The Lower Brule Tribe in South Dakota hopes to leverage its popcorn enterprise into a driver of inter-tribal economic development, and the U.S. Department of Agriculture has just awarded the tribe a $300,000 Value-Added Producer Grant to help.
The tribe's USDA Value-Added Producer grant was one of 110 such awards totaling $16.9 million given out this year to help agricultural producers increase earnings by expanding their markets, creating new products or developing new uses for existing products.
Lower Brule Tribal Chairman Michael Jandreau says the tribe will use the funding, which it will match with $310,000 of its own money, to develop a robust marketing program for the renewable resource and create more jobs for the 3,800-member tribe.
While many tribes are using casino profits to diversify their economies, Jandreau said that is not the case here. The tribe does have a gaming enterprise, the Golden Buffalo Casino & Motel, but it began its agriculture business in 1977, long before the Indian Gaming Regulatory Act was even passed.
So far, the farm has provided $30 million in revenues to the tribe. That money has produced not only jobs, but also provided a steady income stream for the tribe and made it possible to buy back several thousand acres of homeland within the external boundaries of the reservation, says Jandreau.
With 8,500 acres under irrigated cultivation, the tribe grows kidney, pinto, navy and soy beans, yellow corn and other crops, including popcorn, which is different from yellow corn because it must meet federal standards for human consumption. Popcorn farming uses between 2,000 and 4,000 acres of farmland, and produces an average annual yield of about 17 million pounds.
Popcorn has been a mainstay crop for the tribe for many years, with the farm corporation under contract to grow popcorn for large companies such as American Popcorn and ConAgra Foods and selling raw popcorn to businesses as far away as Bulgaria. The Lower Brule Tribe still raises a lot of popcorn under contract, but in 2004-2005, depressed commodity prices dropped sharply and bulk sales became far less profitable, says Barry Heiss, farm manager for the tribe's farm corporation.
The tribal council decided to explore value-added agriculture and a pilot program to clean and package popcorn in one- and two-pound bags for the retail market was born. That venture was successful enough for the tribe to invest in building its own cleaning, processing and packaging facilities in order to increase the number of dollars that stayed with the tribe and to create job opportunities for tribal members.
The popcorn enterprise today employs about 10 people directly and indirectly, says Jandreau. The tribe markets both raw popcorn and pre-popped popcorn, which it produces in several flavors—honey, cheese, caramel, butter and plain—and sells into the retail market in various size packages under the brand Lakota Foods.
The tribe has invested about $3 million in getting the popcorn operation up and running over the past seven years and now sells about half of its crop in grocery and other stores and on the internet.
But growing sales has been much tougher than growing popcorn—and that's where the USDA grant comes in. "There's no limit to how much popcorn we could produce," says Jandreau. "The sky's the limit, but you have to get into markets."
The grant will help the tribe continue the certification process for its popcorn and develop a marketing strategy with the help of the University of Nebraska, which is assisting with research not only on marketing but also on logistics, such as freight, which is a major expense since the tribe is so remote, say Lee Brannon, general manager for the tribe.
Retail popcorn, says Heiss, is just the beginning. Since the tribe has already built processing and packaging facilities, "we could be in a position to add value to our kidney and pinto beans, what we call edible beans. That's something we'll look at once we see how our popcorn business goes. It would be relatively easy to begin packing the edible beans."
And beans could lead to beef. The tribe runs about 1,500 head of cattle on 40,000 acres of grass. "We have a lot of natural raw resources here. The vision down the road could lead into processed meat and edible beans and other food types," says Heiss.
Heiss credits the tribal council and chairman for having the vision and dedication to develop the tribe's farming enterprise. "The council deserves credit for its support and commitment. We have this mission–to be self-sustaining and to create jobs on the reservation. We've had trials and tribulations all the way through. Certainly it would have been a lot easier to try and say the idea didn't work, but the council and chairman have set the mission. There's been countless hours spent making this deal work. Quitting is not an option."
Jandreau, who has served on the Lower Brule Tribal Council for 41 years, 34 of those as tribal chairman, has an even bigger vision. "Agriculture is a great tool for survival for Indian tribes. We do not see enough of the business that should exist between tribes in order to create a cycle of return for everyone. Tribes should associate their businesses more effectively, not to the point of exclusive preference, but in a competitive context."