For Jeremie Pavelski, farming is a mountain of data waiting to be conquered. Every point of production, financial or logistical information can be aggregated and analyzed to create smart and well-calculated decisions. Time spent on a task can be shortened, return on investment can be multiplied and employee retention can be increased. The answers are all in the numbers, and Jeremie knows how to separate the wheat from the chaff.
As president of Heartland Farms, Jeremie, 36, is combining two passions: agriculture and technology. The millennial leader is propelling his family’s 145-year-old farm to be a cutting-edge business that withstands volatility and fickle consumer habits.
The top crop on this Hancock, Wis.-based farm, which includes 27,000 acres, is potatoes, though they also grow other vegetables and row crops. Annually, 9,000 acres are dedicated to potatoes, most of which end up as potato chips.
“The chip segment is one of those demanding segments of the potato industry,” Jeremie says. “You want to have the perfect chip in each bag.”
Innovation Pays. On the journey from field to bag, potatoes require acute production practices, intense storage monitoring, careful handling and unwavering food quality standards. As a result, chip manufacturers would rather work with a handful of sophisticated growers, instead of hundreds.
In the early 1990s, Richard Pavelski, Jeremie’s dad and business partner, heard a leader at Frito-Lay preview the direction of the chip supply chain. “Dad has never been shy,” Jeremie says. “He grabbed a seat by the guy and said he wanted to be one of the big growers.”
Today, the majority of Heartland’s chip potatoes are contracted through Frito-Lay. “Everything that we plant is driven by having contracts in place before we plant it,” Richard says. “My attitude is I will take production risk, I won’t take market risk.”
This business model has paid off. During the past 40 years, the farm has grown from 1,100 acres to its current size. Under the direction of Jeremie and his two non-family business partners, Dave Knights and TJ Kennedy, the operation uses cost-effective technology to manage risk and make sound financial decisions. Heartland also creates hundreds of jobs in rural central Wisconsin and is one of the area’s largest employers. For these reasons, Jeremie earned recognition as a finalist for the 2018 Top Producer of the Year Award.
“While technology is great, part of Heartland’s true success is the ability to think outside the box and apply available technology in a better way,” says Randy Blin, executive vice president of Blin Management and a business consultant to Heartland. “This innovative streak is a core value. If they have a better idea that isn’t commercially available, they will create it. This allows them to stay well ahead of the competition.”
Heartland includes 120 full-time and 150 part-time employees. “We have an amazing mix of what I call ‘old-school knowledge’ and ‘new-tech savvy,’” Jeremie says.
With his wired mind, Jeremie has helped bridge that gap. “We have our IT team and our programmers actually sit out in the tractors with the people who are utilizing the technology to make sure it works,” he says. “If it doesn’t, then why not?”
Case in point: The IT team noticed regular data-entry errors. After the programmers spent time in the field, they realized the buttons were too small for those who were entering the data. It proved to be an easy fix. Now, there’s constant collaboration between those creating the technology solutions and those who are using them.
“Technology has to be user-friendly and has to fit the culture of an organization,” Jeremie says. “I view software and technology as living and breathing tools that need to be dynamic enough to change with the organization.”
In every area of the operation, the Heartland team looks for ways to increase efficiency, reduce their carbon footprint and increase work-life balance. “All team members are aware and strive for our goal of reducing all inputs per unit of output by 20% over a five-year period,” Jeremie says.
One early victory is fuel usage and idle time. By monitoring and providing fuel data to the team, they have reduced usage by over 70,000 gallons in the past two years. This has saved $140,000 in fuel costs, even while adding acres and machinery.
Another new tool is 140 automated rain gauges and thermometers. All of their cropland is irrigated because their soils are so sandy. Team members spent countless hours monitoring rainfall and moisture levels. Now, that data flows right into the office and each person’s iPad, which eliminates 4 a.m. and 7 p.m. field checks.
“Every action taken on a farm has a cost or a revenue associated with it, and it’s important for team members to understand the true impact of their decisions,” Jeremie says. “Speed of information is one of the most important items when it comes to financial and production decisions.”
Inspire And Empower. Heartland is a community. Regardless of ranks or positions, employees show pride in their work. The facility is sparkling clean, and employees wear smiles. This is a culture cultivated by the operation’s leaders.
“Without good, dedicated people, you can’t make it very far,” Jeremie says. “Each individual at the upper levels of the company understands that our job is to train our replacements and to make sure they are better than us.”
The farm’s leaders conduct multiple employee reviews per year and offer regular training. They provide catered meals at harvest and offer bonuses based on good attendance. These benefits help secure their labor needs in a state with less than 2.9% unemployment.
Jeremie has also started a “State of the Farm” address to share updates and the farm’s long-term vision with employees. “We open those meetings up for comments, which allows managers and owners to receive feedback from our team members,” he says. “We also encourage all team members to share their ideas and opinions to help empower them.”
The Bottom Line. Financial risk management is a core focus of the leaders at Heartland, says Cathy Schommer, Compeer Financial senior focused lending specialist. “The management staff works well as a team to make financial decisions that will affect the business. Decisions are not made lightly, but with research and analyzing data.”
Jeremie is quick to credit his dad with instilling strong financial skills. “He always understood the value of making sure you have correct and accurate financial information at your disposal,” Jeremie says.
For the past several years, Jeremie has evaluated and upgraded their financial analysis tools. Several of the programs he built himself.
“As soon as we have a transaction, we get it on an accrual and on a cash basis,” he says “At the end of the year, we also put together a market-based financial statement, where we plug in all the market values for assets. Even if you are
on an accrual basis, there could be some pretty big discrepancies, depending on what’s happening
with asset values.”
This up-to-the-minute financial data lets the team make smart production decisions. It also helps them evaluate new opportunities.
“To me, you are either on the leading edge or the bleeding edge. We have been on the bleeding edge a few times. It cost us a little money, but that’s just part of it. Jeremie has seen me make multimillion-dollar mistakes, and so far, it doesn’t look like he’s taken that as a challenge,” says Richard, chuckling.
Dedication to the bottom line, an eye for efficiency and a knack for retaining and empowering good people serve as the foundation of Heartland. “As one of our managers, Brian, says, ‘We all may not be related by blood, but we’re related by sweat,’” Jeremie says.
Even at their large scale, the leaders of Heartland stay focused on their roots and values. When asked how they can still be a family farm at their size, Richard says: “We are the kind of family farm you build when you do it for 145 years with five generations.”
A Snapshot of Heartland Farms
Operation: Spanning 27,000 acres of mostly owned land, potatoes claim the most acreage. Other crops include sweet corn, peas, green beans and soybeans.
Facility and Logistics: To be a constant supplier of chip potatoes, Heartland has storage capacity for more than 275,000 tons. They have the capacity to ship 120 truckloads per day.
Team: Heartland is a partnership among the Pavelski, Knights and Kennedy families. Jeremie Pavelski serves as president. He and his wife, Alicia, have one daughter, Charlotte. The farm employs 120 full-time and 150 part-time team members. They are organized into several divisions, such as research and development, IT, human resources, finance and production.
Community: Heartland Farms is committed to its local community. Jeremie holds numerous roles in leadership and community organizations. To support their local school’s STEM (science, technology, engineering and math) program, the operation and the Pavelski family have committed to donate $450,000. They’ve also committed $500,000 to help start a new Breast Care Center in Stevens Point, Wis. The family provides venture capital funding to start-up businesses.
Watch a video about Heartland Farms at bit.ly/HeartlandFarms
The award honors three producers whose operations are at the forefront of agriculture and crowns one winner. Entrants are judged on entrepreneurial originality (50%), financial and business progress (30%) and industry or community leadership (20%). All three finalists receive trips to the Summit, CEO coaching sessions and other prizes. The winner also receives a lease of a Case IH tractor. Download the application and apply by Aug. 30. Sponsored by Bayer and Case IH