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ECOMOAMC OUTLOOK i the income generated by a wide variety of sup- A business, Don Mengedoth-president of Fargo-based porting industries. Front transportation and not just a way of life Community First Bankshares,Inc.,a bank hold- banking to insurance and construction,agricul- A tar cry from the American Gothic-depicted ing company with a heavy concentration of lure generates a significant amount of income industry of yesteryear,farming.agribusiness. agriculture loans,believes he's dealing with a for major Minnesota industries. and food processing,like other industrial sec- solid core of agricultural borrowers today. Transportation,for example,is a key benefi- tors,have employed major technological ad- "There is a much stronger group of survivors:' ciary of the state's agriculture activity.Jerry vances and sophisticated business management he says of those who made it through the 1980s. Fruin,a professor in the Applied Economics practices in recent years to improve productivi- "Farmers now,from our view,are much more Department at the University of Minnesota's ty and efficiency.Development of technologies capable managers.They understand markets College of Agriculture,says that in a typical like laboratory-engineered,pest-resistant crops and the marketing of their products thoroughly. year Minnesota exports almost a halt-billion and satellite-guided fertilizer application tech- Generally,farmers have been good at produc- bushels of grain. niques have changed the face of agriculture in lion.Now;they are better at managing the busi- "That will require trucks to get it to the ele- recent years,and for those producers who test ness end." vators;semis,trains,or unit trains to take it utilize these advances.they enhance opportuni- Farmers also are in much better shape finan- from the elevators to the West Coast,Duluth- ty and profitability. cially today."From 1955 to 1995,farm balance Superior,or river ports;barges to get it to the "Minnesota is a leader in commodity areas sheets improved dramatically."explains the export ports;and ultimately,ocean-going ves- because we have some really creative,innova- Fed's Lotterman."Farmers got burned in the sels to get it overseas."Fruin says tive producers who are leaders in their fields. 1980s.and farmers who survived put a great Fruin says 67 percent of the Minnesota They are doing some phenomenal things with deal of effort into paying down their debt and barge industry's activity is comprised of agri- improving the efficiency with which their prod- building up their equity.Farm finances general- culture-related traffic,and 31 percent of total ucts are produced:'says Minnesota State Agri- ly are on a much better footing than they were rail cars going to,from,or through Minnesota culture Commissioner Gene Hugoson. 10 or 15 years ago." are involved in agriculture or basic forestry. Henry Mertens,a semiretired farmer whose Hugoson believes the business component of farming is critical."Sonic people are still argu- ing that farming is not a business,it's a way of life.But farms have to operate as businesses," he says."Those peple who„What's really uncertain is whether, as a business and are aggressi epat managintgt it as such can successfully put logelher a topnotch a future Congress will step in to undo operation that will stand the test of time:' i Like other business owners,isomers are also 1 the decision made by this Congress to tanttas good financial management.nt.Mertens is a cofounder of a movement started last Minnesota year to get government out of agriculture.” Minneso the public's perception of[arming. ta Agriculture 2010,a coalition of vir- tually every commodity organization in the slate.describes its mission as"keeping Min- And though northeastern Minnesota is less operation near Blue Earth includes corn and nesota an agricultural leader in a complex world dependent on agriculture than any other re- soybeans as well as a 1,5110-sow farrow-to-finish economy." The group has sponsored a pion in the state,it is nonetheless strongly tied production facility.describes the importance of statewide magazine-and radio-advertising cam- to the sector through shipping.According to technological know-how."There's always going paign highlighting the role of agriculture in the Davis Heiberg.executive director of the Sea- to be somebody else who can supply it at a low- state's economy and the sector's commitment to way Port Authority of Duluth,"Agriculture, er cost.The survivors will be the ones who can environmental responsibility,and has an ac- ted by bulk grain.is more than 90 percent of produce at the lowest cost.and they have to he companying Web site on the Internet. our overseas trade.You can't overstate the im- able to take advantage of technologies.Eco- portance and significance of agriculture to the nontics is a vicious teacher,'he says. Adding value,adding income port's business."Heiberg notes that ag-related Bankers and economists also say the strong One way the Minnesota agriculture industry has shipping accounted for$67 million worth of finance and management skills of those farmers demonstrated its growing business acumen is port commerce last year.That means,if all the who survived the financial crisis of the 1980s through increased efforts to add value to corn- products shipped were loaded on standard IS- are a key reason Minnesota's agriculture sector modities before they leave the state,thus stabi- whcelcrs,the trucks would stretch,bumper-to- has prospered in recent years and why they ex- lizing income and generating more of it."It's humper,down Interstate 35 from Duluth to pest continued health in the industry for years evidence of the knowledge and improved man - Monterrey,Mexico. to come. agement in the industry,"Mengedoth says. 36 OCTOBER 1996 TWIN CITIES BUSINESS MONTHLY