Johnson family has cut wide swath in Red River Valley ag, business
WALHALLA, N.D. — A single landowner group — the Johnsons of Walhalla — owned more than 20,000 acres farmed by McM Inc. of St. Thomas, N.D., when the farming juggernaut went broke.
Instead of renting it all out to other farmers, the Johnsons have announced they'll farm it all in 2017 and beyond.
The Johnsons' new Elkhorn Farms LLP has been formed in only a few weeks — a partnership between Kenny Johnson of Walhalla, N.D. (and Gulfstream, Fla., and Arizona), and his cousin, Al Johnson, who separately runs Johnson Farms of Walhalla (and Canada and several other states).
The two initially said they'd hire Ron McMartin, Jr., of St. Thomas, N.D., the driving force and owner of McM Inc., a now-bankrupt conglomerate that had farmed up to 59,000 acres in 2011 and had slimmed back to 39,000 acres in 2016, focusing on potatoes, edible beans and sugar beets.
McM had influenced farmland rental rates from Fargo to the Canadian border as they rose in the region since 2008. McM filed for Chapter 7 liquidation in February, with a separate receivership action ongoing against McMartin in federal court in St. Paul, Minn., by BMO Harris Bank, which holds $43 million of the farm's $50 million in debts, while the company has $10.2 million in assets.
In earlier interviews, Kenny said Elkhorn Farms would employ not only McMartin, but Eric Eischens, a former farm manager for McM. But now McMartin and Eischens have left without elaboration, other than it was not a "good fit." Rachel McMartin, Ron's daughter, who was working in the office with Kenny's sister, Kim Johnson, also has recently parted ways with the Johnsons.
Now Elkhorn Farms is all in the Johnson family.
Kenny — whose deceased father Hilton was the eldest of three Johnson brothers — says the new farms, with headquarters at Grand Forks, N.D., and St. Thomas, will be managed by Kyle Zak, his nephew, who also had worked for McMartin.
Most North Dakotans are not so familiar with the Johnsons, who live in a town four miles from the Canadian border. Walhalla is closer to Winnipeg, Manitoba, than to Grand Forks, N.D. Other than making lists for farming subsidies, they've stayed outside the news media.
But the Johnsons are a story in themselves. Here is a small taste of it.
The eldest son, Hilton Johnson, was born in 1930 and started out farming at Walhalla. He initially was a spray pilot and owned a car dealership. An out-of-the-box thinker, Hilton in the 1960s moved to Chicago and became a "floor trader" in the open outcry pits, buying and selling grains in the Chicago Board of Trade. Hilton and Marjorie had four children, including Kenneth Hilton "Kenny" Johnson, 55, and Kim Johnson, who now works as an office manager for the new Elkhorn Farms.
In 1971, Hilton moved back to Walhalla, where he worked in seeding road construction sites and farming. The children were Karen, Kim, Kenny and Konnie.
Kenny remembers being around for harvest and hanging around the warehouse. In the mid-1970s, Hilton bought the King of Spuds potato flaking plant in East Grand Forks, Minn., which he ran until he died in 1979 at 48. He suffered a heart attack while attending his son's basketball game at Milton, N.D.
Hilton's widow, Marjorie, lives in the house where they raised their family in Walhalla. Hilton had about 160 acres of farmland near Walhalla, N.D., and 2,000 acres in Kittson County, Minn.
Kim worked at Johnson Farms for 28 years, working in trucking and doing the dispatching, billing and payroll. She also did office work for land deals involving Bert's and Kenny's properties, now for Kenny and for her sons' oilfield roustabout business in Williston.
Another sister, Karen Zak, Grand Forks, is the mother of Kyle Zak, who is now a manager of the new Elkhorn Farms.
Kenny was 17 when his father died. After graduating from Walhalla High school in 1979, Kenny played basketball at Lake Region Junior College and then started on a marketing degree at the University of North Dakota. In 1985 he went to Chicago, getting into the commodities trading pits.
Kenny started as a "runner" — running orders to the pit, where they were filled by open outcry.
"I got familiar with the 'floor' and the business by being a runner close to a year before applying for membership and getting my own seat and began trading," he says. He traded from 1986 to about 2001, but was a member until 2005. He was a so-called "local," a floor trader who trades his own money in his own account in the S&P 500 Pit.
The funds he accumulated in Chicago were invested in ag land and kept in close contact with his uncles and cousins in Walhalla. When he was trading in Chicago he maintained a Citation II Bravo jet that would land in Walhalla and he hired a pilot. Meanwhile, he owns Gold Coast full-service car washes in the Chicago area, and he once owned Pasha, a restaurant and nightclub. He got out of the S&P trading when things shifted toward electronics.
In about 2001, he purchased 400 acres south of Walhalla — where he built a recreational "horse property," overlooking the Pembina Gorge. He built a "cabin" there in the mid-2000s, and recently has added a glassed-in addition. He recently put in a large glassed-in addition onto an impressive log home. He and Al own some Thoroughbred horses.
Back in Walhalla, Kenny had individually acquired about 15,000 acres to 18,000 acres, including some in common with his cousin Al. He and his uncle Bert had purchased a lot of together from the early 2000s to 2012. He separately owns 5,000 acres in the Cando, N.D., area, farmed by a joint venture with William Wakefield.
Kenny says he's been in North Dakota mostly in the summer months, but he votes here so it's his official residence. In the early 2000s, he bought Elkhorn Ranch — a second ranch owned by Theodore Roosevelt in the 1880s, north of Medora, N.D. The land was acquired in transactions involving 22,000-acre deed plus more than 7,000 leased land. (It doesn't include the original Maltese Cross Ranch cabin, which originally was on the Chimney Butte Ranch and now is at the National Park visitor's center.)
He refurbished the ranch, including a main place for his family and a bunkhouse for guests.
"I run the cattle: I've got a manager and a family and some hired men that work out there," Kenny says. "It's a Black Angus cow-calf herd of about 160 to 170 cows. We're working to get into the grass-fed niche. It's not a hassle owning it, but the hunting pressure out there gets a little tough sometimes."
There have been depredation hunts on elk in that region in the past couple of years, and Johnson, who sees himself as "kind of pro-elk," offers a sanctuary for the elk on the ranch.
"I'm kind of proud of that, actually," he says. "We've saved quite a few of the elk. I think a lot of people are happy about that, too."
Kenny is married to Michelle (Smith) Johnson, originally from Hannibal, Mo., whom he met in Chicago. The family makes its home in Gulf Stream, Fla., a community within in Palm Beach, Fla. Their sons are Hilton, 14; London, 11; and Sebastian, 9. They're all taken up with baseball, but may want to be farmers someday.
"They live in the city but they're country boys," he says, enjoying hunting and fishing when visiting Walhalla.
Albert D. "Bert" Johnson
The second son (1936-2014), was a driving personality in what became Johnson Farms. As a young man, Bert worked as a potato inspector for the North Dakota State Seed Department, and went farming with his father.
Known for his "dazzling smile," and as a deal-maker, according to his own obituary, Bert sold seed potatoes across the country and made land deals in many places. He was instrumental in creating Johnson Farms, which became one of the region's largest. Bert's obituary said he at times had farmed in North Dakota, Minnesota, Nebraska, Colorado, Illinois, Arizona, Washington, California and Canada. Kenny adds that he had farming interests in other states. The obit said the North Dakota farming operations alone included 100,000 acres, a figure Kenny couldn't confirm.
"Maybe it was a cumulative number," he said.
"Bert was a maverick in the valley," Kenny says "If there was a hall of fame for farmers, he'd be the Babe Ruth."
Kenny says Johnson Farms continues to have a substantial farm in Canada. Bert, Kenny, cousin Rodger Johnson, and Al Thompson in the early 1990s purchased a farm in the Queen Creek, Ariz., area. They sold that for development, and Bert and Kenny exchanged land at Willcox, Ariz. Bert and Kenny also owned potato land in the Tule Lake, Ca., area.
Bert farmed with his brother Lyle. They bought into Walhalla State Bank. In 2001 Bert helped oversee the merger of community banks to create Choice Financial Group. He was a board member for the bank. The Johnson Farms partnership farmed but also developed real estate, principally about 2,000 acres of land in and around Grand Forks.
Bert's first wife, Betty Lynn, died 1998. Their children included Albert "Al" Russel Johnson, Walhalla, N.D., the operating partner in Johnson Farms and the 50 percent partner in Elkhorn Farms. Al's children include Max and Sam, who are in the Walhalla area and work with Johnson Farms, and daughter, Tess.
As with many farming families in the United States, Bert and Lyle's families have separated the land ownership from the farm operating entity that run them. Kenny declined to speculate on how many acres Johnson Farms might control, and Al Johnson did not return several phone and text requests for an interview.
Bert also had Lynell (Rodney) Stegman, Grand Forks and twins: Sandra and Susie.
Sandra "Sandy" Crary, of Grand Forks, is married to Tim Crary, owner of Prudential Crary Real Estate, which is also in the Fargo area. In the late 1990s Crary was an agent for Johnson Farms, according a 1996 court case. Susie Sproule, also of Grand Forks, is married to Paul Sproule, who operates a substantial operation called Sproule Farms, based in Grand Forks. In a news interview at Bert's death, Paul Sproule would say that Bert was an inspiration to many farmers.
Lyle M (or V) Johnson
Now in his 70s, Lyle remains a partner with nephew Al in Johnson Farms and lives in Walhalla and in Mesa, Ariz.
Lyle's surviving children are Rodger, one of the partners in Johnson Farms and a board member of Choice Financial, and Brian, who serves as president and chief executive officer of Choice Financial.
Kenny credits cousin Brian Johnson with engineering the financing package that allowed the formation of Elkhorn Farms LLP, so the Johnson family could retain control of land that McM Inc. had farmed, and perhaps farm for other landlords. Brian also worked with AgCountry Farm Credit Services to complete the deal, Kenny added.
(Among the luminaries on Choice Financial board are North Dakota Sen. Tom Campbell, R-Grafton, N.D., who has his own substantial farming interests. Campbell has announced his interest in running for the congress if Rep. Kevin Cramer, R-N.D., announces a run for the seat held by Sen. Heidi Heitkamp, D-N.D.)