businesses didn’t have any remote access system in place because they had security concerns.” Nathan Stolt of Tech Connect in Mankato said it wasn’t just businesses but also employees who found gaps in technology when they were sent home to work. “What people realized when they started working from home was their wireless. It’s one thing if you have a basic wireless and you have a couple of kids on their phone or game boxes, but now you have a work

Cover Story

8 • JULY 2020 • MN Valley Business

computer and you realize there are a lot of people on your network. You have to print and do Zoom calls and maybe log in remotely,” Stolt said. Bill Coleman of Community Technology Advisors Corp. has spent decades working on getting improved broadband internet access to rural Minnesota. He said the gaps in high-speed access became glaring when more people began working remotely. “People just at home at night and streaming one or two devices, it’s fine. But it’s not enough when they’re at home working and going to school and there’s Zoom meetings going on,” Coleman said. “With businesses if they send 100% of their workforce home and only 75% have adequate connectivity, what do they do? Do they get laid off or drive somewhere and sit in their car outside a librar y Wi-Fi or something?” Coleman noted school districts spent a lot of money handing out cellular hot spots to kids. Now students have to turn them in and many of their families are without reliable internet again.

Hardware, firewall updates

Gilbert said the move to more remote working left many businesses vulnerable. “If people work from home, you want to have firewalls. Some small businesses ignored that to save money. “With people working remotely you provide a door into your (business) network, and if you don’t have good security on that door, bad people will find a way in,” Gilbert said. For many businesses and for individuals there are also good free antivirus programs available, including AVIRA, Malwarebytes and AVG, among others. The free versions often have some pop-up ads. Good firewalls on business networks are also a must. “Upgrading firewalls was the main thing we were doing early on,” Gilbert said. “Firewalls are rated for a certain number of remote users. So if you have 30 workers and they want five

Mankato Computer Technology is located in the Hubbard Building in Old Town. remote accesses, that’s one type of system. But if now you have 25 or 30 people working remotely, you need an upgrade.” Gilbert said that in spite of some technology shortcomings businesses had, he’s glad most businesses have IT systems that allow for remote working. “Thank goodness this (pandemic) didn’t happen 10 years ago or the economy would have really been harmed.” Gilbert and Stolt said updated security patches are a must for businesses to protect themselves. They said some businesses were also lax on having good backups to save their vital information in case something does happen to their system. Stolt said they spent a lot of time upgrading employees’ home

Bill Coleman of Community Technology Advisors Corp.

MN Valley Business • JULY 2020 • 9

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FARGO

Many still lack quality internet

By Tim Krohn

or decades there has been a push to bring highspeed internet service to all of Minnesota, but today about one in five rural Minnesota households still lack access. “It’s criminal we don’t have high-speed internet in rural areas,” said Wes Gilbert of Mankato Computer Technology. “I know rural businesses that could have (tech) solutions during this (pandemic) but they don’t have the internet speed.” Nathan Stolt of Tech Connect in Mankato said it is a world of haves and have nots when it comes to what has become a near necessity of life. “I don’t think people in Mankato or St. Peter know how good they have it. You have a lot of these small communities — and not that far away — that don’t have good internet. The St. Clair, Janesville, Elysian areas, there are a lot of dead areas. You may only have one provider and it might not be a great option.” Stolt said even those who have internet may not have enough band width to handle the several computers and streaming devices many families have today. “Literally, you can’t get anything done without internet these days,” he said.

Bill Coleman of Mahtomedi-base Technology Advisors Corp. has for 20 years worked with counties, communities, schools and others to improve internet access. “We’re chasing something that’s running very fast in front of us,” he said of getting universal access. He said poor internet speed is especially highlighted as people try to upload data. The state’s definition of and goal for high-speed broadband has been a 25 megabits download speed and 3 megabits upload. There are a variety of maps of the state, often based on information given by internet provider companies, that show who has high-speed internet and who doesn’t. Coleman said the maps are often inaccurate. “They’re done by census blocks, which are many miles across. If one home in that block is served, the provider can claim that whole census block is served.” He said there are companies now able to better measure who really has high-speed internet. A current speed test is being conducted in northeast Minnesota. “Their mapping in a very sophisticated way and they can show where service is and isn’t despite what providers say. In many cases the service providers say they’re providing doesn’t really exist,” Coleman said. “A lot of providers say they deliver 25 megs but it’s actually maybe 5.” Depending on how the service is being delivered, customers living farther away from certain equipment will have a slower speed than advertised, and if copper wires or other equipment isn’t good, it weakens speeds. Coleman said internet service that has data caps is also a hindrance to rural customers who can burn through their data limit relatively quickly, particularly during the current pandemic when people are doing a lot of Zoom meetings and other online work. “The deficiencies in the system are becoming very apparent in many places.” One federal program Coleman is hopeful could provide a boost is the Rural Development Opportunity Fund, funded through the FCC. There is a total of $20 billion available and the money is to be distributed across the country using a “reverse auction.” That means internet providers who show they can provide the most broadband for the lowest cost will qualify for the grants. “The lower the speed (providers) promise, they get penalized. So the FCC is incenting the higher speed. “It will be interesting to see the strategy of providers and how they bid and who gets these dollars,” Coleman said. The first round of providers getting funds will be announced in January and the companies then have several years to build out the system in underserved areas.

MN Valley Business • JULY 2020 • 11

Tom Branhan.

Beautiful history

Edenvale Nursery tradition carried on by Branhans By Katie Roiger Photos by Pat Christman

ore than four decades of hard that once upon a time in 1976, there was work, love, and a little bit of wellnothing in the lot but soybean plants. timed luck is usually said to “Our business didn’t start out with a produce good things. In bang,” said Betty the case of Edenvale Koberoski, who began Plant Nurser y, the Edenvale with her first combination was husband, Jim. downright magic. “It was slow but EDENVALE NURSERY progressive, On Highway 22, a kind of like Highway 22 south of Mankato the story of the hare and short drive south from Facebook: Edenvale Nursery Mankato brings the the turtle!” Edenvalenursery.com traveler to a red-sided Now the nurser y’s 507-387-6761 country house with a tradition is being carried wraparound porch, a on by Tom Branhan, white picket fence, and who with his wife Robin five acres brimful of every kind of plant, purchased the business a few years ago. shrub, and tree imaginable, all tucked When the Koberoskis first imagined inside a protective grove of tall arborvitae. starting a nursery in Minnesota, they Pulling into the gravel parking lot, a visitor weren’t even in the state. After their might understandably be surprised to learn marriage, the couple spent 13 years

Spotlight

12 • JULY 2020 • MN Valley Business

working out of the California Bay Area. Each time they drove back to the North Star State for family reunions, they would spend a portion of the visit searching out a location for their dream business. Jim’s parents, longtime nursery owners, were excited by their kids’ interest in beginning their own plant emporium. They joined the hunt for an available property and found the 5-acre field that would end up becoming Edenvale. In just one more year, Koberoski and her husband packed all their belongings in the biggest U-Haul they could find and made the drive from California to Minnesota for the last time. “Oh my, the work!” Koberoski said of their first years in business. “I was outside every light hour of the day. At the end of the day, when the help would go home, even when we were open till 8 o’clock, I would stay out there until I couldn’t see anymore. There was so much deadheading and fertilizing and watering and all that kind of stuff that you just can’t do when you have people there.” Other than the house, there was no building on the property and certainly no landscaping. The Koberoskis and their employees were responsible for every single nursery addition, from installing the picket fence to raising the sheds and greenhouses. Until they established a line of credit that would allow them to order from multiple vendors, the Edenvale team got all of their product from a wholesaler out of Madelia and planted nearly as much as they sold. “We used to go pick up our stock for ourselves,” said Koberoski, who recalled the first years as being make-do-or-do-without. “I had a little card table in the corner of the office shed with a cigar box for my till.” Koberoski became the head salesperson for the nursery, a role she never would have envisioned for herself. “I didn’t know a thing about landscaping or shrubber y,” Koberoski laughed. “I didn’t know a dandelion from a potentilla, hardly.” Koberoski took classes at the Arboretum as well as instruction from her knowledgeable employees, and soon grew to love

working with plants. Thanks in part to her newfound interest, Edenvale became known for carrying some of the most unique plants in the region. “We prided ourselves in having some unusual plant material that was hardy for Minnesota that you didn’t just find in the box stores, like weeping white spruce,” shared Koberoski. They often planted the stock they liked best, so that customers could see the possibilities. It was important to both Betty and Jim that Edenvale be both a place to shop and a place to enjoy nature’s beauty. When they planted the huge arborvitae, they designed the rows so that secret pathways took shape as the shrubs stretched to the sky. Then, they planted hidden gardens inside the quiet, shady hideaways. Koberoski’s husband Jim was responsible for much of the landscaping and what his wife called the “heavy-duty, behindthe-scenes” tasks. He had a natural sense for where specific plants would flourish, and how to landscape for the most beautiful effect possible. “Jim’s side of the family were artists [and] I think Jim had some of that creativity,” Koberoski remembered. “He could just visualize things. I could always see it after it was done.”

Branhan takes over

In early 2016, the Koberoskis made the decision to sell Edenvale. To ease themselves out of their lifestyle, they began renting the nursery to Tom Branhan, who now manages the business. “I had retired from a corporate job in the cities and decided I wanted something to do that I enjoyed, which is outdoor gardening and being outside,” Branhan said. “I really enjoy watching vegetables and flowers grow, how they open up.” Branhan’s first experience with Edenvale was through buying plants from the Koberoski couple. When Branhan voiced his interest in the property once Betty and Jim decided to retire, the transition seemed natural. The gardening enthusiast worked for the couple throughout 2016 and

then began leasing Edenvale from them towards the end of the year. Besides the picturesque surroundings, Branhan’s favorite part about the Edenvale experience is unquestionably his staff. “They’re good people - best employees there are,” Branhan said. “They all have a lot of experience. They really want people to grow plants well; they want to see them succeed. There’s no one who leaves here unhappy with our customer service.” To leave his own mark on Edenvale’s history, Branhan plans to focus on recognition and advertising. “This place has been here a long time but every day we still have people come in here who say ‘I didn’t know you were here!’” Branhan laughed. Branhan’s wife Robin has taken over Edenvale’s social media page and focuses on raising awareness of all that the nursery has to offer. This year, the Branhans are especially proud of their hydrangea selection. “Hydrangeas are really cool because they make beautiful flowers,” Branhan said, mentioning that the foliage comes in multiple different colors. One of his favorite varieties is known as the PinkyWinky, whose flowers start out lime green, then turn white and pink. “It’s like an ice cream cone type of flower,” said Branhan. Like other stay-at-home activities, gardening has seen a recent surge in interest that occasionally makes it difficult to keep nursery shelves stocked, but Edenvale staff are confident in their ability to supply their customers and provide a picturesque shopping experience. “It’s a beautiful place to see,” Branhan shared. “We have fountains running and wide-open spaces with plenty of room to walk around for social distancing.” Koberoski is happy that Branhan and his team plan to keep Edenvale a relaxing, rejuvenating space to celebrate gardening and to appreciate the outdoors. “We just wanted it to be a place where people could unwind from the busyness of the world and get in touch with nature and the great Creator,” Koberoski said. MV

MN Valley Business • JULY 2020 • 13

Mason Grove operates the MN Primitive Skills and Survival School.

Sur viving

Primitive skills school teaches survival tactics

By Katie Roiger | Photos by Pat Christman

ould you survive without toilet paper, flour, or “My Side of the Mountain.” The tale of a young boy hand sanitizer? For most people facing Covid-19 running away to make a life in the forest captured his lockdown, the thought of common conveniences interest and he learned all he could about primitive running short sends them sprinting skills – although he stopped short to the local grocery store. For of actually running away to do it. Mason Grove, doing without is a “I liked that in those books, no welcome challenge – and a skill matter what else was going on in that he teaches through his MN the world, those kids survived and MN PRIMITIVE Primitive Skills and Survival School. were all right,” said Grove of his SKILLS AND “I definitely feel more of a sense favorite survival stories. “I also SURVIVAL SCHOOL of security and freedom from being liked that they decided to do mnprimitiveskillsschool.com able to be self-sufficient,” said something different with their lives Grove, who built his own house in than having normal jobs and rural Mankato and routinely forages working until retirement.” for wild edible plants in southern Minnesota area. “In That “something different” is exactly what Grove the future we’re going to have more issues because chose for himself when he enrolled in the Tom Brown our supply of food isn’t exactly reliable in all situations. Jr. Tracker School when he was 18. The renowned It’s good to know some alternatives.” New Jersey institution taught him how to be selfGrove’s interest in wilderness survival began during sufficient in the most inhospitable environments, from childhood, when he became fascinated by classic the Arizona Desert to the Virgin Islands. adventure stories such as Jean Craighead George’s For some time, Grove was happy to use his newfound

Profile

14 • JULY 2020 • MN Valley Business

skills strictly for his own benefit, but soon he felt called to share his knowledge with others. In 2013, he offered his first Basic Survival class and said he was blown away by the positive response. “People seemed to have fun meeting other people who are into the same kind of skills they are, because it’s kind of hard to find around your normal life,” Grove said. He expanded his courses to include an intermediate class, as well as custom workshops for individual groups. These, too, met with success. Kate Tohal, a former attendee of Grove’s basic survival class, remembers being impressed by the depth of Grove’s knowledge. “The level of detail was amazing,” Tohal said, recalling the lessons. “He [Grove] said if you have a location out in the wild and if you are hunting or trapping to get your food, don’t hunt anything very close to your dwelling because if you ever get injured, you’re going to need to use those closer animals to survive on. He not only had very, very detailed notes, but he had a sketch board so he could draw stuff out for us so that we could see a visual.” Tohal and her daughter, who is a friend of Grove’s, enrolled in the three-day training camp together at Minneopa and left at the end with several new skills. The campers learned how to forage safely in local wilderness areas, as well as how to build shelter, craft a snare for hunting, make rope from natural materials, collect clean drinking water, and start a fire. “We learned so much!” said Tohal. “I liked spending time with the same people three days in a row that all had a passion for learning this stuff, and being able to do it hands-on.” She believes that the knowledge she gained will be useful to her throughout her life. “You never know when your car’s going to break down, or you get lost in the woods, or there’s a zombie apocalypse,” Tohal laughed. “You just never know when you might need skills like that, and if you ever did need them, you’d sure be glad you had them!”

Top left : Mason Grove shows how to build a trap for small game. Top right: Mason Grove forages for edible and medicinal plants in rural Mankato. Middle: Mason Grove works on starting a friction fire.Bottom: Fire starting is one of the basic skills Mason Grove teaches.

Respect for nature

Even beyond survival tactics, Grove believes that learning primitive skills training is a great way to learn respect for the natural world. “It’s good for us as a whole species, because I think if more people know how to get their own water and make it safe to drink, what plants they can eat and what plants they can use to cure their illnesses, then they’ll have more appreciation for that and be more conscious of what we do to our environment,” Grove said. Another added bonus is increased self-confidence. “When you’re in the mindset of a survivalist, you are better at thinking practically,” explained Grove. “You’re more aware of your surroundings and you have

less anxiety because you know that no matter what is going on in the world, you’ll be able to survive.” Besides enriching his daily life and giving him a job that excites him every day, Grove sees the MN Primitive Skills and Survival Training as simply a way of preserving history and giving back to his community. “I hope people get the skills to survive, and also the feeling of connection to the land and the feeling of confidence in themselves, their skills and their ability to learn more things,” said Grove of his students. “The most rewarding thing is knowing that I have helped spread and preserve this ancient knowledge for future generations.” MV

MN Valley Business • JULY 2020 • 15

Tim Hatlestad did his first woodworking project in the third grade and went on to learn more about building furniture.

Wood wonders Hatlestad’s outdoor furniture popular at Farmers Market By Dan Greenwood Photos by Pat Christman

hen Tim Hatlestad began initially to help fund his children’s college woodworking, he was the same age education. as the 3rd grade students he teaches “A lot of times when I’m talking to people, at Bridges Community they go, ‘I could never do School in North Mankato. that,’” Hatlestad said. His first project was “And I tell them there was assembling a birdhouse a time when I couldn’t do kit. Now he makes entire it either. I’ve made lots of TIM’S WOODCRAFT furniture sets. A lesson firewood over the years Facebook: Tim’s Woodcraft that he often tells his trying to learn how to do 507-340-3137 students is this – if you this.” want to get better at After making that initial something, start small and work your way birdhouse, Hatlestad took woodworking up. classes in high school, building benches and Every Saturday morning, he loads up a storage chests. But he really delved into it trailer full of handcrafted furniture and heads when he had extra time on his hands between to the Mankato Farmers Market. Over the college graduation and his first job. past 15 years, his woodworking has “When I met my wife, she grew up on a blossomed into a lucrative side business, dairy farm by Detroit Lakes,” Hatlestad said.

Feature

16 • JULY 2020 • MN Valley Business

Tim Hatlestad often spends weekends in his garage shop. “We were up there, and her dad had a bunch of oak sawed to make hay wagons.” That led him to begin experimenting with furniture for his own family. Soon their house had bunkbeds, dressers and other furniture, made by Hatlestad in the garage, which doubles as a studio space for his woodworking. “I noticed once we moved in eight years ago that he was always in his garage doing woodwork,” said neighbor Kent Holzer, who sometimes helps Hatlestad set up at the farmers market. Soon he was selling planter boxes and outdoor benches at Edenvale Nursery in Mankato. “Eventually I landed at the farmers market and that’s my main location,” Hatlestad said. “People sell plants and I could sell a planter box to go with it or an outdoor bench, so I’ve been at the farmers market for 15 years in the summertime.” After a couple years at the farmers market, he began making Adirondack chairs, and they’ve since become his best seller. Holzer bought a set about a year after he moved to the neighborhood. “We have a patio in the backyard,” Holzer said. “We had lawn chairs, but it was nice to have something that was homemade instead of from plastic. That’s what drew us to the Adirondacks that he was making.

We love them. We sit in them almost every day.” Cedar was Hatlestad’s preferred medium, but then prices skyrocketed, so he switched to red oak initially, but red oak wood isn’t weatherproof the way cedar is. Then he connected with an Tim Hatlestad says his skill and confidence Amish farmer near Detroit Lakes, grew as he learned more about woodworking. who sold him 5,000 boards of white oak. Unlike other softwoods, cedar simplicity are key, and that often has a chemical composition that includes a method of trial and makes it waterproof, ideal for error when he’s designing chairs outdoor furniture. The less and tables. expensive white oak doesn’t have “Basically, I come up with my that same chemical makeup, but own plans off of plans of other it’s a hardwood with a physical chairs that I look at,” he said. structure that keeps water out. “Now I’m kind of at the point “It’s closed-cell wood, so the where I’m getting close to retiring, water doesn’t penetrate into it,” and thinking, this could be a Hatlestad said. “That’s why they retirement hobby to make a little use it for wine and whisky barrels, extra money,” he said. for railroad ties, and a lot of semiLooking to the future, Hatlestad trailer beds are made from white would like to spend more time on oak. It’s really hard so everything building indoor furniture as well, I make you have to pre-drill he just needs to find a venue to everything, but it’s pretty.” sell it at during the winter months. He said the key to building But in the meantime, he’ll keep furniture is to separate the building on his own terms. components that make up the “That’s the nice thing about it,” final product. Hatlestad said. “I can work as “When I build Adirondacks, I’ll hard as I want to or as little as I build 10 at a time, I won’t just want to. I’ve just been able to build one,” Hatlestad said. “So, I’ll keep busy enough to be satisfied. cut out 20 arms and 20 legs and It’s a creative process, and it feels all the back slats that I need and good to create something new.” then move onto the next part, so MV it’s a little bit more efficient that way.” Creativity, flexibility and

MN Valley Business • JULY 2020 • 17

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

Business and Industry Trends ■

We Know Commercial Real Estate.

Tim Lidstrom CCIM/Broker

100 Warren Street, Suite 708, Mankato, MN 56001

507-625-4606

Energy

www.lidcomm.com Karla Jo Olson Broker

CARPET • RUGS • HARDWOOD • andersontuftex.com CARPET • RUGS HARDWOOD • andersontuftex.com CARPET • RUGS • • HARDWOOD • andersontuftex.com

Ethanol production changes follow gas trends

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U.S. fuel ethanol production fell dramatically during late March CARPET • RUGS • HARDWOOD • andersontuftex.com and in April, driven by significant reductions in motor gasoline demand as a result of mitigation efforts for COVID-19. Fuel ethanol production fell to 537,000 barrels per day in the week ending Cross April 24,St. which was the 1107 Cross St. 1107 North Mankato 1107 St. 1107 Cross Cross St. lowest level on record since June 507.625.3089 North Mankato 2010, when the U.S. Energy North Mankato Mankato North www.rickwaycarpet.com Information Administration 507.625.3089 507.625.3089 507.625.3089 began collecting weekly fuel www.rickwaycarpet.com www.rickwaycarpet.com www.rickwaycarpet.com ethanol production data. Because almost all finished motor gasoline sold in the United States is blended with 10% ethanol (E10), the drop in gasoline demand has BEST OF MANKATO: ARCHITECT driven similar decreases in fuel ethanol demand and, correspondingly, fuel ethanol Jeremy Wiesen AIA, LEED AP Bryan Paulsen AIA, CID LEED AP production. ISG Senior Architect ISG Principal and Senior Architect As a result of reduced economic activity and stay-at-home orders aimed at slowing the spread of COVID-19, transportation fuel demand has sharply declined since March. Weekly U.S. motor gasoline product supplied fell to its lowest level on record during the week ending April 3. Fuel ethanol production reached a low point three weeks later. Sharp reductions in motor gasoline blending demand reduced already weak fuel ethanol operating margins, leading many plants to suspend operations entirely or significantly reduce output. Press reports indicate that nearly 30% of the nation’s fuel ethanol plants have been idled since early March, while another Simplified Solutions. Focused Approach. 35% have reduced production.

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18 • JULY 2020 • MN Valley Business

Oil at 20-year lows

Despite the April agreement between the Organization of the Petroleum Exporting Countries (OPEC) and partner countries to reduce production levels, oil prices have remained at some of their lowest levels in more than 20 years. Brent crude oil prices averaged $18 per barrel in April, a decrease of $13/b from the average in March. EIA forecasts Brent crude oil prices will average $34/b in 2020, down from an average of $64/b in 2019. EIA expects prices will average $23/b during the second quarter of 2020 before increasing to $32/b during the second half of the year. EIA forecasts that Brent prices will rise to an average of $48/b in 2021.

Natural gas use down

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2019 - 2020 1500

833 637

1200 900 600 300

EIA expects total consumption of natural gas to average 81.7 billion cubic feet per day in 2020, down 3.9% from the 2019 average primarily because of lower industrial sector consumption of natural gas. EIA forecasts industrial natural gas consumption to average 21.3 Bcf/d in 2020, down 7.1% from 2019 as a result of lower expected manufacturing activity.

Sales tax collections Mankato

Coal production plummets

600

EIA expects that coal generation will fall by 25% in 2020. Forecast natural gas generation is relatively flat U.S. Energy Information Administration | Short-Term Energy Outlook May 2020 4 this year, reflecting favorable fuel costs and the addition of new generating capacity. Renewable energy sources account for the largest portion of new generating capacity in 2020, driving EIA’s forecast of 11% growth in renewable generation by the electric power sector.

Renewable builds slow

Although EIA expects renewable energy to be the fastest-growing source of electricity generation in 2020, the effects of the economic slowdown related to COVID19 are likely to affect new generating capacity builds during the next few months. EIA expects the electric power sector will add 20.4 gigawatts of new wind capacity and 12.7 gigawatts of utility-scale solar capacity in 2020. However, these forecasts are subject to a high degree of uncertainty, and EIA will continue to monitor reported planned capacity builds.

CO2 down 11%

After decreasing by 2.8% in 2019, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decrease by 11% (572 million metric tons) in 2020. This record decline is the result of restrictions on business and travel activity and slowing economic growth related to COVID-19. CO2 emissions decline from all fossil fuels, particularly coal (23%) and petroleum (11%). In 2021, EIA forecasts that energy related CO2 emissions will increase by 5% as the economy recovers.

Source: Sales tax figures, City of Mankato

(In thousands)

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

- 2019 - 2020 $347,685 $386,391

500 400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato

- 2019 - 2020

70000

$53,379 $17,319

52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2019 - 2020 175000 140000

$53,101 $63, 561

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • JULY 2020 • 19

■

Agricultural Outlook

By Kent Thiesse

CFAP payments provide assistance for farmers

ign-up is currently underway for the Caronavirus Food Assistance Program (CFAP), which will authorize up to $16 billion in direct payments to farmers and ranchers to partially help offset the negative financial impacts that U.S. farmers and ranchers have incurred as a result of the COVID-19 pandemic. The aid package also included $3 billion for USDA to purchase fresh produce and meat to be delivered to those in need through food banks and other charitable organizations, which is already occurring. The payment structure and formulas for CFAP crop and livestock payments are somewhat complex. Following is a brief overview of sign-up details and payment calculations for the CFAP payments: • CFAP Enrollment - Sign-up for the CFAP program began on May 26 and continues through August 28, 2020 at local Farm Service Agency (FSA) offices. Once FSA has verified CFAP eligibility, producers are able to complete the application online. The CFAP payment calculator, CFAP application form, and other FSA forms will be available at: www.farmers.gov/CFAP • Other CFAP requirements - For producers that normally enroll in farm programs or utilize other FSA services, the FSA offices likely already have most of the background information needed to apply for CFAP payments. For producers that are new to utilizing FSA programs and services, they will need to supply the FSA office with name, address and personal information, as well as business structure, adjusted gross income verification, direct deposit information, and conservation compliance. • Covered Commodities Field Crops - Corn, soybeans, spring wheat, durum wheat, sorghum, oats, malting barley, canola, upland cotton, millet, and sunflowers. Livestock - Cattle, hogs, sheep, wool, and dairy. Specialty Crops - Numerous fruits, vegetables, nuts, and other specialty crops. For a complete list, go to: www.farmers.gov/CFAP Commodities Not Covered --- Winter wheat, rice, rye, flax, feed barley, peanuts, alfalfa, forage crops, ESL cotton, eggs, poultry, hemp, and tobacco. Note - Commodities were deemed eligible for CFAP based on a 5 percent or more price decline from January 15 to April 15, 2020. Except for hemp and tobacco, USDA may reconsider eligibility

20 • JULY 2020 • MN Valley Business

of the other commodities, if there is evidence that supports the required 5 percent price decline. • Payment structure and timeline - The funding for the CFAP direct payments will be derived as follows: $9.5 billion from the $2.2 trillion CARES Act and $6.5 billion that is currently available through Commodity Credit Corporation (CCC) funds. There are two listed payment rates for each commodity, one for the CARES Act funds and one for the CCC funds. The eligible payments are then combined into one payment to producers, which will be paid at 80 percent as an initial payment and the final 20 percent will be paid later, as funds become available. FSA hopes to have initial payments out very soon after the CFAP application process is completed. • Field Crop payment rates - Following are the payment rates for common crops: Corn - CARES rate = $.32 per bushel; CCC rate = $.35 per bushel Soybeans --- CARES rate = $.45 per bushel; CCC rate = $.50 per bushel Spring Wheat - CARES rate = $.18 per bushel; CCC rate = $.20 per bushel • Livestock payment rates Hogs - CARES rate = $18 per head for market hogs; $28 per head for hogs under 120 pounds. CCC rate = $17 per head for all hogs. Cattle - CARES rate = $214 per head for market cattle; $102 per head for feeder cattle under 600 Pounds and $139 per head for 600 pounds and over; $92 per head for market cows. CCC rate = $33 per head for all cattle. Sheep - CARES rate = $33 per head for market sheep less than two years old. CCC rate = $7 per head for all sheep. Dairy - CARES rate = $4.71 per hundredweight of eligible production. CCC rate = $1.47 per hundredweight of eligible production. • CFAP payment calculations - Field Crops - Both the CARES and CCC payments will be based on the following bushels or amount: The lesser of 50 percent of the verified 2019 production for a crop or the unpriced bushels in inventory on January 15, 2020. The CARES and CCC rates are each applied on 50

percent (.50) of the eligible bushels. Livestock - The CARES rate funding is based on the number of head sold from Jan. 15 to April 15. The CCC rate funding is based on the highest inventory between April 16 and May 14. Dairy - CARES payments will be based on the certified milk production for the first quarter of 2020. The CCC payments will be based on the first quarter production times a factor of 1.014. Calculations for specialty crops and other commodities are available at: www.farmers.gov/CFAP

Agriculture/ Agribusiness Corn prices — southern Minnesota

• Other details on the CFAP payments --- Payments 8 through CFAP are direct payments to producers of crops, livestock, and specialty crops and do not 6 to be repaid. This is different than the PPP have and EIDL loan funding that was received through the 4U.S. Small Business Administration (SBA). In addition, the CFAP payments will not affect other farm 2 program payments that may be available to crop and livestock producers. 0

F more M A details M Jregarding J A CFAP S O N D • WhereJto get enrollment and payments - Information and applications for the CFAP program are available at local FSA offices; however, producers are encouraged to use the on-line CFAP application 8 form and resources that at are available on the FSA 100website at: www.farmers.gov/CFAP. CFA 6 85

The 4CFAP payments will not make farmers and ranchers 70 “financially whole” for the financial losses that resulted due to the COVID-19 outbreak. 552 the CFAP payments will provide some However, much-needed short-term financial relief, particularly 400 to livestock J producers F M A that M were J Jespecially A S hard-hit O N D by a sudden price-drop, as well as reduced capacity at 25 J F M A this M Spring. J J Cattle A S and O hog N D meat processing plants producers typically do not qualify for most other farm programs that are available to crop producers and dairy producers. It is possible that there could be additional 100 aid for farmers if Congress passes future coronavirus aid packages later this year.

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

(dollars per bushel)

$8.11

$8.08

Iowa-Minnesota hog prices — 2019 — 2020

20 100 25 16 $67.54 85 22 12 70 19 8 55 16 4 40 $30.82 13 0 J F M A M J J A 25 10 J F M A M J J A J F M A M J J A Source: USDA

Milk prices

25 22 19 16 13

S O N D S O N D S O N D

$17.30

$12.30 J

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

185 pound carcass, negotiated price, weighted average

Minimum prices, class 1 milk Dollars per hundredweight

— 2019 — 2020 25

F M A M J J A S O N D 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

8 55 2 4 40 0 0 J 25 J

— 2019 — 2020 208 100 166 85 12 4 70

Soybean prices — southern Minnesota

$2.98

Source: USDA

12 8

$4.19

• Payment Limits - Following are payment limits that apply to CPAP payments: $250,000 per individual or entity or all commodities. A corporation or partnership may have payment limits for up to 3 individuals, for a total of $750,000, provided that they meet eligibility requirements. A person must have an adjusted gross income of less than $900,000 to be eligible.

(dollars per bushel)

— 2019 — 2020

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 • JULY 2020 • 21

Construction/Real Estate Residential building permits Mankato - 2019 - 2020 (in millions) $1,959,312

Commercial building permits Mankato - 2019 - 2020 (in millions)

$2,444

60000

50000

40000

30000

20000

10000

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

- 2019 - 2020 (in thousands)

$164,900 $177,900

200

104 123

180

Median home sale price: Mankato region 250

300 240

Source: City of Mankato

Existing home sales: Mankato region

150 100

120

0 J

Source: Realtors Association of Southern Minnesota

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

Housing starts: Mankato/North Mankato

— 2019 — 2020

- 2019 - 2020

5.5

5.0

4.1%

4.5

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

4.0

3.4%

3.5 3.0

$13,043

Source: City of Mankato

$11,900,869

16 8

Source: Freddie Mac

Read us online! 22 • JULY 2020 • MN Valley Business

Source: Cities of Mankato/North Mankato

Gas Prices 5

Gas prices-Mankato

— 2019 — 2020

54 43

$2.58

32 21 10 0

$1.99

$42.38

+19.4%

Ameriprise

$124.09

$159.59

+28.6%

Best Buy

$78.77

$81.62

+3.6%

Brookfield Property

$13.60

$11.12

-18.2%

Crown Cork & Seal

$61.60

$68.23

+10.8%

Consolidated Comm.

$5.55

$6.97

+25.6%

Fastenal

$39.41

$42.86

+8.7%

General Mills

$60.67

$62.82

+3.5%

Itron

61.25

$71.09

+16.0%

Johnson Outdoors

$68.27

$84.32

+23.5%

$146.42

$166.70

+13.9%

Target

$119.65

$120.72

+0.9%

U.S. Bancorp

$33.52

$42.10

+25.6%

Winland

$0.69

$0.75

+8.7%

Xcel

$59.84

$66.37

+10.9%

32 $2.01

$35.50

$2.60

Archer Daniels

Percent change

June 9

— 2019 — 2020

May 11

Gas prices-Minnesota

Stocks of local interest

0Source: GasBuddy.com J F M A

C. Sankey

MN Valley Business • JULY 2020 • 23

Minnesota Business Updates

■

The big-box retailer said that it’s looking to new technology and sort centers to help keep up with demand and drive down costs. The big-box retailer reported nearly all of its firstquarter sales growth came from online. Its digital sales grew by 141% in the quarter. On average days in April, the retailer fulfilled more orders than last year’s Cyber Monday. Target Chief Operating Officer John Mulligan said the retailer will soon test another tool to drive down costs: Sort centers for packages. It recently acquired technology and talent from same-day delivery startup, Deliv. The company specializes in the “last mile,” the distance an online purchase travels from a fulfillment center or store to its ultimate destination - such as a customer’s home. The “last mile” is one of the biggest cost drivers for digital sales.

■ Suit: Cargill, others fixed meat prices A class-action lawsuit claims that four large beefpacking companies and an industry informationsharing service have schemed to suppress the prices they pay for cattle and inflate the prices they charge consumers. The lawsuit filed in U.S. District Court in Minnesota names Cargill, Tyson Foods, National Beef Packing and JBS USA Food Co. — who collectively control 70% of U.S. beef processing — as defendants, the Star Tribune reports. The plaintiffs argue that the decoupling of the price of cattle and the retail price of beef is the result of pricefixing by the meatpacking companies, which boosted their profit margins in recent years. Cattle prices fell in 2015 and have not recovered, while the price of beef at the grocery store remained roughly constant.

■ Fastenal going strong For the second month in a row, Fastenal notched impressive growth in its sales of safety products, with the in-demand category spiking 136.3% in May after a 119.7% jump in April. Overall, the Winona-based company’s May sales increased 4.4%. And while Fastenal again saw a decline

■ Target soars with online sales Target’s online business has boomed during the coronavirus pandemic and that’s pushed the company to solve a riddle for retailers: How to turn rising e-commerce sales into rising profits.

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major April Industry 2019 2020 Construction Manufacturing Retail Services Total*

136 132 46 97 411

659 2,225 1,513 5,119 9,516

Local non-farm jobs Percent change ‘19-’20

Construction

126000 126000 Manufacturing

Retail 113000 Services 113000 Total*

126000

2100 1400

113000

700 100000

Minnesota Local non-farm jobs

2019

2020

Percent change ‘19-’20

3,246 1,641 919 3,355 9,161

16,610 34,348 40,777 137,738 230,473

+411.7% +2,139% +4,337% +4,035% +2,415%

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

24 • JULY 2020 • MN Valley Business

3500

122,883

2800

+384.6% +1,585.6% +3,189.1% +9,710% +2,215%

Minnesota initial unemployment claims April

129,634

139000

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.

Major Industry 139000 139000

- 2019 - 2020

Nine-county Mankato region

240000 180000 120000

60000

700 0

300000

2,939 2,790

1400 1400 2000 700

- 2019 - 2020

(in thousands)

10000 3500 3500 8000 2800 2800 6000 2100 2100 4000

F M

M A A M

M J

J J

J A

A S

S O

O N

N D

Best Buy is also continuing to provide computers and internet access to hundreds of thousands of youth so they can learn from home to help reduce the digital divide and opportunity gap.

in its fastener sales — down 15.3% in May — that category appears to have stabilized and could be trending upward soon as the economy strengthens. Not only did the May sales total represent a marked improvement over April’s 22.5% dip, but also the fastener market is improving, according to the most recent Baird/Fastener Distributor Index (FDI) survey. The May FDI was 45, up five points from April’s index of 40, indicating the category is seeing some tailwinds as the coronavirus crisis subsides.

■ ADM starts plant-based venture

■ Best Buy eyes systemic changes

139000

As protests spread nationwide after the death of George Floyd while in Minneapolis Police custody, Best Buy Co. Inc. CEO Corie Barry said she’s committing the company to assist in systemic, permanent change in as many ways it can find. “I don’t have the answers, but I am no longer OK with not asking the question: If everything were on the table, what could Best Buy do?” Barry said in an email sent to customers. “With that in mind, I am appointing a diverse group (by demography and level in the company) to challenge 139000 one another and, ultimately, our senior 139000 leadership team and Board of Directors, with substantive, enduring ways we can Best Buy plans to create more 126000 than 100 additional Teen Tech Centers, places where 126000from disinvested communities are exposed to and teens trained on a range of technology that helps them find 113000 success 113000 in college or the job market.

3500 2800 2100 1400 700

100000 100000 J F

J M

M J

J A

J S

100004,677 10,000 10000 3500 8000 8000 2800 6000 6000 2100 4000 4000 1400 2000 2000 700 0 J F M A M 0 J F M A M J J 0 J F M A M J J

98,830

S N

O D

120000 60000 J A A

J S S

A S O N O N D O N D

262,518

60000 J

2800 2100 1400 700 0

240000 180000 120000 60000

M MJ

J JA

J JS

A AO

S N S

O D O

N N

D D

240000

April 180000 Unemployment rate 120000 Number of non-farm jobs Number of unemployed

60000 J

0 F

J M

F M A A M J

M J

J A

2019

2020

2.7% 60,441 1,658

7.4% 57,634 4,604

J S

A O

S N

O D

Unemployment rates Counties, state, nation Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

300000

(includes all of Blue Earth and Nicollet Counties) 300000

County/area - 2019 - 2020

120000

10000 2800 8000 2100 6000 1400 4000 700 2000 0 0 J F M A J F JM FA M M AJ

3500

Mankato/North Mankato Metropolitan statistical area

180000

D 0

240000

300000

Minnesota number of unemployed 300000

A O

- 2019 - 2020

Nine-county Mankato region

markets. The two companies have already been working 126000 together to produce plant-based meat substitutes for the South American market. Marfrig will own 70% of the new venture while ADM will own 30%. 113000 Marfrig will handle production and distribution of products using its South American facilities as well as 100000in the U.S. Archer Daniels will provide technical plants J F M A M J J A S O N D expertise and plant-based ingredients, flavors and systems from a specialty protein plan in Campo Grande, Mato Grosso do Sul, and its network of U.S.-based ingredient and flavor facilities, including a new pea protein 3500 plant in Enderlin, North Dakota.

Employment/Unemployment

F M A A M J

Local number of unemployed

Archer Daniels Midland Co. and Brazilian beef processor Marfrig Global Foods are creating a joint venture called PlantPlus Foods to create plant-based foods for the South and North American

April 2019

April 2020

2.8% 3.8% 4.7% 5.6% 3.5% 2.5% 4.1% 3.9% 4.3% 2.8% 3.1% 3.3%

7.7% 6.6% 8.5% 9.7% 5.6% 6.7% 7.2% 8.0% 5.5% 9.2% 8.6% 14.4%

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

MN Valley Business • JULY 2020 • 25

Sponsored by the Carl & Verna Schmidt Foundation

Is your target date investment letting you down?

By Liz Weston | NerdWallet

arget date investments are supposed to be an easier way to invest, and they’re a popular choice in 401(k) plans. But the recent market downturn showed that some target date strategies suffered much bigger losses than others, especially for investors nearing retirement. Target date investments did protect nearretirees from the full force of the sell-off. While U.S. stocks overall lost 33% in the 30-day period ending March 20, the average target date fund for people retiring in 2020 dropped 17%, says Leo Acheson, director of multi-asset ratings at Morningstar. But losses among some popular funds ranged from 13% to 23%, reflecting dramatic differences in how the investments are constructed. “Some of these 2020 funds, you might look at them and think they’re probably pretty similar to one another,” Acheson says. “But when you look beneath the hood, you find out that actually some 2020 funds are taking a lot more risks than other 2020 funds.” An outsize loss by itself isn’t a good reason to bail on an investment. The same strategy that’s giving you heartburn now could deliver above-average returns later. If you’re approaching retirement, however, you want to be sure the investment strategy you’re using still makes sense. You have less time to make up losses — and more risk of running out of money.

How target date strategies work

Target date investments come in two forms: mutual funds, which are available at brokerages and in workplace retirement plans, and collective investment trusts, which are found only in workplace plans. Although people use target date strategies in IRAs and taxable accounts, they’re particularly popular in 401(k) s. One Fidelity survey found about half of all assets in tax-exempt retirement funds are invested in target date options. The name comes from the fact that the mix of stocks and bonds gets more conservative as the target date — typically the year the investor plans to retire — gets closer. A Target Date 2020 option is designed for someone retiring soon while Target Date 2060 is meant for retirements that are 40 years away.

How strategies differ

That’s where the similarities end, however. Investment companies offering these products choose different initial mixes of stocks and bonds as well as different “glide paths,” or rates at which the mix is adjusted. On average, target date strategies for 2020 had 43% of their portfolios invested in stocks, but one 26 • JULY 2020 • MN Valley Business

fund had 55% in stocks while another had just 8%, Acheson says. The types of investments differ, as well. For example, some funds that are more conservative with their stock allocation take more risks with their bonds, choosing corporate bonds or even high-yield “junk” bonds over U.S. Treasurys and other government debt. Those riskier bonds offer better returns in good times but often get trounced in extreme downturns, when investors flee to the safety of government bonds. On top of all that, investment companies tinker with their formulas, so the strategy in place when you initially invested might change by the time you retire.

So what’s an investor to do?

Understanding how your target date works requires time and research. Your 401(k) provider or brokerage will be able to provide you with information, including how the investment’s glide path works, its expense ratios and how those compare to industry averages. Then you have to decide if you’re comfortable with its approach, given the expected risks and returns. If you decide you’re not happy with your current choice, you have options. If you’re in a workplace retirement plan, you might choose a different date (such as the 2015 fund if you think the 2020 option is too risky, or Target Date 2025 if you’re willing to take more risk), though you probably can’t switch target date providers since most 401(k)s only offer one. If your money is in an IRA or taxable account, you could switch providers as well as target dates. Another possibility is to craft your own portfolio. Consider consulting a fee-only, fiduciary advisor — one who’s committed to putting your best interests first — for help. Getting good advice is something you should do anyway before you retire, because many retirement decisions are irreversible and mistakes can make your life a lot less comfortable. Also, our ability to avoid financial errors tends to decline starting in our 50s, even though our confidence in those abilities remains high. Working with a trusted advisor can help us avoid blind spots that could be costly. All of this work is the exact opposite of the handsoff-the-wheel approach you probably wanted when you chose a target date investment. But staying handsoff — or making changes without professional advice — could mean losses that drive your retirement into a ditch. MV

Sponsored by the Carl & Verna Schmidt Foundation

Make room on credit cards to add options in an emergency

By Sean Pyles | Nerdwallet

aybe you’ve been working through credit card debt for a while now. Or maybe you racked it up recently as you prepared for the coronavirus lockdown. Regardless of how and when you got into debt, ridding yourself of this financial burden can free up cash and relieve at least one stressor in an exceptionally anxious time. If you’re in a good financial position right now, meaning you have savings in the bank and a steady income, it’s a good time to knock out some credit card debt. Here’s how to think about debt payoff now and what tactics you should consider.

Get budget, savings in order

The economic and personal upheaval of the coronavirus pandemic has made sorting out your budget and savings top financial priorities, even before debt payoff. — Update your budget: Unless you were a groceryhoarding hermit before the pandemic, chances are your spending habits have shifted. Revise your budget to reflect where your money is going now, accounting for things like expanded grocery expenses and less spending on entertainment, such as concerts and dining out. — Beef up your savings: Preparing financially by increasing your emergency fund is almost always a wise decision. Savings are a source of stability in uncertain times. Work to have at least a month or two of expenses in the bank. “Now is actually a good time to pay off your debt,” says Kate Welker, a certified financial planner in Rochester, New York. “But my advice is build the emergency fund first, because it can get you through a tough time and help you avoid building up new debt in the future.”

How to pay off credit card debt

Though it feels like the world has changed from top to bottom, tactics to pay off debt have largely stayed the same, says Billy Hensley, CEO of the National Endowment for Financial Education, a nonprofit promoting informed financial decision-making. “The traditional sort of boring vanilla strategies still seem to work well,” Hensley says. “Look at where you can cut expenses now, look at if you can lock in a lower interest rate that could save you a few dollars a month.” The goal is to knock out your debt while you’re in a good place financially so you don’t have this burden if you lose your job or your income is reduced later on.

Don’t close credit cards as you pay them off, though. You may need access to that credit if your situation changes. Consider these tactics: — Ask your creditors for lower interest rates: You may not qualify for any hardship programs being offered by your credit card company, but you might be able to get your interest rate cut. That can make paying off your debt more affordable. “It’s not a bad time to call a lender and see if they can reduce your rate right now,” Welker says. Be sure you understand the terms of any agreement and get them in writing, including how long the benefit will last and any trade-offs, like having a lower credit limit. — Direct freed-up cash toward debt: With restaurants closed, travel a no-go and fewer events to buy new clothes for, you might have actually saved money throughout lockdown. Use that money to boost your debt payoff. And if you have federal student loans, which are on pause through September thanks to the coronavirus relief bill, consider putting what you would have paid on those loans toward credit card debt, which likely has a higher interest rate. — Try your luck with a 0% APR card: For those with good credit, balance transfer credit cards with 0% APR introductory periods are a go-to for making debt more affordable. Creditors aren’t handing these out as generously as before, but they’re still on the market. If you qualify, these cards can make your debt payoff faster and cheaper, because for a time your entire payment goes to your balance, not interest. In addition to these tactics, try to find a debt payoff method that works for you and stick to it over the long haul. Take the debt snowball method, for example: You direct your cash toward your smallest debt first, maintaining minimum payments on the others. When the first debt is paid, focus your payoff efforts on the next-biggest debt. Picking off the smallest balances first can give you some quick wins that will help see you through your debt payoff journey. MV

MN Valley Business • JULY 2020 • 27

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Where's My Beef? Dan Lemke, Spirited Communications on behalf of GreenSeam

s the calendar flips to June, American’s will increasingly light the charcoal or fire up gas grills as part of their meal preparation process. Grilling season is prime time for beef as people enjoy the shift to warmer weather. But, as is the case with many sectors of the economy, the coronavirus has thrown some cold water on the beef industry’s fire.

Unlike the pork industry which has seen some farmers forced to euthanize animals because of processing plant shutdowns, that unthinkable step has not been taken in the cattle industry. Landuyt says “so far everybody has been able to find a spot to tuck them and not have to do anything too drastic.”

Beef packing plants around the country reduced their level of processing due to worker safety concerns with COVID-19. While all of those facilities are up and running, Minnesota Beef Council Executive Director Karin Schaefer says production is still well below normal levels.

The nation’s food supply chain is a sophisticated process that links growers, processors, distributors and retailers in a delicate dance to keep product moving as efficiently as possible. Hiccups anywhere in the path affects the other portions of the supply chain.

“When coronavirus hit, we had challenges right off the bat from our packing plants, all the way back to our livestock markets,” Schaefer says. “Auction barns paused because there weren’t buyers and we saw that trickle down into the cow-calf sector where calves just weren’t getting moved into the next phase of production because there wasn’t any movement on the upper end.” Beef packers are running at about 80 percent capacity, which is an improvement. But for many cattle farmers, serious damage has been done. “Like other industries, it (coronavirus) was really hard on our market,” adds Minnesota State Cattlemen’s Association President and Walnut Grove farmer Mike Landuyt. “We saw over 35 percent decline in our prices just because of this.” Landuyt says he knows fellow farmers who have lost $300 to nearly $500 per cow. Chain Reaction Schaefer says Minnesota is the 10th leading cattle producing state in the country. Minnesota cattle farms are a mix of feed yards, which feed calves until they reach market size, and cow-calf operations that produce the calves those feeders need. With fewer cattle going to market, the demand for calves was reduced, creating an unwanted trickle-down effect. “We’re seeing the holdup for cow-calf operators,” Landuyt explains. “They’ve not been able to move their cattle. If we don’t have pen space in the feed yard, there’s no place for their cattle to go. They made their feed last summer based on how long they expected to have their cattle, now farmers are starting to run out of feed, and they have to come up with alternative ways to feed them.”

30 • JULY 2020 • MN Valley Business

“I don’t think a lot of people realize just how intricate our supply system is, just how timed out everything is and how much thought goes into what happens each day,” Landuyt contends. “Which hogs, turkeys, chickens, cattle go where is all plotted out, sometimes years in advance, especially on the cattle side. The cattle that are being bred this year won’t calve until next year and won’t hit the market until the year after that. Decisions being made now are several-year decisions, so you don’t just change that overnight.” While Minnesota has substantial cattle production, the state has limited packing capacity. Most of the state’s cattle are processed in other states. “That’s one of the obstacles we have. We don’t have a lot of control over the packing capacity. What’s governed by states and governors in other states we have no control over that, but it does impact us,” Schaefer says. “This showcases the dynamics of our food supply and that its nationwide. What happens in one plant, even if Minnesota farmers aren’t selling to that plant, will affect all the other packers and it will affect cattle prices, too.”

Schaefer and Landuyt agree that it’s important for the beef industry to have plants up and running at full capacity while maintaining a safe work environment for employees. Schaefer says packing plants are prioritizing employee COVID-19 testing “so I think that’s going to be really helpful to make sure that those who have been cleared to go back to work feel safe.” On the Shelf

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Agribusiness & Food Innovation Program Cultivating New Talent & Opportunities

he AgriBusiness and Food Innovation Program in the College of Business continues to make great strides in developing a presence on the Ag scene and providing leadership opportunities for students. New courses, programming and student initiatives are creating excitement around agriculture at Minnesota State Mankato.

Check out what we’ve been up to this year: » AgriBusiness & Food Innovation minor available for the first time » Inaugural cohort of the Henze Ag Innovators Leadership Development Program » AgriBusiness students participated in AgriGrowth Ag & Food Summit in Minneapolis; the GreenSeam Rural Legislative Forum; Minnesota Ag Expo » Learning tours of Land O’Lakes; Cargill Food Innovation Center & Headquarters; Canterbury Park; Agropur, Davisco Family Dairies, Jack Links, Walmart Food Distribution; Ardent Mills » Big Ideas Challenge – new venture competition- with awards in Ag, Food and Beverage Division » Annual Richard Schmitz Food Entrepreneurship Lecture » Numerous ag-related companies recruit and hire COB students » Various Ag professionals were class speakers and mentors » Ag and Food related scholarships offered » Working towards a new School of Agriculture

Learn more at cob.mnsu.edu/agriculture Faculty members are conducting research in Ag and food. Please scan if you are a farmer to take a 2-minute survey on side-hustles.

An Affirmative Action/Equal Opportunity University. This document is available in alternative format to individuals with disabilities by calling the College of Business at 507-389-5420 (V), 800-6273529 or 711 (MRS/TTY). BUSC594AD_02-2020

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