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Flour Power: NW wheat growers find success with eco-marketing strategy.

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A small group of farmers in the Spokane, Wash., area has developed a local niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector.

By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers.
 for sustainably grown wheat products that is adding to their incomes, helping stabilize their prices and encouraging environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1]  farming.

The value-added marketing business they formed, Columbia Plateau Columbia Plateau, physiographic region of North America, c.100,000 sq mi (259,000 sq km), NW United States, between the Rocky Mts. and the Cascade Range in Washington, Oregon, and Idaho.  Producers LLC (Logical Link Control) See "LANs" under data link protocol.

LLC - Logical Link Control
, today has 32 member-farmers and sells high-quality flour under the Shepherd's Grain brand to bakeries from Seattle to Northern California. It's a member of the Food Alliance, which certifies food producers for sustainable practices and rang up $4 million in sales last year.

The venture began in 1999 when wheat farmers Fred Fleming and Karl Kupers decided to try growing hard red spring wheat in an area where soft white wheat was the norm. Soft white wheat is generally used for pastry and specialty flours, while hard red is more suitable for making bread. Growing hard red wheat would allow diversification, and they hoped to develop a differentiated product that could command a premium price.

Fleming and Kupers figured that a new strain of red wheat developed at Washington State University--combined with improved nutrient packages and precision farming methods--might make the grain feasible in an area formerly considered unsuitable for it.

No-till proponents

Both men are enthusiasts of "no-till" farming, which eschews plowing, leaving the soil as undisturbed as possible to reduce erosion and run-off. As they became more involved with the no-till movement, they became aware that their earth-friendly method of farming could be used in a marketing strategy in the environmentally conscious Pacific Northwest region. "We wanted to market good food that's been produced in an environmentally safe way," says Fleming.

For 3 years, they experimented with different varieties of hard red spring wheat, working with a nearby bakery to test the flour produced from their grain. By 2002, they had worked out most of the kinks and settled on a hard red spring wheat variety that did well in the region and yielded a high-quality flour that baked into flavorful breads and other products. Later, a hard red winter wheat was also adopted.

Together they formed Columbia Plateau Producers in 2002 to handle the milling of their product. The LLC contracts with a facility owned by Archer Daniels Midland The Archer Daniels Midland Company (NYSE: ADM), is a conglomeration based in Decatur, Illinois. ADMoperates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed  (ADM See add/drop multiplexer.

(language) ADM - A picture query language, extension of Sequel2.

["An Image-Oriented Database System", Y. Takao et al, in Database Techniques for Pictorial Applications, A. Blaser ed, pp. 527-538].
) to mill the grain into flour. "They have the size and ability to mill the quantities of flour we need," Fleming says, "And we've developed a good working relationship with them." Fleming says that ADM, which is certified by the Food Alliance, was eager to work with them because it wants to promote sustainable farming.

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The growers also set up the LLC to operate as a cooperative--originally with six members. "We saw a farm marketing co-op go out and recruit a bunch of farmers for a venture a while back," says Fleming. "But they couldn't develop enough of a market to sell everybody's product." Instead, their organization recruits new members only when the market has developed enough to support them.

In 2007, Fleming and Kupers received a $50,000 Value-Added Producer Grant (VAPG VAPG Value-Added Producer Grants (Rural Development, US Department of Agriculture) ) from USDA USDA,
n.pr See United States Department of Agriculture.
 Rural Development to conduct a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change.  and create a business plan to develop a new line of consumer packs of flour under the Shepherd's Grain brand. (For more information on the VAPG program, visit: www.rurdev.usda.gov/rbs/coops/vadg.ht m).

Non-traditional co-op

Columbia Plateau Producers is not a traditional farm co-op. Each member-farmer has a share of voting stock Voting stock

The shares in a corporation that entitle the shareholder to vote.


voting stock

Stock for which the holder has the right to vote in the election of directors, in the appointment of auditors, or in other matters brought up at the
 and votes at an annual meeting to elect board members. The board consists of four member-farmers and three at-large members drawn from the baking industry. "Farmers are pretty sharp when it comes to business," says Fleming. "But they don't have experience retailing. We're trying to enlarge the brainpool."

Farmers must practice no-till farming to be invited to participate. No-till methods decrease erosion, encourage moisture retention and reduce soil compaction and nutrient loss, but they require new seed drills and other equipment and can increase the use of herbicides. It can also take a few years to become profitable after switching from conventional methods. However, Fleming sees no-till farming as especially appropriate for his area.

"The topography and the soil here are really conducive to erosion," he says. "I remember when I was young, a heavy rain would leave ditches in your fields, and lots of topsoil would end up on the roads and in the water system." Every farm is inspected by the Food Alliance to ensure that it adheres to sustainable farming principles.

Today, says Fleming, soil on no-till farms is healthier and thicker. "It's a nice healthy compost, and it acts as a scrubber to clean runoff water." Combining no-till with precision farming techniques, he says, allows farmers in the area to reduce their inputs 12 percent and their fuel use by a whopping 38 percent.

Pricing strategy

Member farmers typically grow about 15 to 30 percent of their annual crop for the cooperative, with the rest grown as typical soft white commodity wheat--much of which goes for export.

Shepherd's Grain offers customers in the baking industry high-quality products at stable, pre-agreed prices calculated to bring a reasonable rate of return to the farmers. "Our customers can plan around the agreed price, and it's also good for us to know what we're going to get for our product," Fleming says. "We try to shoot for about an 8-percent margin every year." The co-op also recently signed an agreement to supply flour to Stone Buhr, a Food Alliance flour retailer located in San Francisco.

The cooperative offers four varieties of flour: a high-gluten, unbleached flour for bread; an all-purpose flour; a whole wheat flour with a unique, sweet flavor; and a soft white flour for pastries.

Sustainable practices are all well and good, but success depends on a good-quality product. Kupers says Shepherd's Grain flour more than meets the test. "Recently I was told that our flour has the most integrity that the baker has seen in his 30 years of baking."

Stephen Thompson, Assistant Editor

stephenAthompson@wdc.usda.gov
COPYRIGHT 2010 U.S. Department of Agriculture, Rural Business - Cooperative Service
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Author:Thompson, Stephen
Publication:Rural Cooperatives
Date:Jan 1, 2010
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