South Dakota: great faces, great places—and great value-added opportunities

Rural Cooperatives, Sept-Oct, 2007 by Dan Schofer

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South Dakota's state motto, "Great Faces, Great Places," refers to Mr. Rushmore National Memorial, the Crazy Horse Memorial and many other breathtaking scenic vistas the state offers. It is also a land of great co-op and value-added venture development opportunity, which USDA Rural Development is working to promote.

"USDA Rural Development in South Dakota is interested in strengthening and developing South Dakota's rural cooperatives to provide increased economic opportunities to farmers and rural businesses," says Mike Jaspers, the state director for USDA Rural Development. "By furthering the development of agricultural products, we are securing a future for the next generation as well as providing increased economic opportunities."

Rural Cooperative Development Grants, Value-Added Producer Grants and the Small Minority Producers Grants (the later program will be featured in the next issue of "Rural Cooperatives") are all tools being used in this effort.

Value-Added Ag Development Center

Since 1999, the Value-Added Agriculture Development Center (VAADC) in Pierre has been a valuable partner in helping farmers' ideas become productive, economic realities. VAADC's mission is to foster the creation of producer-owned, value-added agriculture by offering technical assistance, staff support and by championing value-added agriculture. VAADC is funded through USDA's Rural Cooperative Development Grant (RCDG) program.

Cheri Rath, VAADC executive director since early 2005, grew up on a farm near Aberdeen, S.D., and was with the Governor's Office of Economic Development before heading VAADC. Supporting the center are established agricultural-based associations, South Dakota state government agencies and South Dakota State University.

"South Dakota has traditionally lagged behind neighboring states in value-added agriculture," says Rath. "VAADC has turned that situation around with many partnerships and is now able to deliver quality technical assistance to farmers, cooperatives and other agribusinesses. Past projects have involved aquaculture, buffalo processing and patented grain processing, all of which have demonstrated the ingenuity and entrepreneurial spirit of our farms and rural communities."

Through a vast network of federal, state and local partners, VAADC has dramatically increased its capacity to deliver technical assistance.

Dakota Provisions LLC

Dakota Provisions, in Huron S.D., is a state-of-the-art, poultry harvesting and processing business owned and operated by 44 turkey producers. In 2003, individual turkey growers in the community realized that they needed to capture more economic return from their birds. They were looking for a profitable, long-term market that provided stability and security. They were planning and investing for their grandchildren's livelihood and quality of life.

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In 2003, they organized an exploratory committee to look at marketing opportunities for their flocks. Working with the Governor's Office of Economic Development, VAADC organized meetings, compiled research and helped with local infrastructure issues. The research and analysis derived from a feasibility study showed that the proposed business structure and plant could be viable.

A business plan was developed using the assumptions and projections of the feasibility study. This led to the current organizational structure, financials and plant designs. The plant was financed in part by direct producer investments. VAADC helped Dakota Provisions through the funding process and forging of a comprehensive financial package.

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Dakota Provisions' turkey processing plant, near Huron, also cooks beef and pork products, but is not involved with cattle or hog slaughter.

The plant came on-line in early 2006, providing ready-to-eat meats, poultry and protein products for the retail and foodservice markets. The plant now employs 500 people and harvests 16,000 turkeys each day. It hopes to double that amount by 2009.

Ready-to-eat products are available cooked, oven roasted, netted or with collagen casings. For food-service customers, Dakota Provisions provides turkey breasts, boneless pork hams, natural roast beef and chicken-formed deli items, as well as deli slicing logs. Deli trays and platters with turkey, beef, pork, chicken and cheese items are available to retail partners. The plant also provides raw commodity products.

"There are very few opportunities for consumers to purchase products raised on the family farm and brought to a world-class facility that prides itself on innovation and food safety," says Rebecca Steele, director of sales and marketing for Dakota Provisions. "That is what Dakota Provisions provides."

Hayco Premium Forage

Hayco Premium Forage is a partnership between a family of farmers and a processing business in Sioux Falls, S.D. Hayco owns the production and processing from seed to packaged value-added product. Products include a variety of different mixtures of high-quality forage combined with other ingredients to maximize the nutritional value for either horses or cattle. Hayco guarantees that its forage products are sun-dried, certified weed-free, blister beetle-free and dust-free. Products promote equine performance and digestion.