Local farm boys go international
A pair of Fort Dodge brothers have been breaking new ground in global food marketing in Russia and the Philippines.
In Russia, Shane and Heath Peed formed the Agricultural Holdings International LLC in 2011 in the extreme eastern region of Primorsky Krai, near its primary city of Vladivostok.
They are in the process of constructing a grain elevator, establishing a tiling business and a seed dealership.
In 2012, the brothers have established Peed Bros. Farms and Trading Corp., where they market bananas from their own 75 hectares, roughly 190 acres, of Cavendish bananas, but also contract with other growers to market their fruit, including bananas, mangos, coconut and pineapple.
The Philippine project, as Peed calls it, developed from his relationship with a Russian partner, who owned an import company.
In June 2012 Peed Bros. exported its first fruit, after taking less than six months getting an export license in the Philippines.
“People told us that that’s unheard of here,” peed said. “It was an intense time. The Filipinos really like their paperwork.”
Peed said the Iowa Economic Development Authority would be visiting with him and others in the Philippines later this month looking to develop more business activities.
“We’ve basically turned our company into being even more global,” Peed said. “Rather than just U.S.-Russia, we’ve moved into other things other than corn, soybeans and potatoes.”
He said farming their own bananas, the brothers have developed some practices they learned as row croppers they think may help cut the cost of fertilizing the plantation.
They plan to test these practices and share what they learn with other banana growers.
“One thing we have learned from our Philippine neighbors is what they call intercropping,” Peed said, “which is interspersing one crop with another for pest control.”
They know that some crops are offensive to some bugs, so they grow two crops together for mutual pest protection.
“That’s something we either don’t know a lot about or have forgotten in the U.S.,” Peed said. He plans to begin some test plots on the intercropping practice.
In August 2012, Peed was in Fort Dodge to talk to potential investors in joining either or both of the projects in Russia or the Philippines.
“We wanted to help (investors) see how they could be involved with us,” Peed said.
Peed said the Philippine project was satisfying to him. “These are great people here,” he said. “They love America. They are very pro-American.”
The Russia project
In what started as a mission to repair ag machinery in Russia, the Peed brothers created agricultural opportunities in this farthest eastern Russian region, that is bordered by China on the west, North Korea on the south and Japan on the east across the Sea of Japan. The region’s shape is similar to an appendix wrapping itself around the east border of China.
Although the dominant ag sector in the krai is fishing, Peed said he and his brother have discovered farming and agribusiness opportunities for developing row crop agriculture in the fertile plains of the Sikhote-Alin mountain range.
The Peeds are planning on growing non-genetically modified organism crops. “I don’t mind walking beans once a year,” he said. “I can handle it.”
The krai has 1,000 miles of rail service. Its primary city, Vladivostok, was the eastern terminus of the Trans-Siberian Railroad. Of the rail mileage, 345 miles are electrified.
Peed said Ag Holdings is working on railroad agreements for moving ag products to markets.
The krai, with a population of almost 2 million, has 7,850 miles of roads. It’s also the financial center of Far East Russia.
Peed said most Russians have collective farm experience, which may be an adjustment for experienced Russian producers to farm in a more conventional manner.
“We’re going to experiment with test plots,” Peed said, “and work on improving the soil.”
He said the Primorsky region is vast and will work well for row cropping.
“Our farmers in Iowa would go nuts to get land like this,” Peed said.
Most Primorsky Krai farms are managed by foreigners, he said, “and the Russians know they need the technology and expertise of U.S. farmers.”
An immediate market open for investors is upgrading and repairing older farm implements and shipping them to the region. He said it’s a win-win situation, bringing more affordable ag equipment to Russia, while creating a market for moving used machines out of the U.S.
“There’s a big need for equipment over here,” Peed said.
Although many ag producers have a collective farm mentality, Peed said, “the Russians are very good to work with and they are very supportive of us over here.”
He said the rail services have the available cars to move grain. “It won’t be hard to get rid of the crops,” he said.
Land is inexpensive, he said during a November 2012 interview, roughly $600 to $1,000 per hectare. A hectare is equivalent to 2.47 acres.
“We’re in a global market,” Peed said. “There’s always risk, but we’re not throwing all of our eggs into one basket.”
Peed said within the Russia project the partners are preparing to build a grain terminal for receiving and shipping grain. The company has contracts to sell grain to China and South Korea during the 2013-2014 marketing year. Their farm manager, Andrew Burton, also lives in Russia.
For the Philippine project, Peed said they are looking to venture into rubber. He’s looking to establish a rubber processing plant in Davao del Norte on Mindanao, the southern island in the Philippine chain.
Also, he’s set a goal to expand the banana plantation from 75 to 1,000 hectares within the next 10 years. “I don’t know if we’ll get that done,” he said. “But it is a goal.”