Story courtesy of U.S. Small Business Administration Wichita office
Mike Bergmeier, President of ShieldAg Equipment in South Hutchinson, Kansas, would likely tell you that the challenges for small manufacturers in Kansas before the pandemic were many. From supply chain issues to changing access to markets to skilled labor shortages, running a manufacturing business was no picnic. It should come as little surprise that the pandemic greatly exacerbated those challenges while introducing new ones. While many businesses and individuals have been able to pivot and embrace virtual meetings globally, the lack of broadband access in rural areas around the world, including in Kansas, makes virtual business meetings nearly impossible. What does a small business owner do in these unprecedented times to surmount the increasing challenges? They enlist their partners and fellow business owners to combine their creativity, innovation, resourcefulness, and determination to not only ensure their businesses survive but thrive in this new environment.
ShieldAg Equipment has been an innovator in the design and manufacturing of agricultural equipment for more than 50 years, providing fertilizer application equipment, conservation tillage tools, combine harvesting aids, seed and grain handling equipment, and other long-wear-life tools and parts used on farms around the world. While their products can currently be found in more than 2,000 distributor and dealer locations worldwide, that hasn’t always been the case. Like many small businesses, the thought of exporting was quite daunting for Bergmeier. But he knew there was market potential for ShieldAg Equipment beyond the Midwest and even internationally, that would help the company grow and diversify.
Bergmeier sought information and assistance from many resources to begin his adventure in international trade and solidify exports as a key component of revenue for ShieldAg Equipment. Often working with one partner or agency led him to another that had services to offer. Over time, Bergmeier worked with the Small Business Administration, US Commercial Services, the Kansas Departments of Agriculture and Commerce, Kansas Global Trade Services, and others to leverage every resource available to make his company a successful exporter.
“You guys (agencies and partners) have helped me remove my fear of exporting and have helped a lot with your programs. We just need more Kansas manufacturers to apply for these great programs,” said Bergmeier
Prior to the pandemic ShieldAg Equipment partnered with two other Kansas based small businesses, Farmada and SureFire Ag, to manufacture an innovative toolbar for fertilizer application invented by Farmada founder Daniel Rauchholz. The idea for the toolbar called Elixr came to Rauchholz while he was in Ukraine representing another top agricultural equipment company. As it happens the agricultural landscape in Ukraine is very similar to that in Kansas, but farmers there do not have access to innovative tools used throughout the US that improve efficiencies and margins. In 2018 Farmada was able to produce the first Elixr toolbars.
Olesksii Khvorostianyi a Ukrainian agronomist and representative with the company Iva Rove says “There is [a]very big problem in Ukraine that the innovative products cannot come very fast to (the) Ukrainian market. (The) Ukrainian market is [a] developing market in the agriculture market. Unfortunately, we have only products which [are] quite old. We want to find the good partnership here (in the USA), for example for the anhydrous ammonia application because it is more and more popular in Ukraine.”
With the pandemic a conventional trade mission was out of the question. But it’s hard to sell innovative farm equipment site unseen, without demonstrations, and without being able to travel to Ukraine to make an in-person sales call. With the help of US Commercial Services in Ukraine, potential customers that are farmers, agronomy experts, and equipment dealers were vetted and brought to the Sunflower State as part of a reverse trade mission in February of 2021. In total 6 Ukrainians visited the small Kansas manufacturers and included one farmer that alone farms over one million acres and has one of the largest sunflower operations in the world.
The reverse trade mission was a resounding success and not only included orders for the innovative equipment, but also resulted in a follow up visit from another large agricultural equipment dealer in the Ukraine when travel became a bit easier as well as a trip to the Ukraine by Rauchholz to solidify the deals made.
Many state and federal agencies provided support for this unique opportunity, including some funding to help offset costs. Bergmeier said “This was actually NOT about the money, don’t take that wrong - we were grateful for the partial offset of our spending, this was about changing the way we all think about foreign trade missions during and even after the pandemic.”
After the success of the reverse trade mission and subsequent visits to and from Ukraine in the spring of 2021, the pain of the pandemic including supply chain issues and the rising cost of steel and other manufacturing supplies has still been all too real. The decision by the SBA to increase the amount of COVID Economic Injury Disaster Loans (EIDL) could not have come at a better time for ShieldAg Equipment and Mike Bergmeier.
“The EIDL loan increase is essential for a lot of us in small business right now. I have a huge backlog and even larger increasing material costs and the extra $350,000 will be a huge benefit to my company,” said Bergmeier. For Bergmeier the increasing orders from Ukraine and being poised for rapid expansion in that market is an amazing opportunity but having access to capital is essential for these manufacturers to access the supply chain and increasing material costs.
While the pandemic still endures, so does the drive of small businesses to keep going, take care of their employees, use their ingenuity, and access every available resource they can find to make it to the other side. Companies like ShieldAg used the programs available such as the Paycheck Protection Program and EIDL to keep employees on the payroll, the lights on, and limited materials arriving at their shops. And with the newest increase to 2 million dollars for EIDL loans, small manufacturers like ShieldAg Equipment may really begin to recover from the financial pains incurred over the last eighteen months.
When asked about bringing so many government resources together for a few small businesses in Kansas, Bergmeier said, “You know, one thing that we all have to realize is that in the end, business and government worked together as a team to make this happen. I want it to be able to happen in the future for ALL interested Kansas and USA industries. Post-pandemic it can be more effective to bring vetted customers to America to explore new business.”