Midwest states with significant agricultural industries have recognized the role value-added agriculture plays in keeping a state economy strong. Advancing new opportunities for producers and opening new markets for commodities is a key to economic sustainability.
Naturally, states do not all take the same approach to value-added opportunities. Several have grant programs; others offer technical assistance. Some help through their state university systems or state departments of agriculture; others have independent organizations. In the Midwest, AURI is unique in its mixture of programs and technical assistance. Regardless of structure, these efforts promote value-added agriculture and the rural economy. Following is a brief overview of programs from other Midwest states.
North Dakota
Agricultural Products Utilization Commission
Mission
To create new wealth and jobs through developing new and expanded uses of North Dakota agricultural products.
Funds
State of North Dakota.
Services
APUC awards grants for basic and applied research, marketing and utilization, farm diversification and prototype development programs.
Project examples
The APUC commission meets quarterly to award funds for value-added projects.
In February of 2003, the APUC funded 10 projects for a total of nearly $430,000. Among the projects are a security fence for North Dakota State University’s industrial hemp-growing studies, the development of a seed potato farm, and the marketing of whole peeled onions.
South Dakota
Value-Added Agriculture Development Center
Mission
To foster the creation of producer-owned, value-added agriculture by offering technical and staff support and championing value-added agriculture by educating producers, lenders and the public.
Funds
18 producer-based commodity groups, trade organizations and cooperatives.
Services
Project facilitation, feasibility studies, business planning, market assessments, technical assistance, capital drives, loan packaging and education.
Project example
VAADC participated in a producer meeting in the fall of 1999 to test interest in the construction of a 40-million-gallon ethanol plant in the Milbank area. VAADC helped guide the project through preliminary development. When it became evident the project was feasible, VAADC handed it to a full-time project manager and construction firm. The capital drive was successful and construction is expected to begin this summer.
Value Added Finance Authority
In February of 2003, the APUC funded 10 projects for a total of nearly $430,000. Among the projects are a security fence for North Dakota State University’s industrial hemp-growing studies, the development of a seed potato farm, and the marketing of whole peeled onions.
Mission
To develop and promote agricultural processing in South Dakota. One of the authority’s programs, the Value Added Agribusiness Relending Program, loans businesses up to $250,000 for processing or marketing agricultural commodities.
Funds
State of South Dakota (through the Department of Agriculture).
Iowa
Center for Crops Utilization Research
Mission
To improve American agricultural competitiveness by improving understanding of the basic properties of crops and their components and using that information to develop new food, feed and industrial products.
Funds
State of Iowa (through Iowa State University).
Services
This is a research, development and technology transfer program focusing on new processes, products and markets for ag commodities. Research is conducted on emerging ag-based products, such as degradable plastics, industrial adhesives and novel construction materials.
Project examples
CCUR has conducted substantial research into producing rubber, adhesives and plastic materials from polymerized corn and soybean oils. Research has also been conducted into protein isolation and purification for enhanced food products. CCUR utilizes a $15 million state-of-the-art lab that includes a processing and training facility for wet processing, dry processing, fermentation, biocomposites, industrial product development and consumer and sensory testing.
Iowa State University Extension Service
Mission
To educate the public about new opportunities in value-added agriculture.
Funds
State of Iowa (through Iowa State University).Services
Marketing and business plans, technology transfer and business assistance.
Project examples
Extension Service projects include work on a dry edible bean cooperative and assistance for organic fruit production including grapes, apples and blueberries.
Wisconsin
Wisconsin Department of Agriculture, Trade and Consumer Protection
Mission
To develop high-value industrial crops for nutraceutical and pharmaceutical uses, along with ethanol and fiber crop production, and cultivate improvement in the economic well-being of farmers and rural communities.
Funds
State of Wisconsin.
Services
Agricultural Development and Diversification grant program, alternative fuel development, aquaculture, direct marketing, new uses, organic agriculture, “Something Special from Wisconsin” brand identity program.
Project example
ADD grants have supported efforts to market cheese from grass-based dairies, studies to improve chicken egg production, and evaluations of dairy manure in potato production.
Cooperative Development Services
Mission
To work with crop and livestock producers to add value to their products through cooperative value-added processing, to identify market niches and opportunities in a changing marketplace, and to provide expertise in conventional, sustainable and organic agriculture.
Funds
Fees for services.
Services
Market research, feasibility analysis, business planning, funding procurement.
Project example
In early 2002, CDS completed a comprehensive market study of the organic dairy industry for a dairy farmer group. Through interviews with industry leaders and secondary research, CDS produced a detailed report and developed a set of recommendations for a value-added organic dairy enterprise.
Nebraska
University of Nebraska Food Processing Center
Mission
To assist food manufacturers with product and process development. The Center offers a range of business development capabilities in market research, product costing, ingredient sourcing, market testing and business venture development.
Funds
State of Nebraska (through the University of Nebraska).
Services
Pilot plants Ñ extrusion, meat processing, dehydration, packaging, spray drying; laboratory services Ñ comprehensive product development, microbiological services, analytical services, shelf-life and sensory evaluations; marketing services Ñ product costing, customer processing, packaging and ingredient sourcing, market testing, business plan development, product line extension.
Project example
The Food Processing Center worked with the Southeast Iowa Nut Growers Cooperative to identify value-added chestnut products for the foodservice industry. Assistance was provided with processing chestnuts for a test market in upscale restaurants. As a result, the cooperative identified a niche market opportunity for chestnut products.
Kansas
Agriculture Value Added Center
Mission
To provide technical and financial support for the creation and expansion of producer-based alliances and value-added businesses. AVAC pursues this objective through a foods and feeds program, an industrial agriculture program and a cooperative development program.
Funds
State of Kansas.
Services
AVAC funds provides loans and services to value-added projects for processing and marketing. AVAC assists individual producers, cooperatives and other business structures as well as rural communities.
Project example
In December of 1997, soybean producers from Washington County met to identify ways to add value to their crops. In April of 1998, the producers formed North Central Kansas Processors to finance a soybean crush plant. A year later NCKP leveraged several loans with producer equity and raised $1 million for building the plant, which began operating in July 1999.
Missouri
Ag Innovation Center, Missouri Department of Agriculture
Mission
To be a resource and assistance center for Missouri’s agricultural producers by providing business counseling, training and resources for start-up and expanding agricultural businesses, with a primary emphasis on value-added agriculture.
Funds
State of Missouri.
Services
Assistance in identifying and assessing market opportunities, writing business plans, facilitating projects in the start-up phase, designing new or expanded organizational structures, assessing capitalization strategies, identifying financial assistance opportunities.
Missouri Value Added Development Center
Mission
To (1) provide extension educators with decision support tools with which to assist agriculture producers in the formation and operation of collective businesses, (2) develop a mechanism for linking campus research and extension activities related to value-added agriculture, and (3) provide support and strategic planning input to functional business units.
Funds
State of Missouri (through the University of Missouri). Services
The Center is home to the University of Missouri Outreach and Extension Agricultural Business Counselors, with 41 professionals trained in business development and leadership skills. The ABCs serve three primary roles: initial contact, information source and value-added educator.
Project example
One Missouri farmer switched from a hog operation to carve out a niche raising and selling varieties of freshwater fish. Some of the fish are sold to restock lakes and rivers, others are for food markets. The producer is now able to set the price he needs rather than simply take the price he’s given.
