The Water Table
The Water Table
#112 | A Five Generation Farm; One Woman’s Journey Home
One woman has taken over the family farm her great-great grandfather started in 1883 with $500 and a team of horses... What led her to leave the city life behind and return to work the land in her rural community?
Host Jamie Duininck sits down with Rachel Arneson, a fifth generation farmer from the Red River Valley in Minnesota. Learn how succession planning can be helpful and why getting involved in producer organizations can contribute to little changes that have a big impact.
It’s an episode of the Water Table podcast you don’t want to miss!
Chapters & Episode Topics:
00:00 Today on the Water Table Podcast
00:50 Welcome Rachel Arneson
01:11 Where in the world is Halstad, MN?
01:47 All the crops: Sugar beets, wheat, corn, soybeans…
02:30 Sugarbeets carry the farm
04:00 The best wheat crop
05:00 Sugarbeet reports
06:00 Sole proprietor and how it all started
07:30 The importance of education
08:30 Getting back to the farm
10:03 Succession planning
11:40 Working in the dirt
14:09 Appreciating life on the farm
14:45 The long process of succession planning
16:06 The trickle-down effect
19:40 Taking smaller bites
21:44 On the board
23:54 What have you learned from the exposure?
26:40 The importance of mentors
28:00 The challenges of finding employees
31:13 They’re not making any more land
32:00 What is your impact?
About the Guest:
Rachel Arneson is a fifth generation farmer from Halstad, Minnesota. She earned a Master’s degree in Liberal Studies from the University of Minnesota before returning to the family farm in 2012. Rachel is currently raising a two-year-old daughter, as well as growing corn, soybeans, wheat, and sugarbeets.
Related Content:
- Episode 46: How the Next Generation is Using Technology to Take Agriculture to the Next Level
- Episode 102: Grand Farm: Regional Solutions; Global Impact
- American Sugarbeet Growers Association
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Jamie Duininck (00:00):
Today on the Water Table Podcast, I'm interviewing Rachel Arneson from Halstad, Minnesota. Rachel's a fifth-generation farmer. We're going to talk all about her operation, how she decided to come back to the farm, and a lot about sugar beets, because that's something we don't talk about all that often on the water table.
(00:26):
Well, welcome to the Water Table podcast. Today, I have Rachel Arneson with me. Rachel farms in Halstad, Minnesota. She has a really great story that I've read about and just wanted to get her on the podcast and chat for a little while about how she became the owner of her family farm and why she's passionate about what she does.
(00:50):
So, welcome to the podcast, Rachel.
Rachel Arneson (00:54):
Thank you so much. It's a pleasure to be here.
Jamie Duininck (00:56):
Yeah, this will be fun. First of all, for our listeners, why don't you tell us where Halstad, Minnesota is, as we've got people from all over, and Halstad's a pretty small community. So, where are you from and kind of the geography of the area?
Rachel Arneson (01:11):
Yes. Well, I am located in the Red River Valley. I'm just right between Fargo and Grand Forks on the Minnesota side of the river. Literally, I could throw a stone and hit North Dakota. So, I'm in the northwest corner of the state.
Jamie Duininck (01:32):
Sure, sure. And heavy soil, flat ground, a lot of corn, soybeans, and sugar beets, which you are a sugar beet grower, from what I understand.
Rachel Arneson (01:44):
Yes, that's correct. I raise sugar beets, wheat, soybeans, and then corn, when the rotation needs it. So, yeah. A lot of barley and a few sunflowers grow in my area, as well.
Jamie Duininck (02:00):
When you talk about your rotation, that surprised me a little bit, that corn is not always in the rotation. So, is sugar beets 40% of your crop each year, or what would it be?
Rachel Arneson (02:12):
Oh, great question. So, sugar beets make up just under, well, actually probably about a fifth of my acreage. So, even though, quantity-wise, it doesn't make up most of the farm, it certainly carries the farm on a year like this one, where the markets and our other crops just aren't making break-even right now.
(02:40):
I was raised to understand that our ground isn't the best for corn. So, on some of the acreage that isn't prime for sugar beets, I need something to break up the soybeans, of course.
Jamie Duininck (02:59):
Sure. So, basically, are you mostly wheat and soybeans, then? And then, the rest, kind of a corn crop or sugar beets?
Rachel Arneson (03:10):
It's a lot of soybeans. The wheat, we plant for the following year sugar beets. So, again, about a fifth of our acreage is wheat. The other fifth is sugar beets, and then a lot of soybeans, and then of course some corn in there, as well.
Jamie Duininck (03:29):
Yeah, yeah. How is the crop this year? We're talking here in September of '24, and I'm sure you're going to be getting in, you probably have your wheat crop harvested, I would assume. But how was that, and then how do the sugar beets look up in the valley this year?
Rachel Arneson (03:49):
So, yeah, the wheat crop has been the best, at least for my farm in recent history. Within the last five years, it was the best average wheat crop. I really do think that the weather accommodated us nicely this year for that. I'm trying to think back. It feels like it's been a long summer. But we were wet straight out the gate and some cooler temps, which was concerning for the corn but really helpful for getting the wheat started off well. Whereas, the last few years, we've been more in a drought cycle, and the wheat just has headed out too quickly. But this year, that went really, really well.
(04:47):
I'm a member of American Crystal Sugar Co-op, shareholder member, and they do sample polls leading up to harvest in the last month, month and a half of the summer. And so, this past week, the report came out. We are right around, right now, our record-breaking yield at harvest from last year.
(05:15):
So, we still have another three weeks before main campaign. We're already expecting to exceed our record-breaking yield from last year for sugar beets. And I mean, that's good and bad. We had to leave some sugar beets last year because the co-op, just the factories can't process that many, but it's a good problem to have.
Jamie Duininck (05:38):
Right.
Rachel Arneson (05:40):
Yeah.
Jamie Duininck (05:41):
Yeah. So, let's back up here a little bit, and tell me your story a little bit about your family and then your family farm and how you became the sole proprietor there on the family farm with working with your parents. And now, I think this is your second year, or is this your first year as ownership of the farm?
Rachel Arneson (06:00):
This is my first full year as sole proprietor of the farm, yes. Well, if we go back, so I'm 5th generation farmer, so if you wanted to go back to the very beginning, that would be 1883 when my great-great-grandfather, Oli Beaker came to Halsted. His dad gave him $500 and a team of horses. From the southeast corner of the state is where they immigrated from Norway. But yeah, Oli Beaker, my great-great-grandfather followed the railroad. In 1883, they were still trying to get it all the way to Canada. It hadn't been completed yet, and that's where the line stopped at that time. So, yeah, that's where my great-great-grandfather started his own independent farming career, is here in Halsted in the late 1800s.
(07:08):
My grandfather was the first one in my family to grow sugar beets. He started out with just 80 acres back in the early 60s. And then, as far as my own personal story, my parents always really valued my education, my brother's education, above farm work. I was always jealous. I remember, growing up, some of my farming classmates would be able to be excused from school for a few days during harvest or spring's work, and I never was, but it's because my parents valued my education. And so, as a result of that, I really was given the freedom to explore what I wanted to do. There was no real expectation for myself or my brother to return to the farm.
(08:08):
So, I earned a bachelor's in English literature and writing, and then went on to earn my master's in liberal studies with an emphasis in Anthropology before eventually returning to the farm. So, I served for various non-profits. And then, there was a year where my dad, he had some health concerns and was hospitalized over one winter, and it was right around tax season. He would do his own taxes. And so, I was working for that non-profit at the time and had the flexibility to work from home. So, I came back to the farm to help my dad with his taxes and office work, and then stuck around while he was still recovering to help with spring's work.
(08:55):
So, even though I grew up on the farm and I helped out when it didn't interfere with school's work, there was still a learning curve there with some things, but that's when I really recognized that this is something I should probably reconsider and determine if I wanted to do. I believe that was in 2011, and I came back. So, off and on for the next few years, I came back and forth, up from St. Paul where I had gone for school and then started working for various nonprofits and then to the farm. I was traveling back and forth for a few years.
(09:42):
In 2015, I came back fully. Yeah, it's been ever since 2015, when it became very clear to my parents that, okay, Rachel is actually serious about doing this now, we started working with a succession planner and using some of his recommendations to begin the transition process that finally came to a head this past winter.
Jamie Duininck (10:15):
Sure, interesting. Lots of questions there. So, back in the 2011 timeframe, when you started having these thoughts of maybe this is different than I thought, not just coming back to help my dad, but I actually enjoy this, what were some of the feelings or thoughts that you had that surprised you? What was it that was drawing you back home?
Rachel Arneson (10:45):
Other people have asked me this question a lot, and I've asked myself this question a lot. I think I keep coming back to just my proud heritage in agriculture. I think, with my dad's health at that time, it really made me realize that, or at least ask the question, do I want the farm to end here or is this something that I can pick up? I always knew that I would be involved in some capacity as a landlord someday, but to be working in the dirt for the purpose of providing food, fiber, and fuel for the world just is even more meaningful after living in the cities for a few years and being away from this lifestyle.
Jamie Duininck (11:47):
Yeah, interesting. Was part of it just living on the rural landscape, too? Did you miss that, or are you more of a city-
Rachel Arneson (12:01):
I really remember, during the time that I was in college, missing the stars. It sounds so basic, but the night sky, you realize just how small you are in this giant world and universe, but then it also makes you recognize just what do I want my impact to be here? I just felt like I kind of disappeared in the city. Again, it sounds kind of cliche, but just the hustle and bustle, things just run on a different frequency that didn't feel good when it came down to it.
Jamie Duininck (12:53):
I think, for those of us that have had the opportunity to grow up in our formative years in more of a rural setting, in rural America, it's just a real opportunity that we don't realize at the time. A lot of times, you don't even realize later on, but that a city kid will never really have that opportunity. I think part of that's because when you're 18 and you go into the city to school, it can be quite traumatic and it's a big change, but it's that time of your life where you're willing to make that change. Whereas, if you're in the city and then you stay in the city for college, you're probably not going to move, when you're in your 30s or 40s, to rural America if you've never lived there.
(13:46):
I hear it a lot, something that I experienced myself, but then I have kids now that are kind of growing up and leaving and how they really appreciated their growing up experience in a smaller school, in a smaller town, where they know people and have that sense of community.
Rachel Arneson (14:06):
Yeah, yeah. It's something that we don't appreciate in the moment and growing up, but when you look back and finally get out in the world and see how other people live, it gives you a new appreciation for it. For sure.
Jamie Duininck (14:23):
Yeah, for sure.
Rachel Arneson (14:24):
Yeah.
Jamie Duininck (14:24):
Talk to me a little bit about the succession planning that you did with your parents and on the farm. Sounds like that process was, I guess, I don't know if it was real in depth, but it was a long process, because if you started that in 2015 and then ended that, now, with you being the owner here in 2024. I think that'll be interesting to a lot of our listeners, just around how there's always a little bit different way of doing it or things that you learned through that process. I would just like to hear about that.
Rachel Arneson (14:59):
Yes, absolutely. I was just talking with a new farm acquaintance just this past week, who was just really fascinated knowing the nuts and bolts of that, as well. I think each story is different and some of the techniques used are a little bit different, but it's really helpful to consider and apply some of those same concepts, anyway, to one's farm.
(15:29):
So, I think that we would have started the process sooner had my grandmother not been living. My grandmother passed away in 2013, and then we started that succession process in 2015. Part of that was that I had made the permanent move home, but another big piece of that was just that my dad was waiting, sort of, for that trickle-down effect to see where exactly the land was going to end up between his siblings and himself. The land that I farm right now, most of it is owned by my parents and my uncle and my aunts. And then, some of it, I also rent from more extended cousins, relatives. Oli Beaker had 11 kids, so I farm next to a lot of extended family. So, part of it was waiting for that trickle-down effect.
(16:43):
But one of the very first pieces that the planner recommended was for the land that my dad then did receive and inherit, as well as his own land, he recommended putting it into a LLLP. It's been a while since I've thought about that acronym, a limited liability limited partnership. So, there are two limiteds in there. The general partner in that LLLP being my dad, and then my mother and my brother and I are the limited partners in that partnership.
(17:28):
What they do is every year they gift a portion of a small percentage of that land partnership to my brother and I as it correlates with the value of the partnership and the federal gifting limits. So, that was something that they grasped onto and implemented from day one of the succession planner recommending it. Someone more proficient in tax law could explain all the benefits of doing it that way, but no matter what my brother might choose to do in the future, he'll always have a vested place on the farm as a landlord through this partnership, as an example. So, it's a great way of managing my parents' estate and beginning a very intentional plan process for the succession of the farm. That has been the biggest piece.
(18:57):
Since 2015, well, actually a little bit before that, I've been farming my own acres, as well as managing my dad's. We would both be separate sole proprietors, just obviously using the same equipment and representing the same overall family farm. But a couple years ago, the succession planner recommended that I take on the labor cost exclusively, as sort of the next step in the transition. Taking some of that in smaller bites has been very helpful, because even though I knew the process, I was managing the employees already as far as their salaries and taxes to state and federal, and all that fun paperwork side of things. It was just helpful to make sure that I had my own EIN number and just little pieces all at once rather than just having to do everything overnight this past winter. So, that was another piece, another small baby step in the succession process.
(20:14):
I think the biggest thing this past year has been just taking the opportunity to negotiate land rent with my aunts and uncle, and maybe looking at it-
Jamie Duininck (20:30):
Sounds fun.
Rachel Arneson (20:30):
Yeah, and maybe looking at it a little bit differently than what they had had in place with my dad and my grandmother before them. They just sort of inherited this practice, the way of doing it. And so, that was a little nerve wracking to take that on, but I mean, they've all been very, very supportive. My uncle still, he lives in the area, and he comes out and rides on the combine on occasion. And so, it's great that he's been able to be interested and still involved in the farm in that way, too. It's really helpful when communicating with landlords and him knowing a little bit more about all the inputs and the great cost of farming these days.
Jamie Duininck (21:23):
Sure, sure. Yeah. Well, interesting. Thanks for sharing that. Also, another thing that I read that I wanted to ask you about was, I think you're on the board or on one of the committees, anyway, but I think you're on the grower board for American Crystal Sugar. Is that right?
Rachel Arneson (21:48):
It's taken me a couple years to get this straight. So, there's the co-op, American Crystal Sugar Company, and then there is the Red River Valley Sugar Beet Growers Association. The association represents the grower members of American Crystal Sugar, but they're two separate entities. So, I do serve on the latter side, on the Sugar Beet Growers Association. There are five districts that make up the Red River Valley Growers, and so I serve on the Hillsborough District. The actual town of Hillsborough is just 10 minutes west of me. So, yeah, currently, I am serving on that board, and we are having an election this winter. We'll see if I end up on the executive committee, which 10 members represent the entire Red River Valley, two from each district. So, I've been told that my name might come up as a nomination for that. Yeah.
Jamie Duininck (23:04):
Well, great. I think where I wanted to go with that, American Crystal Sugar has been really supportive of any issues in agriculture, any water issues that I would be aware of. They're always willing to be at the table politically, they're supporting the causes of the North Dakota and Minnesota farmer, but not ever really knowing or seeing or asking from your side of things, as a young farmer and a young sugar beet grower, have they provided anything you've been able to take back and learn from that you can adapt to your farm that comes from just your exposure there in that role?
Rachel Arneson (23:56):
On the board, on my role-
Jamie Duininck (23:56):
Yes.
Rachel Arneson (23:57):
... on the board? Oh, gosh. I feel like no matter which industry or which crop organization, the more involved you are and go to meetings, no matter if it's a board meeting or just a general informational meeting with sponsored speakers and all that, I always glean some piece of information that at least gets the wheels turning in my head or something tangibly to take back onto my farm.
(24:37):
This is a really random example, but at the Hillsborough Growers Association meeting this past summer, I offhandedly mentioned how much of a pain it is to spray the specific type of fungicide on our sugar beets, which everybody who grows sugar beets is familiar with it. It's really thick, but it's kind of sunscreen for this specific leaf disease. So, it just sits on top of the leaf and protects it from this disease that, I mean, it can wipe out fields pretty quickly if you don't stay on top of it. So, I just offhandedly mentioned how much of a pain in the butt it was, and someone was like, "Oh, you just need to put one squirt of Dawn dish soap per like a hundred gallons of water when you spray that product." I was like, "What?"
(25:41):
I'm not on TikTok, Jamie, I don't know if you are, but apparently this was old news for at least a year or two that was available on TikTok, that there's this hack. It's not a lot of soap that you're adding to the tank, but I guess it just makes it slippery enough to make it past those nozzles. But anyway, that was exciting. That just sort of changed my world in a very small way, but I did try it and it does work.
Jamie Duininck (26:24):
Yeah, well, sometimes those little things that you learn from others are big life changers for you, because they're-
Rachel Arneson (26:33):
Yeah. I mean, that's a really small example, but that's something recently that I was just like, I'm really glad I attended that meeting today.
Jamie Duininck (26:42):
Yeah, sure. And you get exposed to a lot of people, I'm sure, that are a generation older than you and that have a lot of experiences, probably like this one, but a lot of experiences that just can help you learn and grow in your trade.
Rachel Arneson (27:00):
Oh, yeah. I have so many non-family mentors, primarily who are sugar beet growers, just because it is such a strong network of people that come together. I feel like what strengthens relationships are when you go through challenging times with other people and nobody knows the same hardship of sugar beet harvest as other growers do. So, that just kind of is a natural bond, right out of the gate, that provides a lot of room for relationships and networking.
Jamie Duininck (27:41):
That isn't really where I was going to go today, but around the challenges of growing sugar beets and just what has happened in all of America with labor in the last few years and how hard it is to find employees, and especially in an operation like yours, where there's times of the year and significant periods of the year, where you don't need an employee or maybe one, and then you get to harvest for sugar beets, and I don't know on your operation, but you probably need a dozen.
Rachel Arneson (27:41):
That's about right.
Jamie Duininck (28:13):
Yeah, and the challenges of that can just create a lot of where you really love what you do, but you ask yourself, I'm sure at times, is it worth it because it's just so challenging to put that whole crew together and to make it work. I don't know if you have any comments to that or not. It's more of just a comment on my end.
Rachel Arneson (28:40):
Yeah, no, I mean, you're right. I have to hire about a dozen seasonal employees every harvest to help bring in the sugar beets. Dad has been pretty fortunate that he gets return help, local help, year after year, people that are flexible and can take time off or they're near retirement and can have more flexibility. This is actually the first year, in a long time, just because of circumstances of some younger people who have helped in the past have moved away, and they haven't built up enough paid time off in their new employment or something like that. I've had to do a lot more fresh hiring this year than ever before. I've been hearing of others having this challenge for a long time, and thankfully, I'm benefiting from some of the great tools that others have helped set up for this purpose. The Growers Association actually has a website that we can all use as growers in order to advertise.
Jamie Duininck (29:54):
A bit heavy in that.
Rachel Arneson (29:57):
Yeah, it's been a long time coming. It's been a problem, I think, in the area for a while. But yeah, like you say, it's everywhere, that challenge.
Jamie Duininck (30:08):
Sure. So, last question, Rachel. You have 25, 30 years, probably, to do this on your own as the operator of your family farm. What are your hopes and dreams for that period of time and how you want to leave your legacy on a family farm that's been around for over a hundred years, almost 150?
Rachel Arneson (30:35):
Yeah, I was just thinking about this earlier today, actually. I have another big milestone this Friday. I'm closing on an 80-acre piece that I'm going to be owning outright. So, that's a big first, but it really makes me think, how many more times am I going to have the opportunity? This was kind of a once-in-a-lifetime opportunity, adjacent property, not even across the road, it was just right there, but they're not making any more land. There are plenty of very, very good farmers around me.
(31:17):
And so, my intended focus is just to be as efficient as I can be with the land that I have, and yeah, just be open to those opportunities. I'm thinking years down the road, I'm going to have a lot more landlords, probably, in my cousins. Just seeing the importance and value of maintaining those relationships with family and helping them understand, even just now through sharing on Facebook or social media or what have you, about the challenges and blessings that is farming.
(32:16):
So, I don't know exactly what the farm is going to look like when, perhaps, one day my daughter decides to farm, but I hope it's still standing. Yeah, it's just been such a gift. I don't take that lightly. Being a 5th generation farm that has lasted, I certainly don't want to be the one responsible for upending it, but I do hope to experiment and adapt and hopefully take it another step further.
Jamie Duininck (32:59):
Yeah. Well, good answer. Good answer.
Rachel Arneson (33:03):
Thanks.
Jamie Duininck (33:04):
Well, thank you for joining me today on the Water Table Podcast and wish you the best of luck this harvest season and safety and hope to communicate and connect again in the future. So, thanks for joining me.
Rachel Arneson (33:18):
Thank you. Thank you. It was great talking with you. Thanks so much.
