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Let’s hear the story of Nebraska, its communities, its number one industry Agriculture, and the people who make it happen. Sponsored by Nebraska's Law Firm® - Rembolt Ludtke.
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Steve Gangwish - CSS Farms
Nebraska--The Potato State? This episode features Steve Gangwish, President & CEO of CSS Farms, LLC, a vertically integrated farming company headquartered in Kearney. With a focus on customers like Frito-Lay and a commitment to sustainable farming practices, CSS Farms grows potatoes in Nebraska and across the United States.
Nebraska. It's not just a place, but a way of life. It's 93 counties that are home to innovative individuals, caring communities, and a spirit that runs deeper than its purple story. It's a story that should be told. Welcome to 93, the podcast.
SPEAKER_00:Welcome to 93, the podcast, where we talk about Nebraska, its communities, its number one industry agriculture, and the people who make it happen. I'm Mark Folson, your host for today's episode, brought to you by Nebraska's law firm, Rembrandt Lati. Today we're going to talk about potatoes, that delectable crop that gives us potatoes our gratin, potato salad, mashed potatoes, potato chips, tater tots, and my personal favorite French fries. Our guest for today's episode is Steve Gangwish, president and CEO of CSS Farms. CSS Farms is a vertically integrated farming company that grows potatoes all over the United States, including Nebraska. Steve, thanks for joining us.
SPEAKER_02:Hey Mark, thanks for having me. It's a pleasure.
SPEAKER_00:So give our listeners a little background on yourself. Where'd you come from and how did you ascend to this president-CEO position you currently hold today?
SPEAKER_02:Sure. My brother and father still run the family operation. We grow corn and soybeans. And you know, I spent most of my upbringing uh uh trying to figure out uh how uh what would I do with my life, um, which would not uh until farming. Uh and uh went to school at the University of Nebraska Lincoln and um got a degree in engineering, uh seemed like a good idea. Uh but from there um uh you know did a couple different things, decided I didn't know I crossed off farming, I crossed off engineering, uh, worked in consulting for a bit, went to a business school out east and um got into finance and uh through my uh through a couple different uh career experiences in finance. I worked for a bank and and uh got to know CSS Farms on a transaction uh I was helping with. Uh, it was um pretty interesting to me to learn about this potato company. I didn't know there were potato companies in uh Nebraska or around uh the Midwest and um got to know the the founder and CEO at the time, Milk Carter. And um uh pretty quick, one thing led to another, and um uh he he uh convinced me to join the company. And I've been with the company now for 15 years since 2009, and um you know part of my role with the company was to provide succession to the founders and and take the company into the next uh generation. So it's been a fun ride.
SPEAKER_00:So grew up in Shelton. One thing we ask all of our guests if they grew up in Nebraska, what county is Shelton in?
SPEAKER_02:Yeah, so uh where I grew up and where I live now in in Carney is in uh Buffalo County.
SPEAKER_00:What's the prefix for the license bite for Buffalo County?
SPEAKER_02:Yeah, nine.
SPEAKER_00:Awesome. So okay, so CSS Farms, you're currently you you have facilities or headquarters of some sort in Kearney, Nebraska. Is that right?
SPEAKER_02:Yeah, our headquarters are in Carney. Um we moved the headquarters about five or six years ago from uh where the company was uh founded in Watertown, South Dakota.
SPEAKER_00:So is it a privately held company, family company? What type of company is CSS Farms?
SPEAKER_02:Yeah, we're we're privately held, myself and another business partner um uh that helped run the business, and then we have a capital partner uh that joined the company when the when the founders uh uh entered retirement.
SPEAKER_00:CSS, what does that stand for?
SPEAKER_02:Yeah, CSS uh stands for Carter, Spivak, and Spivak. It was it is really um it was two Spivak brothers, but it's really uh Mel Carter and Randy Spivak. They started the company and and as I mentioned, Watertown, South Dakota um in 1986 and um kind of got its start. Uh uh both both those gentlemen came from family farms, but through the farming crisis in the 80s, the the families had sold the farms. They they were back in South Dakota from different experiences and uh wanted to try their hand at growing potatoes. Milt didn't know anything about potatoes. Randy um's father actually had grown potatoes, so he knew a little something about it. Um history of how kind of how we how the company got started. Um they decided to grow a circle of chip potatoes, and it was a variety, they chose a variety that um you can't put into storage. And so the options uh at harvest time is you have to deliver them to a customer. Well, just like you know, corn and soybean farmers in August and September, when everyone has corn and soybeans, um, having uh chip potatoes in August or September, a time of harvest without a customer or contract is is not a big idea. In fact, they they probably should have gone bankrupt, but but uh as it as it turns out, um uh and at that time in the late 80s, uh uh about 60 to 70 percent of the country's chip potatoes uh were grown in the Red River Valley of North Dakota and Minnesota. And it so happened that year there was a record drought in the in Red River Valley, and so the country was short of potatoes, and most of them were dry land um chip potatoes up there. And so the chip customers heard that um there was this circle of potato chip potatoes in Watertown, South Dakota, so they came down and bought them all up, and Milton and Randy were happy to have a customer. And so, like um most farmers, you know, if one uh circle of chip potatoes was a good idea and worked out, well, next year let's do two circles. And uh they they they hadn't quite learned their lesson. In fact, they grew this, they grew the same variety that you can't put into storage, and they still didn't have a customer. And so they should have uh you know been bankrupt the second straight year, but as it turned out, it was the second consecutive record drought in the Red River Valley where all the country's chip potatoes were located. And so the the country needed chip potatoes. The the customers heard there was these these um chip potatoes in Watertown, South Dakota. They they came down and at this time Randy and Milt finally realized they were just lucky, and so before they sold their crop that year, they they negotiated a contract for the following year. And so they sold their potatoes to Friedolai, and that's how our relationship with Fritale started and how the business uh kind of got off and running.
SPEAKER_00:I mean, I kind of know knew or know that there are different varieties of potatoes based upon what I see at the supermarket, but how many different varieties of potatoes do you grow currently?
SPEAKER_02:Yeah, we grow we grow uh quite a few, over 50 different varieties, and and they're for different segments of the industry. Each segment has has a different um traits they need. And so commercially, we operate in the chip sector um as well as the uh especially table stock sector. Um we've been in the fry sector before, but we also uh uh have several seed farms, and because we grow seed for our our own internal uses as well as for external customers, you know, consequently we grow a lot of different varieties of uh potatoes.
SPEAKER_00:So do you have an RD department? Do you start looking, do you work on different hybrids, or is there a university or some research facility out there that helps you?
SPEAKER_02:Yeah, most of the um breeding stems from uh university breeding programs throughout the US. There are also varieties that are brought in from uh internationally, from Europe and other places. We um we do not do our own own breeding, but we do have an RD group and um uh innovation group that uh focuses on variety development. We work on um developing and identifying varieties that have been bred to work for our own internal needs, but we also do the same through our seed program, do the same for large processors, whether it be Fruit Olay or Lame Weston or uh McCain's, etc., uh uh on their behalf.
SPEAKER_00:So, how many states does CSS currently operate in?
SPEAKER_02:Yes, we operate in in nine states. The legacy of the business um was in the central part of the U.S. The first state we we uh started farming outside of South Dakota uh was Nebraska, uh, then and then we went to Texas. Um in more recent times, our our we've grown quite a bit on the coast. So we operate in the west on you know, traditional potato states, Washington, Idaho, Oregon, also in Nevada and California. And then um we also uh on the east uh grow chip potatoes uh in New York is as it turns out uh New York's not a great place to grow potatoes, but there's a lot of people in the east that um need potatoes, and the freight is um delivering the potatoes to the market, uh, and the freight uh economics are a big part of the industry.
SPEAKER_00:So, what operations does CSS Farms have specifically in Nebraska?
SPEAKER_02:Yeah, so in Nebraska, we we really uh do two things. We have uh two chip farms uh in Minden and Columbus, Nebraska. Uh those farms primarily serve um Fruit of Lay, a plant in Topeka, Kansas. Um, and then we have two seed farms, uh, one in North Platte and one in Cody, Nebraska, uh west of Valentine. And and those seed farms um uh after after our uh our vertical integrated seed program starts at a greenhouse in Colorado, and then they they first uh then go to the Cody seed farm, and that's our our kind of our largest and uh most strategic seed farm from uh as the seed uh gets multiplied.
SPEAKER_00:It wasn't until recent years that I realized that Nebraska actually grows quite a few potatoes. Is there a chance that Nebraska could displace Idaho as being the potato state and we would no longer be the beef state?
SPEAKER_02:Uh I don't, I don't, I wouldn't, I wouldn't bet on that. Um Nebraska does play a strategic role in the the potato supply chain and and specifically as uh as it relates around a freight, as I mentioned, but you know, Idaho's done a wonderful job at marketing. Um their potatoes, they also uh do a lot of uh more commoditized table stock russet production that um they do a pretty cheap. Uh Nebraska is much more of a contract, uh, you know, all of our potatoes are contracted and serving um supply chains, so we know where they're going when before we put them in the ground.
SPEAKER_00:I assume it's somewhat hybrid specific, but is there a preferred soil type for potatoes?
SPEAKER_02:Yeah, absolutely. So uh you when you grow potatoes, you want sandy soil. Uh and so, and that's for a couple reasons. One, uh when you harvest the potatoes, uh, we're digging 10 to 12 inches um underground to dig up all the potatoes in the in the in the dirt. And if you have uh a clay or a heavy type soil, um you're gonna have a bunch of clods going into the truck. Uh, whereas if you're harvesting sandy soil, the sand falls through the harvesting uh belts and chains, and you're left with just the potatoes going in the truck. And so the separation of the dirt um from the from the potatoes is a very important aspect of the production. The other piece is potatoes, um, they're very sensitive to water, uh, swings in water uh change. So they can they can be stressed by having too much water, and they can be stressed um by having too little water. Um but if you have a sandy uh soil and you get a three-inch rain, um it goes through the sand and you're probably turning the pivot on the next day. So um it keeps the keeps the plants happier, and because the potatoes are underground, um, if if it was if it was if the soil was holding the moisture uh for extended periods of time, you're gonna have start having disease problems with those potatoes.
SPEAKER_00:So those growers with whom you contract, are they do they all irrigate or do you have any dry land potatoes?
SPEAKER_02:Um the vast majority of of we uh what we grow is is irrigated. Um and the only exception would be in New York, uh part of our production is uh irrigated and part of it is is dry land or uh rain fed, we as we say. Um but we we do um our our business model, we partner um with land, we have many land partners. We don't own a lot of land, um, but all the operate, all the activity and operations are CSS operations. So we'll we'll lease the land, um, but it's our equipment, our team. Um, you know, we own the crop and um and then deliver to the customer.
SPEAKER_00:What's the growing season and and the days to until you get to harvest for a potato?
SPEAKER_02:You know, fairly similar to our uh you know to a corn crop. We're planting in um April or May. We're you know harvesting as early as August, but often uh September and October. Um and so uh you know, you know, potatoes can you can grow potato is uh with as little as uh you know 80 green days, um but you know, and other areas where the environment uh allows, such as the Columbia Basin and Washington, you know, we'll get up to 120 um growing days um from uh from coming out of the ground to harvest.
SPEAKER_00:Do potatoes uh uh handle frost or freezes very well, or is it much like corn that uh once that first hard freeze comes in, it's done?
SPEAKER_02:Yeah, frost is a problem in potatoes. So I mean we we have a perishable crop, and so just like if you put a potato in your freezer and then try to take it out and and eat it um as after thaws, it's gonna be a problem. Uh and so particularly as we put them into storage. And so when we think about harvest, you know, harvest uh for our teams is the is the busiest and most stressful time of the year. We can't start harvest, and I'm speaking about storage harvest as we're putting the potatoes into our storages. We can't start harvest until the potatoes cool off and the and the the pulp temp is 65 degrees or less. And and the reason why is if you put the potatoes in through the storages at over 65 degrees, you just can't take the amount of mass and and field heat out of that uh out of that crop and you start getting bacteria and rot issues. And so we have to wait until it cools down, but then it's a race before it freezes because um uh if you get you know, if you get a light frost, 32, 31, 30, it's for a for an hour or two, it's not the end of the world. But if you get a if you get a deep frost, you know, if it's 25 degrees for eight hours, you're gonna have a lot of potatoes that are closer to the surface that are gonna freeze and cause problems um in the storage. So um so we have a window, usually it's kind of a three or four-week window from when it cools, starts cooling off to when before it freezes that uh we're harvesting every day um and every hour. So, you know, that that means we're you know starting at two in the morning till whenever um whenever it it gets too hot, that's what we're doing.
SPEAKER_00:So you mentioned you plant seed. I remember the one time I tried to grow potatoes as a kid. I cut the eyes out of some existing potatoes and planted those. What what is the seed for the potatoes that you grow? What's it look like?
SPEAKER_02:Yeah, so um when you in in today's commercial environment, uh what we're we're planting the actual potatoes. So it's not true seed, it's actually a tuber. And we do that in one of two different ways. Um so we're we're harvesting, when we say we have a seed crop, we're harvesting the potatoes and then multiplying to uh to the next year. Um you can plant whole seed, meaning um if if the potato is uh individual potatoes not too large, we'll plant whole seed, and and we prefer that because um we get better uniformity and and less disease issues. But the most traditional uh uh way to do in the industry is actually cut uh potatoes. And so we have machines that will cut a potato in half or into quarters depending upon the size of the potato. You you need to allow that um potato to we say suborize or heal up, uh it kind of um creates a second skin where you cut it, and then you can um after about a week you can plant it in the ground and have a better likelihood of success and not having it rotten the ground.
SPEAKER_00:And I assume planted in rows.
SPEAKER_02:Yeah, we we plant in rows, um but but uh CSS is a little unique in the industry in that um uh we actually do more bed planting than than rows, even. And so um by bed meaning we have we'll have like a 12-foot bed, and within that bed, uh there could be six or or seven um effective rows in that bed. But the majority of the industry uh you know would look just like a cornfield in terms of furrows and um space, you know, 30 to 32 inches apart. We use some of that, but the majority of what we do is is in beds like I described.
SPEAKER_00:So the harvesting equipment, uh, I assume it's much different than what I would expect for a combine for corn or soybeans. What's it look like?
SPEAKER_02:Yeah, there's a couple different uh types of harvesters. There are some self-prepare self-propelled harvesters that some uh potato geographies use, but the majority of what we use is a it's a pull-behind implement, so we're we're pulling it with a tractor. Um, it is uh you know anywhere, it's about uh 12 feet wide, and so we're digging up either beds or rows as it may be. Um it has a blade on the front of the machine. Um and then it and it goes over a series uh after it digs in the ground 10 to 12 inches deep, and it's taking everything out in the soil, the potatoes, anything that's in the ground, and it goes over a series of um rolling chains and and belts to effectively sieve out this uh the sandy soil that drops to the ground, and then you're left with potatoes that um go up a series of um inclines and belts and into the trucks.
SPEAKER_00:Sounds fairly labor intensive. Is it more labor intensive than corn, soybeans, wheat, traditional crops in Nebraska?
SPEAKER_02:Yeah, you you hit the nail on the head there. Um it is more labor intense intensive. Uh to provide uh an analogy, so our Minden farm actually is uh it's uh we grow about 1,500 acres of potatoes at the Minden farm. And so, you know, that might be analogous to uh maybe an average-sized family farm in Nebraska. That family farm, you know, may have you know a father-son or you know, an employee or you know, two or three folks um farming that 1,500 acres. Um at our potato farm in Minden, we have um approximately 20 full-time staff, and then during harvest, um we will um increase in our seasonal staffing, including truck labor. You know, we'll have 60 uh plus folks during harvest um for that 1500 acre farm.
SPEAKER_00:Or any of the potatoes that you grow in Nebraska are any of those exported to Mexico or other countries outside the U.S.
SPEAKER_02:Yeah, we um we do export. We we don't export a lot from Nebraska, and again, it's it's it's not close to um a border, so you're gonna have extra freight to get it close to the border. But but we do export uh from Texas into Mexico and Central America. Uh we do a lot of export from Washington to Asia. Um, some of our biggest markets are um Japan, Korea, uh, Philippines, um, Indonesia, Thailand, etc.
SPEAKER_00:So I noticed on your website sustainability is a big issue. What I think folks outside of the ag world don't understand is the best stewards of our natural resources are our farmers and ranchers. What is your company doing with respect to sustainability?
SPEAKER_02:Yeah, that's that's a good question. And and uh I'll I'll I'll answer that um a little bit in terms of uh what the marketplace is is requiring. So when you know our largest customers, Free to Lay, which is owned by PepsiCo. And you know, when I started 15 years ago, we'd we'd have a meeting with with uh Frito Lay and we'd talk about um you know the quality and and the volume and how we're delivering and so forth and that would that would consume the discussion. When we fritolate today uh at least 75% of what of the discussion and in the in the airtime is around sustainability. It is it is the number one uh topic um you know we certainly have to hit expectations in terms of uh deliveries and quality and and uh reliability and service and all that but um but sustainability is a big focus um from uh and how that's defined in our world is um measuring in uh reducing greenhouse gas emissions um through our operations. Um some of the big movers uh of of that relates to energy use um whether it's in the field or in our storages or uh irrigation pumping costs uh also fertilizer uh is a big uh synthetic fertilizer is a big um source of of um greenhouse gas emissions as as it's measured uh by our customers and so increasingly we are evaluating um more organic uh whether it be compost or or um you know in Nebraska we use swine manure we use uh um chicken uh compost from from uh many of the of the you know the new chicken industry in the in the eastern part of the the state uh we also are starting to um buy um uh uh different types of uh nitrogen uh as as it's as it's termed uh blue UAN or or green uan and and uh the industry is just evolving such that um our inputs um what uh what we choose to use as inputs are being driven by um sustainability and so between greenhouse gas and the other the big other big driver that we measure is uh water and water use efficiency um which is primarily around irrigation um you know those are those are the things we talk about with our customers and uh we have staff now that are focused um in driving that innovation measuring uh that progress and and delivering the results to our customers what's the future of the potato industry in Nebraska and beyond what's it look like say five 10 15 years down the road yeah I'm I'm pretty bullish on Nebraska uh for the following reasons I mean I mean Nebraska is always going to be a bit of a niche uh role in in the broader potato industry but um several areas uh that we grow and and and other folks grow are becoming more water constrained you know example is uh we grow a lot of potatoes in West Texas um that part of the Ogallala aquifer is is declining and um you know there's a finite uh life lifespan for for you know agricultural production in that in that neck of the woods but but where we have the benefit in Nebraska of having an aquifer that is um being maintained and uh is renewable um you know through through the rain we get in the sand hills and so forth uh we we believe we'll grow more be growing more potatoes in the next five and ten years um purely through the the resource that we all um uh share in Nebraska through the Ogoala aquifer.
SPEAKER_00:What are the biggest challenges that you face?
SPEAKER_02:You know the biggest a couple of the biggest challenges our company faces I mentioned just one uh is uh water constraints um you know farming in West Texas in California Nevada you know a lot of these areas um uh water regulation and just water availability will continue to be a a challenge and so that's something we we have to uh innovate um we uh use a lot of different technology and and kind of on the leading edge as it relates to uh irrigation technology or um ensuring we're putting just the right amount of um water on our fields so that we're not overusing so so water is a big challenge um the other challenge we face um somewhat relates to the the fact that the potato industry uh has no uh genetically modified um potatoes and uh commercially grown today and and with that there's just not been a lot of innovation around genetic improvement like you see in other crops like corn or soybeans etc because of that you know we're dealing with the uh same diseases today that you know the Irish dealt with during the Irish potato famine for example and and you know we certainly have a lot of chemistries and crop protectance to uh protect against those diseases but as as as time um evolves and um consumers uh demand um uh whether it's sustainability or um epa regulations um there'll there'll be more limitations and so there's going to need to be more technology evolved uh and acceptance within the potato industry on on how we get to um innovation of of variety development and and i think and the and and and the biggest challenge we face um beyond what I just mentioned is uh uh soil borne diseases are very impactful in the potato industry once once uh that type of disease is in the soil it's it's often there forever and so you know absent of of um technology innovation for how varieties and um are developed and accepted in the industry it's uh you know we're gonna continue to face those challenges.
SPEAKER_00:So I can remember what farming or ag magazine I was reading through recently that this uh maybe I didn't know this existed maybe it's been around for a long time it was actually uh an implement that would actually uh sterilize the soil as it goes through to kill not only weed seeds but other uh bacteria uh fungi whatever may be there have you ever seen something like that?
SPEAKER_02:Uh not directly or haven't seen that in the the potato industry uh you know I do think um in today's uh accelerated uh age of learning and AI and other things um I you know I'm I'm I'm bullish and optimistic that uh while we think we know how to grow crops today um you know I think we'll probably look back and say well we just did that because you know that's the way our daddy did it or something you know something like that. I think we'll I think we'll learn um uh new ways of doing it we'll be innovative and we'll drive productivity for uh for the needs of our customers and feeding the world.
SPEAKER_00:So what's your favorite potato product?
SPEAKER_02:Well I'd I'd probably um uh lose uh uh all of our business if I didn't say potato chips so it's certainly potato chips and it's just a matter of of what flavor I'm a big fan of salt and vinegar.
SPEAKER_00:Very nice I'm a barbecue guy myself but I certainly consume my fair share of potato chip. So it's good to know that maybe just maybe some of those potatoes came from Nebraska.
SPEAKER_02:Yeah um so we we um CSS Farms is uh uh fortunate to supply around 12% of the country's um chip potatoes and in certain geographies like Nebraska we uh do uh we have a much higher market share so if if uh if you're in Nebraska and you eat a bag of layers potato chips there's a a very high probability it came from one of our farms so Steve one thing we ask all of our guests give us one word and just one word that best describes this wonderful place in which we live and work and were raised the state of Nebraska what's your word?
SPEAKER_00:Humility want to explain f flesh that out a little bit for our listeners I think it's part of our DNA and part of our state it's certainly ingrained in in agriculture you know it's ingrained in how we if you think about you know the things we love like you know football and volleyball and and so forth but uh we I we just we just live our lives um in a in a humble way and and particularly when it comes to agriculture uh while we uh are some of the most innovative and productive farmers um in the world uh we do it in a in a in a humble way so I'm proud to be a part of that well said and I agree Steve thanks for joining us today grateful that you would share and uh your thoughts with our listeners and take some time out of your busy schedule appreciate it if you enjoyed this episode consider giving a good rating we love good ratings sharing it on Apple or Spotify or whatever uh service you use to listen to this share it with your friends family and any potato lover in your life please keep on listening to 93 the podcast as we release additional episodes on Nebraska its great communities Nebraska's number one industry agriculture and the folks who make it happen.
SPEAKER_01:Thanks this has been 93 the podcast sponsored by Nebraska's law firm Rembolt Ludke
