Owatonna's Bushel Boy building $35 million facility to increase tomato business

Bushel Boy Farms sees the future of food production as volatile and risky, which is why it is bullish on greenhouse agriculture.

The Owatonna-based grower of year-round tomatoes in Minnesota is expanding with a new 50-acre greenhouse and campus in Mason City, Iowa.

Last week, the company broke ground on the $35 million facility that will increase its production by 50% and allow it to maintain a more consistent crop of tomatoes throughout the year.

Bushel Boy grows all of its tomatoes in a highly controlled greenhouse in Owatonna. The company is also expanding that facility with a 4.5-acre greenhouse dedicated to research and development.

"If you look at volatility across the produce market — from transportation [costs], access to water, immigration issues and climate change — we believe it will become increasingly feasible to grow produce in those controlled environments," said Steve Irland, president of Bushel Boy Farms.

Together, the Mason City and Owatonna expansions will immediately increase Bushel Boy's production capacity from 20 million pounds annually to 30 million pounds per year. It will also give it the option to experiment with other types of produce, including cucumbers, peppers and strawberries.

The company is part of a growing national movement of indoor agriculture. Between 2007 and 2017, the square footage of tomatoes grown under protection in the U.S. grew 45%, according to the U.S. Agriculture Department's National Agricultural Statistics Service.

In the last five years, Minnesota's indoor tomato square-footage increased 43%, according to the USDA. Other Minnesota food companies, such as Medford, Minn.-based Revol Greens, grow other crops indoors. Revol — which was started by Jay Johnson, who was also the founder of Bushel Boy — grows salad greens in a climate-controlled greenhouse. That company is in the midst of its own 7.5-acre greenhouse expansion.

Of Bushel Boy's 50 acres in Iowa, the company will first build a 16.5-acre greenhouse. As demand grows, the company has space to add two more greenhouses on the site.

"We want to smooth out our ability to supply our customers consistently," said Irland. "Because of crop rotation and the limited space we've had up until now, it's been difficult to keep business consistent 365 days a year. This investment will make that much more achievable."

Max Maddaus, the produce director for Woodbury-based Kowalski's Markets, said he "couldn't be more excited about the expansion" for both Bushel Boy and Revol.

"From our perspective as a company, any opportunity we ever have to be able to purchase and offer to our customers something that's grown locally, we jump on it," Maddaus said. "There's a big shift in what some local companies are doing in the indoor-growing arena, with so many benefits to the local consumer who are now able to get a variety of local, high-quality produce year-round."

Founded in 1990, Bushel Boy started growing fresh, vine-ripened tomatoes in Minnesota through the harsh winter months that it then sold to Minnesota grocery stores, reducing long-distance transportation.

Most tomatoes bought in Minnesota supermarkets during the cool-weather seasons come from farms much farther away. They are picked green, trucked to distribution centers and gassed with ethylene to speed up their ripening.

Because its distribution zone is close to home, Bushel Boy can pick their tomatoes red and get them on store shelves that same day.

In November 2018, Shakopee-based Rahr Corp., known for its malting business, quietly bought Bushel Boy.

"They saw a great future in controlled-market agriculture, which is something Rahr brings a tremendous amount of experience to," Irland said. "When Rahr turns barley into malt, they have to control the process indoors through four distinct phases."

Rahr believes growing crops indoors will become increasingly attractive as the volatile climate and social conditions drive up the costs associated with existing outdoor food systems.

Bushel Boy's methods are "a real blend of science and traditional agriculture," he said, and "Rahr is familiar with the ups and downs of that."

The Owatonna expansion will wrap up in December with production starting in February, while the new construction in Mason City won't be completed until next fall.

The company's greenhouse footprint will grow from 28 to 48 acres, with the potential to add an additional 33 acres of production at the Iowa facility in the future. The Mason City operation will employ about 50 full-time workers.

In addition to the physical expansion, Rahr has brought a greater emphasis on sustainability to Bushel Boy, capturing rainwater, converting carbon dioxide from its natural gas boilers into carbon dioxide to feed the plants and moving toward an LED lighting system, which is not only more energy efficient, but offers a light spectrum more suitable for growing tomatoes.

The company has no intent to expand its geographic reach beyond the nine Midwest states where it currently distributes. Instead, it wants to better saturate the local market.

"We have every intention of being the pre-eminent greenhouse-growing produce company in the Upper Midwest," Irland said.

Kristen Leigh Painter • 612-673-4767