State program promotes innovative ag products

Minnesota State Roundup

Published July 1, 1996  | July 1996 issue

African cookies, chili-flavored nonalcoholic beer, natural cat litter—all these are products made in Minnesota with Minnesota ingredients by small businesses that have been nurtured by the Agricultural Utilization Research Institute (AURI).

AURI, a nonprofit corporation established by the state to strengthen the rural economy through new uses for Minnesota farm products, combines ag resources with business innovators and applied science expertise. AURI receives about $4.4 million annually from the state and has a budget of about $5 million to provide technical and financial assistance, through loans and grants, to clients who are developing new products or technologies. These clients must at least match, dollar-for-dollar, AURI expenditures on their projects.

Since 1989 AURI has been instrumental in 190 new products developed, 122 new products commercialized and 93 new business starts. In 1995 AURI was involved with 138 projects through its four offices in Marshall, Waseca, Morris and Crookston, and through its applied research facilities that include the oils and fats laboratory in Marshall and the pilot plant and lab in Crookston.

In addition, AURI staff work closely with regional economic development organizations, largely to inform companies about rural community business locations, according to Brad Mitteness, general manager of AURI's southwest office in Marshall.

The Marshall office has been working with the Minnesota Valley Alfalfa Producers (MnVAP) to establish a processing facility to turn alfalfa leaves into high quality dehydrated animal feed and, ultimately, the stems into energy. Over the last two years, MnVAP has raised more than $2 million in equity investment and received a start-up loan from AURI. Now the co-op has purchased an alfalfa processing plant in rural Priam, near Willmar, and is about to become the largest alfalfa feed processor in the United States.

The long-range plan is to establish a processing plant that would chop alfalfa stems, feed them into a gasifier and produce energy that would be sold to electric utilities.

AURI's Marshall office also brought together two existing companies that have created biodegradable pet toys made from corn starch polymers. The new toys will be made by RDS Associates in St. Bonifacius, an injection molding company that decided to manufacture and market its own products, and Minnesota Starch Polymers, which will supply the raw material and specializes in corn starch products.

Dan Schlueter, RDS president, says that AURI has helped with media exposure on the first product, a toy dog bone made of 70 percent corn starch. And AURI's knowledge of the product or materials serves to put investors at ease, Schlueter says.

By supporting value-added agriculture, Mitteness says, more of the food dollar is captured in Minnesota. "The dollars flowing into Minnesota agriculture are all new dollars, all new inflow," Mitteness says.

Kathy Cobb