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Beyond onions

DAWSON, N.D. - Kidco Farms Processing L.L.C. in Kidder County, N.D., is diversifying beyond onions and has started making mixed vegetable packages for national contracts.

DAWSON, N.D. - Kidco Farms Processing L.L.C. in Kidder County, N.D., is diversifying beyond onions and has started making mixed vegetable packages for national contracts.

Mary Moser, operations manager for the plant, just south of Dawson, N.D., says production of new vacuum-packed mixed veggie packs started July 9 after 1½ years of research and market development.

After a production hiatus, a core group of about 15 people were rehired in the first week and an additional 15 have been newly hired, moving the company into a second shifts July 16.

Kidco Farms is owned by three North Dakota farmers - Van Amundson of Jamestown, N.D.; Monte Benz of Steele, N.D.; and Rod Holth of Grand Forks, N.D.

"We're very pleased. To be tied in with a major market is something we've been working hard on for 14 to 16 months," says Benz, an owner of the company as well as a local onion producer, noting that the start-up will be faster than initially anticipated. "Instead of starting out in first gear, we're we started out in third. We're trying to catch up, but by the time we get to high speed, we should be ready."

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Kidco Farms Processing is resuming production with two main products - both vacuum-packed vegetable mixes for grocery shoppers looking for convenience. Both already are available in the nation's major retailers, including Wal-Mart.

One product is a "pot roast pack," which is 55 percent of the so-called "B" size red potatoes, 20 percent quartered Spanish onions and the rest cut carrot "coins" and cut celery.

A second package is a "fajita vegetable blend," which is designed for stir-fry applications. This one has red peppers, green peppers and - of course - onions.

The vacuum-sealed packages are picked up in Dawson and trucked to Council Bluffs, Iowa, where another company boxes them with separately prepared pork and beef and then ships them nationwide.

"We're doing about 100,000 pounds in a week," Benz says, noting that right now that translates into about 2½ semi-trucks per week. All of the end product is as raw and crisp as the day it was packaged.

In the vacuum sealing, the product is held at 34 degrees. Kidco adds an "enhancer" of some kind, which helps the product keep a 45-day shelf life under refrigeration.

Bumps in the road

Onion production is a potentially important development in the region because it is a high-value crop that rotates with processing potatoes, which have two regional processing plants in Jamestown and Grand Forks, N.D.

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Several producers started planting some onions in the region in 2001. They soon ran into trouble when the 9-11 attack occurred. Their market had been in Hanover, Md., and it was difficult to get truck delivery to the East Coast in the wake of the tragedy.

"We decided to build our own markets," Benz says. "We put our heads together and bought a 'whole-onion' peeler and put this facility together in 2002."

Kidco Farms Processing started peeling in April 2003 and tried to get into major markets. In 2005, the company peaked, operating three shifts of workers. But it didn't last.

"We were smothered by the bigger players, basically," Benz says. "We were fighting an uphill battle against the bigger companies."

In 2006, the company ran into an even bigger problem - high onion prices. A national onion shortage was triggered in various parts of the country by a number of causes - drought, excess moisture and related disease and storage problems and an early frost. Onion prices went through the roof.

That spelled trouble because, initially, Kidco Farms had been outsourcing 90 percent of its onions, getting them from places such as California, Washington and Idaho.

"We ran out of contracted raw product, so we decided to slip into 'neutral' instead of trying to play ball against the big boys," Benz says.

The company stopped onion processing in September 2006, but still was busy behind-the-scenes working to diversify so it wouldn't be solely dependent on just onions again.

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"People thought we were closed, but the doors were never locked," Benz says smiling.

Drive for diversity

Back in April 2006, Inn Foods Inc. of Watsonville, Calif., a custom frozen foods packaging company, contacted Kidco Farms.

An Inn Foods official previously had worked with Kidco's Holth on another value-added project. Established in 1976, Inn Foods markets to various of the giant food retailers in the country.

Moser, who joined the company in 2004, advanced to her current post last year. Inn Foods officials advised her that developing a project with Inn Foods would take 18 months of testing and paperwork. She was able to get it done in 14 months.

"We did several test runs. Lots of paperwork," she says.

Among other things, the plant must be proven to be "food grade." Some of the equipment used in the new process was acquired from the defunct Dakota Fresh salad plant in Medina, N.D., where Moser had worked.

The company was up to code on whole-peeled onions, but the new markets took different machinery that needed new approvals. The companies Kidco Farms is working with have their own set of audits, which now all are complete. Among the things they check for are the "good manufacturing process," or GMP.

"They're not going to move production to you and then find out that you're not here to stay," Benz says.

Another challenge is the sheer workability of moving product across the country.

Inn Foods and its end-use customers were impressed that Kidco Farms could move product to an Iowa repacking facility within eight hours, thereby staging it for national distribution.

Inn Foods officials say Kidco Farms was chosen for its proximity to raw product, proximity to its end customers, expertise in refrigerated vegetable production and ability to support and maintain a quality work force.

Among other things, Kidco Farms had to demonstrate that its product could be shipped across the mountains and through deserts at various pressures and be "the same product, no matter where it's delivered," Benz says. Product within the vacuum-sealed packages must remain stable in various air pressure scenarios.

Benz looks forward to a day when more of the company's production will be more locally grown.

Use of locally grown onions is a goal.

"We're doing whole peeling, but on a smaller scale," Benz says. "When the 'new' product becomes available, we'll be whole peeling again, on a larger scale."

(On his own farm, Benz doubled his onion production to 260 acres in 2007. Part of his production also is planned for an Oakes fresh pack facility, which was started in 2006 and was scheduled to be expanded in 2007.)

On the potatoes, Benz says the initial product has come out of Texas.

"As soon as the Upper Midwest crop becomes available, our potatoes will be coming from here," says Benz, himself a former potato grower.

Some of the region's red potato producers already have talked about converting existing storage buildings to refrigerated ones to have longer-term supply for Kidco Farms, he says.

"We're looking for Upper Midwest potato production sources through June, or as long as possible," Benz says, meaning only July and August might have to come from somewhere else.

Similarly, carrots are being sourced from California, but Kidco Farms also is looking for more local, year-round suppliers. The region's carrot producers need time to set up adequate storage.

"There are a lot of good carrots grown in the Upper Midwest, but they're all harvested and 'poof' they're gone," Benz says. "We need an extended supply, a stable supply."

Benz says that if the Kidco Farms owners were to build a plant like theirs again, they'd put it in the same place.

"We're right in the center of the irrigation region, and we're right on Highway (Interstate) 94 and close to (U.S.) Highway 83," he says.

And with a new, diversified market.

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