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Continued: Schafer: Main Street looks lonely, but Minnesota's farm country is doing just fine

  • Article by: LEE SCHAFER , Star Tribune
  • Last update: March 22, 2014 - 4:58 PM

Eric Fisher, the director of operations, explained that his company has continued to invest in Jackson because of its local workforce. At least two-thirds of the staff, if not more, he said, have a personal experience with farm life. They know how a tractor gets used on a farm because they likely have driven one.

AGCO in Jackson is already so large that it can’t just staff its line from the local community. Nearly 75 percent of the employees live within a radius of 30 miles, but it’s not until you go out 60 miles that the total gets to 99 percent.

A key stop on the factory tour is the room Fisher called “assembly academy.” AGCO’s hiring strategy is to screen candidates for traits such as reliability and problem-solving, knowing that they may need to train for specific skills.

Jay Mulso, the tour guide through the AGCO factory and manager of the company’s gleaming, not quite two-year-old customer welcome center, said no one really joins AGCO with the right skills to start welding on day one. The best new hires get up to speed quickly because they had experience working with their hands and with tools, much of it gained while growing up on nearby farms.

Mulso worried aloud, when walking through the fabrication plant, that as the farm economy continues to evolve with fewer farm families, finding applicants with that kind of background may get harder.

If there’s any worry that surfaced during the day it’s that one, that a shock to the farm economy could lead young people to abandon the area for opportunity elsewhere. For farm-country veterans like Roesler, it was the brutal farming recession of 1980s, known now simply as “the farm crisis,” that fundamentally changed the area.

The population of the county only declined by about 7 percent that decade, to just under 23,000, but the net out-migration of people in their 20s accounted for the entire drop.

There isn’t any reason to expect a similar farm crisis in the next few years. But after an extraordinarily good year in 2012 for farmers, the 2013 results that come out this week will likely show that farm incomes declined. It looks like 2014 is going to be worse. Both Deere & Co. and AGCO have been cautious in their near-term sales outlook for farm equipment.

In Martin County a slump in farm income also means there likely will be a decline in the cost of farmland, currently the most costly in the state, according to the U.S. Department of Agriculture. Last year cash rent there averaged $274 per acre.

Such price adjustments are slow to happen, suggesting at least a year or two of high costs with declining revenue, so there may be some financial pain for farmers.

The farmers should be far more resilient than those of my father’s generation, as balance sheets are strong and borrowing costs remain near historical lows.

And, of course, they’ve managed through far more dramatic changes already.

lee.schafer@startribune.com • 612-673-4302

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