Capturing value, creating new markets

That economic development opportunity should not be overlooked, and it is a vital spoke in the hub of the Initiative. Many communities throughout farm country are struggling in tough economic times to maintain their identity and economic promise; however, people like Don Frye liken the Initiative’s potential impact for rural North Dakota to what the silicon chip has done for the Bay Area in California.

“The state is blessed with first and foremost, a diverse and vital agricultural base which allows us to create new feed products more easily than anywhere else in the country,” says Frye. “Cities like Carrington are ideally located along major highway and rail transportation routes, so getting products to the processing centers and out to the world is relatively easy, and from an economic standpoint, we enjoy some of the lowest utility rates in the country.

“Combine these production advantages with incentives and marketing efforts of the State Department of Agriculture, and you can make a very compelling case for succeeding in cities like Carrington, Devils Lake and elsewhere in the state,” Frye notes.

With the promise of opportunity comes the promise of jobs — jobs for those who construct and remodel mills and processing facilities; jobs for those who operate these facilities and employment opportunities in the production agriculture sector as well.

In fact, the economic development opportunity is so important to this effort, the Initiative’s formal administrative body is comprised of a joint effort between the Carrington Job Development Authority and Forward Devils Lake.

This co-mingled effort between economic development and research is one of the facets of the CDFI which make it so interesting. Efforts to raise the seed money to initiate product research and to develop a business modeling tool have borne fruit in the form of financial support from state and federal agricultural and economic development sources, commodity groups, private industry, foundations and private utility providers.

With a price tag of nearly $500,000 to move the CDFI forward, the monies are for three key research and development tasks: nutritional and feasibility studies and a business modeling plan.

The nutritional study is about 50% complete, with its focus on the feed manufacturing and beef feeding pilot trials. Trials encompass creep feed, grower/finisher, cow and bull feeding studies in beef; calf, grower and lactation studies in dairy and nursery, grower/finisher and sow trials for swine.

Feasibility study work is underway and centers primarily on how best to source co-products and studying their costs, location and availability. Identifying transportation issues and defining potential target markets both domestic and abroad round out the study.

“The feasibility study is especially important as it will provide the data necessary to help decide which feed products and in what form, will be introduced to the marketplace,” says Anderson. “Combined with the feeding trials, these are the two linchpins of the Initiative.”

Of most interest to the development community is the site and business plan development effort. Centrally locating future feed receiving and manufacturing facilities to accommodate the outbound flow of feed products, requires deep study of many factors.

“Site selection will most likely be determined by which areas in the state offer distinct advantages for being located near established, reliable supplies of co-products; and proximity to major transportation routes,” Edwardson surmises.

“A computer model is in development which would factor in all the fixed costs and potential market value capture of this entire process,” says Edwardson. “Once completed and tested, this model would provide an accurate financial and operational analysis of the purchasing, manufacturing and marketing potential for novel feed products in a given area. This tool provides processors with a chance to assess the market opportunity using real-world data for their region which, in turn, helps the operator make a better informed business decision relative to novel feed product production.”

Yes, but does it work?

When an idea is in the “idea phase,” everything is possible. This is the reason why researchers exist, to prove or disprove an idea.