Sales Plan Development for Expansion of a Family On-Farm Flour Milling Company

Project Overview

FNC01-345
Project Type: Farmer/Rancher
Funds awarded in 2001: $5,000.00
Projected End Date: 12/31/2004
Matching Non-Federal Funds: $3,140.00
Region: North Central
State: North Dakota
Project Coordinator:
Dennis Kubischta
Summers Harvest Flour Mill

Commodities

  • Agronomic: barley, corn, flax, rye, spelt, soybeans, wheat
  • Vegetables: beans
  • Animals: bovine, sheep
  • Animal Products: dairy

Practices

  • Crop Production: conservation tillage
  • Education and Training: farmer to farmer, on-farm/ranch research, technical assistance
  • Farm Business Management: whole farm planning, new enterprise development, budgets/cost and returns, cooperatives, marketing management, feasibility study, market study, value added
  • Production Systems: holistic management
  • Sustainable Communities: new business opportunities, public participation, community services, employment opportunities, social capital, social networks, sustainability measures

    Summary:

    Marketing Specialty Flour

    The objective of this grant was to identify specific customers for a variety of flours produced by Summers Harvest Flour Mill. The hope was that this would lead to increased sales and profitability, and increased opportunities, not only for the mills owner/operators, Dennis and Mary Kubischta, but neighboring farmers as well.

    The Kubischta started their small on-farm flour mill in 1994. By 1999, they recognized that the one mill they were using to produce high gluten natural whole wheat flour, had limitations. While they were able to meet demand at that point, the older mill would not allow them to increase their milling capacity. Plus, with only one mill, it was difficult to meet organic specifications since the mill had to be cleaned out between natural and organic flour production.

    With the help of a NCR-SARE Farmer Rancher grant (project number FNC99-259, Summers Harvest Flour Mill), the Kubischtas studied a variety of options for expansion. "As a family farm operation, it was determined that the most prudent approach was to increase from the current one mill to three mills and expand the processing facility on the farm." For future expansion, they explored building a larger off-farm mill in a nearby community.

    The Kubischtas proceeded with the on-farm expansion. They added two new mills, which increased their capacity to 900 bushels of wheat milled into flour per week. One of the new mills is used for additional natural flour production, and the other is used for milling organic wheat. Summers Harvest now produces high gluten flour, organic whole wheat flour, and other specialty flours.

    Dennis Kubischta explored growing organic wheat, but because of the cost of certification, he decided it would be better to find a market for the organic flour first, then pursue certification. He would like to grow organic wheat since the organic market is growing rapidly.

    The Kubischtas continued to explore the flour market and discovered enough demand to further expand their milling operation. They received a 2001 Farmer Rancher grant to increase sales with current customers and identify new customers.

    The mill had a loyal customer base including an area bakery and national dough distributor. But in order to expand, they needed to increase the distribution of their product. The 2001 grant project was set up to help create a marketing plan for Summers Harvest that would allow them to increase their distribution of and demand for the various types of flour. As part of this project, Summers Harvest obtained professional assistance to contact potential customers. They planned to exhibit their flours at the 2001 International Bakery Industry Exposition (see http://www.bakingexpo.com/). The exposition would provide an opportunity to meet directly with thousands of retail bakers, supermarket bakers, and baker product distributors who were interested in specialty and organic breads.

    According to Dennis Kubischta, this project was a complete success. Summers Harvest found additional, larger markets than they ever imagined possible.

    The Kubischtas were able to get support for their expansion project from area farmers and formed a cooperative of five farmer-owners. The cooperative is in the process of building a larger specialty flour mill in Colgate, ND, and plans to open the new mill in July 2005. The five farmer-owners raise hard red spring wheat and can produce 150,000 bushels per year for the mill. The new mill will have a capacity of 500,000 bushels per year, which will provide a market for other local wheat farmers.

    The new mill will impact the community in many ways, including an increase in the number of jobs available and the use of products grown by area farmers. Summers Harvest was able to find the market niche they were looking for and to expand their business to the benefit of the surrounding communities.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.