Center guides producers in turning dreams into value-added ag projects

Expertise guides people through process

Connie Sieh Groop
Special to the Farm Forum

Who wouldn’t like to take a dream and turn it into a money-making venture?

A woman in Pierre is using her knowledge and connections to South Dakota's number one industry to guide those with value-added agriculture dreams as they maneuver the path to become viable businesses.

At the South Dakota Value Added Agriculture Development Center, Executive Director Cheri Rath admits what she does flies under the radar. By providing expertise and education, ideas grow from the wishing stage to working enterprises. She has 30 years of experience and taps partners across all ag sectors to draw on the skills of shared resources to help the Center’s clients.

And the best part is the services are free.

ValueAdded Ag Center Day at the SD State Fair shows, from left, Garry Dearborn, SD Rural Electric Association; David Struck, SD Soybean Research & Promotion Council; Cheri Rath, VAADC Executive Director; Wayne Soren, SD Farmers Union; Brenda Forman, SD Association of Cooperatives; Wally Knock, Agtegra Cooperative. Not pictured directors: Bert Rogness, East River Electric Cooperative; Kevin Jaspers, Farm Credit Services of America; Brad Seman, SD Bankers Association; Reid Christophersen, SD Wheat. Courtesy photo

“It all starts with, ‘I have an idea,’" Rath said. "Those who contact us may come in with an idea, while others already may have an existing company and are looking at expanding production or developing markets. No idea is too outlandish or too small. We can explore the concept and help equip individuals with strategy and skills needed to operate and manage their ventures.”

She explains the process starts with a visit or a phone call and an overview of the project. From there, work begins to identify challenges and move into a feasibility assessment, evaluating all the pieces of the project.

If it appears that the idea could be viable, she then helps develop a business plan which includes specifics, such as operations, management, marketing and financing. With this plan, she and others involved review the projected income and expenses to see what the bottom line is going to be.

“About 40 percent of our projects become operational,” Rath said.

In its first 20 years, VAADC delivered technical assistance to about 250 projects. Of the 135 projects that became operational during that time, 79 percent remain operational today.

“That’s significantly higher than the 10 percent of startups that typically succeed," Rath continued. "We feel that’s because we hand-hold through the development stages and work through things on paper before the endeavor is launched.

"At some stage, it may become apparent the concept isn’t viable, the numbers don’t pencil out or funding won’t be available. The idea might be something the clients are trying to add to their current operation and family situation, but it might come down to the timing isn’t right to move ahead. In these instances, the venture can be stalled or stopped before additional resources and investments are injected,” Rath said, “Once they work through the planning and identifying costs, we help them identify funding sources like

low interest loans and grants at the local, state and federal level. We can also facilitate putting the application package together in collaboration with incentive program entities. We can help them apply and, if funding is approved, guide them in administering the funds.”

VAADC has been successful in helping businesses secure more than $63 million for technical assistance, construction and working capital.

What are some of the projects? Here are four examples:

• Badlands Distillery of Kadoka began with a partnership between a retired manufacturer and a rancher who had his great uncle’s recipe to make distilled spirits. They grow their own corn to make a traditional “bourbon” mash recipe. They retrofitted a building into a distillery and received a grant to provide working capital. VAADC is assisting them in considering options to further grow their operation to meet demand for their collection of flavored spirits and bourbon.

Badlands Distillery of Kadoka began with a partnership between a retired manufacturer and a rancher who had his great uncle’s recipe to make distilled spirits. Courtesy photo
The fully automated HydroGreen Grow System performs all functions including seeding, watering, lighting, harvesting and re-seeding. Courtesy photo
LemmonMade Butcher Shop built a custom meat processing facility that allows producers to sell their farm-grown meats. Courtesy photo

• In Lemmon, a company called LemmonMade Butcher Shop built a custom meat processing facility that allows producers to sell their farm-grown meats. The owners are a young couple who that moved back to South Dakota to live on her grandfather’s farm. They are also developing their own branded beef and pork products to market locally and online. A loan from the SD Department of Ag helped build their business.

• At Sisseton, the Schlitz Goose Farm is adding value to their antibody enhanced eggs obtained from geese raised in their specific pathogen- free egg laying facility. The on-farm egg processing operation harvests eggs from vaccinated geese, separates the yolk containing antibodies against the targeted disease, then homogenizes, packages and freezes the product. Biopharmaceutical manufacturers use the goose antibodies to make therapeutic treatments to combat diseases in companion animals. The first application is expected to be a treatment for parvovirus in dogs.

• Rath said one of the most inventive is HydroGreen at Renner, which uses hydroponics to grow fresh, green livestock feed indoors in six days. The fully automated HydroGreen Grow System performs all functions including seeding, watering, lighting, harvesting and re-seeding. “HydroGreen Healthy” nutrition represents a unique approach for safe feed and food production, and a responsible solution for the environment. VAADC helped with obtaining funding and connecting them to other resources. They are now tapping worldwide markets, including a water buffalo dairy in Southern Italy.

“Some of our clients are very entrepreneurial, starting with an idea in their garage or at their kitchen counter and spinning it into a commercialized project,” Rath said. "Some are more traditional, adding value to commodities, such as corn, soybeans and wheat while others add value to berries, goats and more niche type ideas. Some are sidelines, others are a hobby rather than the main focus of their operation."

But Rath said that each business stands out in its own way.

“Creating and growing agribusinesses is a challenge because every project is unique,” Rath said. “There isn’t a template. Everything we do is tailored to their business’ specific needs. It’s a learning curve for me and our staff. As we work to develop client ideas, we learn their goals, markets, technology and connections needed within the sector of ag they are in so we can accurately assess possibilities.”

And the hands-on mentality is something Rath looks forward to.

“I really enjoy working with the producers developing these projects," she said. “We have a brief time with them in their business lifecycle to get things up and going, these ideas turn into companies which provide economic enhancement in small rural communities across the state. Once the projects launch, it’s rewarding to drive by and know we helped them through the process to get the brick and mortar in place.”

VAADC is structured as a non-profit. A combination of member sponsorships and USDA funding makes the Center’s services available to citizens.

“It’s beneficial to us and our clients that we can go to our sponsors and get expertise and support from different agricultural industry perspectives as we work with a diverse mix of projects,” Rath said.

Cheri Rath with Julie Gross of USDA Rural Development celebrating the 20th anniversary of the Value-Added Agriculture Development Center in 2019. Courtesy photo

Phone: 605-224-9402

Email: cherirath@yahoo.com