On a farm in small-town Pierz, Minnesota, Tom and Jenni Smude are breaking new ground in the cooking oil business. Tom and Jenni started Smude’s Natural Sunflower Oil in February of 2010 and have enjoyed the ride ever since. What began as an idea to grow a drought-tolerant crop transformed into a rural small-business success story with the potential to become something even bigger.
A couple of dry seasons on the farm led to the Smudes planting sunflowers. Tom originally wanted to extract biofuel from the crushed sunflowers, but he quickly learned there were other, more profitable, uses for his new crop. After using a bottle of sunflower oil to fry potatoes for dinner one night, Tom and Jenni were instantly hooked. “It was like butter,” Tom said. “Just awesome.” The idea to cold-press sunflower seeds and start bottling and selling all natural, high-oleic sunflower oil took shape.
The Smudes built a processing building on their farm and process about 30,000 bushels of sunflowers annually. The sunflowers are augured into the building and the seed is sent through an automated system to be cleaned, destined, hulled and sorted.
After that, the seed is cold-pressed, typically at a temperature around 78 degrees. Anything less than 125 degrees is considered cold-pressed. Cold-pressing produces a higher quality and more flavorful oil. After the oil is extracted, it’s filtered and sent to three 7,000-gallon on-site storage tanks before getting bottled and labeled with the help of part-time staff.
That’s quite the process for two people who never envisioned they’d one day enter the sunflower oil business at the ground level and rapidly start moving up. “This was a new idea. It wasn’t a common business,” Jenni said. “The support we’ve gotten has been unbelievable.”
USDA Rural Development recently selected Smude’s Natural Sunflower Oil to receive a Value-Added Producer Grant to help with marketing activities, working capital and overall growth.
Value-added grants may be used for feasibility studies, business plans, working capital for valued-added agricultural products and farm-based renewable energy projects. Eligible applicants include independent producers, farmer and rancher cooperatives, agricultural producer groups and majority-controlled producer-based business ventures.
Using a revolving loan fund established through Rural Development’s Intermediary Relending Program, Morrison County provided startup financing in 2009. Other assistance came from the Initiative Foundation of Little Falls, USDA’s Farm Service Agency, the Small Business Development Center at Central Lakes College in Brainerd and private financing.
“It’s all about jobs,” said Colleen Landkamer, USDA Rural Development State Director. “Smude’s is a great example of how products grown right in our own backyards can spur economic development for an entire region.”
But no matter how much business grows, the Smudes know it wouldn’t have happened without the grass-roots support from the Pierz community and surrounding region. “It’s all about community pride,” Tom said. “Whether people know me or not, they know where my product comes from. That means something, both to us and our customers.”
Tom also works with five other local growers to purchase sunflowers. He uses the by-product after pressing to feed his Black Angus cattle – all 400 of them. By-product also is sold to other area farmers for feed and bedding. Nothing is wasted.
The on-farm processing facility is a shining example of energy efficiency. Tom says the heat from the machines when running at full capacity provides plenty of warmth during the winter and keeps heating and electricity bills well below what was originally budgeted.
Future plans include working to gain additional access to markets like restaurants, movie theaters and specialty stores. There are also a couple of new products created with the oil that the Smudes hope to begin marketing.
With two children, a farm, a full-time job, a separate day-job and other side businesses, it’s hard to figure out where Tom and Jenni find the time to oversee a blossoming sunflower oil business.
But they wouldn’t have it any other way.
“I want to take the risk. Let’s do it,” Tom said. “I believe in this product and I know others do too.”
Click here to learn more about the Value Added Producer Grant Program.