State mill prospers

North Dakota State Roundup

Published October 1, 1992  | October 1992 issue

The North Dakota Mill and Elevator, a state-owned facility in Grand Forks that produces semolina for pasta manufacturing and bread flour, reported profits of nearly $3.2 million for the year that ended June 30, 1992.

Under a profit sharing plan adopted with a new contract in 1991, the mill's 120 employees received 35 percent of that total. The balance was retained by the mill for capital improvements or turned over to the state treasury.

Many people might consider a government-owned flour mill to be an anachronism in this age of privatization. Manager Roger Dunning says that the mill was started as the result of efforts by the Non-Partisan League to improve the prices farmers received for their wheat in the era prior to World War I. Transportation costs to Minneapolis and other milling centers were high relative to the price of wheat, and it was widely perceived that farmers were at the mercy of large grain companies. The League won a large number of legislative seats in the 1916 election and moved to organize a state-owned mill that would improve wheat prices by adding more value within the state and by undermining any monopolistic power in the private grain trade. The mill began operation in 1922.

Seventy years later, the mill is a modern facility that produces 525 million pounds of spring wheat and durum products per year with gross sales of over $60 million. A recently completed modernization project expanded capacity to a total of 47,000 bushels of wheat per day.

Milling is very competitive, and the North Dakota Mill must deal with new mills on both coasts as well as a new mill and pasta factory under construction in North Dakota. Dunning and the State Industrial Commission, which is the mill's board of directors, are examining alternative marketing strategies.

The mill's concentration on semolina for pasta reflects North Dakota's predominance in durum production. The state produces over 40 percent of all US durum. Demand for durum has grown steadily over the past three decades as pasta shifted from an ethnic dish to a common item on the menus of many American families. That growth has now leveled off, but pasta continues to be an important outlet for wheat producers in the region. A high-quality bread flour, the mill's second most important product, is now marketed in 10-pound bags in an effort to expand retail sales as a supplement to existing commercial bulk sale.

Edward Lotterman