21st Century Alliance formed to seek value-added

By Tracy Sayler

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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.

Created last summer by leaders of the Kansas Association of Wheat Growers (KAWG) and the Kansas Corn Growers Association (KCGA), the 21st Century Alliance is a big-picture idea based on a relatively simple plan. KAWG and KCGA members will invest a flat sum of $500 per person (a prerequisite is membership in the organizations; so it’s an additional $100 for nonmembers) which will be pooled to develop a business organization that will identify opportunities for investors to add value — or capture additional profit — on the grain they produce. Further investment would then establish a cooperative business to carry out a targeted value-added venture.

The venture would be a closed cooperative, meaning that only the investors would benefit. After which, membership may be opened periodically to new producers, possibly at an increased investment level.

Project leaders set a goal of enlisting at least 200 contributors, or a minimum investment level of $100,000, before taking the more formal step of establishing by-laws and a steering committee to oversee the value-added organization. So far, close to 350 growers have invested in the project.

"There are detractors who say it can’t be done, but we’re really confident about the quality of the people, progressive farmers in Kansas, who are supporting this. There is a real interest of farmers to move up the value-added food system," says Lynn Rundle, KAWG’s executive director, who is spearheading the alliance project.

At first, the 21st Century Alliance was named the 21st Century Club. "A big reason for the name change is the possibility that this project has potential to include growers in other states," says Rundle.

The project’s steering committee is now searching for value-added possibilities, which might be in processed wheat foods such as frozen dough or bagels, white wheat markets, or even non-food uses. Organizers want to attract an established industry player as a venture partner.

Grower bargaining power

"We bring two key things to the table: a capital base, and the raw product," says Rundle. "We fulfill a goal that’s needed in a vertically-integrated business, and that’s total quality management, from the raw commodity until it reaches the consumer. "The poultry industry does it, and so can wheat."

Media in Kansas have taken notice with coverage lending momentum to the project. "What’s really pitiful about the idea is that it hasn’t happened sooner," said one columnist in the Topeka Capital-Journal. "Cranberries come from Ocean Spray, a farmer cooperative. So do Sun-Maid raisins and Sun-Kist oranges and sugar cubes from American Crystal…There’s even a pasta-making cooperative of durum wheat growers in North Dakota."

Indeed, the Kansans have kept a close eye on the value-added movement in the Northern Plains. Rundle and other KAWG leaders have visited cooperative ventures in the area, and have established close working relationships with out-state farm leaders and commodity groups who believe in a similar vision: that for better prosperity, farmers need to become less dependent on the government, and more reliant on the value-added marketplace.

"We’re not talking about pooling grain to market, we’re talking about owning the product all the way to the consumer," Rundle says. "And we’re not looking to become contract growers; our goal is to become partners in the ownership of a processing system."

Rundle says he views his role as executive director of the KAWG the same as a coach of a team in any sport — to get in a position to win. "What I think the alliance can do is put farmers in an economic position to win in the marketplace."