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State-owned mill a budget bright spot for North Dakota

GRAND FORKS -- With the North Dakota budget in rough shape, officials are glad for any boost to state coffers. That includes the modest bump from the North Dakota Mill and Elevator that towers over north Grand Forks. The mill, the only such state...

GRAND FORKS -- With the North Dakota budget in rough shape, officials are glad for any boost to state coffers.

That includes the modest bump from the North Dakota Mill and Elevator that towers over north Grand Forks.

The mill, the only such state-owned operation in the country, contributes millions every year to the North Dakota budget. But as president and general manager Vance Taylor points out, the mill is financially self-sufficient.

"We don't receive any financial assistance from the state," he said while giving a tour this month. "All the projects that we're doing, we're doing with our own special funds."

The facility, located just north of Gateway Drive on Mill Road, is on the verge of completing a major expansion project that will make it the largest single milling operation the country. Taylor said demand for flour is largely driving the addition, which will increase its daily production capacity from 38,000 hundredweight of flour to 49,500 hundredweight.

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"We're also trying to serve our mission to increase value for farmers," he said.

The expansion, first approved by the North Dakota Industrial Commission in 2014, will add an eighth milling unit to the facility. It also includes enough room for another expansion in the future, Taylor said.

The mill is also planning a project that will include a new track and wheat unloading pit that may be completed this fall.

Budget

The mill posted a nearly $16.7 million profit in the fiscal year that ended June 30, 2015, marking a record.

Five percent of its profits are transferred to the Agricultural Products Utilization Commission and 50 percent of the remaining profits go to the state general fund, Taylor said. The rest goes back to the mill to help pay for things like capital projects.

While it's a relative drop in the bucket for a state that had planned on a $6 billion general fund for the current two-year budget cycle, those dollars are a welcome sight.

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"It is still needed revenue," said Sen. Ray Holmberg, R-Grand Forks, who is chairman of the Senate Appropriations Committee.

The mill isn't subject to the 4.05 percent cut ordered by Gov. Jack Dalrymple in February, but Becky Keller, a budget analyst at the state Office of Management and Budget, said the state is asking the mill to "look for efficiencies in operations."

Although it isn't directly affected by state budget cuts, the mill isn't expecting to match its record-setting 2015. Taylor said they project $9 million in profits in fiscal year 2016, which he mainly attributed to "depressed grain markets."

Pragmatism

But despite the contribution to government coffers, Holmberg doesn't expect that any other states would institute a similar operation to raise revenue, as North Dakota was in a much different political climate when the mill was established in the early 20th century. The creation of the North Dakota Mill and Elevator Association "was the result of a long battle waged by farmers and progressives in an attempt to break the grain trade monopoly and have some control over pricing and grading of grain," according to the State Historical Society.

Writing for the New York Times in 2012, Gretchen Dykstra recounted the Nonpartisan League's rise to political power in North Dakota and the mill's origins. She said some in North Dakota may be "uneasy" about the mill's "socialist roots."

"The people of North Dakota have long since put aside their anger and fear, and pragmatic government officials just keep doing what's right for the people, socialist or not," she wrote.

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Holmberg said other states have looked at launching a state-owned bank -- another North Dakota oddity -- but traditional banks have lobbied against them.

"I would be surprised if other states would (establish a mill)," Holmberg said. "But I'm sure they look at it."

Related Topics: AGRICULTURE
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