Manufacturing Agriculture
Minnesota's agriculture and manufacturing industries team up to help feed the world -- and the state's economy.
BY SUZY FRISCH
It's no secret that agriculture plays a starring role in the Minnesota economy. From grains and soybeans to livestock and dairy, growers combine to make Minnesota the sixth-largest agricultural producer in the nation. In 2008, the agriculture sector contributed $15.84 billion
to the state's economy.
But every powerhouse needs a partner, and in Minnesota, the manufacturing industry has stepped up to help agriculture do its job better every step of the way. Manufacturing companies provide an assist in a multitude of ways: making equipment to boost farmers' productivity,
creating high-tech tools to help producers develop a better seed or raise a healthier pig, designing systems for processing output into cereal, chili, and butter, and much more.
Across the state, in rural communities and urban areas, manufacturers team with their agriculture clients as they bring their products from farm to factory to table and around the world. "When you have agriculture and manufacturing, you have connected two of the largest
industries in the state, and that's really powerful," says Bob Kill, president and CEO of Enterprise Minnesota. "You can't take wheat or livestock or corn or hogs to market without manufacturing."
It's difficult to quantify the close relationship between agriculture and manufacturing in Minnesota, but Toby Madden, a regional economist for the Federal Reserve Bank of Minneapolis, takes a crack at it. Minnesota produced $260 billion worth of goods and services in 2008,
and agriculture contributed 2.6 percent of that total, or $6.8 billion. Manufacturing contributed 13 percent or $34 billion; of that 13 percent, food processing makes up about 13 percent of the output, or $4.4 billion, depending on the year. In general, agriculture is more critical
to the Minnesota economy than the country as a whole, where food processing makes up 11.4 percent of the manufacturing total.
"From manufacturing, Minnesota has huge productivity gains over time," says Madden. "When we can produce more with less it ripples through all of our society. The two sectors are very strong in productivity growth, which leads to a higher standard of living in Minnesota
and across the nation."
Minnesota hosts a diverse array of manufacturers that serve the agriculture industry, notably because the state's ag sector is more varied than most. That rich heritage includes strong clusters of sugar beet, grain, dairy, and livestock producers, says Daryn McBeth, president
of the Minnesota Agri-Growth Council, a St. Paul-based member association. The relationship between agriculture and manufacturing is co-dependent in the positive sense, spurring each industry to do better.
"Like any industry, agriculture is competitive. Lowercost producers will excel and more competitive production will carry the day," says McBeth. "To have that partnership between cutting-edge technology and manufacturing that are supplying systems to make the Minnesota
agriculture industry more competitive, that's key."
Not only are close ties between agriculture and manufacturing powering the Minnesota economy, they also help preserve rural communities across the state by nurturing varied, vibrant economies. When agriculture and manufacturing entities team up, everybody wins.
"Fewer farmers make a living off the land than ever before, and communities can't rely on agriculture to live in a strong rural economy," notes Colleen Landkamer, Minnesota state director for USDA Rural Development. "People in rural communities need quality jobs in
manufacturing and other arenas to help them grow. A diversified economy helps communities withstand economic downturns and helps with innovation."
Hundreds of manufacturing businesses across Minnesota work in tandem with ag operations to help them do their jobs better or more quickly bring their products to market. Read on for profiles of just a few of them.
Douglas Scientific: Research tools for better seeds
As large producers like Syngenta, Monsanto, and Pioneer develop their next generations of seeds, they conduct copious studies examining seeds' DNA in hopes of producing a hardier or more effective product. Using instrumentation developed in Alexandria by Douglas Scientific,
seed suppliers can more quickly and less expensively identify seeds' genetic markers.
"They need to do millions and millions of screenings, and they are accomplishing in the course of a few days or weeks what took them an entire year to do before," says Dan Malmstrom, president and COO of Douglas Scientific, a wholly owned subsidiary of the packaging
equipment manufacturer, Douglas Machine. "The throughput gains and cost savings we're providing is profound. Our instrumentation and consumables enable customers to have 10 times the throughput while reducing costs 90 percent."
Standard throughput screening typically involves microplates, plastic devices embedded with nearly 400 minitest tubes. In 2004, Douglas was approached by the late entrepreneur Jim May, founder of Advantek, which makes tape for the microelectronics industry. He had the notion
to apply his technology to the biosciences. Together, they created Douglas' ultra-thin array tape that holds the equivalent of 200 microplates spooled onto a single reel.
Douglas also makes the equipment needed to take advantage of the tape, including a liquid handling system, an inline scanning instrument, and a thermal cycler -- all in Alexandria. With these instruments seed manufacturers can do markedly more research, which fuels their
development of hardier hybrids that can withstand drought, pathogens, or bio-terrorism.
It hasn't taken long for Douglas Scientific to make a name for itself around the world. Its clients include seed giants like Pioneer, Syngenta, and Monsanto, as well as many top-ten plant genomics companies from Thailand to the Netherlands. After experiencing the efficiency of
Douglas' machines, producers typically buy multiple units to meet their high demands for genomic screening.
These efficiency gains are fueling rapid growth at Douglas. When it became a subsidiary in January 2009 it had three employees; today the company has 40 employees and 10 openings for other scientific and high-tech jobs. The company recently moved into a new 30,000- square-foot
facility that it already has outgrown. "We're continuing to grow rapidly," Malmstrom adds, "and we're contributing nice margins and profitability to our parent company."
Zinpro: Minerals for raising healthier animals
For 40 years it has been the mission of Zinpro to help farmers raise healthier animals through improved nutrition. This Eden Prairie-based manufacturer makes minerals that feed producers add to their food for a wide array of animals, including pigs, chickens, cows, horses, and
aquatic life.
From manufacturing facilities in North Branch, Minnesota, and Garner, Iowa, Zinpro has evolved into an international supplier of nutrients for livestock around the world. Zinpro's products are typically transition metals like zinc, manganese, iron, chromium, cobalt, and
copper. Animals and humans need to consume small amounts of these minerals daily, but they do not get stored in the body.
The minerals enhance human and animal health by boosting immune systems, improving metabolic function, and strengthening bones. "Our job is to help animals perform better and live healthier lives," says William Scrimgeour, president and COO of Zinpro. "Feed producers do
business with us because we have very efficacious products. They clearly provide a return on investment for customers who buy them."
Zinpro often teams with its feed producing customers on research to develop more effective products for different species. For example, the company has enjoyed some success in improving lameness in dairy cows by strengthening their hooves, joints, and bones with minerals.
"As cows get older a lot of times their ability to stand and move around becomes diminished and they need to leave the herd," says Scrimgeour. "Our products work to improve the animal's welfare and well-being so that she can stay in the herd for a long time."
After expanding the company's portfolio from zinc to many other trace minerals between 1971 and 1995 and building market share in the United States, Zinpro started selling its minerals abroad. Today Zinpro distributes its products in 60 countries, including many key
agriculture markets such as Australia, Brazil, the European Union, China, Japan, Thailand, and Vietnam.
Employing a team of animal nutritionists, Zinpro conducts about 60 research studies each year to find new ways to deploy minerals to improve the health of animals. Its future growth will come from entering new markets worldwide, growing sales in its existing markets,
developing new ways to apply its minerals, and creating entirely new products, Scrimgeour says.
The Aagard Group: Efficient packaging equipment for food processors
In teaming with food manufacturers on their automated packaging systems, the Aagard Group helps producers more efficiently get its bags of cereal or cups of yogurt into cartons, then cases, onto pallets, and to the store. Its manufacturing niche is designing customized
machinery often combination equipment that allows food processors to operate more quickly and efficiently.
Alexandria-based Aagard often works closely with food giants like General Mills, ConAgra, and Hormel to design and build custom packaging machinery. Located in the heart of Minnesota's lake country in a region with a strong agricultural legacy, Aagard thrives on partnering
with customers to design and build the equipment they require.
Aagard's product line includes wrap-around cartoners, case packers, sleevers for packaging items like pudding or yogurt cups, and retort loading and unloading equipment. Its hallmark equipment, though, are combination instruments that tackle gluing, cartoning, case packing,
and palletizing, all in one fell swoop. They also handle tasks like laser coding, bar code scanning, and labeling.
Often starting the design process from scratch and collaborating with customers along the way, Aagard has grown since 1997 into a $20 million company with about 110 employees, reports Vice President of Operations Steve Mulder. "For us the challenge is providing customers
with specific solutions for a particular need but still giving them the ability to redeploy or reconfigure that equipment for other applications," he says. "I think we're doing a good job at that already, but there is a good opportunity for us there."
Aagard shines when it helps food companies face numerous challenges, including boosting productivity, quickly reacting to changing market conditions, and adjusting to new food safety regulations. Clients often turn to Aagard for designing combination equipment that can easily
be transformed over the years to meet these fluctuating needs.
Aagard has enjoyed reliable growth because of theseneeds and its niche in the ag sector. "Agriculture is an interesting and challenging industry, but one of the things that's nice for us is it's a very steady industry," Mulder says. "We always say, 'Everybody's got to
eat.' Capital investment plans can vary from year to year, but for the most part we don't get hit as hard as other industries during downturns."
Schaefer Ventilation: Keeping plants and animals comfortable and productive
An overheated animal is an unhappy and unproductive animal, while plants growing in enclosed environments require heating or cooling to thrive. These pressing needs give Sauk Rapids-based Schaefer Ventilation a prime opportunity to sell its thermal control systems to
agricultural operations around the world, transforming the company into a $10 million and growing business.
About 60 years ago, a furnace repairman looking to utilize his extra motors started Schaefer Ventilation. He attracted the interest of local farmers by attaching steel blades to these motors and creating high powered fans. Ever since, Schaefer maintained its reputation as an
innovator in ventilation systems.
Today the company sells exhaust fans, misting fans, cooling and heating systems, and more to the agriculture, horticulture, commercial, industrial, and rental sectors. Ag and horticulture comprise about half of the company's business, says President Neil Crocker.
As agricultural operations have grown bigger and animals spend more time in enclosed spaces, keeping their environments comfortable is essential. "There is absolutely no doubt that animal cooling is necessary to be a lowcost producer. Efficient dairies and hog producers,
poultry producers, they absolutely need ventilation," Crocker says. "It's a slam dunk that it's the right thing to do."
In a dairy operation, for instance, cows need to live in an environment that's 80 degrees or lower to be productive. Creating cross ventilation can be a challenging endeavor in cold climates like Minnesota and Wisconsin and in blazing hot states like California and Arizona,
which actually are very large dairy producers.
Schaefer recently came to market with a combination mister and fan that is a big hit in the southwest. "With ventilation and mist, you can lower the ambient temperature by 30 degrees," says Crocker. "That means in some very, very nasty locations, you can have pretty
highly productive cows."
American manufacturers that work in the agricultural sector are known around the world for helping producers operate more productively, and Schaefer is proud to do its part. "We farm well in America," Crocker notes. "One of the reasons is that our farmers spend a lot of
money and buy good equipment to get a lot of productivity."
Thanks to Minnesota manufacturers like Aagard, Douglas, Schaefer, and Zinpro, the state's agricultural entities -- as wells as operators across the country and around the world -- do their jobs faster, better, and stronger.
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