Organic Valley: Big business in tiny towns

2013-05-19T00:00:00Z 2013-05-20T14:50:11Z Organic Valley: Big business in tiny townsBy CHRIS HUBBUCH and ALLISON GEYER | La Crosse Tribune La Crosse Tribune

LA FARGE — In 2003, when the farmer’s cooperative behind Organic Valley decided to invest in a new headquarters, company leaders brainstormed a location.

Some of the more obvious choices for a growing multimillion dollar business in western Wisconsin were off the table.

“We knew we weren’t going to a larger metropolitan area,” said Mike Bedessem, an organic apple farmer from Gays Mills who joined the board in the early years and has been chief financial officer since 1994. “We knew we weren’t going to Madison. We knew we weren’t going to La Crosse.”

They considered some smaller cities, such as Sparta, that could be considered rural, but ultimately built the nearly $6 million complex, with room for hundreds of workers, right in La Farge, pop. 774, more than an hour drive along serpentine country roads from the nearest city or interstate highway.

“La Farge was the obvious choice. We had our roots there.”

A decade later, the co-op has grown into an organic behemoth, with worldwide markets and annual sales approaching $1 billion. The footprint has expanded to include nearby Cashton, where a $20 million office building under construction near the state-of-the-art distribution center will have room for hundreds more workers.

But even as fire ravaged the La Farge headquarters this week, the company is vowing to rebuild right where they started.

“You maintain your commitment to the area,” Bedessem said.

It’s not just a commitment to the area, it’s a commitment to the company’s mission: creating sustainable rural communities.

“You need businesses to stay in those communities,” Bedessem said. “You have to have people willing to commit capital and time and effort if you’re going to have sustainable rural communities.”

A big player

With about 400 workers at its La Farge headquarters, CROPP, as it is officially known, is the second largest employer in Vernon County, just behind Vernon Memorial Hospital.

With big employers like Fort McCoy, Wal-Mart’s distribution center, the Tomah VA and Toro, Organic Valley doesn’t have as big an impact on Monroe County’s workforce, but the effect – even with about 150 workers – is sizeable in Cashton, pop. 1,196.

The distribution center accounts for nearly a fifth of the village’s $53 million property tax base, and there are expansion projects underway.

“They’re a big player,” said village clerk Hemmersbach, who is awaiting word on applications for about $2 million in grants to expand roads, sewer and electric services for the growing co-op.

The $20 million new office complex now under construction will have room for about 400 more workers, enough to make Organic Valley one of the county’s top six employers.

In La Farge, village leadership created a tax increment financing district to include a business park for Organic Valley. Affectionately known as “up on the hill,” the complex is assessed at approximately $7.8 million, accounting for nearly a quarter of the village’s tax base.

Repayment from the TIF district is several years ahead of schedule, said Larry Gabrielson, La Farge village president, and the village could start seeing a profit within the next decade.

Rural prosperity

The company’s exponential growth has been felt in these small communities at a time when rural America has not experienced much economic or population growth.

Between 1999 and 2011, the median income in Cashton rose by more than 57 percent, according to Census estimates, to $48,672 per household, just below the state median. Statewide, income during that period grew just 15 percent.

In La Farge, which entered the 21st century with a median household income more than $20,000 below that for Wisconsin as a whole, the growth was more than 65 percent.

And there’s more at play than just the payroll of more than $30 million a year.

“CROPP’s influence goes beyond these numbers,” said Bill Brockmiller, labor market analyst for the Wisconsin Department of Workforce Development. “They have a heavy influence on the individual family farming in Vernon County.”

Bedessem cites a figure to put that into perspective: $180 million. That’s the organic premium paid to member farmers last year above and beyond the price of conventional milk.

“All of our farmers are small business people … they’re investing it in their local communities,” he said. “Now we get back to sustainable rural communities. How do you get sustainable rural communities? You have lots of successful farmers.”

Adding value, attracting workers

While there are challenges recruiting highly skilled workers to come to tiny communities in rural Wisconsin, Bedessem said the communities also have plenty to offer those looking to raise a family – good schools, low crime, no traffic.

“While we don’t have a freeway, we don’t have traffic,” he said. “We think a traffic jam is two cars at a stop sign.”

The impact has been felt in Cashton, where school enrollment is climbing and the community this year approved a $12.3 million referendum to expand the school.

“There are small schools across the state of Wisconsin just begging to be in the position of having wonderful industry growth,” said Brad Saron, the superintendent of Cashton Public Schools.

Saron said there’s a palpable change in the community since he arrived in 2004.

“We’ve got businesses doing well, all kinds of activities happening around the village. Fiber optic being looped through the village, access to excellent health care. There’s tons of development,” he said. “I think it’s had a huge impact on the greater Cashton area and the way that the students and families and people of Cashton look at the development of our community.”

About a quarter of the students in the La Farge schools have one or both parents who work at Organic Valley, said superintendent Shawn Donovan.

Enrollment, at 278 in 2012, has grown gradually over the past five years, Donovan said. She has has seen families relocate to La Farge, drawn by jobs and the natural beauty of the Kickapoo Valley.

“There’s advantages of living here,” said Gabrielson, the village president, who added that a recent survey of Organic Valley employees showed an interest in relocating to La Farge, particularly among the cooperative’s younger workers.

The village is in the process of building a five-unit apartment complex targeted at single people or young families and has plans to break ground on a second complex if the demand is there, Gabrielson said.

The village is also conducting studies on how to make its main street more appealing to residents and developers and working to add amenities like nature trails and a fishing area.

“We’re working on things like that,” he said. “And if it goes over well, we’ll do more.”

Slowing brain drain

Organic Valley’s presence in Cashton has meant more than just jobs and property taxes. It’s led to opportunity often lacking in small town America.

Throughout the last century mechanization and consolidation reduced the number of on-farm jobs, and many of the manufacturers who moved to rural areas in search of lower wages have since gone overseas for the same reason, said Lorin Kusmin, an economist with the USDA.

And with fewer high-skilled jobs available, the greatest payoff to a college degree has been in urban areas, contributing to what’s been called “brain drain.”

Organic Valley has helped change that.

“We have seen people coming into town,” Saron said. “We have seen opportunities arise where alumni have been able to come back.”

Beth Wells is one such graduate. After earning a masters degree in agricultural business at the University of Kansas, she had an opportunity to pursue a Ph.D. but decided instead to move back home, where she landed a job with a biodiesel plant while keeping an eye on Organic Valley, where she now works as a sales forecaster.

“I think with Organic Valley and businesses like it – it affords people an opportunity to move back to their rural communities and raise their children with the values they were raised with,” Wells said. “But also the opportunity to pursue a professional career.”

Sara Cook is assistant dean of the business school at Viterbo University and a Cashton native who returned in 2000 to raise her family. She said many of her students from rural backgrounds look to Organic Valley for opportunities to return to their roots, just as she did.

“There’s a real sense of pride to come from that rural background,” Cook said. “If there weren’t an organization like that growing nearby then the future of any rural community is kind of in question right now.

Still, not all employees see the joys of country living. Bedessem estimates at least several dozen Organic Valley employees commute from homes in La Crosse.

“People will drive farther the more they get paid for their job,” said Bill Brockmiller, labor market analyst for the Wisconsin Department of Workforce Development, who said Organic Valley is likely one such draw.

Setting limits

Even with the commitment to staying and rebuilding in La Farge, Bedessem said the company realizes there are limits.

“We realized you can only put so many people in a community before it became hard to recruit,” he said. “We set a – let’s say informal limit of saying is it fair to having more than 500 people come to work in La Farge every day? Can the community support that?”

That helped spur the decision to target future expansion in Cashton, where a new office building is already sprouting next to the distribution center.

Scot Wall is president of the Bank of Cashton and headed the Cashton Area Development Corp., which helped recruit Organic Valley to the village.

He said Organic Valley has been a good corporate partner as it continues to grow – and the onus is on Cashton to keep pace.

“What you’re hoping for with development is being able to sustain what they have. It’s not one step forward two steps back,” Wall said. “Organic Valley has been so consistent and such a wonderful corporate steward. They do exactly what they say they’re going to do.”

Copyright 2015 La Crosse Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(3) Comments

  1. CuriousG
    Report Abuse
    CuriousG - May 19, 2013 3:41 pm
    Also, a new regional bus system started up recently. http://www.ridesmrt.com
  2. Sarahkay24
    Report Abuse
    Sarahkay24 - May 19, 2013 2:36 pm
    While public transportation does not exist, OV does have a ride-share program that sends ride share vans from several communities from LaCrosse, Richland Center, and Viroqua. We also encourage car pooling and assist people with finding ride share buddies if they are coming in from another town. This is a program we offer that we expect to add to as long as we continue to recruit from areas such as La Crosse. If you are interested in working for us, I would encourage you to apply and we can probably find a travel solution for you.
  3. oz
    Report Abuse
    oz - May 19, 2013 10:55 am
    While I respect what OV has done for these small towns, one of the biggest barriers to growing the small-town appeal is the lack of public transportation linking these towns to the rest of the world.

    I'd love to work at OV, but to do so would mean spending thousands of dollars a year on a car (don't want to do that), or being stuck in La Farge or Cashton with no access to the outside world.
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