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Ag expert: Unpleasant turnaround is around the corner

ALSO: College debt balloons; memorial for hanged Indians planned in Mankato; all-day kindergarten a success in southeastern Minnesota; and more.


Edmond Seifried, professor emeritus of economics and business at Lafayette College in Easton, Pa., laid it on the line to farmers at South Central College in North Mankato last week: “Sometime in the next couple years, you are going to have an unpleasant experience,” he said. Kylie Saari of the Fairmont Sentinel was at the conference, where farmers talked about trends in agriculture. Seifried discussed a likely turnaround in profitability stemming from an increase in loan rates, expected to rise sometime this year. Ag economist David Kohl agreed, saying one of the top challenges in the next five years is a generation of young lenders and producers who have never faced an agricultural downturn. Kohl also pointed to “black swans” – i.e. unusual events – that can wreak havoc on business, such as uncertainty in oil markets, trouble in Europe that affects Chinese trade relations, and the changing policies of many world leaders.

However, both Seifried and Kohl agreed that being aware of what is happening and planning accordingly can make a difference. Seifried urged producers to determine if future expansion plans are feasible while interest rates are still low, noting the same work could cost double in a few years. Younger farmers were advised to devote some income into funds in case of a change in economic forces. Overall, Kohl said, keep debts low and grow slowly. “If (your business) grows too fast, it is a weed,” he said.

Skyrocketing debt for college grads is not new news, but Marino Eccher of the Fargo Forum takes a Moorhead-specific look at the issue., an online financial aid resource center, says two-thirds of four-year college graduates last year accumulated an average of $34,000 in college debt, a figure that has more than tripled in the past two decades. Locally, he writes that at North Dakota State University, about 74 percent of 2011 graduates carried college debt. They owed an average of $28,689; at Minnesota State University – Moorhead, about 68 percent of last year’s graduates owed an average of $30,036; and at Concordia, about 79 percent of students from the 2010 graduating class – the most recent year for which data was available – owed an average of $32,271. Over the past decade, tuition, fees, room and board at MSUM has nearly doubled from $7,790 a year in 2002 to $14,904 this year. NDSU and Concordia have seen similar increases.

The numbers are driven by rising attendance that has outpaced state and federal aid. That leaves students to pick up the difference. Steve Schuetz, vice president for enrollment at Concordia, said part of the increased loan burden comes from diminished family savings and earnings during the economic downturn. Jeanne Enebo, NDSU’s director of student financial services, said students are also borrowing more because access to federal and private loans has increased. Enebo says they tell students to be wary of loans.  “Our motto is, ‘Live like a student now so you don’t have to live like a student later.’ ”

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As the 150th anniversary of the Dakota-U.S. War nears, Vernell Wabasha wants to see a memorial to the 38 men who were hanged together on Friday, Dec. 26, 1862, writes Dan Linehan of the Mankato Free Press. Wabasha, married to hereditary Dakota chief Ernest Wabasha, says there are memorials at battle sites, and a buffalo monument symbolizing reconciliation sits at the spot of the Mankato executions that ended the conflict. Wabasha wants a memorial to the 38 men who were hanged after the war. “These men fought for the Dakota way of life, trying to hang onto something, to hang onto this land for the future generations of their children and grandchildren,” she said.

The monument, designed by Martin and Linda Bernard of Winona, lists the 38 names on a 10-by-4-foot scroll. The phrase “forgive everyone everything” circles the monument, planned to be 20 feet in diameter. The names on the scroll, made of fiberglass crafted to look like leather, will face south. The memorial will cost an estimated $55,000 to $75,000 and would be near the buffalo statue in Reconciliation Park. The Mankato City Council has given its informal permission to place the memorial on city land. The next task is fundraising, and they plan to mail letters to 17 tribes, Linda Bernard said. They hope to finish by September, in time for the Mankato wacipi, or pow-wow.

Matthew Stolle of the Rochester Post-Bulletin reports that all-day, every-day kindergarten is catching on everywhere in southeast Minnesota in spite of lack of state funding. Hayfield Public Schools was the latest district to join the trend, he writes. Superintendent Ron Evjen said the decision was driven by several factors: Evidence that all-day kindergarten boosts academic achievement, that it helps narrow the achievement gap, and that it increases school readiness as children make the transition to first grade. Also, most of Hayfield’s neighboring school districts have adopted the all-day approach to kindergarten, placing Hayfield at a disadvantage in the competition for per-student funding under the complicated formula used by the state. By moving to an all-day program, Hayfield hopes to even the playing field.

A vast majority of schools in southeastern Minnesota — 31 of 33 districts — have shifted to an all-day, every-day program. Many have done so in the last decade and it has occurred despite a state funding formula that provides only 60 percent of the funding necessary for an all-day program. Many districts draw from other areas of their budgets to offer this necessary education to students.

As the frac sand industry grown on the Wisconsin side of the Mississippi River, hundreds of additional trucks will cross the State Highway 43 Bridge into Winona, writes Mary Juhl and Adam Voge of the Winona Daily News They asked Minnesota Department of Transportation officials if the 71-year-old bridge could handle the additional traffic. Officials say it won’t be a concern as long as trucks observe the 40-ton weight limit. MnDOT plans to rehabilitate the bridge and has tentatively scheduled the work for 2014.

Meanwhile, approved mining permits mean that several hundred additional trucks may cross the bridge each day by year’s end. The majority of the mines send their sand to Winona for processing, shipping or both. Craig Lenz, a MnDOT structures engineer, said he isn’t worried about possible long-term degradation caused by increased truck traffic as long as the trucks don’t exceed the bridge’s individual weight limit of 40 tons. Any normal wear-and-tear on the bridge would be caught during regular checks from a bridge maintenance crew stationed in Winona.

In another sign of the times, a Cloquet paper mill is moving from its 113-year tradition of making pulp for paper plants to making pulp for clothing and baby wipes. John Myers of the Duluth News Tribune writes that Sappi Fine Paper has been given the go-ahead by the Minnesota Pollution Control Agency for construction on the $170 million project, the first of its kind in Minnesota. The Cloquet mill hopes to begin shipping chemical cellulose, also called dissolved pulp, to textile mills in China, Indonesia and India by May 2013.

The mill will be converting wood to a purer form of cellulose fiber that can be processed into viscose staple fiber to make textiles like rayon, which can be made into cosmetics, pharmaceutical binders, diapers, cigarette filters, bandages, ingredients for ice cream and yogurt, and even the screens on cell phones and computers. It’s part of Sappi’s plan to diversify from lower-profit paper pulp into the higher-profit pulp used to make textiles, especially with new South American paper pulp mills coming on line. South African-based Sappi projects a huge shortage of chemical cellulose for rayon over the next 20 years. The project won’t add jobs to Sappi’s work force, which now stands at about 760 people in Cloquet, but will add years to the life of the mill.