Final Report for FNC06-607
The families will produce and process value-added white hard spring wheat to create sustainability for their family farms through forming an LLC Dakota Family Mill.
The LLC Corporation of Dakota Family Mill is owned by three family farms located in Richland County in southeastern North Dakota. The farms are family owned and combined acreage is approximately 2500 acres. The main crops grown are soybeans, wheat, and corn. The families are growing white hard spring wheat to increase the return on investment in farm-based business in the short term plan. Dakota Family Mill is currently processing and packaging whole-white-wheat-based dry recipe mixes for sale to local and national markets.
Dakota Family Mill did not carry out any sustainable practices before the SARE grant.
The Dakota Family Mill located in Richland County, North Dakota, is a corporation developed to utilize Identity Preserved and farm fresh white spring wheat grown in the Red River Valley of the North, to mill, process, and market the flour and custom bake mixes as a convenient health benefit for consumers.
We became Pride of Dakota members in May 2006 and attended the Nebraska Workshop. The company completed a certified kitchen to mill and bag product in June in 2007. We developed a website and milled 5 lb. bags of flour and cracked wheat. Dakota Family Mill tested a bread machine mix, a chocolate chip cookie recipe, and a pizza dough recipe with Bonnie Jacobson at North Dakota State Cereal Technology Department in July of 2007. The recipes were baked, perfected, and converted to weight. Our website was running in October 2007.
In late July 2007, Dakota Family Mill signed the contract for product development with University of Nebraska. Nebraska worked on nutrition labeling and package recommendations for our mixes. They were much too slow. NDSU was much faster. We had a graphic artist redesign our label for the mixes.
We promoted our products at the River Art Festival in Moorhead, MN during August 2007 and Potato Days in Barnesville, MN in October 2007 and 2008, and at Market Place in 2008.
We began local marketing of the mixes once the UPC codes were completed in February 2008. We are distributing in small towns until we have a larger supply and a better understanding of the business. We located a co-packer in March 2008 and scheduled a large run and mill of product. We completed the run in October 2008. In November 2008 we purchased a 16 inch grist mill to grind wheat for our 5 lb. bags of wholegrain flour.
Currently, Dakota Family Mill is distributing 5 lb. bags of flour and cracked wheat, and six mixes to Econofoods in Wahpeton and The General store in Abercrombie and Colfax, ND, Dystes Food Service, Fargo/Moorhead Hornbachers, and Sun Mart grocers. We are in other grocers scattered around the state. In March 2008, our products were featured at a two-day sale promotion at Wahpeton Econofoods and sold out the shelf stock three times during that promotion in addition to our booth display inventory. We have worked with the Econofoods bakery to help produce buns and bread for sale from their bakery. We have developed shelf talkers and purchased a display stand for the store display.
We have learned many aspects of the flour business. With an interest in this type of business, we have examined competitor’s products and pricing and used that information to build our line. It was a challenge to find equipment and resources locally that meet our needs. Most companies want huge quantities of product to work with thus either our company did not have that much product or it would be too expensive at this time.
It has been a learning experience to work with our local grocer which is Wahpeton, Econofoods. They were very open to offering our product on the shelf and have started providing baked white wheat products from their bakery. We were part of the baking mix refinements for their batches and were asked to evaluate their products. They have been very helpful and will enable us to better meet the needs of future customers.
Since we have found a co-packer and have purchased a large stone flour mill, we have freed up time to begin to more intensely marketing and promoting our product.
• We successfully raised hard white spring wheat with a 60 bushel average over two years. Test weight was normal with protein fluctuating from 12% for one variety to our variety of choice achieving 14.5% the first year and 12.8 % in 2008.
• We have successfully milled and packed our products. We have not had any substantial complaints on the flour or mixes in the 9 months of operation.
• Our classes reached youth and adults.
1. Research into the commodity and its capability to our region, the current availability, and the potential for it to create and sustain a market is important. Rationale: Is it an emerging product or need? Is it an existing product that can flourish in a niche market? Is there a large enough market to build wealth?
2. Evaluate local and regional business networks and resources to develop your product. They are impartial. University campus services are best as they know what resources they can provide and where to go for the resources needed beyond that.
3. Develop a business plan. It is surprising how a business plan evolves and develops as your company members learn more and market influences shape the process. The business plan provides a starting point and tells the story to others who are interested in where you want to go.
4. Financial capital will determine how much advice you can afford. How much debt and partner involvement does the business want or need? Business development will take longer with less debt but may be more sustainable. Outside investors or multiple partners may slow business development due to decision making but can develop faster as sufficient financial capital is available to make quick adjustments or respond to opportunities.
5. Promotion and advertising is an aspect of the business that is hard for people to justify expenditures for when they are not accustomed to utilizing this tool in their current occupation. The product will not fly off the shelves without customers being introduced to it. Your products are displayed with hundreds of others – what will make yours stand out?
6. The cost of transportation has been a challenge. We have not had enough distribution in areas to use a central distributor. We have been making the deliveries. You need many sales to pay for gas along with time to accomplish this. I suggest saturating an area so that it is feasible for a distributor. Our stores have indicated that it is better to establish your products and develop sales volume before doing this.
• NDSU Extension Service provided resources in product development, seed variety, agronomy, labeling, and facilitated partnership development and some training.
• NDSU Cereal Technology provided recipe testing and label requirements
• NDSU Agricultural Department provided agronomy information on hard white spring varieties.
• Pride of Dakota provided resources in marketing and training assistance.
• University of Nebraska Omaha completed product labeling and specifications for ingredients.
I would suggest other farmers that take on this type of venture take some college business, marketing, and even graphic design classes. Transportation costs and commodity prices became more of an issue in setting profit margins while maintaining a reasonable priced product in the boom and bust of 2008.
It can take a large amount of capital to build a business the right way while also participating in a risky business like farming. I know many farmers who have suffered large set backs when participating in outside adventures. We have made every effort to accomplish as much as we could by ourselves using our extension and other resources available. We have not taken any loans yet. This may have slowed our progress but it has kept us from taking on more financial risk.
Social: The business has provided some opportunity for area grocers to sell a home grown (at this time) unique product line. Area customers have commented on preferring a home grown product by someone they know.
Environmental: It has established the ability to be a crop rotation choice for the area farmers.
Economic: Our sales are steadily increasing and we are continuing to spread into more grocer chains. The news and future of hard white spring wheat has spread in our area. A local elevator (Colfax) is contracting acres and has been able to move the crop with ease.
We have learned that people are ready and willing to learn about and embrace the idea of eating more whole grains. We stress that White Wheat Whole Grain Flour can be used in ordinary recipes by substituting up to 1/3 of the regular flour. We teach that whole grains can be implemented in recipes and food for every meal of the day--pancakes and waffles for breakfast, buns and bread for lunch, cookies for snack, pizza for supper, etc. We all have learned so much about the benefits of whole grain and the importance in our diet for overall good health. Colleen Svingen, Extension Agent, has many teaching posters to help people visualize what we are teaching. We have many positive comments about our classes.
The outreach required in the grant is completed. Dakota Family Mill has provided 750# to date in product for the outreach and a member of the company has worked each session with the program.
Our school program “Kids Get the Skinny on Whole Grains” has met with much success. Colleen Svingen and Deb Evenson have been to each public school in Richland County. They have programmed in each sixth grade classroom in Richland County (five rural schools and Wahpeton) with “Bread in a Bag” reaching 190 students, and also at each afterschool program in seven elementary schools reaching 130 students with “Pretzel in a Bag”. Programming has also occurred for 35 4-H students at various age levels. Currently, they are preparing to do the next round of school programming before the end of the 2009 school year. The whole grain trunk for extension has been completed and will be used for the first time as an educational trunk for the state 4-H program at the North Dakota Western 4-H Camp during the 2009 Baking Boot Camp session.
“Your Body Kneads Whole Grains” community outreach whole grain program has also met with much interest. The six towns have had an attendance of 147 participants in seven program opportunities.
See attached articles. [Editor’s Note: To see copies of the articles, contact NCR-SARE at: firstname.lastname@example.org or 1-800-529-1342.] We identified the SARE grant in extension conferences, adult classes, and in the newspaper articles.
The grant and the people were easy to work with. I would suggest quarterly reports.