IOWA FALLS, Iowa — When Bruce Rastetter was in the hog business, he wasn't exactly loved by everyone in the state.

As the former president and founder of Heartland Pork, once the 13th largest pork producer in the country, Rastetter endured his fair share of criticism from people not fond of large-scale pork production. He's been sued, town meetings have been held to denounce farmers who wanted to contract feed for the company and countless numbers of letters to the editor have been published in the state attacking Heartland, including Rastetter, and its business practices.

"Bruce wasn't always the most-liked person, but I think it was more the business he was in rather than him as a person," said Iowa Sen. Stewart Iverson of Dows, a longtime friend.

But tough times in the hog industry forced Rastetter to leave that world and enter another.

Now that he's is in the renewable energy business, Rastetter switched from villain -- in some people's eyes -- to hero. No one protested when his new company, Hawkeye Renewables of Iowa Falls, built an ethanol plant just outside of Iowa Falls. Or rallied against the plant currently under construction near Fairbank.

In fact, lawmakers in Fayette and Buchanan counties quickly worked together last year to approve zoning changes so construction of the Fairbank plant, which straddles both counties, could commence without delay. Fairbank Mayor Maurice Welsh said any potential problems like increased traffic, noise or odor, were far outweighed by the economic benefit.

If the ethanol plants were hog confinement facilities, though, it's doubtful the welcome mat would have been extended so freely -- given the track record in the state. While proud of his past, Rastetter said it's a relief not to have to feverishly fight and defend his new business.

"It's nice to do a non-controversial story for once that doesn't have to do with hogs and hog smell," Rastetter said.

Once considered a "big guy" in the pork industry, Rastetter certainly didn't grow up that way. The 48-year-old was raised on a 280-acre grain and livestock farm near Buckeye. The family farrowed 40 sows and managed a small beef cow herd.

His parents encouraged him and his three brothers and sister to do anything but farm. Rastetter didn't listen. He liked raising livestock.

All the Rastetter children attended college, including Bruce. He got a degree in political science from the University of Iowa in 1978. He then attended law school at Drake for a year, realizing that career path wasn't for him.

He returned to the family farm and worked part-time as a letter carrier in Iowa Falls. The farm didn't generate enough income to support more than one family, the exact reason Rastetter's parents discouraged their children from the business.

"It's the typical Iowa story of small farms. As things change, the ability to make the kind of income one would hope for wasn't there," Rastetter said.

Rastetter eventually got a job selling livestock feed in Alden in the mid-1980s when the farm crisis hit. Farm land values plummeted by two-thirds their value. Customers were in desperate need of adding income without the risk of buying more livestock and land, or getting an off-farm job.

At the same time, consumer demand for lean pork wasn't compatible with the way many Iowans were raising hogs outdoors. Most hogs eventually moved in to climate-controlled buildings so hogs didn't need as much fat to survive the winter.

Those two changes in agriculture made contract feeding of hogs a viable business opportunity, Rastetter realized. Farmers are paid a wage for labor and facilities, and they keep the manure for fertilizer to reduce crop input costs. The company that owns the animals doesn't have to invest in costly buildings and overhead to keep expenses down.

Rastetter founded Alden Feed service in 1985, then Advance Management, which matched owners of hogs with people to raise them. In 1988, he started to raise hogs on his own under the name Heartland Pork. He also started an ag construction business with his brother in 1990.

All these entities eventually merged into Heartland Pork in 1994. The company started out contract feeding 250,000 head with 45 employees.

Four years later it was raising 1.1 million head, with more than 200 contract growers and 550 employees.

"We had the distinction of being the fastest growing hog company at the time the market dropped to 50-year lows," Rastetter said. In December 1998, too much pork and not enough demand and slaughter capacity forced prices to less $10 per hundred weight.

The company's production contracts weren't set up to protect it from Great Depression-era prices and prolonged losses, he said.

The hog market crash and several years of stagnant pork prices -- even after years of prosperity at the beginning -- forced Rastetter to sell to Christensen Family Farms of Minnesota about 15 months ago. Keeping the company would have meant going into debt further and he didn't want investors to lose more than they already had. He couldn't count on prices rebounding.

"Obviously any time you build something from square one and go from the first employee to 550, and having a huge sense of ownership, for me personally it probably was a disappointment," Rastetter said. "At the same time, I created a company that had significant respect in the industry, conducted itself with integrity and environmental responsibility."

As luck would have it, prices dramatically rebounded in the last two months of the sale process. By that time, it was too late to call the deal off.

Rastetter, sitting in his office at the Iowa Falls ethanol plant, surrounded by Iowa Hawkeye memorabilia, gave a sarcastic laugh and shook his head when recalling what it was like seeing prices go up, which might have saved the company if he'd waited to sell a little longer.

"I try hard not to look back. The reality is you can't change what you've done," Rastetter said. "You have to learn from it and try to be positive going forward."

J.H. Whitney and Co., a Connecticut-based investment bank who worked with Heartland, apparently liked Rastetter's management skills and didn't hold Heartland's sale against him.

Interested in renewable energy, the bank asked Rastetter if he would head a project to build ethanol plants and a wind farm in Iowa. Seeking a new challenge, Hawkeye Renewables was born. The private company is made of up of less than a dozen investors, including J.H. Whitney and Rastetter, who also serves as CEO.

The 45-million-gallon Iowa Falls facility has been selling ethanol for a little more than a year, and a current construction project more than doubling its capacity will be completed by February. The 100-million-gallon Fairbank plant will be in operation by May.

Together, both plants will produce 210 million gallons of ethanol a year, employ 110 people and consume 66 million bushels of corn a year.

The total investment in Northeast Iowa is $250 million, not counting a $200 million wind farm in the planning stages in southern Franklin County.

"Clearly, energy production using ag resources is an important thing.

It's renewable, energy positive, creates jobs through further processing and is going to be here for generations to come," Rastetter said.

While some might consider the switch from raising pork to producing ethanol a drastic change, Rastetter doesn't see it that way. He's still producing an agricultural-based product that relies on farmers that people need. Only ethanol, at least locally, is far less controversial than large-scale hog production.

"It's like comparing apples and oranges... ," Rastetter said.

Ethanol is touted as a clean-burning corn-based fuel additive that will make the country less dependent on foreign oil. Local communities with plants benefit by additional high-paying jobs, an increased tax base and another market for corn, boosting prices.

Iowa Secretary of Agriculture Patty Judge described Rastetter as a dynamic person always looking for a challenge. She considers him, being raised on a small farm, one of Iowa's success stories.

"He has taken his knocks and certainly has his critics, but I see him as an asset," Judge said.

One of Rastetter's more vocal critics doesn't quite see it that way.

Hugh Espey, executive director of Iowa Citizens for Community Improvement, still considers him a villain in agriculture, despite changing jobs.

ICCI battled Heartland for years due to their opposition to large-scale, confinement livestock production. They believe it pollutes the water, air and ruins the quality of life in Iowa. Heartland was never cited for an environmental infraction by the state.

Espey still doesn't think Rastetter has the best interest of the state and farmers in mind, only profit, much like when he ran Heartland. If he did, Hawkeye Renewables would be paying $3-plus per bushel for corn instead of in the $2 range, Espey said.

"A leopard doesn't change his spots," Espey said. "What we know about him is tied up in Heartland, so there's not a lot of good things to say.

(Heartland) was not a good neighbor.

"If ethanol is such a boon, where is the price of corn?" he pondered.

"That's the question family farmers should ask."

Not everyone in the organization apparently feels that way, Rastetter said.

"We don't believe in burning bridges with people. We enjoy seeing ICCI members sell us corn today that previously wrote letters to the editor about us" at Heartland.

Rastetter realizes his views and vision for Iowa clash with some people in the state. He thinks the evolution of hog farming is good for the environment compared to 30 years ago when a 2-inch rain would wash manure out of open feedlots and into waterways. Today, most manure is contained.

As far as renewable energy is concerned, he said it will help the communities that embrace it. An ethanol plant will raise the local corn market by 4 cents to 6 cents a bushel or more, provide farmers another local market for grain and investment opportunities in farmer-owned plants, like in Steamboat Rock.

The regional impact was clear last Tuesday, as trucks loaded with corn from Osage, Beaman, Hampton and many other towns came across the scale at the Iowa Falls facility. It's the view Rastetter sees every day just outside of his office window.

"The rural communities that embrace and support change, like Iowa Falls and Fairbank, are going to have opportunities," Rastetter said. "It's a disservice to young people who want to stay in rural Iowa for communities not willing to embrace change in a positive way."

To see more of the Waterloo-Cedar Falls Courier, or to subscribe to the newspaper, go to http://www.wcfcourier.com.

Source: Knight Ridder/Tribune Business News