The Rebirth of Rural America

September 24, 2008

WASHINGTON (Sep 24, 2008)—Want to take a cooking class from the founder of the Viking Range Corporation? You don’t have to shell out for a trendy culinary school in Manhattan; you simply need to head to a small town of 20,000 in the Mississippi Delta.

Fred Carl, Jr., Viking’s founder, has joined the ranks of other wealthy investors in reenergizing rural America. He’s even brought a high-end boutique hotel to an area once best known for its high poverty rates.

But it’s not just Viking stoves that are cooking in rural America – things are heating up all over the heartland.

Sweetwater, Texas, has built wind farms—lots of them. And those wind turbines have brought with them more than 1,000 jobs and an annual payroll of nearly $60 million.

Sweetwater Mayor Greg Wortham is himself a New York City attorney who moved back to rural America. In a recent interview with the Fort Worth Star-Telegram he said, “In addition to having ideal conditions for wind farms, the heartland has the most receptive communities in need of revitalization.”

Go to the Sweetwater web site, and you’ll find dozens of restaurants, hotels, and shopping options that include a historic district with an impressive antique store variety and even a French Connection designer store. All of this is found in a town whose population doesn’t break 12,000.

Iconic oilman T. Boone Pickens has already invested more than $2 billion to build an even bigger wind farm just down the road in Pampa, Texas—home to 18,000.

Minnesota, another state in the valuable wind corridor, has seen its fortunes rise on a different energy investment.

“Ethanol has brought a lot of money in to Minnesota. Farmers are diversifying and investing in value-added ag ventures, like ethanol production and wind farms that allow farmers to keep more of the value of what they produced and what they control. The standard of living has improved for everyone as the wealth is spread around,” said Roger Moore, a Minnesota corn grower with investments in both wind and ethanol projects.

And with cellulosic ethanol technology which can turn wheat straw, rice husks, sugar cane stalks, and switch grass into fuel—getting closer to commercialization every day, farmers are optimistic that the good fortune will spread to non-corn-producing areas.

However, rural America isn’t popping the champagne corks just yet. Input costs are expected to remain near record levels next year. Some see an eerie similarity to the economic conditions during the farm crisis of the 1980s.

“The 70s crops were great. Prices were up, rural incomes were on the rise, and everything was humming along. Then the 80s came, and they were a disaster,” related Moore.

Back then, high input costs, rising food prices, stagnant wages for consumers, and Wall Street woes created a perfect storm that quickly eroded the gains seen in rural America. Sound familiar?

Moore thinks things will be different this time around, though. “We learned a lot from that crisis,” he said.

The government now has a more effective farm safety net in place that is designed to kick in when times get tough. And the country’s energy future is increasingly tied to the Midwest, not the Middle East.

A 2007 National Farmers Union study (pdf) estimates that agriculture could supply as much as 20-25 percent of America’s energy needs in the next two decades, with the potential to create well over 1 million new jobs and $100 billion in new revenue.

Only time can tell how long and robust this rebirth in rural America will be, but for now, the future of this part of the country looks as bright as the prairie sun.