Latimer, Iowa (north central) | NW Minnesota is where most of the wheat is grown now. Mankato wouldn’t be a terrible location for a mill because it’s in the right direction of the end users. The Mankato site is very locked in by the river and downtown. It’s hard to navigate with trucks.
Grain Mills have really moved in a direction of getting their raw materials in by train. It’s very easy to make one call, especially to an elevator they own, and get a trainload vs dealing with 100 farmers. Cargill and CHS are also sourcing the grain from their elevators. This commodity system works well on producing a large supply of milled grain. It also doesn’t provide any traceability of the source. Once wheat, or oats, is dumped in a big bin traceability is gone.
Cost wise, at least on oats, by the time an oat leaves a farm, taken to an elevator, taken to a shuttle train loader, and shipped to a huge mill, then shipped to the US distribution network/co packer/ retail the number of entities needing a cut of the dollar eats up a large chunk of everything. A mill closer to the US distribution network, with direct delivery by farmers to the mill, allows a mill to pay a significantly higher price for the oat to the farmer, while also adding a layer of traceability brands are looking for, while also not being at a higher price point for an F.O.B. Product. Farmers can make significantly more, we just have to be closer to consumers. Move beyond being commodity producers only. It has to be done at scale to be efficient but is achievable.
Oat consumption per capita is increasing. Up to 5lbs from 4 lbs a few years ago. Europe and Canada average around 28 lbs per capita. The market is there for some other crops we just need the farmer controlled infrastructure to get down the supply chain.
Sorry, got off topic. Yes I am the guy working on a mill, have been getting messages asking about Mankato closing and why. Mainly a facility owned by a conglomerate that has reached its useful age. They do have pretty silos though.
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Ardent Mills Mankato
