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GRAIN PROCESSING: ADDING
                                      VALUE TO FARM PRODUCTS
                                                          VALUE-ADDED TECHNICAL NOTE


 Abstract: Value-added processing is a strategy used by some grain growers to keep their farming operations
 viable. This publication introduces ideas that have worked for some farmers, provides sources for equipment, and
 lists sources of further information.

By Janet Bachmann and Lance Gegner
NCAT Agriculture Specialists                                                Table of Contents
November 2002                                               Introduction ................................................. 1
                                                            First, Learn about Regulations .................... 1
      INTRODUCTION                                          Whole-grain Flour ....................................... 2
                                                            Additional Products ..................................... 3
     Farmers who grow oats, wheat, rye, bar-                Animal Feed ................................................ 4
ley, corn, and other grains are looking for ways            Cooperatives .............................................. 5
to command better prices. But while many                    Educational and Training Resources .......... 6
farmers dream of getting a share of the value               Summary .................................................... 7
that is added to their crop after it leaves the             Further Resources ...................................... 7
farm, only a few actually succeed. Those who                References ............................................... 10
do increase their profits through on-farm pro-              Appendix ................................................... 10
cessing generally don’t get there quickly or
easily (Kessler, 1989). Adding value requires
doing more work, investing in additional sup-
plies and equipment, possibly hiring more                            The following examples of grain farmers who
help, and definitely dealing with additional rules               have gone into a variety of processing enterprises
and regulations.                                                 are just that: examples. They are presented not
                                                                           to suggest a specific blueprint but to
                                                                           give ideas about what can be done.


                                                                               FIRST, LEARN
                                                                                IRST
                                                                                           ABOUT
                                                                                REGULATIONS
                                                                                 EGULA
                                                                               Hilgendorf’s Whole Grain Milling
                                                                            Company, just outside Welcome, Min-
                                          ©www.ClipArt.com2002              nesota, is an example of a successful
                                                                            on-farm milling operation. Lyn and
                                                                            Doug Hilgendorf have been farming or-


ATTRA is the national sustainable agriculture information service, operated by the National Center
for Appropriate Technology through a grant from the Rural Business-Cooperative Service, U.S.
Department of Agriculture. These organizations do not recommend or endorse products, companies,
or individuals. NCAT has offices in Fayetteville, Arkansas (P.O. Box 3657, Fayetteville, AR 72702),
Butte, Montana, and Davis, California.
he says, with a chuckle. “I motorized it right
     Related ATTRA publications:                           away. Then I answered an ad for a mill that
                                                           would ‘make cake flour with your own grain.’
  Evaluating a Rural Enterprise                            I got one of them and it speeded up the pro-
  Adding Value to Farm Products: An Overview               cess.” Then someone referred him to a bakery
  Direct Marketing                                         that used whole-wheat flour.
  Keys to Success in Value-Added Agriculture                    He is now using a mill that runs off a trac-
  Organic Marketing Resources                              tor, “bought used and rebuilt to serve the pur-
  “Green” Markets for Farm Products                        pose.” The flour is packaged in 50-pound
  Eco-Labeled Foods: Profit or Problems?                   food-grade paper bags, which he says can be
  Marketing Organic Grains                                 found in any large city. In regard to wheat
  Moving Beyond Conventional Cash Cropping                 varieties, Larry says he is using an old standby
  Organic Livestock Feed Suppliers                         variety. He advises would-be flour makers to
  Alternative Agronomic Crops                              experiment to find the right variety for their
                                                           own markets. “Grind a gallon of each [of sev-
                                                           eral varieties] and go to the baker [with the
                                                           flour] to find what works well for them. Stay
ganically for about 15 years. Their crops include        with that variety so that the flour will be consis-
corn, soybeans, oats, wheat, rye, and buckwheat.
About ten years ago, Doug and his
brother Ralph began to discuss process-
ing and marketing their own grains.
“The price of grain was below the cost
of production,” says Ralph. Grains are
now milled, mixed, and bagged on the
farm and sold to individuals, retail out-
lets, and bakers. Ralph notes that since
the products are for human consump-
tion, it is important to keep everything
clean—free of dust, cobwebs, and ro-
dents. In regard to information sources,
Ralph said that some could be found in
the public library and others through                                               ©www.ClipArt.com2002

the local Extension Service. However,
he strongly advises anyone considering
processing to talk with state Depart-
ment of Agriculture officials first to learn about       tent for the baker from batch to batch.” (Nordhus,
regulations (Hilgendorf, 1999).                          1999)
                                                             Another Kansas couple who started home-
                                                         scale grain grinding that grew into a business are
       WHOLE-GRAIN                                       Gerry and Larry Yost. In an interview a number
                                                         of years ago for The Furrow (Kessler, 1989), Gerry
         FLOUR                                           told about the many details that needed atten-
                                                         tion: “I didn’t have any trouble coming up with
                                                         a name and a logo, but after that, I really didn’t
    Larry Nordhus, a Kansas wheat, corn, and             know where to begin. Fortunately, I’ve been able
soybean grower, has been grinding whole-wheat            to find a number of people with answers who
flour for “10 or 15 years.” He grinds the whole          have been willing to help me. But even with that,
berry, including bran and germ. He says he               there are so many decisions to make and details
started out doing a little bit for relatives for their   to work out that it’s almost overwhelming.” The
home baking. “I started with a hand-crank mill,”         task list included:

PAGE 2                                         //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
•    Remodeling a room, making changes to com-
     ply with health department regulations                      ADDITIONAL
• Modifying two kitchen food mills to handle a
     larger volume of grain                                      PRODUCTS
• Locating weighing and packaging equipment
• Finding someone to design a logo                          David Vetter returned to his family’s 280-acre
• Getting labels printed                               farm in 1975 intending to grow grains organically
• Lining up a packaging supplier                       (Vetter, 1999; Cramer, 1993). Dave soon realized
     Gerry advises starting out with a top-quality     that to really succeed as an organic grain farmer,
product, preferably one that has some feature          learning to grow organically was only half the
that sets it apart from the competition. The Gra-      battle. He’d also have to help develop the pro-
nary, as she calls her enterprise, sells only wheat,   cessing and marketing infrastructure to deliver
farm-grown without insecticides. All of the grain      those grains to consumers. In 1980, Dave and
is thoroughly cleaned at a nearby elevator, then       his father, Don, invested $170,000 to build a small
tested at a private laboratory to make sure its        grain-cleaning plant. The operation has grown
protein content and baking quality meet Gerry’s        into Grain Place Foods, Inc., employing 13 people
standards.                                             full time to grow, clean, process, package, and
     Her primary product is whole-wheat flour          market grains and beans for its own line of prod-
packaged in 2– and 5–pound plastic bags. Whole-        ucts as well as for other food companies.
kernel wheat, a cracked-wheat cereal, and a com-            The facility includes grain storage with forced-
bination pancake-and-waffle mix Yost developed         air drying capability; a state-of-the-art gas-fired
herself complete her product line. Each item is        infrared processing toaster (to stabilize the oils
also packaged in smaller plastic bags and deco-        in the grains); bagging, packaging, and labeling
rated glass jars for sale as gifts. Recipes and tips   equipment; and a refrigerated warehouse. Grain
for storing whole-wheat products are included          Place Foods products include:
with each item. They are sold in stores and gift       • Ready-for-retail and bulk flaked cereals and
shops in north-central Kansas.                              mixes, including rolled oats, wheat, barley,
                                                            rye, rice, triticale, spelt, kamut, and soybeans
                                                       • Microwave and regular popcorn
                                                       • Organic livestock-feed ingredients, including
                                                            full-fat soymeal, cracked corn, and crimped
                                                            oats and barley
                                                       • Organic birdfeeds
                                                            Although the business was initially conceived
                                                       as a way to add value to grains grown on their
                                                       own farm, Dave says they now grow only 3 to
                                                       5% of the grains processed. Additional grain is
                                                       purchased from organic farmers from as far away
                                                       as Canada and Nicaragua.
                                                            In regard to the difference between the price
                                                       that farmers receive for their grain and the retail
                                                       price of the final product, Dave says, “Sometimes
                                                       they think they are being gouged. But that’s be-
                                                       cause few of them are aware of the costs and
                                                       work that go into cleaning, processing, packag-
                                                       ing, and marketing.” He cites some examples:
                                                       • The labeling machine that prints lot numbers
                               ©www.ClipArt.com2002         and expiration dates on packages costs about
                                                            the same as a used, mid-sized tractor in good
                                                            condition.


            //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS                                   PAGE 3
•   Nutrient analyses to comply with FDA nutri-         feed. More people than us would want it. Maybe
    tional labeling requirements cost from $500         this is what we should do. It has taken much
    to $6,000 per product. The costs of organic         longer than we ever anticipated. I learned a lot
    certification, licensing, permitting, and plant     more about business than I ever wanted to know;
    and scale inspections all add up. To satisfy        we’re not business people. We’re farmers who
    buyers’ requirements, the farm and process-         are trying to get this thing started because we
    ing plant have been certified by as many as         think there’s a need for it.”
    five different groups.                                   The mill has its own siding platform where a
• Economies of scale determine the cost of dis-         railroad car or truck can dump feed into a chute.
    tribution. “It costs 15 to 30                                          There an auger picks it up and
    cents a pound to ship a pal-                                           carries it to a bucket elevator that
    let. But I can send a semi-                                            can take the grain anywhere in-
    load for less than six cents a       “We’re farmers who are            side. Counting the outside bins,
    pound.”                              trying to get this thing          the mill can store about 20
    Dave emphasizes that high            started because we                traincar loads in a number of dif-
quality is important. “Post-har-         think there’s a need for          ferent storage hoppers. This
vest handling and storage                it.”                              gives the facility a lot of flexibil-
present a big opportunity for                    Gerry Coleman             ity in creating custom mixes. The
farmers to improve quality, and                                            mill has a full range of internal
they’ll be rewarded in the mar-                                            equipment: grinders, mixers,
ketplace,” he says. “Most of the                                           baggers, and equipment to
premium is for the extra care and service you           steam, cool, and pelletize feed. It has chutes
provide that high-quality product.”                     above the truck loading area and a scale to weigh
    Dave strongly encourages anyone consider-           vehicles. A platform next to the bagging station
ing starting a value-added business to take the         also facilitates truck loading.
University of Nebraska’s “From Product-to-                   Freshness is a primary concern—once a grain
Profit” course offered through the Food Process-        is ground, it starts to oxidize. Another difficulty
ing Center Business Development Office (see Edu-        is state regulations. “You have to register feed
cational Training Resources). He says it is the         in each state where you sell it,” Gerry explains.
best entrepreneur-training program in the U.S.          “You have to tell the department of agriculture
Of those who complete the course and then start         there exactly what’s in it: protein, fat, fiber, etc.
their own business, 80% are successful, compared        So there has to be enough volume for a mix in a
to a national average of only 8%. He also notes         state to pay the registration fee there.”
that of those who take the introductory course,              A similar operation is that of Mel Gelsinger
80% decide not to go into a value-added busi-           in Robesonia, Pennsylvania (Cicero, 1995). When
ness.                                                   Mel switched from conventional to organic pro-
                                                        duction, he had trouble finding outlets for much
                                                        of his organic corn, soybeans, and small grains.
        A    NIMAL EED      F                           Then he met some farmers who wanted to raise
                                                        their livestock organically but couldn’t find or-
    Animal feed production is another niche for         ganic feed. For six years, he sold whole corn and
grain growers. The Vermont Organic Grain Com-           soybeans, and the farmers did their own milling.
pany was founded as a result of Gerry Coleman’s         Then he was convinced to put up a mill. His
search for organic feed grain (Kittredge, 1995).        fully computerized mill and storage bins cost
To put the story in a nutshell: Gerry and others        $320,000. The mill became operational in 1982,
were looking for a bulk storage facility and found      with his own crops accounting for only three per-
an abandoned grain mill instead. “We weren’t            cent of his milling volume. It supplies feed for
looking for a facility like this. But we turned this    broiler operations, dairy and beef cows, horses,
up and said, ‘Bingo!’ There’s a need for organic        and exotic livestock.



PAGE 4                                        //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
bakery and grain elevator, thus minimizing the
                                                        amount of borrowed money needed.
      COOPERATIVES
       OOPERATIVES                                          For producers exploring the possibility of
                                                        forming a marketing cooperative, the best source
     More than 1,000 North Dakota, Minnesota,           of information is USDA’s Rural Business and
and Montana wheat farmers joined forces to form         Cooperative Development Service (RBCDS). The
a cooperative to turn their top-quality hard am-        RBCDS helps farmers and rural residents form
ber durum wheat into pasta. The Dakota Grow-            cooperative businesses and improve the opera-
ers Pasta Company in Carrington, North Dakota,          tions of existing cooperatives. They provide tech-
produces and markets spaghetti, linguine,               nical assistance, conduct cooperative–related re-
fettuccine, macaroni elbows, and egg noodles.           search, and provide informational products to
The company shipped its first product in Decem-         promote public understanding of cooperatives.
ber 1993; it is now the third-largest pasta com-        For additional information contact:
pany in the U.S. The farmer-owners’ initial in-             USDA/RBCDS Cooperative Services
vestment of $12-million dollars (based on bush-             AG Box 3255
els delivered, minimum 1,500 bushels) was used              Washington, DC 20250-3255
to raise the $42–million capital investment that            (202) 720–7558
built the mill and pasta plant. A nine-member               e-mail: coopinfo@rurdev.usda.gov
board of directors, all active farmers, oversees            http://www.rurdev.usda.gov/rbs/coops/
all aspects of the business. In May 2002, the mem-          csdir.htm
bers of the cooperative voted to change to a com-
mon stock corporation. For additional informa-
tion about Dakota Growers Pasta Company, visit
<http://www.dakotagrowers.com/>.
     Liz Reinhiller, who works with the Dakota
Growers Pasta Company, says that the coopera-
tive concept is a good one. If farmers who have
a crop that is special to their area can get together
and can find a market, they can put together a                   USDA/RBS Publications
business plan and build a solid business team.                    Available from ATTRA
She notes that some ventures have failed because              (call 1-800-346-9140 to receive a copy)
they didn’t have a good marketing or business
plan, and may not have had a good management                Cooperative Services: What We Do,
team with the best interests of the growers in                 How We Work
mind (Reinhiller, 1999).
                                                            How to Start a Cooperative
     The Mountain View Harvest wheat growers’
cooperative in Colorado has gotten into the whole-          Small Fresh Fruit & Vegetable
sale bakery trade with “par-baked” (partially                  Cooperative Operations
baked) breads (Campbell, 1997). This is a grow-             Understanding Cooperatives: Ag
ing segment of the baking industry, in which
                                                               Marketing Cooperatives
breads and rolls are baked to within ten percent
of completion, then flash-frozen and shipped to             Cooperative Feasibility Study Guide
restaurants. Critical to the birth of Mountain              Cooperative Farm Bargaining & Price
View Harvest was a grant from USDA Rural Busi-                 Negotiations
ness and Cooperative Development Service for a
                                                            Cooperative Marketing Agencies-in-
business feasibility study. Members had some
ideas for products, but they knew they needed a                Common
thorough marketing study to find out what was
truly promising. Grower-members raised $5-
million of the $6-million needed to purchase a


            //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS                                      PAGE 5
tana, and South Dakota for promotion and mar-
                                                     ket development of crops grown in the four-state
  EDUCATIONAL AND
   DUCATIONAL                                        region. The Institute provides educational
                                                     courses, customized training, and technical as-
     TRAINING                                        sistance in many value-added, processing, and
                                                     marketing areas for northern crops.
    RESOURCES                                             Northern Crops Institute
                                                          Bolley Drive
                                                          Fargo, ND 58105–5183
    A 2001 award from the USDA created the Ag-
                                                          (701) 231–7736
ricultural Marketing Resource Center (AgMRC).
                                                          http://www.northern-crops.com
The AgMRC brings together experts from four
                                                          The American Institute of Baking is a non-
of the nation’s leading agricultural universities—
                                                     profit center for education and research that of-
Iowa State University, Kansas State University,
                                                     fers correspondence courses, seminars, and cus-
the University of California, and Oklahoma State
                                                     tomized training, as well as books and technical
University—into an electronically based center to
                                                     bulletins on all aspects of baking.
collect and interpret information about value-
                                                          American Institute of Baking
added agriculture. The AgMRC will create an
                                                          1213 Bakers Way
electronic hub that connects producers and busi-
                                                          PO Box 3999
nesses to knowledge, research, organizations,
                                                          Manhattan, KS 66505–3999
business resources, and ongoing activities in the
                                                          (785) 537–4750, (800) 633–5137, Fax: (785)
agricultural sector. The Center has an online di-
                                                          537–1493
rectory listing value-added state resources (See
                                                          http://techserv.aibonline.org
Further Resources: Websites).
                                                          Kansas State University is the only univer-
    Many state land-grant university departments
                                                     sity in the world offering a four-year degree pro-
of food science and state departments of agricul-
                                                     gram in milling and a separate program in bak-
ture are good places to begin gathering informa-
                                                     ing. Dr. Dale Eustace, head of the Department
tion. Some states have specific agricultural de-
                                                     of Milling, Kansas State University, offers this
velopment centers to assist their producers in
                                                     advice to farmers considering on-farm grain mill-
developing new agricultural products and mar-
                                                     ing:
kets for adding value to their farm products (see
                                                     • Stay with whole-grain flour. A stone mill for
Further Resources: Some State Sources of Value-
                                                          small- to medium-scale whole grain flour pro-
Added and Development Information).
                                                          duction can be purchased for $15,000 to
    The Nebraska Food Processing Center Busi-
                                                          $20,000. A stone mill will work well for most
ness Development Office has an Entrepreneur As-
                                                          people. You can adjust the stones to get the
sistance Program that offers the “Recipe to Real-
                                                          appropriate grind, experimenting to see what
ity” seminar, “Product to Profit” individualized
                                                          suits your market. A tabletop grinder can be
consultation, and additional assistance to help
                                                          used, but the capacity of these is low.
existing businesses expand into new markets. For
                                                     • To process wheat into white flour, a business
information about these and other services, con-
                                                          would need to invest a million dollars or more
tact Arlis Burney at:
                                                          for the mill alone. Additional capital would
    Nebraska Food Processing Business
                                                          be needed for other components of the facil-
    Development Office
                                                          ity.
    University of Nebraska–Lincoln
                                                     • Call your state capital to find out who handles
    60 Filley Hall
                                                          regulations. In some states it is the depart-
    Lincoln, NE 68583–0928
                                                          ment of agriculture. In other states it will be
    (402) 472–8930, Fax: (402) 472–8831
                                                          another agency.
    http://www.fpc.unl.edu/
                                                          Dr. Eustace is willing to talk with people who
    The Northern Crops Institute is a collabora-     call, and he can provide help specific to your situ-
tive effort among North Dakota, Minnesota, Mon-      ation. He can be contacted at:


PAGE 6                                     //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
Dr. Dale Eustace                                       Don Hofstrand
     Department of Milling                                  2023 S. Federal Ave.
     Kansas State University                                Mason City, IA 50401
     Manhattan, KS 66506                                    (641) 423–0844, Fax: (641) 423–2642
     (785) 532–4063                                         e-mail: dhof@iastate.edu
     e-mail: dde@wheat.ksu.edu
                                                        USDA Farmer Direct Marketing
                                                        http://www.ams.usda.gov/directmarketing/
            SUMMARY
             UMMARY                                     index.htm
                                                            USDA Farmer Direct Marketing website is an
    Resources for specific information on grain             excellent source of publications, resources, and
processing are fairly scarce and hard to find. Most         links to direct marketing materials. It also has a
of the farmers interviewed developed their prod-            Farmers Market Directory and a Direct
ucts through their own trials and errors. Value             Marketing Resources by State listing.
can be added to grains in many different ways,
resulting in the development of new products or         University of Georgia Extension
the improvement of existing ones. Anyone in-            http://www.ces.uga.edu/pubcd/b1051-w.html
terested in starting a food processing business             Online publication Getting Started in the Food
has to spend a great deal of time looking for in-           Specialty Business.
formation on such topics as federal and state
regulations, labeling, ingredients, packaging, fi-      Illinois Institute for Rural Affairs
nancing, and marketing.                                 http://www.iira.org/pubsnew/publications/
                                                        IVARDC_Other_5.pdf
                                                            Online publication Starting a Value-Added
           FURTHER                                          Agribusiness: The Legal Perspective.

          RESOURCES                                     Minnesota Department of Agriculture
                                                        http://www.mda.state.mn.us/dairyfood/
                                                        startingfoodbiz.pdf
                    WEBSITES                                Fifty-six page online publication Starting a Food
Agricultural Marketing Resource Center                      Business in Minnesota.
http://www.agmrc.org/
    The Agriculture Marketing Resource Center           North Dakota State University Extension
    collects and interprets information about value-    http://www.ext.nodak.edu/extpubs/agecon/
    added agriculture. The Center is creating an        market/ec1137w.htm
    electronic hub that connects producers and              Online publication Developing a New Co-
    businesses to knowledge, research,                      Owned Agricultural Business: How Do We
    organizations, business guidance, and ongoing           Start a Value-Added Firm?
    activities in the agricultural sector. The Center
    has an online directory listing value-added state   University of Tennessee Extension
    resources.                                          http://www.utextension.utk.edu/pbfiles/
                                                        pb1399.pdf
     Mary Holz-Clause                                      Online publication Getting Started in a Food
     101B EES Building/Haber Road                          Manufacturing Business in Tennessee.
     Ames, IA 50011
     (515) 294–0648, Fax: (515) 294–0684
     e-mail: mclause@iastate.edu
or




            //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS                                     PAGE 7
Wisconsin New Farm Options                                          Starting a Small Food Processing
http://www.uwex.edu/ces/agmarkets/                                  Enterprise. 1996. By Peter Fellows, Ernesto
    A web-resource from University of Wisconsin                     Franco, and Walter Rios. 123 p. $15.00.
    Extension that provides information about new                   Brings together important aspects of both the
    niche markets and business start-up issues, and                 technological and business skills needed to start
    about others like you who are pioneering new                    and operate a small food–processing business
    farm-food ventures.                                             successfully. The emphasis is on thorough
                                                                    planning before the enterprise is established and
                      BOOKS
                                                                    then on careful control of production to
Educational Concerns for Hunger Organization                        minimize costs and maintain the desired product
(ECHO) on-line Book Store:                                          quality.

    Traditional Foods: Processing for Profit.                       Baking for Profit. 2000. By George Bathie.
    1997. Peter Fellows, editor. $45.00.                            124 p. $17.50.
    Deals in part one with basic concepts of hygiene,               Intended to help people establish a successful
    processing methods, and quality assurance. Part                 bakery business or improve an existing small
    two covers all kinds of processed foods.                        bakery. Takes the reader, step by step, through
    Emphasis is placed on quality-control aspects of                the stages of market research to establish
    raw-material selection, processing, and                         evidence of a need for a bakery business in a
    packaging.                                                      particular location, and methods for determining
                                                                    the likelihood of success.
    Small-Scale Milling. 1994. By Lars-Ove
    Jonsson, David A. V. Dendy, Karen                          Order from:
    Wellings, and Varis Bokalders. 129 p.                         Educational Concerns for Hunger
    $29.50.                                                       Organization (ECHO)
    Essential reading for anyone involved in the                  17391 Durrance Road
    milling of cereals in developing countries; target            North Fort Myers, FL 33917
    reader is the extension agent promoting                       (239) 543–3246, Fax: (239) 543–5317
    improved small-scale milling. It covers                       http://echonet.org/shopsite_sc/store/
    technical, economic, social, and nutritional/                 html/foodprocessing.html
    health aspects of milling.
                                                                          Volunteers in Technical Assistance
                                                                          (VITA) publications (see their complete
                                                                          catalog at http://www.vita.org/publi-
                                                                          cations/pubcat.htm).

                                                                          Small Scale Maize Milling. VITA
                                                                          Publication. 143 p. $16.50.
                                                                          Describes various milling techniques for
                                                                          production of whole meal, bolted meal,
                                                                          and super-sifted meal. Covers all
                                                                          processing stages.

                                                                          Grain Mill for Home Use. By Walter
                                                                          B. Booker. VITA Publication. 9 p.
                                             ©www.ClipArt.com2002         $5.25.
                                                                          Easy-to-build wooden grinder for corn,
                                                                          wheat, and other grains.




PAGE 8                                          //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
Home Flour Mill. By Walter B. Booker.                   The Bread Builders: Hearth Loaves and
   VITA Publication. 14 p. $5.25.                          Masonry Ovens. 1999. By Daniel Wing
   This mill is made almost entirely of wood.              and Alan Scott. 253 p. Chelsea Green
   Powered by a 1/4-hp electric motor, by wind             Publishing Co., White River Junction, VT.
   power, or by hand.                                      Provides information about making old-
                                                           fashioned naturally fermented hearth or artisan
Order from:                                                loaves of bread, and how to plan, build, and
   PACT Publications                                       operate masonry ovens.
   1200 18th Street, NW
   Washington, DC 20036                                  SOME STATE SOURCES OF VALUE-ADDED
   (202) 466–5666, Fax: (202) 466–5669
   email: pubs@vita.org                                    AND DEVELOPMENT INFORMATION
   http://www.pactpublications.com
                                                           California Small Farm Center
                OTHER BOOKS
                                                           University of California
    The following books are available from book-           One Shields Avenue
stores and online booksellers. If a book is listed         Davis, CA 95616-8699
as out-of-print, you may be able to obtain it              (530) 752–8136, Fax: (530) 752–7716
through Interlibrary Loan; check with your local           http://www.sfc.ucdavis.edu/
librarian. You may also be able to buy a copy
through an online used-book search site, such as           Iowa Center for Crops Utilization Research
<http://www.bookfinder.com/>.                              Dr. Lawrence Johnson
                                                           1041 Food Science Building
   Small-Scale Grain Raising. 1977. By Gene                Iowa State University
   Logsdon. Rodale Press, Emmaus, PA. 305
                                                           Ames, IA 50011
   p. Out-of-print.
                                                           (515) 294–0160, Fax: (515) 294–6261
   Covers production aspects of a large number of
                                                           http://www.ag.iastate.edu/centers/ccur/
   grains, including corn, wheat, sorghum, oats,
   and soybeans. Also provides information on
                                                           Illinois Value-Added Rural Development
   harvesting, storage, grinding, and cooking.
                                                           Center
   Three basic kinds of grinders are described: 1)
                                                           Illinois Institute for Rural Affairs
   burr mills with either stone or steel burrs, 2) the
                                                           Stipes Hall 504
   roller mill, and 3) the hammer mill. Of the
                                                           1 University Circle
   three, Logsdon favors the burr or gristmill for
                                                           Macomb, IL 61455
   grinding flour. He says that none of the whole
   grain is lost in a burr mill, and generally             309 298-2674 or 800 526-9943
   speaking, it grinds finer, although you may have        http://www.value-added.org/
   to run your meal through it twice to get the
   finest flour.                                           Kansas Technology Enterprise Center
                                                           214 SW 6th, First Floor
   Adding Value for Sustainability: A                      Topeka, KS 66047
   Guidebook for Cooperative Extension                     (785) 296–5272, Fax: (785) 296–1160
   Agents and Other Agricultural                           http://www.ktec.com/erc/
   Professionals. 1998. By Kristen Markley
   and Duncan Hilchey. 110 p. DIANE                        Minnesota Agricultural Utilization Research
   Publishing Company.                                     Institute
   Discusses the concept of value-added processing         Michael Sparby
   and how it contributes to sustainable                   PO Box 599
   agriculture, introduces four enterprise owners          Crookston, MN 56716–0599
   who share their experiences in small-scale              (800) 279–5010
   processing, and presents a description of issues        http://www.auri.org
   involved in the start-up of a business.

           //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS                                    PAGE 9
Missouri Value Added Development Center        Cicero, Karen. 1993. Feed for the east (coast).
   143 Mumford Hall                                    The New Farm. November–December.
   Department of Ag Economics                          p. 35–38.
   University of Missouri
                                                  Cramer, Craig. 1993. Shooting for the highest
   Columbia, MO 65211–6200
                                                      average. The New Farm. November–
   (877) ValueAdd (824–8233), Fax: (573) 884–
                                                      December. p. 26–29.
   6572
   http://valueadded.missouri.edu/                Hilgendorf, Ralph. 1999. Personal
   index.htm                                           communication. Welcome, MN.
                                                  Kessler, Karl. 1989. Starting small, thinking
   Nebraska Cooperative Development Center             big. The Furrow. November–December.
   Jo Lowe                                             p. 16–17.
   The Atrium Bldg.
   1200 “N” St., Suite 610                        Kittredge, Jack. 1995. The Vermont organic
   Lincoln, NE 68508-2022                              grain company. The Natural Farmer.
   (402) 471–2698, Fax: (402) 471–8690                 Summer. p. 22–23.
   Toll-Free (877) 814–4707 or (877) 496–5235     Nordhus, Larry. 1999. Personal
   for NE only                                        communication. Centralia, KS.
   http://www.rdc.state.ne.us/coop/
                                                  Reinhiller, Liz. Dakota Growers Pasta
   North Dakota Marketplace of Ideas                  Company, One Pasta Ave., P.O. Box 21,
   Headquarters                                       Carrington, ND 58421–0021, (701) 652–
   Marilyn K. Kipp, Executive Director                2855.
   411 Main Street West                           Vetter, David. 1999. Personal communication.
   Mandan, ND 58554-3164                               Marquette, NE.
   (888) 384–8410, (701) 663–0150, Fax: (701)
   663–1032
   http://www.marketplaceofideas.com/                        APPENDIX
   Oklahoma Food and Agricultural Products
   Research and Technology Center                  RESOURCES FOR FINDING CLEANING AND
   148 FAPC
                                                         PROCESSING EQUIPMENT
   Oklahoma State University
   Stillwater, OK 74078–6055                         Processfood.com
   http://www.okstate.edu/ag/fapc/                   200 Daingerfield Road
                                                     Alexandria, VA 22314
   Tennessee Agricultural Development                (703) 684–1080, Fax: (703) 548–6563
   Center                                            http://www.fpmsa.org/productLocator/
   University of Tennessee                           bakery/index.cfm
   307 Morgan Hall                                   An online search of bakery equipment, suppliers,
   Knoxville, TN 37996-4521                          and services provided by the Food Processing
   (865) 974–3824, Fax: (865) 974–9492               Machinery and Supplies Association
   http://www.utextension.utk.edu/adc                (FPM&SA), a non-profit trade association
                                                     founded in 1885 to provide a business link
                                                     between food & beverage processors and
       REFERENCES                                    suppliers.


Campbell, Dan. 1997. Show me the dough.
   Rural Cooperatives. May–June. p. 24–26.



PAGE 10                                   //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
GrainNet                                           http://www.meadowsmills.com
 3065 N. Pershing Court                             Manufactures stone burr mills, or gristmills,
 Decatur, IL 62526                                  ranging from 50 to 1250 lbs. per hour capacity,
 (800) 728–7511, Fax: (217) 877–6647                along with other related bakery equipment.
 http://www.MillingEquipment.com
 An online Milling Equipment Buyer’s Guide          The CS Bell Co.
 that allows searches by company or by products     170 West Davis Street
 and services.                                      PO Box 291
                                                    Tiffin, OH 44883
 Seed World                                         (419) 448–0791, Fax: (419) 448–1203
 380 E. Northwest Hwy.                              http://www.csbellco.com
 Des Plaines, IL 60016–2282                         Products include hammer mills and burr or
 (847) 298–6622, Fax: (847) 390–0408                gristmills, and corn shellers. The hammer mills
 Seed World is published monthly with an extra      are recommended for livestock and poultry feed
 issue in April. The U.S. subscription rate is      preparation, grinding yard waste for compost, or
 $30/year. The Annual Buyer’s Guide includes        fruit, vegetable, and grain processing for table
 contact information for suppliers of bag-closing   use.
 equipment, bag-filling machines, bags, bins,
 blowers, cleaners, etc.                            Schmidt Flour, Inc.
                                                    Box 99
 Implement & Tractor™                               Maple Creek, Saskatchewan S0N 1N0
 2302 West 1st Street                               (306) 666–4800, Fax: (306) 666–4838
 Cedar Falls, IA 50623–1879                         http://www.schmidtflourinc.com
 (800) 959–3276, Fax: (319) 277–3783                Flour mills ranging in scale from 200 to 4000
 Implement & Tractor™ is published bimonthly        lbs. per hour, and a debranner.
 with an extra issue in December. Subscription
 rate is $30/year. Their Ag Equipment Buyer’s       Forsbergs, Inc.
 Desk Reference includes listing and contact        PO Box 510
 information for many various types of mills,       1210 Pennington Avenue
 cleaners, etc.                                     Thief River Falls, MN 56701
                                                    (800) 654–1927, (218) 681–1927, Fax: (218)
 Feedstuffs                                         681–2037
 Circulation Department                             http://forsbergs.com
 191 S. Gary Ave.                                   Gravity and screen separators, destoners, and
 Carol Stream, IL 60188                             hullers/scarifiers.
 (800) 441–1410, (630) 462–2224
 Feedstuffs Annual Reference Issue contains         Seedburo Equipment Company
 directories for companies supplying goods and      1022 W. Jackson Blvd.
 services to the feed and feeding industries,       Chicago, IL 60607
 association and grain inspection agencies, and a   (800) 284–5779, (312) 738–3700, Fax: (312)
 listing of products and services. Reference        738–5329
 Issues are available for $40.                      http://www.seedburo.com
CLEANING AND PROCESSING EQUIPMENT                   Machinery and equipment for small-scale
                                                    planting, harvesting, cleaning, and grinding of
   MANUFACTURERS AND SUPPLIERS                      grains; some equipment specially designed for
 Meadows Mills, Inc.                                research and quality control. Catalog available
 1352 W. D Street                                   on request.
 PO Box 1288
 North Wilkesboro, NC 28659
 (800) 626–2282, (336) 838–2282, Fax: (336)
 667–6501

         //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS                               PAGE 11
Kansas Wind Power                                     R & R Mill Company, Inc.
  13569 214th Road                                      45 West First North
  Holton, KS 66436                                      Smithfield, UT 84335–0187
  (785) 364–4407                                        (801) 563–3333
  http://www.kansaswindpower.net/                       Hand cranked and motorized mills, primarily for
  Grain_Mills.htm                                       home use.
  Source of various styles of grain mills.
                                                        GrainMaker
  The Country Baker                                     Wild West Machine
  8751 N. 850 E                                         Randy & Bonnie Jones
  Syracuse, IN 46567                                    370 Sharrot Hill Loop
  (866) THE–BAKER, (219) 834–2134, Fax:                 Stevensville, MT 59870
  (219) 834–3993                                        (800) 965–3075
  http://www.countrybaker.com/                          http://www.grainmaker.com
  cataloglist.cfm                                       Hand cranked mills for home use.
  Small-scale professional baking equipment and
  grain mills.                                          Heartland Ag-Business Group
                                                        1003 Central Avenue
  C.F. Resources                                        Fort Dodge, IA 50501
  PO Box 405                                            (800) 247–2000
  Kit Carson, CO 89825                                  http://www.farmequipmentguide.com
  (719) 962-3228                                        Provides a free-of-charge locating service for all
  http://www.cfamilyresources.com                       types of used farm equipment and machinery.
  Small-scale professional baking equipment and
  grain mills.
                                                     By Janet Bachmann and Lance Gegner
  Lehman’s                                           NCAT Agriculture Specialists
  Dept. 2-KNK
  Box 41
                                                     Edited by Richard Earles
  Kidron, OH 44636
  (888) 438–5346, (330) 857–5757
                                                     Formatted by Gail Hardy
  http://www.Lehmans.com
  Look under Kitchen Implements for the mills        November 2002
  and other equipment. Catalog is $3.

  Country Living
  14727C 56th Avenue NW
  Stanwood, WA 98292
  (360) 652–0671                                                                         IP140 / 138
  http://countrylivinggrainmills.com
  Manual and electric table grain mills.               The electronic version of Grain
                                                       Processing: Adding Value to Farm
  K-Tec Kitchen                                        Products is located at:
  1206 South 1680 West                                 HTML
  Orem, UT 84058                                       http://www.attra.ncat.org/attra-pub/
  (800) 748–5400 or (801) 222–0888                     grainpro.html
  http://www.k-tecusa.com                              PDF
  Offers an electric-powered table mill to grind       http://www.attra.ncat.org/attra-pub/
  corn, wheat, rice, soybeans, anything not wet or     PDF/grainpro.pdf
  sticky, at rate of over 1 pound per minute.


PAGE 12                                      //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS

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GRAIN PROCESSING: ADDING VALUE AND PROFITS THROUGH ON-FARM PROCESSING

  • 1. GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS VALUE-ADDED TECHNICAL NOTE Abstract: Value-added processing is a strategy used by some grain growers to keep their farming operations viable. This publication introduces ideas that have worked for some farmers, provides sources for equipment, and lists sources of further information. By Janet Bachmann and Lance Gegner NCAT Agriculture Specialists Table of Contents November 2002 Introduction ................................................. 1 First, Learn about Regulations .................... 1 INTRODUCTION Whole-grain Flour ....................................... 2 Additional Products ..................................... 3 Farmers who grow oats, wheat, rye, bar- Animal Feed ................................................ 4 ley, corn, and other grains are looking for ways Cooperatives .............................................. 5 to command better prices. But while many Educational and Training Resources .......... 6 farmers dream of getting a share of the value Summary .................................................... 7 that is added to their crop after it leaves the Further Resources ...................................... 7 farm, only a few actually succeed. Those who References ............................................... 10 do increase their profits through on-farm pro- Appendix ................................................... 10 cessing generally don’t get there quickly or easily (Kessler, 1989). Adding value requires doing more work, investing in additional sup- plies and equipment, possibly hiring more The following examples of grain farmers who help, and definitely dealing with additional rules have gone into a variety of processing enterprises and regulations. are just that: examples. They are presented not to suggest a specific blueprint but to give ideas about what can be done. FIRST, LEARN IRST ABOUT REGULATIONS EGULA Hilgendorf’s Whole Grain Milling Company, just outside Welcome, Min- ©www.ClipArt.com2002 nesota, is an example of a successful on-farm milling operation. Lyn and Doug Hilgendorf have been farming or- ATTRA is the national sustainable agriculture information service, operated by the National Center for Appropriate Technology through a grant from the Rural Business-Cooperative Service, U.S. Department of Agriculture. These organizations do not recommend or endorse products, companies, or individuals. NCAT has offices in Fayetteville, Arkansas (P.O. Box 3657, Fayetteville, AR 72702), Butte, Montana, and Davis, California.
  • 2. he says, with a chuckle. “I motorized it right Related ATTRA publications: away. Then I answered an ad for a mill that would ‘make cake flour with your own grain.’ Evaluating a Rural Enterprise I got one of them and it speeded up the pro- Adding Value to Farm Products: An Overview cess.” Then someone referred him to a bakery Direct Marketing that used whole-wheat flour. Keys to Success in Value-Added Agriculture He is now using a mill that runs off a trac- Organic Marketing Resources tor, “bought used and rebuilt to serve the pur- “Green” Markets for Farm Products pose.” The flour is packaged in 50-pound Eco-Labeled Foods: Profit or Problems? food-grade paper bags, which he says can be Marketing Organic Grains found in any large city. In regard to wheat Moving Beyond Conventional Cash Cropping varieties, Larry says he is using an old standby Organic Livestock Feed Suppliers variety. He advises would-be flour makers to Alternative Agronomic Crops experiment to find the right variety for their own markets. “Grind a gallon of each [of sev- eral varieties] and go to the baker [with the flour] to find what works well for them. Stay ganically for about 15 years. Their crops include with that variety so that the flour will be consis- corn, soybeans, oats, wheat, rye, and buckwheat. About ten years ago, Doug and his brother Ralph began to discuss process- ing and marketing their own grains. “The price of grain was below the cost of production,” says Ralph. Grains are now milled, mixed, and bagged on the farm and sold to individuals, retail out- lets, and bakers. Ralph notes that since the products are for human consump- tion, it is important to keep everything clean—free of dust, cobwebs, and ro- dents. In regard to information sources, Ralph said that some could be found in the public library and others through ©www.ClipArt.com2002 the local Extension Service. However, he strongly advises anyone considering processing to talk with state Depart- ment of Agriculture officials first to learn about tent for the baker from batch to batch.” (Nordhus, regulations (Hilgendorf, 1999). 1999) Another Kansas couple who started home- scale grain grinding that grew into a business are WHOLE-GRAIN Gerry and Larry Yost. In an interview a number of years ago for The Furrow (Kessler, 1989), Gerry FLOUR told about the many details that needed atten- tion: “I didn’t have any trouble coming up with a name and a logo, but after that, I really didn’t Larry Nordhus, a Kansas wheat, corn, and know where to begin. Fortunately, I’ve been able soybean grower, has been grinding whole-wheat to find a number of people with answers who flour for “10 or 15 years.” He grinds the whole have been willing to help me. But even with that, berry, including bran and germ. He says he there are so many decisions to make and details started out doing a little bit for relatives for their to work out that it’s almost overwhelming.” The home baking. “I started with a hand-crank mill,” task list included: PAGE 2 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
  • 3. Remodeling a room, making changes to com- ply with health department regulations ADDITIONAL • Modifying two kitchen food mills to handle a larger volume of grain PRODUCTS • Locating weighing and packaging equipment • Finding someone to design a logo David Vetter returned to his family’s 280-acre • Getting labels printed farm in 1975 intending to grow grains organically • Lining up a packaging supplier (Vetter, 1999; Cramer, 1993). Dave soon realized Gerry advises starting out with a top-quality that to really succeed as an organic grain farmer, product, preferably one that has some feature learning to grow organically was only half the that sets it apart from the competition. The Gra- battle. He’d also have to help develop the pro- nary, as she calls her enterprise, sells only wheat, cessing and marketing infrastructure to deliver farm-grown without insecticides. All of the grain those grains to consumers. In 1980, Dave and is thoroughly cleaned at a nearby elevator, then his father, Don, invested $170,000 to build a small tested at a private laboratory to make sure its grain-cleaning plant. The operation has grown protein content and baking quality meet Gerry’s into Grain Place Foods, Inc., employing 13 people standards. full time to grow, clean, process, package, and Her primary product is whole-wheat flour market grains and beans for its own line of prod- packaged in 2– and 5–pound plastic bags. Whole- ucts as well as for other food companies. kernel wheat, a cracked-wheat cereal, and a com- The facility includes grain storage with forced- bination pancake-and-waffle mix Yost developed air drying capability; a state-of-the-art gas-fired herself complete her product line. Each item is infrared processing toaster (to stabilize the oils also packaged in smaller plastic bags and deco- in the grains); bagging, packaging, and labeling rated glass jars for sale as gifts. Recipes and tips equipment; and a refrigerated warehouse. Grain for storing whole-wheat products are included Place Foods products include: with each item. They are sold in stores and gift • Ready-for-retail and bulk flaked cereals and shops in north-central Kansas. mixes, including rolled oats, wheat, barley, rye, rice, triticale, spelt, kamut, and soybeans • Microwave and regular popcorn • Organic livestock-feed ingredients, including full-fat soymeal, cracked corn, and crimped oats and barley • Organic birdfeeds Although the business was initially conceived as a way to add value to grains grown on their own farm, Dave says they now grow only 3 to 5% of the grains processed. Additional grain is purchased from organic farmers from as far away as Canada and Nicaragua. In regard to the difference between the price that farmers receive for their grain and the retail price of the final product, Dave says, “Sometimes they think they are being gouged. But that’s be- cause few of them are aware of the costs and work that go into cleaning, processing, packag- ing, and marketing.” He cites some examples: • The labeling machine that prints lot numbers ©www.ClipArt.com2002 and expiration dates on packages costs about the same as a used, mid-sized tractor in good condition. //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS PAGE 3
  • 4. Nutrient analyses to comply with FDA nutri- feed. More people than us would want it. Maybe tional labeling requirements cost from $500 this is what we should do. It has taken much to $6,000 per product. The costs of organic longer than we ever anticipated. I learned a lot certification, licensing, permitting, and plant more about business than I ever wanted to know; and scale inspections all add up. To satisfy we’re not business people. We’re farmers who buyers’ requirements, the farm and process- are trying to get this thing started because we ing plant have been certified by as many as think there’s a need for it.” five different groups. The mill has its own siding platform where a • Economies of scale determine the cost of dis- railroad car or truck can dump feed into a chute. tribution. “It costs 15 to 30 There an auger picks it up and cents a pound to ship a pal- carries it to a bucket elevator that let. But I can send a semi- can take the grain anywhere in- load for less than six cents a “We’re farmers who are side. Counting the outside bins, pound.” trying to get this thing the mill can store about 20 Dave emphasizes that high started because we traincar loads in a number of dif- quality is important. “Post-har- think there’s a need for ferent storage hoppers. This vest handling and storage it.” gives the facility a lot of flexibil- present a big opportunity for Gerry Coleman ity in creating custom mixes. The farmers to improve quality, and mill has a full range of internal they’ll be rewarded in the mar- equipment: grinders, mixers, ketplace,” he says. “Most of the baggers, and equipment to premium is for the extra care and service you steam, cool, and pelletize feed. It has chutes provide that high-quality product.” above the truck loading area and a scale to weigh Dave strongly encourages anyone consider- vehicles. A platform next to the bagging station ing starting a value-added business to take the also facilitates truck loading. University of Nebraska’s “From Product-to- Freshness is a primary concern—once a grain Profit” course offered through the Food Process- is ground, it starts to oxidize. Another difficulty ing Center Business Development Office (see Edu- is state regulations. “You have to register feed cational Training Resources). He says it is the in each state where you sell it,” Gerry explains. best entrepreneur-training program in the U.S. “You have to tell the department of agriculture Of those who complete the course and then start there exactly what’s in it: protein, fat, fiber, etc. their own business, 80% are successful, compared So there has to be enough volume for a mix in a to a national average of only 8%. He also notes state to pay the registration fee there.” that of those who take the introductory course, A similar operation is that of Mel Gelsinger 80% decide not to go into a value-added busi- in Robesonia, Pennsylvania (Cicero, 1995). When ness. Mel switched from conventional to organic pro- duction, he had trouble finding outlets for much of his organic corn, soybeans, and small grains. A NIMAL EED F Then he met some farmers who wanted to raise their livestock organically but couldn’t find or- Animal feed production is another niche for ganic feed. For six years, he sold whole corn and grain growers. The Vermont Organic Grain Com- soybeans, and the farmers did their own milling. pany was founded as a result of Gerry Coleman’s Then he was convinced to put up a mill. His search for organic feed grain (Kittredge, 1995). fully computerized mill and storage bins cost To put the story in a nutshell: Gerry and others $320,000. The mill became operational in 1982, were looking for a bulk storage facility and found with his own crops accounting for only three per- an abandoned grain mill instead. “We weren’t cent of his milling volume. It supplies feed for looking for a facility like this. But we turned this broiler operations, dairy and beef cows, horses, up and said, ‘Bingo!’ There’s a need for organic and exotic livestock. PAGE 4 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
  • 5. bakery and grain elevator, thus minimizing the amount of borrowed money needed. COOPERATIVES OOPERATIVES For producers exploring the possibility of forming a marketing cooperative, the best source More than 1,000 North Dakota, Minnesota, of information is USDA’s Rural Business and and Montana wheat farmers joined forces to form Cooperative Development Service (RBCDS). The a cooperative to turn their top-quality hard am- RBCDS helps farmers and rural residents form ber durum wheat into pasta. The Dakota Grow- cooperative businesses and improve the opera- ers Pasta Company in Carrington, North Dakota, tions of existing cooperatives. They provide tech- produces and markets spaghetti, linguine, nical assistance, conduct cooperative–related re- fettuccine, macaroni elbows, and egg noodles. search, and provide informational products to The company shipped its first product in Decem- promote public understanding of cooperatives. ber 1993; it is now the third-largest pasta com- For additional information contact: pany in the U.S. The farmer-owners’ initial in- USDA/RBCDS Cooperative Services vestment of $12-million dollars (based on bush- AG Box 3255 els delivered, minimum 1,500 bushels) was used Washington, DC 20250-3255 to raise the $42–million capital investment that (202) 720–7558 built the mill and pasta plant. A nine-member e-mail: coopinfo@rurdev.usda.gov board of directors, all active farmers, oversees http://www.rurdev.usda.gov/rbs/coops/ all aspects of the business. In May 2002, the mem- csdir.htm bers of the cooperative voted to change to a com- mon stock corporation. For additional informa- tion about Dakota Growers Pasta Company, visit <http://www.dakotagrowers.com/>. Liz Reinhiller, who works with the Dakota Growers Pasta Company, says that the coopera- tive concept is a good one. If farmers who have a crop that is special to their area can get together and can find a market, they can put together a USDA/RBS Publications business plan and build a solid business team. Available from ATTRA She notes that some ventures have failed because (call 1-800-346-9140 to receive a copy) they didn’t have a good marketing or business plan, and may not have had a good management Cooperative Services: What We Do, team with the best interests of the growers in How We Work mind (Reinhiller, 1999). How to Start a Cooperative The Mountain View Harvest wheat growers’ cooperative in Colorado has gotten into the whole- Small Fresh Fruit & Vegetable sale bakery trade with “par-baked” (partially Cooperative Operations baked) breads (Campbell, 1997). This is a grow- Understanding Cooperatives: Ag ing segment of the baking industry, in which Marketing Cooperatives breads and rolls are baked to within ten percent of completion, then flash-frozen and shipped to Cooperative Feasibility Study Guide restaurants. Critical to the birth of Mountain Cooperative Farm Bargaining & Price View Harvest was a grant from USDA Rural Busi- Negotiations ness and Cooperative Development Service for a Cooperative Marketing Agencies-in- business feasibility study. Members had some ideas for products, but they knew they needed a Common thorough marketing study to find out what was truly promising. Grower-members raised $5- million of the $6-million needed to purchase a //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS PAGE 5
  • 6. tana, and South Dakota for promotion and mar- ket development of crops grown in the four-state EDUCATIONAL AND DUCATIONAL region. The Institute provides educational courses, customized training, and technical as- TRAINING sistance in many value-added, processing, and marketing areas for northern crops. RESOURCES Northern Crops Institute Bolley Drive Fargo, ND 58105–5183 A 2001 award from the USDA created the Ag- (701) 231–7736 ricultural Marketing Resource Center (AgMRC). http://www.northern-crops.com The AgMRC brings together experts from four The American Institute of Baking is a non- of the nation’s leading agricultural universities— profit center for education and research that of- Iowa State University, Kansas State University, fers correspondence courses, seminars, and cus- the University of California, and Oklahoma State tomized training, as well as books and technical University—into an electronically based center to bulletins on all aspects of baking. collect and interpret information about value- American Institute of Baking added agriculture. The AgMRC will create an 1213 Bakers Way electronic hub that connects producers and busi- PO Box 3999 nesses to knowledge, research, organizations, Manhattan, KS 66505–3999 business resources, and ongoing activities in the (785) 537–4750, (800) 633–5137, Fax: (785) agricultural sector. The Center has an online di- 537–1493 rectory listing value-added state resources (See http://techserv.aibonline.org Further Resources: Websites). Kansas State University is the only univer- Many state land-grant university departments sity in the world offering a four-year degree pro- of food science and state departments of agricul- gram in milling and a separate program in bak- ture are good places to begin gathering informa- ing. Dr. Dale Eustace, head of the Department tion. Some states have specific agricultural de- of Milling, Kansas State University, offers this velopment centers to assist their producers in advice to farmers considering on-farm grain mill- developing new agricultural products and mar- ing: kets for adding value to their farm products (see • Stay with whole-grain flour. A stone mill for Further Resources: Some State Sources of Value- small- to medium-scale whole grain flour pro- Added and Development Information). duction can be purchased for $15,000 to The Nebraska Food Processing Center Busi- $20,000. A stone mill will work well for most ness Development Office has an Entrepreneur As- people. You can adjust the stones to get the sistance Program that offers the “Recipe to Real- appropriate grind, experimenting to see what ity” seminar, “Product to Profit” individualized suits your market. A tabletop grinder can be consultation, and additional assistance to help used, but the capacity of these is low. existing businesses expand into new markets. For • To process wheat into white flour, a business information about these and other services, con- would need to invest a million dollars or more tact Arlis Burney at: for the mill alone. Additional capital would Nebraska Food Processing Business be needed for other components of the facil- Development Office ity. University of Nebraska–Lincoln • Call your state capital to find out who handles 60 Filley Hall regulations. In some states it is the depart- Lincoln, NE 68583–0928 ment of agriculture. In other states it will be (402) 472–8930, Fax: (402) 472–8831 another agency. http://www.fpc.unl.edu/ Dr. Eustace is willing to talk with people who The Northern Crops Institute is a collabora- call, and he can provide help specific to your situ- tive effort among North Dakota, Minnesota, Mon- ation. He can be contacted at: PAGE 6 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
  • 7. Dr. Dale Eustace Don Hofstrand Department of Milling 2023 S. Federal Ave. Kansas State University Mason City, IA 50401 Manhattan, KS 66506 (641) 423–0844, Fax: (641) 423–2642 (785) 532–4063 e-mail: dhof@iastate.edu e-mail: dde@wheat.ksu.edu USDA Farmer Direct Marketing http://www.ams.usda.gov/directmarketing/ SUMMARY UMMARY index.htm USDA Farmer Direct Marketing website is an Resources for specific information on grain excellent source of publications, resources, and processing are fairly scarce and hard to find. Most links to direct marketing materials. It also has a of the farmers interviewed developed their prod- Farmers Market Directory and a Direct ucts through their own trials and errors. Value Marketing Resources by State listing. can be added to grains in many different ways, resulting in the development of new products or University of Georgia Extension the improvement of existing ones. Anyone in- http://www.ces.uga.edu/pubcd/b1051-w.html terested in starting a food processing business Online publication Getting Started in the Food has to spend a great deal of time looking for in- Specialty Business. formation on such topics as federal and state regulations, labeling, ingredients, packaging, fi- Illinois Institute for Rural Affairs nancing, and marketing. http://www.iira.org/pubsnew/publications/ IVARDC_Other_5.pdf Online publication Starting a Value-Added FURTHER Agribusiness: The Legal Perspective. RESOURCES Minnesota Department of Agriculture http://www.mda.state.mn.us/dairyfood/ startingfoodbiz.pdf WEBSITES Fifty-six page online publication Starting a Food Agricultural Marketing Resource Center Business in Minnesota. http://www.agmrc.org/ The Agriculture Marketing Resource Center North Dakota State University Extension collects and interprets information about value- http://www.ext.nodak.edu/extpubs/agecon/ added agriculture. The Center is creating an market/ec1137w.htm electronic hub that connects producers and Online publication Developing a New Co- businesses to knowledge, research, Owned Agricultural Business: How Do We organizations, business guidance, and ongoing Start a Value-Added Firm? activities in the agricultural sector. The Center has an online directory listing value-added state University of Tennessee Extension resources. http://www.utextension.utk.edu/pbfiles/ pb1399.pdf Mary Holz-Clause Online publication Getting Started in a Food 101B EES Building/Haber Road Manufacturing Business in Tennessee. Ames, IA 50011 (515) 294–0648, Fax: (515) 294–0684 e-mail: mclause@iastate.edu or //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS PAGE 7
  • 8. Wisconsin New Farm Options Starting a Small Food Processing http://www.uwex.edu/ces/agmarkets/ Enterprise. 1996. By Peter Fellows, Ernesto A web-resource from University of Wisconsin Franco, and Walter Rios. 123 p. $15.00. Extension that provides information about new Brings together important aspects of both the niche markets and business start-up issues, and technological and business skills needed to start about others like you who are pioneering new and operate a small food–processing business farm-food ventures. successfully. The emphasis is on thorough planning before the enterprise is established and BOOKS then on careful control of production to Educational Concerns for Hunger Organization minimize costs and maintain the desired product (ECHO) on-line Book Store: quality. Traditional Foods: Processing for Profit. Baking for Profit. 2000. By George Bathie. 1997. Peter Fellows, editor. $45.00. 124 p. $17.50. Deals in part one with basic concepts of hygiene, Intended to help people establish a successful processing methods, and quality assurance. Part bakery business or improve an existing small two covers all kinds of processed foods. bakery. Takes the reader, step by step, through Emphasis is placed on quality-control aspects of the stages of market research to establish raw-material selection, processing, and evidence of a need for a bakery business in a packaging. particular location, and methods for determining the likelihood of success. Small-Scale Milling. 1994. By Lars-Ove Jonsson, David A. V. Dendy, Karen Order from: Wellings, and Varis Bokalders. 129 p. Educational Concerns for Hunger $29.50. Organization (ECHO) Essential reading for anyone involved in the 17391 Durrance Road milling of cereals in developing countries; target North Fort Myers, FL 33917 reader is the extension agent promoting (239) 543–3246, Fax: (239) 543–5317 improved small-scale milling. It covers http://echonet.org/shopsite_sc/store/ technical, economic, social, and nutritional/ html/foodprocessing.html health aspects of milling. Volunteers in Technical Assistance (VITA) publications (see their complete catalog at http://www.vita.org/publi- cations/pubcat.htm). Small Scale Maize Milling. VITA Publication. 143 p. $16.50. Describes various milling techniques for production of whole meal, bolted meal, and super-sifted meal. Covers all processing stages. Grain Mill for Home Use. By Walter B. Booker. VITA Publication. 9 p. ©www.ClipArt.com2002 $5.25. Easy-to-build wooden grinder for corn, wheat, and other grains. PAGE 8 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
  • 9. Home Flour Mill. By Walter B. Booker. The Bread Builders: Hearth Loaves and VITA Publication. 14 p. $5.25. Masonry Ovens. 1999. By Daniel Wing This mill is made almost entirely of wood. and Alan Scott. 253 p. Chelsea Green Powered by a 1/4-hp electric motor, by wind Publishing Co., White River Junction, VT. power, or by hand. Provides information about making old- fashioned naturally fermented hearth or artisan Order from: loaves of bread, and how to plan, build, and PACT Publications operate masonry ovens. 1200 18th Street, NW Washington, DC 20036 SOME STATE SOURCES OF VALUE-ADDED (202) 466–5666, Fax: (202) 466–5669 email: pubs@vita.org AND DEVELOPMENT INFORMATION http://www.pactpublications.com California Small Farm Center OTHER BOOKS University of California The following books are available from book- One Shields Avenue stores and online booksellers. If a book is listed Davis, CA 95616-8699 as out-of-print, you may be able to obtain it (530) 752–8136, Fax: (530) 752–7716 through Interlibrary Loan; check with your local http://www.sfc.ucdavis.edu/ librarian. You may also be able to buy a copy through an online used-book search site, such as Iowa Center for Crops Utilization Research <http://www.bookfinder.com/>. Dr. Lawrence Johnson 1041 Food Science Building Small-Scale Grain Raising. 1977. By Gene Iowa State University Logsdon. Rodale Press, Emmaus, PA. 305 Ames, IA 50011 p. Out-of-print. (515) 294–0160, Fax: (515) 294–6261 Covers production aspects of a large number of http://www.ag.iastate.edu/centers/ccur/ grains, including corn, wheat, sorghum, oats, and soybeans. Also provides information on Illinois Value-Added Rural Development harvesting, storage, grinding, and cooking. Center Three basic kinds of grinders are described: 1) Illinois Institute for Rural Affairs burr mills with either stone or steel burrs, 2) the Stipes Hall 504 roller mill, and 3) the hammer mill. Of the 1 University Circle three, Logsdon favors the burr or gristmill for Macomb, IL 61455 grinding flour. He says that none of the whole grain is lost in a burr mill, and generally 309 298-2674 or 800 526-9943 speaking, it grinds finer, although you may have http://www.value-added.org/ to run your meal through it twice to get the finest flour. Kansas Technology Enterprise Center 214 SW 6th, First Floor Adding Value for Sustainability: A Topeka, KS 66047 Guidebook for Cooperative Extension (785) 296–5272, Fax: (785) 296–1160 Agents and Other Agricultural http://www.ktec.com/erc/ Professionals. 1998. By Kristen Markley and Duncan Hilchey. 110 p. DIANE Minnesota Agricultural Utilization Research Publishing Company. Institute Discusses the concept of value-added processing Michael Sparby and how it contributes to sustainable PO Box 599 agriculture, introduces four enterprise owners Crookston, MN 56716–0599 who share their experiences in small-scale (800) 279–5010 processing, and presents a description of issues http://www.auri.org involved in the start-up of a business. //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS PAGE 9
  • 10. Missouri Value Added Development Center Cicero, Karen. 1993. Feed for the east (coast). 143 Mumford Hall The New Farm. November–December. Department of Ag Economics p. 35–38. University of Missouri Cramer, Craig. 1993. Shooting for the highest Columbia, MO 65211–6200 average. The New Farm. November– (877) ValueAdd (824–8233), Fax: (573) 884– December. p. 26–29. 6572 http://valueadded.missouri.edu/ Hilgendorf, Ralph. 1999. Personal index.htm communication. Welcome, MN. Kessler, Karl. 1989. Starting small, thinking Nebraska Cooperative Development Center big. The Furrow. November–December. Jo Lowe p. 16–17. The Atrium Bldg. 1200 “N” St., Suite 610 Kittredge, Jack. 1995. The Vermont organic Lincoln, NE 68508-2022 grain company. The Natural Farmer. (402) 471–2698, Fax: (402) 471–8690 Summer. p. 22–23. Toll-Free (877) 814–4707 or (877) 496–5235 Nordhus, Larry. 1999. Personal for NE only communication. Centralia, KS. http://www.rdc.state.ne.us/coop/ Reinhiller, Liz. Dakota Growers Pasta North Dakota Marketplace of Ideas Company, One Pasta Ave., P.O. Box 21, Headquarters Carrington, ND 58421–0021, (701) 652– Marilyn K. Kipp, Executive Director 2855. 411 Main Street West Vetter, David. 1999. Personal communication. Mandan, ND 58554-3164 Marquette, NE. (888) 384–8410, (701) 663–0150, Fax: (701) 663–1032 http://www.marketplaceofideas.com/ APPENDIX Oklahoma Food and Agricultural Products Research and Technology Center RESOURCES FOR FINDING CLEANING AND 148 FAPC PROCESSING EQUIPMENT Oklahoma State University Stillwater, OK 74078–6055 Processfood.com http://www.okstate.edu/ag/fapc/ 200 Daingerfield Road Alexandria, VA 22314 Tennessee Agricultural Development (703) 684–1080, Fax: (703) 548–6563 Center http://www.fpmsa.org/productLocator/ University of Tennessee bakery/index.cfm 307 Morgan Hall An online search of bakery equipment, suppliers, Knoxville, TN 37996-4521 and services provided by the Food Processing (865) 974–3824, Fax: (865) 974–9492 Machinery and Supplies Association http://www.utextension.utk.edu/adc (FPM&SA), a non-profit trade association founded in 1885 to provide a business link between food & beverage processors and REFERENCES suppliers. Campbell, Dan. 1997. Show me the dough. Rural Cooperatives. May–June. p. 24–26. PAGE 10 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS
  • 11. GrainNet http://www.meadowsmills.com 3065 N. Pershing Court Manufactures stone burr mills, or gristmills, Decatur, IL 62526 ranging from 50 to 1250 lbs. per hour capacity, (800) 728–7511, Fax: (217) 877–6647 along with other related bakery equipment. http://www.MillingEquipment.com An online Milling Equipment Buyer’s Guide The CS Bell Co. that allows searches by company or by products 170 West Davis Street and services. PO Box 291 Tiffin, OH 44883 Seed World (419) 448–0791, Fax: (419) 448–1203 380 E. Northwest Hwy. http://www.csbellco.com Des Plaines, IL 60016–2282 Products include hammer mills and burr or (847) 298–6622, Fax: (847) 390–0408 gristmills, and corn shellers. The hammer mills Seed World is published monthly with an extra are recommended for livestock and poultry feed issue in April. The U.S. subscription rate is preparation, grinding yard waste for compost, or $30/year. The Annual Buyer’s Guide includes fruit, vegetable, and grain processing for table contact information for suppliers of bag-closing use. equipment, bag-filling machines, bags, bins, blowers, cleaners, etc. Schmidt Flour, Inc. Box 99 Implement & Tractor™ Maple Creek, Saskatchewan S0N 1N0 2302 West 1st Street (306) 666–4800, Fax: (306) 666–4838 Cedar Falls, IA 50623–1879 http://www.schmidtflourinc.com (800) 959–3276, Fax: (319) 277–3783 Flour mills ranging in scale from 200 to 4000 Implement & Tractor™ is published bimonthly lbs. per hour, and a debranner. with an extra issue in December. Subscription rate is $30/year. Their Ag Equipment Buyer’s Forsbergs, Inc. Desk Reference includes listing and contact PO Box 510 information for many various types of mills, 1210 Pennington Avenue cleaners, etc. Thief River Falls, MN 56701 (800) 654–1927, (218) 681–1927, Fax: (218) Feedstuffs 681–2037 Circulation Department http://forsbergs.com 191 S. Gary Ave. Gravity and screen separators, destoners, and Carol Stream, IL 60188 hullers/scarifiers. (800) 441–1410, (630) 462–2224 Feedstuffs Annual Reference Issue contains Seedburo Equipment Company directories for companies supplying goods and 1022 W. Jackson Blvd. services to the feed and feeding industries, Chicago, IL 60607 association and grain inspection agencies, and a (800) 284–5779, (312) 738–3700, Fax: (312) listing of products and services. Reference 738–5329 Issues are available for $40. http://www.seedburo.com CLEANING AND PROCESSING EQUIPMENT Machinery and equipment for small-scale planting, harvesting, cleaning, and grinding of MANUFACTURERS AND SUPPLIERS grains; some equipment specially designed for Meadows Mills, Inc. research and quality control. Catalog available 1352 W. D Street on request. PO Box 1288 North Wilkesboro, NC 28659 (800) 626–2282, (336) 838–2282, Fax: (336) 667–6501 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS PAGE 11
  • 12. Kansas Wind Power R & R Mill Company, Inc. 13569 214th Road 45 West First North Holton, KS 66436 Smithfield, UT 84335–0187 (785) 364–4407 (801) 563–3333 http://www.kansaswindpower.net/ Hand cranked and motorized mills, primarily for Grain_Mills.htm home use. Source of various styles of grain mills. GrainMaker The Country Baker Wild West Machine 8751 N. 850 E Randy & Bonnie Jones Syracuse, IN 46567 370 Sharrot Hill Loop (866) THE–BAKER, (219) 834–2134, Fax: Stevensville, MT 59870 (219) 834–3993 (800) 965–3075 http://www.countrybaker.com/ http://www.grainmaker.com cataloglist.cfm Hand cranked mills for home use. Small-scale professional baking equipment and grain mills. Heartland Ag-Business Group 1003 Central Avenue C.F. Resources Fort Dodge, IA 50501 PO Box 405 (800) 247–2000 Kit Carson, CO 89825 http://www.farmequipmentguide.com (719) 962-3228 Provides a free-of-charge locating service for all http://www.cfamilyresources.com types of used farm equipment and machinery. Small-scale professional baking equipment and grain mills. By Janet Bachmann and Lance Gegner Lehman’s NCAT Agriculture Specialists Dept. 2-KNK Box 41 Edited by Richard Earles Kidron, OH 44636 (888) 438–5346, (330) 857–5757 Formatted by Gail Hardy http://www.Lehmans.com Look under Kitchen Implements for the mills November 2002 and other equipment. Catalog is $3. Country Living 14727C 56th Avenue NW Stanwood, WA 98292 (360) 652–0671 IP140 / 138 http://countrylivinggrainmills.com Manual and electric table grain mills. The electronic version of Grain Processing: Adding Value to Farm K-Tec Kitchen Products is located at: 1206 South 1680 West HTML Orem, UT 84058 http://www.attra.ncat.org/attra-pub/ (800) 748–5400 or (801) 222–0888 grainpro.html http://www.k-tecusa.com PDF Offers an electric-powered table mill to grind http://www.attra.ncat.org/attra-pub/ corn, wheat, rice, soybeans, anything not wet or PDF/grainpro.pdf sticky, at rate of over 1 pound per minute. PAGE 12 //GRAIN PROCESSING: ADDING VALUE TO FARM PRODUCTS