In some cases, the answer has been found in developing enterprises that add value to what is grown locally. Such local initiatives may include simply branding and marketing commodities like Vidalia Onions or Idaho Potatoes. In other instances, enterprises may require capital-intensive processing plants to add the value. Both approaches help to keep more of a community's wealth at home.
Sometimes the genesis of a successful venture can be a single farmer's decision to raise something new. A case in point is an Iowa farmer's choice to enter the field of aquaculture. The move, as David Miller found last summer, is now generating on-farm revenue and sustaining jobs in town.
Chuck Ehlers, one of the owners of the Loess Hills Aquaculture company, and his wife Nadine, are sorting rainbow trout for market.
(slug flopping fish)
Though rearing fish in recirculating tanks is a fairly common practice around the world, this aquaculture operation is not located near the ocean but hundreds of miles inland in Manning, Iowa.
01:05:43:03 LH01 Chuck Ehlers, Loess Hills Aquaculture: ...we've got to do something different out here to keep our farmers out here and keep our small towns going...
(DZ Ehlers in hog confinement)
Ehlers more closely fits the profile of a traditional Midwestern farmer, planting corn and beans on 600 acres and finishing 5100-head of hogs each year. But the profit margin on these two ventures was getting thinner, forcing Ehlers and his wife to decide between taking off-farm jobs or finding other sources of income.
01:01:41:23 LH01 Chuck Ehlers, Loess Hills Aquaculture: ...Due to the wild catch and the pollution it looked like it was an opportunity to diversify into a new area...So, I got to the point where I felt comfortable to where, maybe, a guy could make it work. So, I pursued it a little stronger then.
That pursuit began seven years ago. Ehlers realized right away that he would need help with the details of how to raise, process, and market the fish he grew.
(slug Blankman on tractor)
The technical expertise of how to raise the fish came from Jim Blankman, a fisheries and wildlife biologist with a degree in aquaculture. Blankman is not a farmer but works for a private firm that specializes in planting prairie grasses on conservation reserve land. After talking with Ehlers for several years he decided to become a partner in the operation and manage the company's fish hatchery.
05:05:24:11 LH05 Jim Manning, Loess Hills Aquaculture: It's been intelligence gathering and we've all realized that we can't go out and do it all ourselves.
In early 1999, they applied for, and received, a combination of Iowa Department of Economic Development grants and forgivable loans totaling $250-thousand dollars. The pair used the money to perform research and development, start a hatchery and begin marketing their product. This work confirmed to them the greatest potential for profit and market share lay in selling rainbow trout and walleye.
05:04:18:26 LH05 Well, I always knew that we could raise fish, one way or another. It was to determine the marketability of the fish. I think that's been our biggest obstacle.
To break into the market, Ehlers and Blankman knew they would need to approach potential buyers with a supply of fish ready to harvest. They turned to Jim Ferneding, a friend and farmer in Templeton, Iowa, about seven miles away.
Ferneding, who grows corn and beans on 500 acres, had already investigated the potential of aquaculture. The idea made sense to him because he had begun supplementing his farm's bottom line with a part time job farrowing hogs and the income from his wife's job in town.
Ehlers encouraged Ferneding to become Loess Hills' first independent grower. Ferneding had raised hogs for almost 30 years but was forced to leave the market when the price plummeted. He believed the switch to raising fish would not be that much of a stretch.
07:15:09:24 LH07Jim Ferneding, Ferneding Fish Farm: there's a lot of big hog finishing units around here, and our investment probably, isn't any more than what those guys are but I think our potential for making money, is a lot better than those.....because those guys are locked in.
(slug getting fish)
Ferneding built this 70-thousand gallon recirculating system in 1999. Once the Ferneding Fish Farm was on-line, Ehlers built his own full-scale operation. Ehlers unit was financed with a $260-thousand loan from the local bank. If everything goes according to plan, he will pay back his obligation to the bank over the next seven years.
All of Loess Hills fish are processed at Arcadia Meats in Arcadia, IA. The plant provides five full-time and ten part-time jobs in this community of 485. Ehlers feels business from Loess Hills will help ensure the longevity of these jobs.
(slug fish in the box)
Since January of 2001, Loess Hills Aquaculture has sold 7-thousand pounds of fish. Ehlers hopes to eventually reach sales of 8-thousand pounds per month between both facilities. The long-range vision for Loess Hills is to create a cooperative with several producers raising fish for the company.
Ehlers and Manning have had some success selling directly to upscale gourmet restaurants and at nearby farmers market's, where filets go for $6.25 per pound. But the day-to-day obligations and long range marketing have become more work than they can handle alone. Ehlers has found a food distributor in the nearby town of Carroll, Iowa, to sell some of the fish and there are plans to hire a part-time employee to pursue the rest of the sales leads.
The food distributor has provided their steadiest customer to date; Harveys Casino-Hotel in Council Bluffs, Iowa, 80 miles away. Every 21 days, the casino's buffet line offers trout from Loess Hills Aquaculture. The fish also makes an occasional appearance on the menu at the casino's up-scale restaurant Beverlee's.
Chef Darren Cobb is the Executive Chef for Harveys Casino-Hotel.
05:13:59:17 05:14:30:27 LH05
Chef Darin Cobb, Harvey's: ...his price is very reasonable for us, in order for us to hit our food cost numbers. And uh, our guests seem to enjoy the product a lot. And we also, since we are in Iowa, we try to buy as much product in the State of Iowa, as we possibly can.
Though profit was one of the main reasons Ehlers started Loess Hills Aquaculture, the major driving force that keeps the company alive is the preservation of small town businesses and a rural way of life.
01:01:41:23 LH01 Chuck Ehlers, Loess Hills Aquaculture: We've got to find something different than hogs, cattle, corn, beans and aquaculture is the fastest growing form of agriculture, right now....
For Market to Market, I'm David Miller.