www.DakotaFarmer.com - February 2008
Around Dakota Ag
GIVING EXTRA: John Wipf, Oak Lane Hutterite Colony business manager, stops his four-wheeler in front of one of the swine barns. He visits the barns each day. Because the farm is owned by the community, everyone gives a little extra to see that it succeeds, Wipf says.
Colony ways By LON TONNESON VERYONE can learn something about farm and business management from the Hutterite colonies in the Dakotas, says Jeff Sveen, an Aberdeen, S.D., attorney who has advised the colonies for the past 25 years. He says some of the keys to their recent success include: ■ Vision. Hutterite leaders had a vision of how the colonies could leverage their buying power. Colonies began buying soybean meal together and were able negotiate better prices and service. That soon grew into a hog marketing cooperative, Prairie Land Pork. The cooperative helped win premiums from packers and secure shackle space. Selling hogs together led to sharing carcass data. Soon colony hog managers were trading ideas on how to improve their production and profit. The success with hogs spread to turkeys. Forty-four colonies and one private turkey grower built Dakota Provisions, a $45 million slaughter and processing plant at Huron, S.D. The col-
Key Points ■ Hutterite colonies have lessons to teach in farm management. ■ Strategic vision, organizational structure and diversification are pluses. ■ Shared ownership increases workers’ commitment to excellence. onies also joined together to self-fund property insurance and health benefits. ■ Organizational structure. Each colony supports approximately 20 families and is widely thought of as a family farm. The families live on the farm and supply all the labor. But a colony is organized like a corporation. Each has a board of elders, which serves as a board of directors. The board of elders consists of colony ministers and spiritual leaders, a business manager and the farm manager. The board meets every morning but Sunday to plan the day’s work. Big decisions are put to a colonywide vote. The organizational structure helps the colony run smoothly. It also keeps everyone informed and involved, develops new leaders and ensures the
continuity of the farm. ■ Diversification. All but three of the Dakota colonies raise hogs. All grow corn, wheat and soybeans. Most of the colonies feed the corn to the hogs and sell the soybeans for cash. Some colonies also raise turkeys. Several milk cows. Some colonies are starting new dairies. Oak Lane and Upland colony, Mitchell, S.D., specialize in producing drug-free natural pork. Spring Lake Colony, Arlington, S.D., and Hutterville Colony, Stratford, S.D., raise tilapia. Colonies have been running non-ag businesses such as printing and repair shops from their farms for years. But colonies have recently also diversified into high-tech manufacturing and renewable-energy businesses. Millbrook Colony, Mitchell, S.D., makes the Hydron Module Ground Source Heat Pump and sells it in 35 states and several Canadian provinces. Oak Lane Colony recently erected two wind generators. Diversification spreads risk, increases revenue streams and provides year-round jobs for colony members. ■ Technology. Hutterites follow religious and lifestyle customs dating back to the 16th century, but they also
quickly adopt 21st century farming and manufacturing technology. Tractors and combines are equipped with autosteer guidance and mapping systems. The turkey plant patented a carbon dioxide stunning system. Newdale Colony, Elkton, S.D., uses laser cutters, CAD/CAM software and robotic welders to build metal feed equipment and siding for buildings. Colonies are especially skilled at profiting from new technology. Often one colony will test an innovation and share the results with others. ■ Shared ownership. Colonies don’t pay salaries to their members, but they provide all the food, shelter, clothing, medical care and other things their members need — even after members can’t work or retire. Colony members consider themselves owners, not employees. They pay attention to detail and are willing to devote the extra time and effort that’s required to make their farms successful. “Little things add up,” says John Wipf, business manager for the Oak Lane Colony near Alexandria, S.D., “and that’s when the dollars go way up, too.”