Old World Values; Modern-day Success
Young, Steve. "Old World Values; Modern-day Success." Argus Leader, 16 November 2003.
State's 53 Hutterite colonies wield power in agriculture
NEW ELM SPRING COLONY - In his black hat, striped shirt and black
suit coat, Mike Tschetter Sr. could be a 19th century sodbuster
trying to scratch a living from the Dakota prairie.
He could be a 16th century preacher as well, for the High German
rolling off his lips during nightly devotions at New Elm Springs
Colony is the very echo of words chanted almost 500 years ago.
In appearance and speech, Tschetter, a modern-day Hutterite minister,
is practically a mirror image of his ancestors who fled the Ukraine
130 years ago to seek religious and personal freedoms abroad.
Yet for their Old World ways, the approximately 6,000 Hutterites
living in South Dakota today have transformed themselves into something
quite remarkable in this computerized era of high-tech farming:
a large and powerful force within South Dakota's agricultural economy.
How big a force is difficult to say. Agricultural economists say
nobody has ever measured the Hutterites' effect on the state economy.
But with their numbers and land holdings growing, and hog and turkey
operations thriving, today's 53 Hutterite colonies clearly defy
the trend that has seen thousands of family farmers leave the land
every decade in South Dakota, largely for economic reasons. According
to an Argus Leader study, today's Hutterite colonies:
• Produce 40 to 50 percent of all hogs sent to market in
this state, as many as 800,000 each year.
• Raise at least 80 percent of South Dakota's 6.2 million
turkeys produced yearly.
• Account for up to $500 million of the estimated $18.2 billion
effect agriculture has on salaries, jobs and spending throughout
"In eastern South Dakota, there is no doubt" that they
have become major players in the farm economy, especially with hogs
and turkeys, said Mike Held, administrative director of the South
Dakota Farm Bureau.
In fact, the economic influence the Hutterites wield is unheard
of in American agriculture today, said Donald Kraybill, senior fellow
at the Young Center for Anabaptist Studies at Elizabethtown College
No other state has the concentration of agriculturally based communes
that South Dakota has, Kraybill said. The Amish in Pennsylvania,
Ohio and Indiana don't live communally and are less involved in
agriculture, he said. The Society of Brothers has a few colonies
on the East Coast but in much smaller numbers than the Hutterites.
"You have a very unique situation there in South Dakota and
in the Upper Midwest," Kraybill said. "You won't find
that kind of agricultural group anywhere else in the country."
According to the federal government's Farm Service Agency, the
Hutterites collectively own almost 270,000 acres of farm land and
rent another 77,750 acres - or 1.92 percent of the available land
in the South Dakota counties in which they operate.
The continued growth of the Hutterite settlements spread across
eastern South Dakota is in stark contrast to what has happened to
small farms in the state over the past three decades. Since 1973,
South Dakota has lost 13,000 farms, and small producers have fought
fierce political battles to stave off the entry of large corporate
farms into the state.
The Hutterites' ability to buy sections of ground when they want
can be unsettling for other farmers, especially those who see the
price and scarcity of available land as a threat to their existence.
"Whenever they buy land, you can pretty much say it will never
come up for sale again," Madison farmer Charlie Johnson said.
"That's probably the biggest rub people have about Hutterites.
Having access to land is very key out in rural areas."
The colonies initially appeared on the Dakota landscape in 1874,
when the first Hutterites carved out the Bon Homme settlement along
the Missouri River near Tabor. They practice a communal lifestyle
based on the fundamental principle of a community of goods. "What
is mine is thine," the Hutterites believe, according to Acts
2:44 and 45. "And all that believed were together and had all
things in common."
Within the communal structure, each member is given a job, whether
it's teacher or preacher, head cook or hog boss. To make the operation
workable, the colonies limit themselves to 120 to 150 members. Once
they get beyond that number, they simply buy additional land and
create new "daughter" colonies.
Measuring the Hutterites' economic impact is a difficult proposition,
since their culture is as deeply private as it is religious.
"I can tell you," said Jeff Sveen, an Aberdeen lawyer
who does legal work for the colonies, "that it would leave
a major hole in this state's farm economy" if the Hutterites
That's especially true when it comes to the production of hogs
and turkeys - two agricultural ventures the Hutterites dominate
in this state.
Tschetter, the New Elm Springs minister and spokesman for the colony,
said many colonies got into hogs 30 to 40 years ago, "when
the prices were good, and it was easy to get into."
"You just turned your boar loose with the sows in the summertime
and raised them all out in the sunflowers," he said.
Now with hog-confinement operations on virtually every colony,
the Hutterites produce between 40 and 50 percent of all the South
Dakota feeder pigs that go to market, said Bob Thaler, a swine specialist
with the state Cooperative Extension Service.
"They've got the manpower, obviously, to run large operations,"
Thaler said. "They have good genetics in the hogs they produce.
And with their computerized hog-confinement systems, they are very
Most of the colonies sell their hogs through a marketing group
called Prairie Land Pork, Sveen said. By working together, observers
say, they are able to negotiate better contracts through their agents.
"With anything, whether it's Wal-Mart or Kmart, the hog industry
or the cattle industry ... people would rather deal with one person
representing large numbers than a lot of people representing small
numbers," said Rick Morren, a Beresford hog farmer and past
president of the South Dakota Pork Producers Council.
Together, Prairie Land and South Dakota Hutterite colonies send
about 800,000 feeder pigs to market each year. Most of Prairie Land's
hogs are sold to John Morrell & Co. in Sioux Falls. Most of
the rest go to Swift in Worthington, Minn., and IBP in Madison,
"We market 10,000 to 12,000 hogs a week to all the different
places, so we are a constant supply," Sveen said.
For a meatpacker that slaughters 4 million hogs a year - and is
always searching for more - there is little dispute about the importance
of the 350,000 hogs that come to Morrell's annually from the Prairie
Land colonies, according to Dave Poppen, corporate director of procurement
for Morrell's. "When you look at 350,000 head against 4 million,
on the surface that doesn't look big," Poppen said. "But
it's huge when you consider that we have 12,000 customers we get
our hogs from."
And they're good hogs, Poppen added. Through their use of genetics
technology, the Hutterites are producing leaner animals. Their sows
have bigger litters, too.
In a state where the average market price of a 250-pound market
hog in 2002 was $90.75, Prairie Land hogs typically earned at least
$4 above that average from Morrell's, Poppen said, and as much as
To lose that many top-quality hogs certainly would send shudders
through Morrell's world, Poppen said. "It wouldn't close us
down; we wouldn't be out of business," he said. "But certainly
it would affect us."
It obviously would affect South Dakota's farm economy as well.
Conservatively speaking, the Hutterites received about $75.8 million
for the hogs they sent to market last year.
And since the Hutterites' track record has been to produce more
hogs while others are cutting back, "if nothing changes in
this state, the future of South Dakota hog production is pretty
much dependent on the colonies," Poppen said.
Of course, hogs aren't the Hutterites' only big sources of income.
The colonies are also huge producers of turkeys. Of the 6.2 million
tom turkeys raised in the state and sent to market each year, at
least 5 million come from the colonies, Sveen said. He estimated
that the colonies earned at least $69.7 million from turkey sales
"As far as I know, there are only two or three other growers
other than the colonies in the entire state," he said.
The colonies send almost all of their turkeys to processors in
Willmar, Minn., and Storm Lake, Iowa. But that could change if the
Hutterites succeed in an effort to start their own processing plant.
Earlier this year, a group of 40 colonies working under the banner
of Dakota Turkey Growers received a $200,000 state grant to study
the feasibility of building a $30 million plant in the state.
"If Dakota Turkey Growers does this, it will be a plant built
somewhere in South Dakota, employing South Dakota people, and with
the profit staying in South Dakota," said Sveen, who also represents
Such a facility could employ 600 to 1,000 people, most of them
noncolony workers, he said. The group should know by the end of
the year if the project will proceed, Sveen said.
Beyond hogs and turkeys, the Hutterites also grow corn and soybeans,
though virtually all of the corn goes to feeding their own livestock.
Soybeans represent the colonies' one significant cash field crop,
Sveen said. The colonies sold an estimated $20.6 million in soybeans
The Hutterites are into many other agricultural ventures as well,
though to a smaller degree. Many have butchering shops and butcher
everything from pheasants and ducks to chicken, geese, even buffalo.
There are 14 colonies in the dairy business, averaging 300 head
per operation. "They are starting to build back up, and big
time," said Tschetter. "It's starting to become profitable
Few colonies raise beef cattle. "The land," Tschetter
explains, "is too expensive to graze them."
Hutterites sell their vegetables and baked goods in surrounding
communities. Some colonies are even diversifying into ag-related
small businesses. For example, the Millbrook Colony southeast of
Mitchell produces heat pumps. And Riverside Colony near Huron manufactures
"Colonies would like to do more and more manufacturing, especially
farm-related manufacturing," Sveen said. "But you need
to find someone who needs them to build a product for them."
There is one other significant source of income for the Hutterites
as well - federal government payments.
In a state where ag producers realized $334.6 million in federal
payments in 2002, the 53 colonies collectively received at least
$2.5 million in corn, soybean, wheat, livestock and conservation-reserve
subsidies, with Spink Colony north of Huron getting the most at
Taken together, the money the colonies received for their hogs,
turkeys and soybeans - combined with their subsidy payments - came
to about $168.6 million in 2002. When those dollars trickled through
the economy, from the elevators to the processing plants, from paychecks
to Main Street transactions, it meant a $365.9 million impact on
the state, estimates Gary Taylor, an agriculture economist at South
Dakota State University.
Observers say that when the miscellaneous other ventures are figured
in, that total is closer to $500 million.
Tschetter insists that his people understand their influence on
the South Dakota economy.
"Absolutely we do," Tschetter said. "That's why
you'll hear us grumbling because everything has to go out of state.
Why does our pork have to be hauled to Minnesota and Nebraska? Why
do practically all of our turkeys have to go to Minnesota or Iowa?
We'd like to see more of those staying in this state."
Larger effect on state
Colonies have an economic impact in other ways, as well. They pay
property and income taxes, Sveen said, just as other South Dakotans
"They don't get any breaks on those taxes," he said.
And Hutterite children, though educated in classrooms at the colonies,
bring in dollars for their neighboring school districts under the
state funding formula.
For example, 14 children in kindergarten through eighth grade at
New Elm Spring Colony northeast of Parkston generate $3,967.88 apiece
in state education dollars for the Parkston School District.
The Parkston district pays for a teacher and teacher's aide to
work at the colony. It also provides books, curriculum, computers
and other supplies. In turn, New Elm Spring takes care of the classrooms
"I think it's beneficial to the districts overall," Parkston
Superintendent Shayne McIntosh said. "If it weren't, if it
was costing districts money to send teachers and supplies out there,
you would probably see a struggle between the colonies and the school
districts trying to get those kids into the mainstream schools."
Indeed, for a culture that exists on the fringes of American society
- that speaks a different language around the dinner table, dresses
differently from everyone else, and eschews materialism for the
most part - the Hutterites seem to have found peace with those around
The colonies are viewed as nonprofit religious corporations by
the IRS, Sveen said, but still must pay income and property taxes.
"In the 1970s in this state, it started to become important
that the colonies be an identifiable entity," he said. "They
weren't up to that point and, it's like the banks were saying, 'We'll
lend you money, but what exactly are you?' "
Colonies didn't show up in statutes as being legal entities. So
the IRS began looking through its codes to see where they might
fit and came upon 501D, which defines nonprofit religious corporations.
"What that says is, a religious corporation has to have its
holdings held in a community treasury," Sveen said. "There
is no individual ownership of assets."
"That's where they put the colonies. It doesn't mean that
since they are nonprofit, they get any benefits. Like for example,
if you donate to your church, you get a tax deduction. They are
not exempt from any taxes. They just fit into that code because
there is no individual ownership; it's all community-owned."
Most South Dakotans in agriculture say they view the colonies as
family farmers and not corporate farmers.
State Sen. Frank Kloucek, D-Scotland, said he doesn't believe there
was ever any intent to limit Hutterite expansion when lawmakers
put together Amendment E, the state's anti-corporate farming law.
"They've always been viewed as family farmers," Kloucek
said. "They live on their land as families. They make the daily
decisions. And if something goes wrong, they're responsible, and
they suffer, too."
There are undoubtedly farmers who envy the Hutterites' purchasing
power, said Held, of the Farm Bureau.
"I know some of the local farmers around here think of them
as corporate from the standpoint of purchasing land," he said.
"Sometimes it does create, I'm not sure animosity is the right
word, but competition. But then other operators create that competition,
too. It's just a fact of life you deal with in farming."
State Sen. Paul Symens, D-Amherst, once introduced a bill that
would have slowed Hutterite expansion after constituents in northeast
South Dakota approached him with concerns about the colonies' ongoing
purchase of land. But he also knew that such a bill would be unconstitutional.
"I think there are jealousies out there," Symens said.
"But people who know the Hutterites and have them as neighbors,
I don't think they view them negatively. They are good neighbors."
In communities and the countryside south of Mitchell, where there
are at least half a dozen colonies, that belief holds up.
In Parkston, for example, Janelle Varney runs the Medicine Shoppe
pharmacy. Many of the area colonies do business at another pharmacy
in town, in large part because they get a better deal there. But
Varney understands that.
"They are very demanding people, but a lot of people are that
way," Varney said. "They want the best price. So does
everyone else. I understand that."
At Farmers State Bank in Parkston, owners Bob and Scott Bormann
do business with five colonies. That hasn't always been true, they
say. Bob Bormann said a majority of the colonies took their money
out of area banks in the 1970s and deposited it in large out-of-state
But in the 1990s, they started bringing their business back to
South Dakota banks, Bob Bormann said.
"Obviously, they're going to go where they can get a fair
deal," Bob Bormann said. "But I've found here in the bank,
if you're open with them and honest with them, that reciprocates
on both sides. They are good customers."
Sveen said the colonies make a conscious effort to buy locally
or in state, whether it's gasoline, oil, feed or groceries. To highlight
that point, he tells about a nationwide pharmaceutical company that
once offered the colonies big discounts if they would buy medicine
from them, Sveen said.
"What that would have done is not allow them to buy their
pharmaceuticals from the local guy," he said. "They didn't
do it. They like their local pharmaceutical guy. They are part of
their community, so they didn't do it."
Neighbors say they get along with the colonies for the most part.
Dick Varney farms near Old Elm Spring Colony south of Alexandria.
He has rented pasture land from the colony and has borrowed machinery
from them. When he's needed help on his place, the Hutterites were
"The colony people are just like anyone else," Varney
said. "There are a lot of good folks in this state, and a lot
of good colony people. And you always have a few of each that are
Near Parkston, farmer Wayne Tiede knows the frustration of trying
to bid on farm land against the Hutterites. While he counts many
on the colonies among his friends, he also understands that the
Hutterites' purchasing power often puts him at a disadvantage.
"It's tough to buy any land in our area because they are in
there, and they will pay whatever it takes," Tiede said. "They
don't have to worry about making money for retirement. ... And once
they buy the land, they never give it up. It'll never be available
to anyone else."
With control over only about 2 percent of the farm land in the
counties where they operate, the Hutterites don't seem to be major
But Johnson, the Madison farmer, asks this question: If the colonies
were viewed as one entity collectively, how many entities could
you have in each county before the farm land was all gone?
"You could have 50 entities per county, at 2 percent each,"
Johnson said, quickly answering his own question. "Obviously
that's not the situation. But at 50 farms per county, that's not
going to be good for school districts and spending on Main Street
and other ag-related services."
A century down the road, as more colonies form, the Hutterites
could own 4 percent of all the land, or 6 percent, he said. "What
that means is that I think they'll have an even greater influence."
Is that good or bad? Johnson isn't sure.
Sure, they are a little different in their Old World ways. But
they are friendly, thoughtful people, too, he said.
"It's like this," Johnson said. "I guess as a neighbor,
I really like the Hutterites a lot. And as a farmer out here, I
have my apprehensions about them. I'd say that captures it the best."
Reprinted with permission of the Argus Leader.