GRAND FORKS - Agriculture officials and wheat producers are welcoming a planned expansion to the North Dakota Mill and Elevator in Grand Forks.

The $27 million expansion, approved by the North Dakota Industrial Commission in mid-September, is the result of increased demand from customers, mill officials said. The addition will increase its capacity by 11,500 hundredweight of flour produced per day to roughly 49,500 hundredweight, making it the largest single milling operation in the country, said Vance Taylor, the mill’s president and general manager.

“It’s driven by current customer demand,” he said. “That’s the reason we’re doing it.”

State agriculture officials said the expansion speaks to the quality of North Dakota’s wheat, and said it could give producers another destination for their crops at a time that rail backlogs are frustrating farmers.

Expansion

The state mill had received approval for a $7.4 million expansion in April. But in a proposal dated Sept. 17, the mill said “increased demand from customers will likely prevent the downtime needed to complete the… expansion project.” Moreover, customer demand was expected to exceed capacity after that expansion, the proposal stated.

The expansion will include constructing new spring wheat mill and cleaning facilities on its property north of U.S. Highway 2.

The expansion will mean the addition of at least six jobs, Taylor said.

Taylor hopes to finish the expansion by the fall of 2015. Current flour production won’t be affected by construction, he said in a press release.

Taylor believes there’s a Nabisco facility in Toledo, Ohio, that’s roughly the same size as state mill currently, but the expansion will make North Dakota’s the largest in the country.

The mill posted its second-highest annual profit at $13.4 million for the fiscal year ending June 30. That’s up from $11.9 million the year before. Mill officials expect its net income to reach $16 million - it set an all-time high in 2011 at $16.1 million - by fiscal year 2017, according to its expansion proposal.

Its shipments during the latest fiscal year set a record at 12.2 million hundredweights, and mill officials said recently they expect that to keep growing. A hundredweight is equal to 100 pounds.

The mill opened in 1922, and is the only state-owned milling facility in the United States. Taylor said much of their products are shipped to the East Coast.

“The North Dakota Mill and Elevator has been a very successful milling venture for a long time,” said Neal Fisher, administrator of the North Dakota Wheat Commission.

Demand

The project will increase the demand for hard red spring wheat each year to more than 32 million bushels, up from 25 million bushels today, according to Taylor. While that is only a fraction of the 250 million bushels of hard red spring wheat North Dakota produces every year, Fisher said it provides another outlet for farmers.

“We have a very competitive situation on the railroads right now,” he said. “Any new destination or expanded destination for our producers is a good thing.”

Fisher said there’s worldwide demand for the kind of wheat North Dakota produces, which he said have higher protein levels. Hard red spring wheat is sometimes blended into other types of flour to increase gluten content, according to the North Dakota Wheat Commission.

“We have some quality product that’s consistent,” said State Agriculture Commissioner Doug Goehring. “And the millers and the rather large companies that we do business with continue to come back to us.”