Crafting legislation and malting barley: a visit with Senator Greg Kessel

In today’s episode, host Emmery Mehlhoff visits with Senator Greg Kessel from Belfield, North Dakota. Senator Kessel farms in Belfield with with his wife and four children. Along with farming, the family is involved in small businesses and recently opened Two Track Malting Company in Bismarck. 

We visit about: 

• Farming in western North Dakota 
• Malting grains for beer
• Value-added agriculture 
• Vertical integration can help your bottom line

They talk about some of his legislation pertaining to the wheat and barley commission, converting abandoned oil wells into cattle waterers, and career programs for high school students. The podcast concludes with a conversation about the mining of rare earth elements and property rights. 

To contact Senator Greg Kessel, visit https://ndlegis.gov/biography/greg-kessel

Learn more about Two Track Malting Company: https://twotrackmalting.com/ 

Session is drawing to a close. Be on a look-out for our session wrap-up as part of Legislative Front. Sign up for Front here: https://ndfb.org/news/signup/

Transcript

[Straight Talk theme]

[00:12] Emmery: Welcome to Straight Talk with NDFB. I am your host, Emmery Mehlhoff. In today's episode I visit with Senator Greg Kessel, a farmer from Belfield, North Dakota. Senator Kessel farms and is in business with his wife and four children who along with other jobs do many things in the realm of value-added agriculture. Senator Kessel visits with me about some of these things and the malting plant that they have in Bismarck. He visits with me about telling the story of agriculture, bringing his family along on his operation and some of the work that he's doing in the Senate. 

We also touch on some of his legislation this session and we go into a conversation about rare earth elements and private property rights. Join me for this episode. 

[Straight Talk stinger]

[01:00] Emmery: I am here with Senator Kessel from Belfield, North Dakota. Senator Kessel is the Vice Chair of Energy and Natural Resources. Senator Kessel, why don't just go ahead, introduce yourself to our listeners, tell us a little bit about your back home job and then how you came to be in the Legislature.

[01:19] Sen. Kessel: Live in belfield, married for 36 years, got four kids that are kind of somewhat on the farm with me. They, they're still involved in agriculture along with their other jobs and they're doing that. So been farming since I suppose around 1980. Actually, I'm what would be considered a first generation farmer, believe it or not. My dad was a contractor. He had a little bit of land but he was the contractor. So kind of grew up in that world, you know, with them and his brothers. 

Started farming about 1980 as I worked in the oil fields. I worked in oil fields for about 14 years, along with farming. I went to school for machining and mechanical drafting and stuff like that. So kind of got on the farm and married my wife in '89. She, she was past Cargill employee, went well have again four kids there with us. And yeah, so we do the farming thing. With that, we've also, we started out, we, we did a lot of seed production that escalated into grain cleaning operation, custom grain cleaning which again escalated into doing some genetic stuff. So we, we work with a plant breeder that helped develop some waxy hull of food grade barleys which was what we kind of got started into which escalated into some hard white spring wheat that we do some programs with the state Mill and Elevator. So and forage barley is kind of the stuff for the cattle guys. So the stuff that university basically didn't want to do or maybe didn't have the means to do. We seen the need and there was a market out there. So we tried to work through that which you know, once we got into that and I guess we always kind of looked at what value added would be and with the waxy hull stuff. 

So we do, we work with a few companies but we've been doing some exporting of food grade barley into this past year. The market picked up since COVID again so we're going, we're shipping back into Korea with some of that stuff right now. You know, along them lines, I guess I was pretty active in the, in the ag world. I was with the North Dakota Barley Council for 20, 20 years I suppose, which exposed me to U.S. Grains Council. So got to see what the world market was out there for. What went on with that. Ended up I chaired the North Dakota Barley Council which led me to National Barley Growers and I just got off as past chairman for the National Barley Growers Association. Part of my duties with North Dakota Barley also encompassed. I'm a past chairman for the Northern Crops Institute and been a big proponent of vertical integration and agriculture and what we can do to, to move that along. 

So which led us to a place we, we were part of a... we have a malting, a new malting facility east of Bismarck here. Two Track Malting which we, we put together. We started out in Lincoln with a, a small craft facility that we assumed during COVID would have, would have buried us in this and we were done for. But the reality is during COVID we, we thrived. People were wanting to know where their stuff came from and they reached out and we grew to the point that we're in the process of commissioning our new facility east of Bismarck here right now. That's, that's going pretty well. We're pretty happy with that. So again, vertical integration, the plant we have there is first of its kind to scale in the world right now. Very high tech, automated, pretty neat facility. If get out take a look at it.

[05:17] Emmery: That sounds really cool. So when you say vertical integration, really what you're talking about is going from producing it to processing it to adding that value and selling it. Is that correct?

[05:29] Sen. Kessel: Absolutely. So basically, you know our, our theme is field to pint and, and a lot of what we talk about is you know, the traceability, sustainability, regenerative ag, how we're doing regenerative ag and we're doing more with less, for lack of better terms. With that comes, you know, things that are very important to our customers and one of them being family. You know, you're a family operation, you're not corporation no more. You're a family operation. And it's interesting that we have certain brewers that we're selling ingredients to right now that, that story says volumes. They can go to their customer and they can, you know, they can trace that pint of beer back to the field that was growing on, to the, the way it was grown and everything that went in, into that glass of beer. And the general public, when you get to the city, we may not see it in North Dakota, in our rural communities, but you get to the cities. Them people, they, they want to know that story. They want to hear that story of, you know, where their food comes from or their product comes from. So, yeah, it's, it's, it's interesting. It's, it's kind of fun. It's, it's great to get places and tell that story and have that connection with the consumer.

[06:49] Emmery: Well, and it really is bringing agriculture to another level. I mean, so many people call us price takers when we're here. We're producing, and then we're just hoping that somebody will give us a good price for our grain. But, I mean, value added gets used so much in conversations that sometimes it loses its punch. But really, I mean, what you're doing is you're, you're really taking a lot of that risk out, so to speak, or hedging that anyway by saying, "Hey, we're just going to go ahead and we're going to sell directly to the person who needs it, and we're going to give them what they want, which is grain that tells a story." A lot of people want to feel connected to the things that they're eating. The story is behind it, and that's what you're doing.

[07:31] Sen. Kessel: And so, yeah, it's been interesting, it's been fun. And, you know, I guess when I sit down and think about, you know, that added value that goes out to them people. It's hard to say until you sat down at a, at a, at a brew pub. And by the way, we, we provide the ingredients for making beer. A lot of people get the misconception that we make beer. We do not. We make the ingredients that the brewers make the beer with. 

But it's when you walk into one of them places and you start telling the story. I mean, I've sat down at a, at a craft brewers and we started the conversation, and two and a half hours later, we're still deep in the conversation talking about production, agriculture. And to me, it's a great medium to go back to the general public and tell our story. You know, we in ag do such a terrible job telling our agriculture story. Of course you have to have a medium to engage in that conversation and, and there's nothing better than having a pint of beer, engaging in a conversation about agriculture. It really kind of escalates it and you can get into the weeds and people. It's a relaxed atmosphere that seems to not be confrontational. And the neat part is right now I think we've sold into 36 states and we've moved product into three countries right now. So we're looking at taking that to another level right now.

[09:01] Emmery: Do you find that doing some of the value-added things that you've done helps with bringing your four children back to the operation as well?

[09:10] Sen. Kessel: Oh, absolutely. I mean, yeah, it's helped. I have one of the boys who's out here kind of overseeing the operations at the plant as well as I have a daughter that's back home that she works for Bayer along with running cattle and doing all that. And I have another boy that's kind of running the farm and he does a lot of the electronic stuff, you know, with all the electronics with farm equipment. Now he's kind of a, I don't know, into that stuff and helps a lot of folks out with that and, and our youngest one that works construction, but when it's come time to seeding or harvest, he's always there to help out. So they're all involved along with their other jobs as well. So, the fact, you know, I made a joke here the other day to someone. They said, well, we wanted to try to keep, we couldn't keep our kids back at the farm. We didn't have enough. And, and jokingly I says, and I can't, I, I can't get rid of mine. They're, they're all hanging around, which is great.

[10:12] Emmery: Well, and I think that's, I think that what you said is the key. It's really the mentality. If you have an operation and your mentality is, "Oh, there's not enough here for me there. So there's definitely not enough here for my kid." But if you look at what you have and you're like, "I have so much and I'm going to make something with it." And then your kids come back with that too. They're like, "Hey, there is here enough here for me. There's plenty for all of us." And I, I really think that that mentality is, is really the biggest thing.

[10:39] Sen. Kessel: A lot of it's perspective because you got to, instead of looking at things negatively, look at opportunities and you know, I, I don't know, maybe an eternal optimist, is I always look for the opportunities. Not necessarily always, you know, the downside.

[10:53] Emmery: I mean, you're first generation farmer, you have that thing that the first generation farmers needed in North Dakota to get going, which is, you know, optimism and a long-term perspective. So you mentioned telling your story. So now that you're in the Senate, do you find that that's an important piece of what you do on a daily basis is tell the story of agriculture to your fellow colleagues?

[11:14] Sen. Kessel: Well, I find it quite interesting that I sitting here in the Senate and... Well, I guess I'll go back to the point. I just got off as chairman for the National Barley Growers and I was kind of winding down on all the stuff I've been involved in with agriculture. And in our district, they redistricted and they were looking for someone to run. And I had, this was not on my bucket list whatsoever to do that. And I had a group of people come and said, you would be, you should do this. And I says, I really, I was actually looking at winding down and not doing any of this. And I had a weak moment and agreed to do it. So that's how I got here, I guess.

With that being said, my duties here, I sit on Energy and Natural Resources [Committee], of which I vice chair right now. And then I also sit on Industry and Business [Committee] and I sit on them. And I, in the past, I guess I've owned several other businesses over the years, so I suppose I brought the... I'd like to think about that small business mentality there. And you know, everything we do in North Dakota doesn't always have to have a billion dollar project behind it. There's a lot of little projects out there that I think our North Dakota people are very innovative and they want to do. And if we can get that up and running again, maybe we can revive some of our small town main streets, which is a huge concern for me because I come from that and my district has all small towns. And what can we do to encourage the people to go back to that? If you talk to people that are moving to North Dakota, that's what they want. They want that small town living that kind of lifestyle. But you got to be able to make a living there and do a lot of that as well. Young people want to raise their families in smaller towns and have that school, they want that. But we need to do a better job of making them towns survive. And not everything has to be in the city.

[13:21] Emmery: What are some of the pieces of legislation that you have been part of this session that are important to agriculture and other small businesses?

[13:30] Sen. Kessel: You know, I've had, I carried a couple bills for agriculture. I did a bill for the wheat and barley folks and tried to, you know, foster that through and get that through. I did that, I had a bill that went through for the grassland grazers. And that, that one in my mind is kind of a big thing because we in North Dakota we talk about, you know, ranching and, and farming and, and things that go along with agriculture. But we have a, at least in western North Dakota we got a pretty large acreage of grazing ground out there that you know, we have, our grazing associations operate with. 

And you know, were dry in western North Dakota. So it basically started out we had abandoned assets out there in the form of oil wells that weren't producing no more. And we developed a program that out in the hills where we can go ahead and make sure these wells are sound, cement them back and cut windows in them and get into the water zones and create water. Because I mean, water is the lifeblood of everything out there. And we were able to do that and work with the grazing associations out in these, you know, unpopulated areas where people are running cattle and stuff. And we were able to help them get through that and put some pipelines in place and, and you know, help them ranchers out. It's been a huge asset for them to help develop that. 

And, and I'll give the, you know, them cattle people a lot of credit. I mean they part, it's not a giveaway program. It's a, it's a cost sharing, a participation program. And I mean they stepped up to the plate big time getting them projects done and you know, helping themselves in the meantime as well as creating things out there that are beneficial for wildlife and, and for, you know, tourism stuff. And you know, it's just, it's helped develop a little bit more of western North Dakota and that, that was a pretty big, from an ag standpoint, I, I, I like working on that project. 

So trying to think of some other things that you know, we did. I'm a big proponent of the CT [Career and Technical] centers working with the ag site a little bit for the rural kids out there that maybe don't want to go in and get a four year degree. They want to go in and they want to do some vocation, if it's mechanics or run equipment or whatever. And I'm huge proponent of the Dickinson CTE center and what they're doing there. I just think that, that was just an absolutely fantastic program to bring forward for them young folks that, you know, not everyone's cut out to go, go to college and get that four year degree. So let's help them out. And with the shortage of labor out there, it's a pretty big deal that, you know, we can provide them an education, they can come out of that door with a job at hand and they go right into the workforce.

[16:27] Emmery: Yeah, yeah. Save a lot of money that way and really just, just launch them into their careers. Oh, that's awesome.

[16:35] Sen. Kessel: Right.

[16:36] Emmery: So right now we're in the conference committee process and the Senate and the House are working on their differences on different pieces of legislation. The version that the Senate passes and then the version that the House passes, you guys come together in committees to really work out any details and make sure that we're crafting laws that'll be best for all of North Dakota. You have, as the vice chair of Energy and Natural Resources, I believe you have sat on some of those committees. In particular one relating to minerals that might be under our feet. Do you want to tell our listeners a little bit about that?

[17:13] Sen. Kessel: Well, we're, we're trying to craft some legislation for rare earth elements, minerals elements. And this is something that's coming up. It's a, it's a national security issue for the United States being reliant on China as much as we are for that. So it's a national security issue. It's not an easy issue to tackle. There's so many nuances to it. You know, it's, where are they at? How do you get to them? Are the concentrations high enough for, you know, to refine them out and to get to them? Who owns them? 

In the case of coal there, there's, you know, coal lease says, coal and all minerals. So does that mean the coal people are laying claim to that, by the way, to get to it, if you didn't have coal industry going on or the, you know, coal mining, it's not cost feasible to go down and go after them without them mining the coal for, you know, power. For the power plants in western North Dakota, specifically in our world, you know, them rare earth elements are prevalent in upper surfaces and towards that, what does that look like? Just the other day I did a little research and back in the '60s, we did a lot of uranium mining, which is an element again, and that was done in western North Dakota. And it was processed, I believe Union Carbide was the one that did it. But they had a processing plant in Belfield, actually, where I live. And I remember growing up that facility and that came and went. 

And interestingly enough, a lot like we're talking about now is you can mine them and you can refine them to a certain level, but then you have to send it off for re-refining to get it to where it needs to be. And at that particular time, them materials got sent to Colorado and to New Mexico. And there are a lot of similarities. And, and, you know, I mean, I don't, I didn't do enough research, but I'm thinking uranium at that particular time, you know, that was probably a security issue, is why we were mining the uranium at that particular time.

So a lot of the same thing going on here, a lot of nuances. It doesn't matter what the legislation we put out now is. It's probably going to be subject to some lawsuits somewhere along the line. I think we realize that. But the fact of the matter is it's a national security issue. We know the Department of Energy, or whichever one is going to oversee this from a federal level is probably going to, there's going to be some dollars put out to enhance or entice production of rare earth elements. And how do we go about this? And you know, those in North Dakota, we seem to be innovators and we usually come to the table and we figure things out here, and that's part of this legislation. Is it perfect? I will be the first to say it's probably not perfect at all, but it's opened the door up and it's the start of the conversation to take us into maybe another industry that we haven't really participated in very heavily yet.

[20:43] Emmery: I'm looking forward to learning more about that in the future. Is that as far as property rights go, obviously it's part of the bigger conversation of when you own land, what is your property? Obviously there's the air that you breathe above it, and there's been all sorts of decisions made about that. And then there's the ground that you stand on. And then not only is there the ground, but then there's the minerals and then the hunting rights, and sometimes those get separated. Where do you see that conversation amidst this conversation on rare earth minerals?

[21:11] Sen. Kessel: And that's some of what we're digging into. You know, where are they? IE, In the, in the coal zone, it's laid out in the leases on the coal that in some of it anyway, that all minerals within that coal zone are there. In the cases of maybe, and this is some of my questioning in western North Dakota, some of these things, gravel rights are retained, or sand and gravel or other rights are retained as a mineral in the transfer of land. Are the rare earths in there? If it specifically says that, you know, who does that go to? These are the things that we're trying to learn. Who lays claim to that.

Rare earth elements are everywhere, so to speak. Are they cost feasible to go after? The cost of refining them and getting them? Is it feasible to go after? So you may have something there. They may be there, but it may not warrant going after them because of the cost of mining or extracting them or whatever it takes to get to that element. So there's kind of a lot going on there, you know, and back to, you know, property rights. I'm 100% in property rights, and I know there's some people, well, you voted on this or you voted on that. We also got to take a look at what, what's best for the greater good of North Dakota. 

I mean, if, if not in my backyard becomes front and center and no one wants to move a project through and do it anymore. Where are we going to be in the future if we said that to the oil and gas industry, "Not my backyard. We don't want it." The lifeblood of North Dakota is oil and gas. It's that money that comes from oil and gas right now and from other energy. So it's a, it's a juggling act. Not everyone is happy about things at times. I think industry as a whole, I. I think they could do a better job of communicating with landowners on when they want to do a project and how they do it. But there are cases where people just say, "I don't want it, period." You know, you may have a handful that don't want it, but you got a lot of people that, you know, they want to progress in what we do. If it's pipelines, power lines, you name it, all of the above. Cattle feeding operations to all of the above.

[23:44] Emmery: Yeah.

[23:45] Sen. Kessel: We can't stick our head in the ground and just say, you know, no, we're not doing nothing anymore. That doesn't work so.

[23:52] Emmery: Well, and really going back to you and your family and what you guys have done, which is take your product and add value to it. And one of the reasons why you've been so successful is because you have a story that goes with it. People get excited about your mission, they get excited about what you have going on, and they get excited about who you are. And I really think in any industry and anything that we do in this state, I think the people of North Dakota, our state, has an epic story of the people who came here and laid claim to it. And I think that as we watch industry continue to do different things, if we can encourage each aspect of that to tell their story and to remember, you know, our North Dakota heritage, I think that, I think that's a step in the right direction. And I appreciate you and all of the other senators going through some of the dirty work of legislation to try to figure out how to make things legally clean. And it's not an easy job. And I really appreciate your values of agriculture and a family-first in the decisions and the voice and story that you're bringing to Bismarck.

[25:08] Sen. Kessel: Thank you.

[25:09] Emmery: Well, thank you, Senator Kessel, for joining me today. And I am looking forward to actually getting together with you in person sometime. And I would love to come see your malting plant. And even if you didn't brew it, I would love to have some of the beer that you grew.

[25:24] Sen. Kessel: We usually have a pint after we're done touring this to test, make sure we're doing it right.

[25:29] Emmery: So that sounds good. All right. Well, thank you again and have a great rest of session.

[25:35] Sen. Kessel: Thank you.

[Straight Talk stinger]

[25:39] Emmery: You've been listening to Straight Talk with NDFB. The end of legislative session is right around the corner, so stay tuned for our legislative summary to find out any changes for agriculture in the 2025 Legislative Session.

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