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Vertical Integration
Farmers producing food rather than just commodities

 

"Like crocuses through the snow of Easter, new businesses are forming. They are businesses formed by farmers who ask financially-strapped neighbors to invest money and commit quality products. Soybeans are now being sold as oil, durum wheat as pasta, hard red spring wheat as partially baked frozen bread, corn as sweeteners, alfalfa to milk and cheese, hogs as hams, and cattle as dining entertainment."

William S. Patrie, Rural Development Director, North Dakota Association of Rural Electric Cooperatives

North Dakota farmers and ranchers are beginning to understand that they need to get closer to consumers. They can no longer sell their products at the elevator or the feedlot and make a profit on them. Instead of selling heifers and wheat, they need to be selling steaks and pasta.

Farmers who control all stages of production from commodity are what economists call vertically integrated. Processing your own products and entering the retail market can be difficult, but new generation cooperatives are providing a way for North Dakota farmers and ranchers to join forces to turn their commodities into food.

The Dakota Growers Pasta Cooperative in Carrington is a good example of farmers banding together to take their commodities from the field to the table. Today it is the third largest pasta manufacturer in the United States. The North American Bison Cooperative in New Rockford is processing and marketing North Dakota bison products around the country for cooperative members.

There are seven cooperatives in the United States that process beans and legumes, 19 that process corn, four that produce or process diversified organic products, six that process fiber, three that produce fish, six that do grain processing and marketing, and 14 that produce, process or market livestock.