Finance

Idaho’s Magic Valley: Miracle or Magic Trick?

Can southern Idaho become to food what Silicon Valley became for the tech industry?
by | April 16, 2014
Idaho Governor C.L. “Butch” Otter welcomes Clif Bar to Twin Falls.
Idaho Governor C.L. “Butch” Otter welcomes Clif Bar to Twin Falls.

Start checking where your food is packaged. If Jan Rogers and others in southern Idaho get their way, there will come a time when you can’t make it through a day without consuming something that was brought to you by the Magic Valley.

Over the last year, this relatively rural region of 200,000 residents has attracted seven food manufacturers, including big names like Chobani and Clif Bar, that are investing a combined $773 million and creating 5,000 jobs, according to the Southern Idaho Economic Development Organization (SIEDO). It’s being dubbed the “Magic Valley miracle” and those involved hope that the region can become for food production what the Silicon Valley has been for the tech industry.

“Our whole focus is to be America’s most diverse food basket,” said Rogers, president of SIEDO, which has played a big part in luring companies to open up plants and offices in the region.

Southern Idaho isn’t starting from scratch, so to speak. More than half of the state’s estimated $8 billion in agriculture receipts come from the region. Idaho ranks No. 1 in meat production and No. 4 in milk production among the 50 states and boasts a 100-year history of farming and livestock production. But the flurry of commitments over the past year has been largely due to a targeted effort by officials here to attract national and international food companies with the idea of becoming the country’s center for food production, processing and science.

It started with Chobani in December 2012, when the yogurt company officially opened a $450 million, 1 million square-foot plant in Twin Falls. It was just the $1 billion company’s second factory and is the world’s largest manufacturing plant. What followed is what some call the Chobani Effect. The agriculture company Monsanto announced it was building a $9.2 million wheat research and development center to open in 2014. Then came an announcement from the organic snack bar maker Clif Bar that it was opening a new, $160 million facility in October 2013. Four other companies, ranging from an animal formula producer to a fruit processor, made similar announcements by the end of 2013.

The Chobani Greek Yogurt facility in Twin Falls, Idaho, is the world’s largest manufacturing plant. (Southern Economic Development Corporation)

“We’re seeing some of that Chobani effect,” said Shawn Barigar, a Twin Falls City Council member and the area’s chamber of commerce president. “Announcements like Chobani and Clif Bar in a rural part of the country raise the visibility of this area.”

Meanwhile, the region’s officials have made the business environment as enticing as they can. Chobani executives have said they chose Southern Idaho for its business-friendly environment and officials there did not disappoint. The plant was built in an astonishing 326 days, largely thanks to the government’s role in helping the company acquire the land and business permits it needed to break ground quickly.

“You can’t build in 326 days the largest plant in the world unless everybody’s walking hand-in-hand,” Rogers said.

To be sure, Idaho’s economy has been on the rise as unemployment has fallen. In March, the state announced a five-year low unemployment rate of 5.3 percent, a full 1.3 percentage points lower than a year earlier. But some are skeptical of the job market picture, noting that many of the new factory jobs created in the Magic Valley are minimum-wage labor. In fact, at 7 percent of its population, Idaho has the largest percentage of minimum-wage workers in the country. A recent editorial in the Twins Falls Times-News criticized Idaho’s governor, who has touted the successes of Magic Valley and the state’s unemployment rate, for not urging a minimum wage hike. Minimum wage in Idaho is $7.25 per hour.

“Sure, some companies will choose Idaho because it's cheap,” the piece published this week said. “But the types of industries that actually build a middle class need an educated populace. That won't be found here.”

But those in southern Idaho say their efforts are as much about attracting diverse jobs as it is in attracting diverse foods. Rogers noted that two of the seven new facilities (Monsanto and the Glanbia Foods Cheese Innovation Center) are research and development facilities attracting strong, middle-class labor. And Idaho, she added is a cheap state.

“Compared to the rest of the U.S., we have a pretty low cost of living,” she said.

Staff Writer J.B. Wogan contributed to this article.

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