State-owned mill overcomes depressed wheat prices to post $9.3M profit
BISMARCK -- It wasn't an all-time high, but North Dakota's state-owned flour mill posted a healthy $9.3 million profit in fiscal year 2016 as record shipment volumes helped offset tough wheat market conditions, President and General Manager Vance...
BISMARCK - It wasn't an all-time high, but North Dakota's state-owned flour mill posted a healthy $9.3 million profit in fiscal year 2016 as record shipment volumes helped offset tough wheat market conditions, President and General Manager Vance Taylor said Tuesday.
The State Mill and Elevator in Grand Forks reported unaudited profits of $9,336,618 for the year ending June 30, down 44 percent from a record $16.7 million in fiscal year 2015.
It was the lowest annual profit since the mill cleared $8 million in 2012, reflecting depressed wheat prices that shrank the mill's profit margins.
"I think we're feeling like it was a good year with the market conditions that we had to deal with," Taylor said. "Our prices go right up and down with the wheat markets."
Shipment volumes reached a record 12.99 million hundredweight, up from 12.5 million hundredweight in 2015, mostly driven by increased demand from current customers, Taylor said.
"Our customers are doing well and asking for more flour," he said.
The mill posted profits of $13.4 million in 2014, $11.9 million in 2013 and $16.1 million in 2011. The last year in which the mill posted a loss was 2009.
The 2016 profit resulted in a transfer of about $4.4 million to the state's general fund and $466,831 to the Agricultural Products Utilization Commission.
"These have all been very good years," said Karlene Fine, executive director of the North Dakota Industrial Commission, which oversees the mill and received the transfer report during its meeting Tuesday.
Taylor said the mill is still calculating bonuses for employees, who last year received an average annual bonus of $13,693 for meeting performance, profit and safety goals. He'll deliver his full 2016 operations summary to the commission next month.
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 start operations in late August or early September, Taylor said.
The mill remains the only state-owned flour mill in the country, created in 1922 to give North Dakota farmers a better price for their wheat by avoiding freight costs associated with shipping it to Minneapolis.