Minnesota's Swine & U

Sarah Schieck Boelke:
Hello, and welcome to Minnesota’s swine & U Podcast series, which is a University of Minnesota Extension Swine program.

Today's podcast is a research update on estimating the impact of swine feedlots on residential values in Southern Minnesota.
My name is Sarah Schieck Boelke, Your host and I’m a Swine Extension Educator with the University of Minnesota

Joining me today is a graduate student, Zack Uter, and he's in the Department of Applied Economics.
So to get us started today, Zack, will you tell us a little bit about yourself, including the faculty member that you're working with on your graduate program?

Zach Uter:
Yeah, hi, Sarah, yeah. My name is Zac Uter. I am a second year Master’s student at the University of Minnesota in the Department of Applied Economics.

I'm actually in my, I guess you could call my first full year of Master’s since I was accepted through the 4 plus one program. So that's pretty cool, I guess. A program that was just offered when I was graduating as a senior. So the faculty member that I'm working with is Dr. Joleen Hadrich. She is now the Associate Dean of Research at the College for Food, Ag, and Natural Resource Sciences at the University.

I'm not really a swine guy. I grew up on a small dairy farm just west of the cities, near Waverly, Minnesota, where we milk about 300 Holstein, so grew up in agriculture. But yeah, I'm I’m more in the dairy side of things. But I got to pick up this project through my adviser, Joleen, and it was his fun.

Sarah Schieck Boelke:
Well, that's great. We're certainly happy that you did pick up this project. Because, yeah, it's not necessarily in my in my expertise area. I'm animal science and swine nutrition is my background. So yes, we're glad that with your educational background that you're able to pick up this project.
Before we get too far. I always think it's good to kind of give a shout out to whoever helped fund the project or partners that we worked with, so are you able to share with us who funded this project?

Zach Uter:
Yeah, So this work was just funded through an UMN Extension Cooperative Agreement with the Minnesota Pork Board. So in cooperation with Minnesota pork. We were able to kind of revive this study that was done many years ago in 1996 and bring it to today's date with today's data.

Sarah Schieck Boelke:
Yeah, 1996 was several years ago and a lot of things have changed out there.

Zach Uter:
I wasn’t born yet.

Sarah Schieck Boelke:
Yeah, a lot of things have changed in the countryside. Yeah, values of things have changed, farming practices have advanced. Yeah., So this is great that you're able to do this.

So can you give us a brief introduction to your project? You know you said that previously it had been done in 1996. So refreshing the data. But yeah, explaining why it was a valuable project to do.

Zach Uter:
Yeah, so just to give a brief introduction of the project.

We're looking at the economics of how swine facilities and their proximity to houses in rural Southern Minnesota impact those real estate values. And so this project was done in 1996 in two counties in southern Minnesota. I believe it was Redwood and Renville and they used a little under 300 of these home sales.

And so this study uses a 5 year period instead of a 2 year period, like the last study. With over 1,700 home sales. And so we're looking at 3 counties in Southern Minnesota, and how swine facilities had impacted home prices. And so the reason this study was a valuable project right now is swine farmers have been in contention in the recent past all over the country with nuisance lawsuits, just preventing them from, you know, construction or expansion, or renovation of their operations.

And so what we try to do is provide some answers to those questions that are posed by the community.

Researchers have conducted studies on feedlots and home prices all over the country for the past I don't know, 25 years since the last study was done. But Minnesota hasn't been really focused on. It's mostly Southern States, and so, at least Southern from here, like Iowa. You know, big pork producing states, and so doing it in that community that's being affected is really important, because we saw a difference. and the research that, or when we were doing research on other studies that had been done. Most studies showed that there was a negative impact. And Minnesota was the only one with the positive impact with swine actually increasing home prices. So that was interesting to see. And so we saw it again with this study. And so it really makes a difference which region you're basing your entire study on.

Sarah Schieck Boelke:
It's very interesting, and I’m sure you'll talk about it more when we get into the results. But yeah, like you said. Yeah, Studies done in different states on this topic. Yeah, regions and places are different. So it's important to get updated data to analyze to get more of an accurate answer. So thank you.

Zach Uter:
Yeah.

Sarah Schieck Boelke:
So now, can you briefly explain How did you complete this project? I mean for me, somebody as an animal science background. Yeah, I'm not sure that I would know where to start. So can you kind of walk us through that process of what you did.

Zach Uter:
Yeah, it was quite the project I won't lie. It was kind of given to me or I shouldn't say that it wasn't given to me. I’m very interested in the economics of producers, and, you know, trying to help those communities. And so I, well my advisor and myself we're collecting data from local counties for home sales. And then we got feedlot information from the Minnesota Pollution Control Agency, which is the oversight agency for all livestock operations. And then we also got information from a tool and interactive tool online called Beacon, which some counties used to store their home sale information.
And so, putting that all together, I learned a very interesting tool. It's called ArcGIS, and so it's a mapping application that allows you to, you know look at proximity, or look at how spatially data interacts with each other. So, it was a very large learning curve. A lot of Youtube was used to learn how to use that tool and put this together. And then, once we got to the actual economic analysis of it that was fairly simple. I knew how to do that. I wish I could have done a little bit more, but I needed to learn more about how to use ArcGIS and GIS mapping tool. But yeah, I guess the biggest thing, the data collection side of it was probably the most challenging. because we wanted to have 11 counties within this study just to try to get as much of the Southern Minnesota hog production as we could.
But we ended up cutting out a lot of that just due to inconsistency in the data collection and how it was entered, or if it was even accessible online, that was an issue. Some counties we were going to have to drive down and look through the old cards that they had in the office, and that was going to be a lot of work. So we took what was available and what was, you know, correct information that was transcribed.

We got down to three counties that had the information that we needed. So Blue Earth County, Jackson County in Freeborn County. Not the largest producing counties in the State, but they're pretty big players, I would say, and so they had the information that we needed, like number of rooms, number of bathrooms like that. All that housing information that we needed to correctly project what a house would sell for in Southern Minnesota.

So yeah, it was, it was quite the project. I got to learn a lot. I had to be patient. Alot of information or a lot of emailing back and forth with different county appraisers, I guess. And yeah it was fun though, it was good.

Sarah Schieck Boelke:
Very good. So yeah, my mind's kind of swimming in how you went about doing that just because it's yeah, not in my area of expertise. So, thank you for explaining that.
So, then what were the results of your project?

Zach Uter:
So when it all came, said and done, we had some interesting results compared to like what we said earlier. The regions around the country, the different regions that have been studied.
We once again saw that Minnesota has a different infrastructure, a unique infrastructure that says houses that are within a mile of a swine feedlot, actually see an increase in price.

And so, we did have different data sets of how we looked at granularity of that. So we had where we split it out between a quarter mile and a mile. And then we had just, if you were within a mile, and we saw that in the data set that had it split out, we saw from a quarter mile to a half mile your house didn't see any change. But if you were on the out outskirts of that, if you were that half mile to a mile, you actually saw an increase which was kind of strange, and I’m not exactly sure of how to explain why that would be the case. But yeah, Minnesota is different. You just see that housing prices increase when they're near swine feedlots.

Another thing that we saw is that we included school districts. And so we saw how a school district might increase or decrease the price of real estate in Southern Minnesota. And how that might play a part in why swine feedlots see an increase when they're within a mile, because those swine feedlots are providing property taxes to the district. So you might have districts that you know have lots of swine producers within it, and that like the school district, is able to take advantage of those better, those increased taxes. So that's that might be the reason that we see an increase in real estate prices.

Sarah Schieck Boelke:
Very interesting. So you maybe kind of alluded to some of this stuff, but based on your results, what conclusions could be made?

Zach Uter:
Well, I guess one conclusion of the research is that we know that we maybe need to find a more consistent way to enter data, because this would have been useful if we could have included a wider variety of the counties that we wanted to include. But weren't able to just based on the data struggles that we had.

But other conclusions that can be made is this could be used for, you know the various like township meetings or community meetings where you're trying to get a variance or something on how to expand your operation or start a new one, or just renovate. And you can kind of combat or not combat. You can kind of address those concerns that the community has about how your real estate in town would be affected if you had a swine feedlot within your area.

Sarah Schieck Boelke:
Looking at your results that you shared, what are some important takeaways from your project?

Zach Uter:
Again, just emphasizing that data consistency and just that recording process. If that could be, you know, somehow standardized across counties. We tried to work with the State to grab some of that those home sales because they, I believe they're reported to the State. The counties have to report that to the State, but even that the State only requires a few things. So the counties having that information would have been very helpful and expanding this. But it depends on what the counties want to collect, so the study could've had close to 11,000 observations, but we had to shrink it down to 1,700.

We would add a lot more information about each individual county, and how the swine producers, and you know how that affects the home sales. But we did the best that we could. So yeah, that would be a big thing, data consistency. And just again emphasizing that Minnesota is a different state that we see that you know hog production is a very important part of the agriculture in Minnesota, and that might lend itself to why homes Don't decrease in value, but it also could be that school district info that we included.

So we had one analysis that did include it and one that didn't. And in both we saw that home values increase in that half to one mile radius. So yeah, I'd say that just the unique characteristics about Minnesota were very interesting to see and to see that they not only happen now, but it was the same back in 1996.

Sarah Schieck Boelke:
Yeah, that is interesting.

So to wrap up our discussion here today. Are there any other closing remarks that you would like to make at this time. I don't know maybe you were going to do this all over again. If there's anything you do differently or yeah, anything else that you would like to share, that you haven't been able to yet.

Zach Uter:
if I were to do it again, I definitely would spend more time working with the GIS mapping software. I'm actually taking a class right now. I'm trying to expand my knowledge on how to use the tool. There's so many functions within it. So I could have been able to do a little bit more with this study if I would have known how to use the tool a little bit better. But Youtube, suffice for that. I was able to do what I wanted.

Thanking Minnesota Pork for supporting this project and thanking my advisor, Joleen for kind of helping me through this project, and it's kind of the first project that I've been able to fit like start and finish almost on my own, with a little bit of guidance along the way. And it was a real learning experience and something that I we'll probably take with me as I go through the rest of my Master's program.

And yeah, I just like to thank you for letting me speak about it, even though I might have rambled at times. This is something that I see myself doing in the future and helping you know the agriculture community in Minnesota. So, it was a fun project.

Sarah Schieck Boelke:
Right, and I’m sure that the pork industry is very happy that you did this project as well as like you mentioned. They can utilize your results as their, you know maybe you know, maybe there's a permit for either building a new facility, or maybe updating a facility, or adding on to it. And it always seems like when you come to those public comments that these are the type of questions that some of the neighbors to those barns have, is they're wondering what's going to happen with my property, value and stuff like that. So I think you were able to give us, meaning the pork industry some good tools to use for talking points.

So I want to thank you, Zach, for sharing your research on estimating the impact of swine feedlots on residential values in Southern Minnesota.

Zach Uter:
Thank you.

Sarah Schieck Boelke:
And I would like to thank everyone listening to the University of Minnesota Swine and U podcast. This has been Sarah Schieck Boelke, Swine Extension educator, along with Zack Uter, Applied Economics, graduate student.

To further connect with the University of Minnesota Extension Swine program. Please visit the Swine specific web pages on a University of Minnesota Extensions website at www.extension.umn.edu/swine and on those pages you will find connections to our Blog and Facebook page.
To learn about research being done by our swine faculty in veterinary medicine. Please visit their Swine in Minnesota blog at www.umn.swinenews.com.