BUSINESS

GFDA zeroing in on specialized agri-processing plants

Peter Johnson
pjohnson@greatfallstribune.com
Pasta Montana employee Jose Lara keeps an eye on spaghetti as it’s prepared for sizing and cutting, making sure none of it has clumped together.

The Great Falls Development Authority and its corporate and community partners are hoping to soon reach the fabled "next year" harvest that agricultural producers are always dreaming about.

Oh sure, they'd love some timely spring rain this year to ensure bountiful crops of wheat, barley and pulse crops and verdant pastures for livestock production.

But the bumper crop that's really in their sights might take a bit longer but would create more jobs and raise local tax bases throughout the Golden Triangle region and beyond.

The GFDA is planting sophisticated seeds it hopes will lead to yields of new agri-processing facilities in such niche markets as pulse crop fractionation, or malting; specialty malting for microbreweries and sprouted grain milling to change nutritional components.

With $50,000 of the $200,000 grant the GFDA was awarded last year by the U.S. Economic Development Administration, it hired a seasoned consultant to make market-based arguments, or business cases, why the Great Falls region is ideally suited for such agri-processing plants.

Business and agricultural consultant Neil Doty of Fargo, N.D.

And just a few weeks ago, while consultant Neil Doty is still completing work on those first three business cases, the Montana Agriculture Department's Growth Through Agriculture program awarded the GFDA another $50,000 to hire Doty to zero in on business cases for four more agri-processing niches.

If the GFDA is successful in recruiting any of those specialized manufacturers to the region, or getting some of those already here to expand, they could end up the second phase of the Great Falls AgriTech Park that is gearing up northeast of Great Falls.

"I'm pleased that GFDA is getting the infrastructure in place at the AgriTech Park to bring in more businesses and move things forward," Montana Agriculture Director Ron De Yong said. "The grant money will help them make the case to businesses in specific ag-processing fields to locate plants in Great Falls and the Golden Triangle."

Montana state Agriculture Director Ron de Yong.

"We think there are tremendous opportunities to process more agricultural goods through intermediate level processing that can produce the ingredients to ship to final-stage manufacturers in bigger markets," said Brett Doney, president of the Great Falls Development Authority.

"We've been shipping out too many agricultural products in Montana without any processing," he said.

More processing would benefit the region and state in three ways, Doney said. It would create good-paying manufacturing jobs, raise local property tax bases and give regional producers more options in where to sell their crops.

Executives at two existing Great Falls-area agri-processing companies support recruiting more agricultural manufacturing. Both are members of the Great Falls Area Food Manufacturers Network that Rebecca Engum, the GFDA's manufacturing partnership director, helped start last year to encourage business startups and expansions within the 13-county Great Falls trade area.

Farmer and Timeless Seeds President David Oien said adding more agri-processing businesses in the Great Falls area“will increase the overall capacity and expertise here.”

"Building up the food processing industry is important for the local economy and growers," said David Oien, a third-generation farmer and president of Timeless Seeds. "The more agri-processing businesses the merrier, since more companies will increase the overall capacity and expertise in the area."

Timeless Seeds contracts central Montana farmers to grow pulse crops and heirloom organic grains. Its 10 employees clean, package and market the product from an Ulm plant.

Randy Gilbertson, chief operating officer and general manager of the much larger Montana Pasta, agreed, with some reservations.

"Although existing regional manufacturers might feel initial pressure that growth in agri-processing will put on skilled labor and other local resources, I believe such growth eventually will benefit all of us, because manufacturing breeds and supports manufacturing," he said.

Pasta Montana was started in Great Falls 17 years ago, drawn by the high-quality durum wheat grown in the area, he said. Its 100 employees use 1.5 million bushels of durum wheat a year to produce as much as 70 million pounds of dry pasta annually that is packaged and shipped to food makers in Japan and the U.S. and restaurant food service distributors in the U.S. and Canada.

The company ships its finished products out exclusively by truck now, Gilbertson said, but could use container and rail shipments if increased manufacturing in Great Falls attracts more rail and container cars and better rates. Similarly, Gilbertson said, as manufacturing increases, area workers will become trained and accustomed to that kind of work, and the good-paying jobs could draw more skilled workers into the region.

Prime location and history

"There's nothing new about recruiting agri-processing plants," Doney said. "The Great Falls Board of Trade sought to attract flour millers to Great Falls 100 years ago."

Great Falls Development Authority President Brett Doney

Great Falls is located in the heart of prime wheat, barley, oil seed, lentil and pea production crops, as well as pork, egg and cattle production, Engum said.

The seven-county Golden Triangle region and 13-county Great Falls trade area are home to several companies that process agricultural goods, add value and sell such finished products as eggs, pasta and organic cereals, Doney said.

But for the most part, because of distance from larger markets, the region's agri-processing plants make such intermediate-stage ingredients as flour and malting barley that are sent to plants in bigger cities for end-stage manufacturing, he said, adding: "You don't see too many soup cans rolling off assembly lines around here."

The development authority has helped agri-processing plants expand for several years, including helping Pasta Montana secure an expansion loan in 2005 and helping Montana Eggs LLC build a new facility to clean, sort and grade eggs grown by Hutterite colonies in 2010.

In recent years, the GFDA has taken a more active role in recruiting manufacturers, Doney said.

As part of an economic diversification study provided by the Defense Department after one of Malmstrom Air Force Base's four missile wings was pulled, consultants recommended the region focus on recruiting manufacturers involved with energy-related projects and agri-processing plants.

"We've been pretty successful encouraging business investments on the energy side," Doney said including the $400 million Calumet Montana Refining upgrade and big growth in manufacturers ADF International and Loenbro, two companies whose specialties include fabricating and assembling equipment for oil field companies.

"With expansion of the energy market slowing because of lower oil prices, we can focus more on recruiting agri-processing companies and expanding existing ones," Doney said.

GFDA staff members have spent time the last few years making connections by exhibiting at agricultural trade shows and exchanging ideas with agri-processing company officials, he said.

The time could be ripe for agri-processing plants to startup, expand or locate in the Great Falls region, Doney said with those connections in place, the Agri-Tech Park nearing completion and specialist Doty completing his first set of business cases.

Wheat harvest underway east of Great Falls in August.

Honing in on niche markets

The Great Falls area is well-suited for agri-processing because the Golden Triangle has a history of producing high-quality grains and other crops on a consistent basis, both critical factors for companies seeking plant locations, said Doty, whose Fargo, N.D., consulting firm is preparing the business cases for the GFDA.

Doty holds both a master's degree in business and a doctorate in cereal chemistry. He developed many factories and dozens of agricultural products before becoming a consultant.

His role for the GFDA was to study the strengths of the region, including agricultural, economic, power, water and labor, and make market-based cases that GFDA officials can take to companies in specialized, niche markets.

In a Great Falls Tribune interview, Doty told why he's focusing on the first three niche areas:

A pulse crop fractionation, or milling plant.

Pulse crops, such as peas, lentils, dry beans and chickpeas are increasingly popular, especially in overseas markets, he said. They're gluten-free, with a lot of protein and fiber. Central and eastern Montana have a good growing climate for pulse crops, which are a good rotational crop because they restore nitrogen to the soil.

A pulse fractionation facility could produce specialized flours "that could generate all kinds of interesting applications," Doty said, such as increasing the protein or fiber content of pasta or being a prime ingredient in meat substitutes.

A specialty malting facility for malt-focused craft beer makers.

"Even though craft beers, or microbrews, represent about 8 percent of the beer consumed in the United States, they use about 20 percent of the malt, Doty said. "They tend to use more malt in their recipes for flavor."

Craft brewers are great marketers and always looking for an interesting way to enhance their recipes, he said, but Montana has no intermediate sized malting plants. A larger malting house could provide customized malts to different brewers.

Great Falls, would be a great location for a specialty malting facility, with such high-quality barley grown nearby, he said.

A sprouted grain milling plant.

Montana grows a lot of grain, including some older, heirloom varieties, Doty said.

"The natural and emerging food industry is keenly interested in sprouting grain, a process that activates the enzymes and changes the nutrition profile," he added.

For instance, sprouting wheat can reduce its phytic acids, thereby allowing consumers to absorb more iron and other minerals, he said.

Sprouted wheat can be produced in the form of a dried whole grain flour, which could be shipped to bigger markets for use by bakers, pasta makers and cracker makers, Doty said.