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Hoosier Hills Fur Farm: mink ranching in southern Indiana.

For 30 years, farmers Dale and Don Schmeltzer have weathered market depressions, radical swings in prices and stiff foreign competition. They've maintained the quality of their product, despite changes in customer preferences and a consumer boycott. Through it all, they've remained a successful family business, respected by their peers in the industry.

They don't raise a traditional Indiana crop, such as corn or soybeans. Rather, they raise a 'crop' prized for its warm, luxurious fur -- mink.

On their 80-acre ranch near Lawrenceburg, the Schmeltzers raise 8,500 black mink. It's a business that's rare in indiana. Theirs is the largest of 10 mink ranches in the state. Production at the Schmeltzers' Hoosier Hills Fur Farm accounts for more than one-third of all the pelts produced in Indiana. Their pelts have consistently commanded higher prices at annual fur auctions than the nationwide average.

The Schmeltzer brothers--including, Ralph, who recently retired--started the farm with 100 brown mink. They built the sheds and cages to house the mink and still use them today. The farm's history dates back to their father, George, who raised mink from 1938 to 1949, back when horses were butchered to feed the animals. Lacking enough help to maintain the farm, George went out of business in 1949, but returned to it in 1956. He had it in his blood,' says Dale.

Shortly after George's sons went into the business, the industry suffered one of its periodic downturns. We went through eight years in the 1960s when we said, 'We'll give it one more year," remembers Don.

It was West Germany that brought the industry out of the doldrums. In the 1960s and 70s, as that country grew wealthier and its standard of living improved, the demand for luxury items, such as furs, increased. The mink ranchers in the United States were more than eager to meet that demand.

Now, the Schmeltzers are counting on another prosperous country -- Japan -- to return the industry to good financial health.

Japanese buyers entered the market seriously in 1987 and immediately drove prices up. The Schmeltzers now advertise their wares in Japanese fur industry magazines. At the April auction, 73 percent of the pelts they sold were to foreign buyers, mostly Japanese and Italians.

While there's a vast market overseas, the Schmeltzers also face determined competition from abroad. Scandinavian countries account for 45 percent of the world's production of mink pelts, while the Soviet Union accounts for 31 percent.

The mink industry in some foreign countries also is heavily subsidized and centralized. In the Scandinavian countries, mink production is subsidized through the European Economic Community. Mink farming is now the third-largest agricultural activity in Scandinavia.

And, in the Soviet Union and the People's Republic of China, mink production is owned and financed by the government. In the United States, mink ranchers, unlike grain and dairy farmers, receive no government subsidies.

Competition within the United States also is tough. The Schmeltzers hold their own against much larger farms in Wisconsin, Utah and Minnesota. Together, those three states account for more than half of the country's mink production.

The fur market is ruthlessly cyclical. The Schmeltzers earned an average of $27 per pelt at the April auction, not much more than the $23 per pelt their father earned in the 1940s. In keeping with a nationwide trend, the Schmeltzers' price per pelt has dropped steadily since 1987, when each one sold for an average of $71.95.

Pelt production is geared toward one auction a year, which is held in Seattle. At the April auction, the Schmeltzers sold 4,777 skins. In 1989, Hoosier Hills Fur Farm grossed $194,000 from the sales of mink pelts. About 50 skins are needed to make a full-length fur coat. It's not exactly a high-volume business.

Traditionally, mink ranches have been family-owned affairs. The Schmeltzers employ only two full-time workers and payroll costs in 1989 totaled only $35,000. On a recent day, part-owner Don was operating a gasoline-powered cart down the rows between the cages, doling out feed through a vacuum hose. A nephew was in the feed room processing the feed and preparing it for consumption.

Feed is by far their largest expense. The animals must be fed every day--sometimes up to five times a day. Each animal devours an average of 110 pounds of feed a year. Feed costs in 1989 were nearly $78,000.

Depending on live animals for profit is touchy. The Schmeltzers must create the proper conditions for breeding and then raise the mink to encourage optimum fur production. The mating season is critical because it is brief, lasting only the month of March. In the wild, the mink is a loner and breeds only one season a year.

Once the animals have grown, each litter is evaluated for its color, amount of fur, softness, overall appeal and appearance. The ideal mink is furry, not hairy, and its coat has a short, dense nap. The evaluation is made in the fall after each mink has produced fu r.

The fur is harvested in the fall. The minks are placed a few at a time in an airtight box and euthanized with carbon monoxide gas. They usually die within a minute or less, says Dale. "I don't know if you can die any way that's less painful than that," he says.

The fat is removed and sold to a rendering company, which processes it into fertilizer. Mink byproducts are used in shoe polish and cosmetics also.

Dale Schmeltzer takes offense at efforts by animal rights activists to portray the mink industry as inhumane. He says caring for the animals 365 days a year demands a humane attitude. if I didn't like animals, I wouldn't be in this business,' he says. Despite that attitude and the quality of their operation, the Schmeltzers have felt the effects of a consumer fur boycott organized by animal rights activists. Dale believes the boycott has contributed to the general downturn in the industry.

Despite the softness of the industry, the Schmeltzers are in the business to stay. Dale's secret of success reflects the simple fundamental principles that have seen the family through the last 30 years. 'I always pay my bills. I want to owe myself, if I owe anybody.'
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Title Annotation:Ventures
Author:Holthaus, David
Publication:Indiana Business Magazine
Article Type:company profile
Date:Oct 1, 1990
Words:1042
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