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Published August 27, 2014, 09:39 AM

ND mill posts second-highest profit ever

The North Dakota Mill posted its second-highest profit on record in fiscal year 2014 and is off to a strong start in 2015, but concerns linger about rail service delays, President and General Manager Vance Taylor said Tuesday.

By: Mike Nowatzki, Forum News Service

BISMARCK, N.D. — The North Dakota Mill posted its second-highest profit on record in fiscal year 2014 and is off to a strong start in 2015, but concerns linger about rail service delays, President and General Manager Vance Taylor said Tuesday.

For the year ending June 30, the state-owned mill posted a profit of nearly $13.4 million, up 12 percent from the previous year’s $11.9 million profit and second only to 2011’s record profit of $16.1 million.

Taylor attributed the 2014 profit to increased shipment volumes, a nice wheat crop that helped the mill run more efficiently and an “excellent effort” from the mill’s 135 employees.

“Everybody worked hard all year long,” he said, presenting the year-end report to the state Industrial Commission, which oversees the mill, located in Grand Forks.

Sales fell from about $319 million to $310.2 million last year because of slightly lower grain prices, but shipments for the year totaled a record 12.2 million hundredweights, Taylor said. The mill also set a record for wheat purchased, buying more than 26.2 million bushels.

Taylor said he expects shipments will continue to rise.

“We’re seeing nice demand right now, and we’re hoping for another high-quality wheat crop to work with,” he said, adding that some producers in northeast North Dakota think it might be one of their best wheat crops ever.

A major downside risk heading into 2015 is the possibility that rail service issues will continue, “which can be very disruptive,” Taylor said. The mill temporarily shut down 25 times last winter because of railcars not arriving on time, he said.

With rail service still experiencing delays and a bumper crop expected, “We are concerned that when we get into the colder months, we will see that begin to deteriorate again,” he said.

Mill officials have reached out to the federal Surface Transportation Board, Burlington Northern Santa Fe and other railroads about the need to reduce delays, he said.

The North Dakota Mill and Elevator is the only state-owned milling facility in the country. It started in 1922 as a way to give North Dakota farmers a better price for their wheat by avoiding the freight costs associated with shipping wheat to the flour mills and grain exchange in Minneapolis.

Fifty to 55 percent of the mill’s profits typically go to the state’s general fund, and most of the rest is invested back into capital projects at the mill, Taylor said.

The Industrial Commission on Tuesday approved capital expenditures of about $12 million for 2015. Roughly $9.9 million of that is carryover from 2014, including a $6.6 million expansion and a $2.7 million electrical power distribution upgrade.

Mill employees received an annual pay bonus of roughly 18 percent for meeting certain performance, profit and safety goals this past year as part of the mill’s gain sharing program, Taylor said. The average annual bonus in the past 10 years was about 12 percent, he said.

Gov. Jack Dalrymple, chairman of the three-member Industrial Commission, called Taylor’s presentation a “good report.”

“Keep up the good work,” he said.

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