Published Thursday, June 20, 2013 at 1:00 am / Updated at 3:13 pm
value-added ag in Nebraska
World-Herald editorial: Ag producers are finding right niche

Add it all up, and three agricultural staples — cattle, corn and soybeans — total almost 90 percent of farm receipts in Nebraska.

Still, there’s opportunity for exploring niche markets in agriculture.

Plenty of room, that is, for the agricultural entrepreneur.

The World-Herald’s Emily Nohr recently reported on Nebraskans who are drawing on their vision and talent to pursue opportunities in value-added agriculture. Examples include pumpkin puree, soup mixes from dehydrated vegetables, compost from dairy byproducts, Kobe beef and all-natural cat litter.

Some of those efforts are sidelines; others are a bit more substantive in terms of revenue.

In all of those cases, Nebraska producers pursued those items because they wanted to explore the full potential for market opportunities and revenue generation for items available to them.

Pumpkins, for instance. Time was, says Brett Nunnenkamp, a farmer in Sutton in south-central Nebraska, that extra pumpkins at his family farm were just left for the cattle to clean up. But as Nohr’s article explained, Nunnenkamp’s family now uses the pumpkins for a successful puree business.

One of the most interesting and notable developments in Nebraska value-added agriculture came in May, when Cardinal Farms Aquaculture broke ground on a $1 million fresh fish production facility in Dakota County. The company will raise hybrid, striped-bass fingerlings to maturity — the goal is more than 20,000 fish at any given time — prior to selling them for processing.

The facility will be co-located with Cardinal Farms greenhouse, which produces pesticide-free tomatoes for sale in the Siouxland area. The company’s CEO, Doug Garwood, notes that this is the latest agricultural venture from his family’s six generations of food production in the South Sioux City area.

Marilyn Schlake, an extension educator at the University of Nebraska-Lincoln, gives a helpful summary of key points relating to value-added agriculture.

“Niche businesses operate within a sliver of the market,” she has written for UNL’s agriculture entrepreneurship program. “They are built around the unique needs of a narrowly defined customer base. This niche is too small for the big companies to pursue, thus leaving room for the small business to operate and grow.”

Fundamental business realities apply no matter the size of the operation, she notes: “The questions are still the same. Is the niche market large enough to make a profit? Are the customers accessible? And is the market growing fast enough? How do you know? Like the big companies, you need to do your research and get out there and talk to your customers.”

Value-added ag operations by definition mean taking a risk — part of what it means to be an entrepreneur. That point is underscored by a Nebraska native and University of Nebraska alumnus, Paul F. Engler, who has gone on to spectacular success as a cattle rancher in Texas. Engler has generously donated $20 million to UNL for programs supporting agricultural entrepreneurship.

“We need to identify these boys and girls,” Engler said, “who have that fire in the belly when they are young and then when they come to the university, expose them to a curriculum that teaches risk — how to evaluate it and how to manage it — because if you do not take risk as an entrepreneur, you are not going to make it.”

Kudos to UNL for helping young people explore the options in value-added agriculture, and to the many entrepreneurs who are out there doing the hard work and taking the risks.

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