The Ellison Meat Co. exports to Japanese companies brought Gov. Jesse Ventura to town. The spotlight then turned to the local bank.
Contrary to recent media reports, the Pipestone System is not under investigation by local, state or federal authorities, according to the veterinarians who manage the system.
The Pipestone System, comprised of 200 networked but independent pork producers centered in Pipestone, MN, came into the media spotlight in late March. An article in the Minneapolis Star Tribune told of alleged bank loan, tax and corporate farming law violation investigations into the Pipestone System and its affiliated businesses. At the focal point was the system's primary lender, the First National Bank and Trust.
"Yes, there is an investigation of the bank, and we are customers of the bank. We became aware of the bank problems over the past two years, but our relationship is strictly a customer relationship," says Gordon Spronk, DVM, who is with the Pipestone Veterinary Clinic, which manages the system's gilt multipliers and sow farms.
That investigation by the U.S. Office of the Comptroller of Currency focused the activities of the former co-owner and director of the bank, Mike Morgan. He resigned from the bank in mid-1998. He was also a partner in Global Ventures, a company that provides services to Pipestone System producers.
First National Bank and Trust was sold March 1999 from Morgan's family to the Fischback family, who owns several banks in eastern South Dakota. New bank president Jeff Jones explained other activities, not loans involving the Pipestone System, led to the sale.
"The Pipestone System and related hog businesses had nothing to do with why the bank was sold," he says. "The bank was never under investigation - its former owners and officers were."
Jones admits that the bank has a high number of loans to pork producers and related businesses. He stressed agricultural operations are the primary loan customers for rural banks.
Spronk points to the political climate and the media spotlight on Gov. Jesse Ventura. Ventura lauded Ellison Meat Co., which producers and businessmen in the Pipestone System own, for its meat exports to Japanese companies.
"We firmly believe, had Jesse Ventura not supported us last fall, this would have never happened," Spronk says. "He brought the spotlight with him. He supports us, and he has held up the Pipestone System as an example of people grabbing their own bootstraps and taking care of themselves."
Gerald Kennedy, DVM, Pipestone Veterinary Clinic and organizer of the system, knows people not involved could have a difficult time understanding the new structure of production agriculture. The system will need more staff to help the core group that started it 10 years ago.
"We've started to bring in more people - the financial people, the customer service people," he says. "As the system grows and as agriculture continues to change, we have to bring in more talent to the table to move forward."
After the newspaper report, the veterinarians published an open letter to their community summing up their views with this comment: "The recent notoriety hasn't shaken our belief in the importance and effectiveness of this pork production system. When the reporters and television cameras leave town, we'll still be here, producing pork."