BISMARCK – The North Dakota Mill and Elevator ground out a record profit in fiscal year 2015, fueled by a nice wheat crop, higher shipment volumes and strong employee effort, General Manager Vance Taylor said Tuesday.
The state-owned flour mill in Grand Forks posted a nearly $16.7 million profit for the year ending June 30, beating the previous record of $16.1 million in 2011 and marking a roughly 25 percent increase over the previous year’s profit of nearly $13.4 million.
“We did have a very nice wheat crop to work with, and it absolutely doesn’t happen without a strong effort from our dedicated employees,” Taylor told the state Industrial Commission, which oversees the mill.
Shipments jumped 2.7 percent to 12.5 million hundredweight, and total wheat purchased increased 2 percent to 26.7 million bushels, both records for the mill. Gross sales were $305 million, down from $310 million last year.
A $27 million expansion of the mill, which will boost production capacity by about 30 percent and make it the single largest milling operation in the country, is expected to be completed in late spring or early summer, Taylor said. The Industrial Commission also approved a $4.4 million storage expansion in June to accommodate the additional capacity.
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Taylor said he expects strong demand in fiscal year 2016 and another high-quality wheat crop this fall.
“It might be difficult to match the record performance we had in 2015, but we’re sure going to give it a try,” he said.
Mill employees received an average annual bonus of $13,693, or about 21.8 percent, through a program that awards employees for meeting performance, profit and safety goals. The average annual bonus over the last 10 years was about 13.2 percent, Taylor said.
Gov. Jack Dalrymple, chairman of the three-member Industrial Commission, called Taylor’s report “really good” but questioned whether they should consider raising the $2 million profit threshold that triggers bonuses, given the mill’s string of highly profitable years.
Taylor said the market can be volatile, and if the threshold is set too high, employees may not put forth the same effort if they think they won’t reach that year’s goal.
“I feel it’s a big part and big reason why we continue to have the results that we have,” he said. “I would be hesitant to make any major changes to our program, but we can definitely look at it.”
The mill employs 135 workers and will add a dozen more by year’s end as authorized by the Legislature, he said.
The mill transferred $3.4 million – about 25 percent of the profits – to the state’s general fund and $833,767 to fund the Agricultural Products Utilization Commission. The remaining profits are used for mill operations.
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The North Dakota Mill and Elevator is the only state-owned mill in the country, created in 1922 to give the state’s farmers a better price for their wheat by avoiding freight costs associated with shipping it to Minneapolis.
Taylor said during his annual report last year that rail service delays were a lingering concern, but he said Tuesday the effect turned out to be minimal.
“Rail congestion cleared up faster than anybody thought it would,” he said.
Reach Nowatzki at (701) 255-5607 or by email at mnowatzki@forumcomm.com .
