Close to one-year anniversary,

FarmConnect Lands a Wheat Deal

By Tracy Sayler

Coming up on its first anniversary, FarmConnect has worked out its first business deal, shipping a 27-car unit train containing 90,000 bushels of identity-preserved spring wheat to one of the nation’s largest food companies.

FarmConnect (www.farmconnect.com) wrapped up its membership drive last April with more than 600 producers from across Minnesota. Commodity groups in the state, including the Minnesota Wheat Research and Promotion Council, were actively involved in forming the producer-owned alliance to identify and create crop and livestock market opportunities for its members.

FarmConnect’s business plan thus far is on track, says Brent Sorenson, Crookston, MN, interim CEO. “Our vision has stayed focused on looking for ways to get our members more integrated in the supply chain, and find ways that by supplying the customer, we are able to add value to that product and get more for it,” he says.

After organizing, FarmConnect went to work on implementing its business plan, conducting a survey to get a better understanding of FarmConnect members’ production capacities, capabilities and interests, and seeking buyers willing to pay a premium to receive farm commodities of a specific quality and quantity.

“Mainly what we have been doing over the past year is getting the word out on what FarmConnect is all about,” says Art Brandli, company chairman and a Warroad, MN producer.  “Not only to producers but also the buyers and as a result, it is amazing to me how many processors, companies, and interested parties out there that not only want to source products through us, but who also are interested in joining us to become part of FarmCon-nect’s philosophy.”

Brandli, who also serves as chairman of the Minnesota Wheat Research and Promotion Council, says FarmConnect has also been surveying customer needs. “These surveys are directed toward potential clients or buyers. They are the companies that wish to source products that have unique characteristics, and they are trying to find an organization or a place where they can provide information so that what they want is produced.  We have garnered tremendous amounts of information; data that has come about this last year and that all needs to be sorted through to help provide direction for our membership.”

Sorenson says FarmConnect’s recent wheat shipment, originating out of Hallock, MN, and moved by rail in early March, is a good stepping-stone transaction. “It gives us a pilot project to establish ourselves with the company, to try identity-preserved shipping, develop a supply relationship with the company, and better understand how we can deliver what they need,” he says.

Sorenson declines to mention the buyer, the variety involved, and the price premium earned by FarmConnect members who participated in the transaction. “The biggest thing is that the system is coming together and starting to work. Our first transaction happens to be wheat, but we have a number of different projects in different stages, and want to stress that we are working on business arrangements involving other crops too, as well as livestock,” he says.

As well as domestic buyers, FarmCon-nect has had contacts from potential customers in China, Japan and Mexico, who are looking for substantial volumes of unique types of grains. Mexico may be one of the most immediate export possibilities for FarmConnect, says Brandli, who was part of a trade delegation to Mexico late last year, led by MN Gov. Jesse Ventura.

“There are some substantial volumes of commodities that they want, and what they are looking for is to try to improve the logistical movement, almost more so than any specific variety or characteristic of the grain,” he says. “They want to find out how the movement and handling of grain can be minimized, and I think we can help, not necessarily starting with a specific trait they are looking for but to provide a cleaner grain product than what they have been getting. We would hope then is as we look to the future, they will start sourcing specific varieties.”

 Brandli says a key objective this year is hiring staff. FarmConnect now contracts with Sorenson and others at Northern Great Plains Inc. (www.ngplains.org, formerly the Red River Trade Council) for staff services.

FarmConnect will hold its first annual meeting in Alexandria, MN on March 29. Membership in FarmConnect remains closed for now.  Sorenson says opening FarmConnect to new members will depend on future business projects, and the ability or need for additional production to fill those opportunities. Although not in the immediate future, Brandli foresees opening FarmConnect to new membership somewhere down the line. “My thought is, we will open it up again. I think we will need to for the volume of business that we see coming.”