Agribusiness: Harvesting Growth In Stormy Weather

Despite a trade war with China that’s clobbering U.S. farmers, locations that have established strong agribusiness and food processing sectors continue to thrive as production moves closer to markets.


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Despite a trade war with China that’s clobbering U.S. farmers, locations that have established strong agribusiness and food processing sectors continue to thrive as production moves closer to markets.
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Agribusiness: Harvesting Growth In Stormy Weather

Despite a trade war with China that’s clobbering U.S. farmers, locations that have established strong agribusiness and food processing sectors continue to thrive as production moves closer to markets.

Agribusiness: Harvesting Growth In Stormy Weather

By the BF Staff
From the September/October 2019 Issue

Falling commodity prices in recent years for a host of reasons have weighed on farm income. Over the past couple of years, the dramatic fall in net farm income in 2015 and 2016 seems to be leveling out at a lower level. However, America’s farmers are bearing the brunt of the impact of a continuation of the current trade war with China.

According to U.S. Department of Agriculture Chief Economist Robert C. Johansson, “Our general expectation is for continued declines in real agricultural commodity prices over the next 10 years. Falling commodity prices are the result of continued production growth, which continues to outpace global demand.”

With respect to soybeans, Dr. Johansson pointed out that, “while U.S. soybean prices have been slightly buoyed amid some signs of progress in negotiations, the export outlook for this year’s crop (2018/19) remains challenging. Currently, the U.S. has exported 24 million metric tons of soybean, down 13.5 million metric tons from this time last year. Under the trade dispute, exports to China alone have plummeted by 22 million metric tons, or over 90 percent.”

The record high [soybean] stocks in the U.S. due to the trade situation will take several years to unwind, which will weigh on U.S. prices going forward even with potential China purchase agreements. Current estimates show that prices for soybeans are likely to take at least until the 2020 crop year to recover.

VALDOSTA-LOWNDES COUNTY IS CENTRALLY LOCATED FOR GROWTH

Valdosta-Lowndes County, GA is a vibrant and premier location for business development opportunities. Located midway between Atlanta and Orlando in the heart of South Georgia, Valdosta-Lowndes County is strategically positioned for businesses to access and serve the global market. They make it easy for small, medium-sized and large companies to establish healthy roots for success. The Valdosta-Lowndes County Development Authority continues to foster relationships with existing businesses to ensure they prosper.

business park
Westside Business Park is less than a mile from Interstate 75. (Photo: Valdosta-Lowndes County Development Authority)

Valdosta-Lowndes County serves as an economic, service, professional, retail, healthcare and tourism hub for a 15 to 18 county region located within South Georgia and North Florida.

With eight industrial parks, Valdosta-Lowndes County, Georgia has the perfect fit for almost any industry. Each park has its own unique attributes, from rail served for plastics and manufacturing to parks situated near Interstate 75 and just north of Interstate 10 for distribution and service industries. Three of the industrial parks—Bassford Business Park, Miller Business Park and Westside Business Park—are recognized as GRAD sites (Georgia Ready for Accelerated Development). “Our prime location, along with strong logistics and supply chain network provides a competitive advantage in helping businesses move their products quickly,” said Andrea Schruijer, executive director of the Valdosta-Lowndes County Development Authority.

Key industries in Valdosta-Lowndes County include advanced manufacturing, distribution and logistics, and agribusiness and food processing.

With a labor force of over 177,700, Valdosta-Lowndes County is prepared with an experienced, educated and productive workforce. It is home to a thriving K-12 education system that provides excellent educational opportunities to secure a productive future workforce. Lowndes County also is home to five higher education institutions, including Valdosta State University and Wiregrass Georgia Technical College.

Valdosta State University (VSU) has a robust enrollment of more than 11,000 students and 2,600 faculty and staff. VSU incorporates state-of-the art technology and a next-generation approach to learning and leading in a global world. Students can earn Bachelors, Masters and Ph.D. degrees in more than 90 different programs of study. While the majority of VSU students are from Georgia, the university’s 2017 enrollment also included students from 50 states, the District of Columbia and 60 countries.

Wiregrass Georgia Technical College is one of the nation’s fastest growing public two-year colleges and helps its more than 6,000 students hit the ground running in a relentless global marketplace. Wiregrass offers a full slate of programs (including Digital Media, Tech and Industry, Business, Professional and Healthcare), while collaborating with local employers in targeted workforce training, and other educational providers to create innovative new learning resources. An excellent example is Wiregrass Tech’s new allied health sciences program, which is offered in collaboration with VSU and South Georgia Medical Center.

Valdosta-Lowndes County, and the entire state of Georgia, is known for having a favorable business climate. As a right to work state, Georgia provides fast-track permitting, competitive warehouse costs and low property tax rates.

Valdosta-Lowndes County is an ideal location to do business. The Valdosta-Lowndes County Development Authority (VLCDA) is here to help businesses succeed. Whether you’re expanding, relocating or just starting up, the VLCDA is working to build a groundbreaking community.

GLOUCESTER COUNTY: A GEM IN VA’S MIDDLE PENINSULA

Gloucester County, VA is strategically located in the southeastern portion of Virginia’s Middle Peninsula. The County’s industries have traditionally been associated with the abundant natural resources, primarily seafood, found in the area. With its advantageous location in the geographic center of the Eastern seaboard, the county is experiencing an increased diversification in manufacturing activities.

agribusiness
Canon Environmental Technologies, Inc. (CETI) in Gloucester County, VA, creates zero landfill waste at its 280,000-square-foot recycling plant. (Photo: County of Gloucester Economic Development)

The state capital is located 59 miles to the west and Washington D.C. is 153 miles north. The Port of Hampton Roads is 45-miles south. Gloucester is located within the Virginia Beach-Norfolk-Newport News Metropolitan Statistical area (MSA).

Gloucester County offers a low cost of doing business, desirable quality of life, state of the art schools, skilled labor force and affordable housing. The county provides a small business incentive program that includes rent assistance, property improvements, façade improvement, advertising and website development grants to new and existing businesses. In addition, Gloucester is one of 212 Opportunity Zones designated by Gov. Ralph Northam. The Opportunity Zone offers Federal Tax Credits to new and expanding businesses. Another incentive is the new Company Incentive Program that provides the benefits of no Virginia corporate income tax on Virginia sales and access to the Commonwealth’s Development Opportunity Fund that provides up to $2,000 per year per new job for six years. Gloucester is one of 60 Virginia localities that is an eligible locality for this program. The Gloucester County Department of Economic Development is committed to providing these benefits and more to new and expanding businesses.

Agribusiness is one of the county’s top targeted markets for new business recruitment. There are several seafood manufacturing, food processing, forestry facilities in the county and a skilled workforce. Gloucester is also home to the renowned Virginia Institute of Marine Science, a major marine research center conducting global research for the blue/green economy.

Whitley’s Peanut Factory has called Gloucester home for the past 30 years, enjoying the low cost of doing business here in the county and attributing their success to the skilled workforce. In April of 2018, Secretary of Agriculture and Forestry, Ms. Bettina Ring announced that the company was expanding, creating more jobs and capital investment for county.

In December 2018, Secretary Ring traveled back to Gloucester to announce Zoll Vineyards, a new farm-to-table winery, was coming to the county. The company plans to use Virginia grow-grapes, honey and apples to produce wines, meads and ciders. The owner Frank Zoll plans to offer food parings to winery visitors, featuring meat, fish and produce grown on site.

Over the past year, two new craft breweries have opened providing a variety of ale for the beer lovers. That Damn Mary’s Brewing Company is a restaurant-brewery. The beer is brewed for sale in the restaurant and bar. The beer is dispensed directly from the brewery’s storage tanks. The Gloucester Brewery, located on Main Street, is a small brewery with a hometown atmosphere. The Gloucester Brewery hosts local food trucks nightly for food that pairs well with the different taps of flavored ale. Both breweries are independently owned and operated.

Gloucester is pleased to be home to Canon Environmental Technologies, Inc. (CETI). Canon is the world’s largest recycling company. In 1990, Canon introduced a cartridge recycling program through its Clean Earth Campaign Program. CETI carries out a zero-landfill waste by reusing parts, recycling materials and employing energy recovery. In 1996, Canon Environmental Technologies, Inc. built a 280,000 square feet recycling plant in Gloucester. The company employees 150 people.

The county has one business park, Gloucester Business Park, with two remaining parcels ready for development. There are plans to expand the current park by mid-2020. The goal is to have at least two, Tier-4 sites, prepared for shovel ready tracts over the next 12-months.

VINELAND, NJ: GROWING GREAT THINGS

From a variety of fruits, vegetables and herbs, to Italian meatballs, Philly cheese steaks and European pastries, Vineland, NJ’s agribusiness and food processing operations contribute significantly to the state’s growing $126 billion food industry and agricultural sector. Some of the largest international brands, including companies like Tyson Foods, Hanover Foods, Archer Daniels Midland, the Agro Merchants Group and Rich Products, are located here. These, along with a variety of national and regional companies, are supported by Vineland’s abundant cold storage and third-party logistics operations.

agribusiness
Phase One of the new 170,000 square foot Kopke Fruit distribution facility currently under construction in Vineland, NJ. The company serves national, regional and local supermarkets, as well as high-end wholesalers and food service distributers throughout North America. (Photo: City of Vineland)

Vineland is strategically located in the heart of the Northeast corridor within minutes of the major arterial highways that link the city with large markets such as Philadelphia, Baltimore/Washington D.C. and New York City. In fact, more than 22 million customers who represent over $800 billion in disposable income live within a two-hour drive. This is just one of the many factors that is attracting new facilities and expansions within the city.

“Selecting the perfect location is a key component of any strategic business model,” said Mayor Anthony Fanucci. “Companies look for the right blend of financial incentives, workforce, business climate and quality of life to be successful. Vineland offers this, and much more, including two existing industrial parks and a third 285-acre site currently under development, local railway access, close proximity to international airports and major ports, and the largest farmers’ cooperative on the East Coast.”

Additionally, companies doing business in Vineland benefit from low cost electric, water and sewerage rates through the Vineland Municipal Utilities and Landis Sewerage Authority which have undergone recent expansions in order to ensure future capacity. There also is a well-established network of support services, technical expertise and resources such as customized workforce education and training, free recruitment and screening services, a designated Urban Enterprise Zone and a successful revolving loan fund program.

These factors, combined with the city’s pro-business approach, have led to a surge in new development. “We appreciate the investment that companies are making when they choose to locate here so we do our best to be a true partner in the process,” said Vineland Economic Development Director Sandy Forosisky. “We provide what we like to call ‘Business Concierge Service,’ which is designed to make expansion and relocation projects easier. We are a clearinghouse for information, while acting as a liaison to city government, to move companies smoothly through the permitting and licensing process.”

For example, Kopke Fruit, which is headquartered in Great Neck, NY, currently is building Phase One of a new 170,000-square-foot facility on a 23-acre site. The company imports the finest fruits from all over the world for distribution throughout North America. “Kopke was considering other locations but was drawn to Vineland, in part because of the existing water and sewer infrastructure and our approval process,” Forosisky said. They join other recent arrivals over the past 18 months, including F&S Produce, Seashore Fruit & Produce Company and Infinity Herbs.

Another new arrival is California-based Del Rey Avocado, which located their East Coast operation here and within a year had to double capacity. Thanks to consumers in the Eastern United States, and their growing appetite for quality Del Rey Avocados (which include conventionally grown, organically grown and the highly sought after Fair Trade product lines), the company had to add an additional 30,000 square feet to the facility which services as far north as Maine, south to the Carolinas and west to the Missouri Valley. According to company officials, Del Rey is one of the few California-based companies that owns its facilities on the East Coast, which gives them total control over operations.

“We had a business relationship with companies in the city, so it made perfect sense for us to purchase a location there,” said Del Rey Avocado President Bob Lucy. “With the addition of new state-of-the-art cooling, ripening and bagging facilities in Vineland, we feel well positioned to service all avocado needs in the growing Northeast region for years to come. It’s a great location for us.”

An existing operation which is seeing rapid growth is Davy Cold Storage, which is supported by their sister company MJD Trucking. Since 2016, the company has added 75,000 square feet of capacity to the existing 78,000 square feet and now has approximately 17,000 pallet positions. “The incentives the city was able to offer, including affordable land and their low interest loan program, made it very attractive for my parents to originally locate MJD in Vineland, which was soon followed by our cold storage operation,” said Vice President Michael Davy. ”It turned out to be the best decision we ever made. The city staff is great to work with, and they are always there for us with whatever we need.”

“The Vineland location provides easy access to Routes 40 and 55, and Interstates 95 and 295, which makes it easy for MJD to move our customers’ frozen and refrigerated products to locations along the East Coast, southwest to Texas and northwest to Chicago,” Davy said.

The Davy expansion, along with new arrivals, including Legacy Cold Storage, M&O Freezer and KRES Cold Storage, will now give Vineland nearly 40,000,000 cubic feet of cold storage capacity.

“We have taken a very aggressive approach when it comes to development by marketing to site selectors and letting them know what we have to offer, which has paid off. As a result, we are confident about the future,” Fanucci concluded.

INDIANA FEEDS THE WORLD

From hams to turkeys to dairy products, Hoosier farmers help put food on the table both at home and abroad. With nearly 15 million acres of farmland, Indiana’s farms grow, produce and process some of the highest-quality products in the world.

“International markets seek us out for the quality of our products and the safety of our product handling,” said Bruce Kettler, director of the Indiana State Department of Agriculture. The state ranks 8th in the nation in agricultural exports, with just over $4.6 billion in agricultural products exported in 2017.

Looking internationally helps keep Indiana top of mind, Kettler added. “Sometimes, all a company knows about the U.S. is what’s happening on the East and West coasts. If we’re talking agriculture, they need to know what Indiana offers.”

Indiana’s commodity and livestock products are much sought after in the food processing industry, Kettler noted. “Processors take the raw commodities our state produces and does something that adds value and creates jobs. Where we can and how we can, we want to develop that.”

“When we narrow down needs, Indiana rises to the top in terms of business climate, culture, tech, supply chain infrastructure and research assets—that’s what they’re looking for,” Kettler added.

For the value-added food processing giants who dot the southern half of the state, trade missions represent an important avenue to expanding beyond the domestic market—while singing the praises of the advanced supply chain they enjoy thanks to Indiana farming operations.

Hoosier Energy, a generation and transmission cooperative serving 18-member electric cooperatives in central and southern Indiana and southeastern Illinois, supports the state’s efforts to encourage direct foreign investment in Indiana agriculture and related added-value businesses. “Maintaining a global focus helps farmers here at home,” noted Harold Gutzwiller, Manager, Economic Development and Key Accounts for Hoosier Energy. “Not everyone is aware of Indiana-grown grains and products or the supply chain infrastructure we have in place to support the businesses that depend upon those products.”

The supply chain expertise in Indiana is worth pointing out, Gutzwiller said.

When Farbest Foods, one of the nation’s largest producers of turkeys, announced a new $70 million production facility in Vincennes a few years ago, investment continued down the food chain. Growing barns, corn and other grains were needed to supply those mills while also providing area farmers with an opportunity to diversify their operations.

“We can show how successful the farmers in our service territory are to the supply chain in supporting a major agribusiness investment,” Gutzwiller said. “Our farmers produce the raw products that have enabled value-added producers to grow and expand and provide jobs here. “If an agricultural delegation is thinking of locating in Indiana, or wants to learn more about supply chain efficiencies, we’re here to help the state any way we can.”

GROW YOUR ROOTS IN FLORIDA

Florida’s agriculture, natural resources and food industries collectively represent the state’s second largest economic engine and account for two-thirds of its land. While Florida is known around the world for its citrus, the state also is a leader in the production of products, including nursery and greenhouse crops, seafood and honey. In fact, Florida ranks among the top four states for production in 15 different crop categories.

Having the proper infrastructure in place to export these crops is just as important as producing them, and Florida excels at it. In 2017, Florida’s agricultural exports totaled more than $4 billion and over the past decade has increased at least 30 percent.

Florida’s export industry is so grand that 90 percent of all perishable imports into the U.S. from Latin America come through South Florida–including fresh flowers.

The Sunshine State has supplemented its geographic advantages and cultural ties to Latin America with an extensive trade and transportation infrastructure, and streamlined logistics and customs operations to reduce cool chain disruptions. These same amenities have helped make Florida one of the top 10 states for agricultural exports.

Meanwhile, Florida, already a leader in industrial food-commodity cold storage, is poised to see strong growth in cold storage warehousing and distribution with the rise in online grocery and meal kit delivery sales.

Florida’s large and growing population has been a growing customer base for a range of new grocery delivery options, from Instacart to Walmart Grocery Delivery. According to CBRE, growth in online grocery and meal kit delivery sales in recent years will generate demand for up to 100 million additional square feet of cold storage warehousing space over the next five years. The bulk of this demand is expected to be concentrated in major food producing states like Florida, and other states like California, Texas, Wisconsin and Washington where there already is a significant food supply chain in place.

All of this activity is supported by Florida’s large food manufacturing base. Florida is home to more than 4,600 food facilities registered with the Food and Drug Administration. That’s the third highest among all U.S. states. In fact, some of Florida’s best known national brands are in the food and beverage business: Boar’s Head, Fresh Del Monte Produce, Cott, Florida Crystals and Publix.

With a diverse array of agribusinesses choosing Florida as its home, it’s no surprise that the state has new industries emerging in the marketplace. Hemp is one of those emerging industries in the U.S. and is poised to become a multibillion dollar enterprise. Florida’s deep agricultural heritage, climate and farming infrastructure make Florida an ideal location for hemp production. Recent legislation created a state industrial hemp advisory council, pilot projects and a state hemp program. State leaders see the potential for hemp products to replace certain plastics, Styrofoam, paper and concrete, and for hundreds of thousands of acres of Florida farm land dedicated to industrial hemp production.

The growth of the industry and the development of new hemp-based bio-composite materials, food additives, cosmetics and medicinal products is being supported by the University of Florida’s Institute of Food and Agricultural Sciences (UF/IFAS). It has launched a pilot research program with Florida-based Green Roads Inc. to explore the potential to grow industrial hemp across the state. UF/IFAS is one of the nation’s largest comprehensive agriculture research extension systems and boasts a strong track record supporting innovation in crop varieties, pest management and growing methods. In fact, UF/IFAS has ranked 1st or 2nd among universities for agricultural research and development expenditures every year since 2000. It is no surprise that its use of technology makes UF/IFAS a leader. UF/IFAS uses soil moisture sensors to help farmers maximize their water efficiency, allowing farmers to view the data directly on their mobile phones to make decisions in a timely manner.

Florida’s agriculture industry employs more than 2 million people and contributes more than $100 billion to the state’s economy each year. The Sunshine State also is a business-friendly state because of its low tax environment and tax breaks for target industries including agriculture. Florida was ranked the second-best state for business by Chief Executive Magazine. It also ranked first in the Southeast U.S. and fourth in the nation on the Tax Foundations State Business Tax Climate Index. With no personal income tax and a highly skilled workforce, Florida deserves a spot on everyone’s short list for agribusiness projects.

Florida Power & Light Company (FPL) is focused on growing Florida’s economy, specifically the agribusiness sector, and offers white glove support to those agribusiness projects considering the Southeast U.S. As one of the nation’s largest, cleanest and most reliable electric utilities, FPL has created innovative solutions to drive down electricity costs. FPL offers a commercial/industrial rate that is 41 percent below the national average. FPL also provides tangible, sustainable benefits for its more than 5 million customers. In fact, FPL is the largest utility by retail electric sales in the United States, serving 35 counties, or more than 50 percent of Florida’s population.

VALUE-ADDED AGRICULTURE IN HUTCHINSON, KS

Located in central Kansas, the city of Hutchinson and Reno County have had strong job growth with abundant value-added agriculture opportunities, manufacturing and food processing industry expansion, and entrepreneurial ventures.

Hutchinson Career & Technical Education Academy (HCTEA) offers courses in five career fields that encompass 18 pathways. (Photo: Queen Bee Marketing)

From large corporations to entrepreneurial ventures—companies like ShieldAg, Kansas Protein Foods, Kincaid Manufacturing and other growing ag based manufacturers of equipment and food products are finding growth opportunities abundant in this central Kansas community.

Agriculture is Kansas’ largest industry, providing nearly $64 billion in total economic contribution to the state, approximately 42 percent of the total economy. Agriculture, food and food processing sectors support over 6,674 jobs in Reno County, 18 percent of the county workforce. The sector provides a total economic contribution of approximately $1.6 billion. Main crops include wheat, soybeans and corn, with an abundance of production agriculture and a diversified mix of crops, beef production, dairy and other expected aspects of the ag economy.

Farm machinery and equipment manufacturers contribute $252.9 million to the economy. Other top ranked sectors of the ag economy include meat processing, flour milling, paperboard mills, beef cattle ranching, grain farming, wholesale trade, spice and extract manufacturing, oilseed farming and fluid milk production.

With support of state and local programs that provide resources to support growth, a local economic development team at the Hutchinson/Reno County Chamber and Greater Hutch, and the focus on the State of Kansas’ Strategic Growth Initiative, it seems that companies in Reno County have all of the ingredients for success. The cluster of industries and services, transportation connectivity with two Class I Rail providers, a certified shovel ready industrial park, a stable and qualified workforce, provide a location which fosters new business growth and supports business expansion.

Debra Teufel, President of the Hutch Chamber, cited location advantages, workforce training and programs such as Reno County’s Job Incentive Program, coupled with State of Kansas incentives, Kansas Global’s export accelerator programs and the four designated Reno County Opportunity Zones in Hutchinson and South Hutchinson as reasons that companies are choosing to invest in Reno County.

Reno County has long been home to companies like Kroger, Tyson Foods, Collins Bus, Superior Boiler, Jackson Dairy, Cargill, Morton Salt, Haven Steel, Sonoco Papermill and Kuhn Krause. Tyson Foods operates two locations in Reno County in Hutchinson and South Hutchinson with nearly 550 employees, with processed meat products. With recent investments in machinery and equipment to enhance production, Tyson continues to be a growing employer in the market.

In addition, Kroger operates a large warehouse and logistics operation in Hutchinson, employing over 1,000 across their distribution, accounting services and various divisions in Hutchinson, near the original location where Dillon’s Grocery Stores were founded.

Other large employers such as Kuhn Krause produce hay and tillage equipment with manufacturing, engineering and R&D, and continue to invest in robotic welding cells to improve efficiency. Kansas’ exemption of business and machinery from property tax make capital investment in equipment more affordable.

For example, ShieldAg, with 44 employees in Reno County, manufactures agricultural conservation tillage equipment, crop care tools, grain drill enhancements, harvest aids and belted grain conveyors and is seeing great success distributing across the U.S., Canada, Mexico and 15 other countries. Mike Bergmeier, ShieldAg President, attributes a central location and robust assistance by partners as a key to their growth. “Our location in Hutchinson places us in the center of our High Plains distribution network with easy access to the greater corn belt and with efficient transportation from our central USA steel mills and other suppliers. With financial assistance from the KS Dept. of Ag, KS Department of Commerce and Kansas Global’s export accelerator programs, ShieldAg has been able to expand exports to the Eastern European countries of Ukraine, Russia and Kazakhstan.”

Another example of recent business growth is Kansas Protein Foods which acquired a former CHS Foods location and brought a shuttered facility back online last year. “The City, County and State all came together to provide resources that brought quality jobs and superior products back to this location”, said Teufel.

Mike Chisam, CEO of Kansas Ethanol and his leadership team saw great promise in the available skilled workforce and a need in the marketplace. He spearheaded the creation of a subsidiary of Kansas Ethanol to form Kansas Protein Foods in Hutchinson in 2018. Since then, the company has grown to employ 35, where they produce flavored and unflavored textured plant-based soy protein in various shapes, colors and flavors.

The 105,000-square-foot processing and warehousing operation sits on 20 acres in the industrial park in Hutchinson. Plant Manager, Buell MacArthur said “Being geographically centered allows for favorable transit of our major raw materials to the facility and also shipment of our finished goods across the U.S.”

Workforce training and readiness is a key driver of the community’s success. The Business and Industry Institute at Hutchinson Community College recognizes the critical training and educational needs of business today and they will work to accommodate businesses’ educational and training needs whether it is on site, a customized training program or a contracted program on campus. Co-located between Hutchinson Public Schools and the Hutchinson Community College is the Hutchinson Career and Technical Education Academy. HCTEA offers courses in five career fields that encompass eighteen pathways.

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