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Grand Forks-area ag businesses plan expansions

Mike Morgan puts it simply. "Our business is just growing," said the general manager of the Thompson Farmer's Co-Operative. In response, they're expanding their operation by constructing three concrete silos to store an additional 600,000 bushels...

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Mike Morgan puts it simply.

"Our business is just growing," said the general manager of the Thompson Farmer's Co-Operative. In response, they're expanding their operation by constructing three concrete silos to store an additional 600,000 bushels of commodities like wheat, soybeans and corn.

Morgan cites increased corn production as one reason for their expansion, as well as a need to load trains at a faster pace. Now, it takes them 12 or 13 hours to load 110 cars, but he'd like to get that down to 10 hours or less.

The Thompson, N.D., elevator is one of several value-added agriculture businesses in the Grand Forks area that has recently announced plans to expand. Local officials attributed the growth at least partially to the area's long-standing ties to the agriculture industry.

"For the last couple of years, the agriculture market has done very well," said Klaus Thiessen, president and CEO of the Grand Forks Region Economic Development Corp.

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Pending projects

Industry officials define value-added agriculture as a process that takes raw commodities and turns it into a product with higher value. Grand Forks is the location of several national and international businesses, such as J.R. Simplot and locally based Black Gold Farms.

Another is Philadelphia Macaroni Co., which takes flour from a mill it owns in Minot to make pasta in the company's largest plant in Grand Forks.

The company announced in July it intends to add a 70,000-square-foot warehouse. In addition, a new macaroni and cheese production line will be completed by spring 2014, increasing their daily production by 504,000 boxes per day.

"We saw the opportunity for more sales if we had the ability to package more macaroni and cheese products," plant manager Tony Pierce said.

Black Gold Farms is in the middle of a project that will expand its potato washing as well as packaging capabilities in Grand Forks, said company President and CEO Gregg Halverson.

Reile's Transfer and Delivery, based in Fargo, plans on building a $10 million facility in rural Grand Forks. There, impurities from raw sugar and edible soybeans will be removed and shipped by truck and rail.

Northern Tier Seeds is another Thompson business with plans to grow. A company official told a city committee in September that they conditioned almost 1 million bushels of wheat and soybeans this past season, up from just 350,000 in 2009.

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Their plans for expansion include adding 12 6,000-bushel hopper bins to increase capacity by 144,000 bushels.

Job growth

A 2012 report prepared by the Grand Forks-based Praxis Strategy Group found that the local food processing industry had seen modest growth over the past decade, particularly in dry pasta manufacturing, perishable foods, frozen foods and soybean processing.

Among the projects announced this year, Philadelphia Macaroni's expansion will add 20 production workers, company officials said. The Reile's Transfer project could employ 14 people within five years.

And although Northern Tier's expansion will only add two jobs, according to its application for a PACE loan, the company only employs six currently.

There are many more crop and animal production jobs locally than in the food processing sector, according to the Praxis report. That's a stark contrast from the rest of the country, where about one-third of the agriculture jobs are in production and more than 40 percent are in food product manufacturing. Part of that difference has to do with the nature of the crops in the area make them suitable for direct export, the report added.

John Mittleider, manager of agriculture and bio-energy development at the North Dakota Department of Commerce, said there are about $4 billion worth of value-added agriculture projects being considered right now. That includes a $1.5 billion fertilizer plant near Grand Forks.

Value-added agriculture is one of the department's five targeted industries. That involves attracting businesses to North Dakota and helping ones that are already here expand.

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Neil Doty, an agriculture business consultant based in Fargo, said the value-added agriculture industry throughout North Dakota could grow alongside the oil boom in the western part of the state. He said a growing workforce and proximity to energy sources could drive that growth.

"Agriculture and energy go hand-in-hand," Doty said. "One helps the other."

Call Hageman at (701) 780-1244, (800) 477-6572 ext. 1244 or send email to jhageman@gfherald.com .

Related Topics: AGRICULTURE
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