New Organic Cleaning and Processing Mill in Northwest Saskatchewan

Source: Saskatchewan Agriculture and Food

What started out as a discussion around the kitchen table in 2002 finally became a reality in February 2003 when a group of organic producers joined together to form the Northwest Organic Community Mills Co-operative Limited.

This new generation co-operative was established to get more value out of grain production and to allow the producer to have more control over the process. The group wanted to get away from just selling grain to the “big guys” and knew that they must be able to get more for their grain by adding value through processing. So, the co-operative was established, and a facility was purchased at Maymont.

Plant and Marketing Manager Brian Reiley explains that the mill was built with "sweat equity" from members with minimal debt, and that they were able to use refurbished equipment to keep costs at a minimum. To try out the cleaning equipment, the group cleaned seed for planting in May 2004. From there, they decided what needed to be changed, and spent the summer putting the final touches on the plant. In November, they got started cleaning.

Over the past year, the plant has cleaned in excess of 350,000 bushels of organic grain, but it has the capacity to clean up to 700,000 bushels annually, given a steady supply of good quality grain.

In addition to cleaning, the co-operative also offers services such as bagging, and container, intermodal and rail car loading. Not only do they provide these services for producers, they also clean and bag grain for other brokers who deal in organics, and have shipped products to the United Kingdom, Italy, Japan and the United States. The co-operative offers marketing services not only to its producer-members, but to any organic producer, as well.

Just recently, the co-operative added processing to its list of services. With the addition of a stone flour mill, the co-operative now has the capacity to produce 1.3 million pounds of organic flour annually. The flour types include whole wheat, buckwheat, barley and rye. They also collect the byproducts from making flour, such as bran and wheatlets, which are also saleable products. Taking it one step further, they have developed multigrain cereal products and muffin and pancake mixes that Reiley hopes will be in stores in early 2006.

The co-operative will be selling products under the name of “Old School Organics,” as the facility is situated in what was once the old school in Maymont. They are currently selling some products at the plant and in some local stores in northwest Saskatchewan. These include small packages of whole grains such as flax and cereal grains, as well as 10 kg packages of flour. The mill is looking at expanding its product line, and is currently trying to source dehydrated organic fruit.

The co-operative is made up of 59 producer members and approximately 100 investor members. There are nine directors on the board, which meets monthly. Organic growers may buy memberships at anytime for $500, and delivery obligation shares at $300 per 30-tonne allotment. The allotments are guaranteed for life, but the co-operative does realize that there can be extenuating circumstances, such as frost, whereby delivery is impossible because the production and quality just aren’t there. Within the next year or so, there may be an investment opportunity for the public, as the co-operative is planning to open a new share offering of preferred shares at some point in time.

Northwest Organic Community Mills Co-operative Limited has viewed the development of value-added organic products, marketing and market development as key components of the organization’s long-term success. To this end, the co-operative has purchased and maintained a membership in the Saskatchewan Trade and Export Partnership (STEP).

From an international perspective, the co-operative has received a lot of interest from overseas buyers. In fact, they had a number of European buyers and members of trade missions from Canadian consulates in Europe visit the mill in September of 2004. In addition, there have been a number of visits from a variety of international firms interested in doing business with the co-operative.

This past November, with funding from the Saskatchewan Agriculture and Food Agri-Value Program, a small group of representatives from the co-operative set off to Europe to return the international visits and to meet with new potential buyers. They also hoped to gain insight into the organic industry overseas in order to see what products would meet the needs of potential foreign customers.

Dayton Funk, an organic producer and director on the board, commented that they learned a lot in terms of the overseas markets they can tap into and the products they need to focus on.

“The overseas markets are looking for grains that can’t be produced there," he says. "There's no sense in trying to sell them low-protein wheat, when they can grow it locally. The grains they are interested in are high-protein wheat, flax and lentils. The buyers prefer to buy whole grains versus processed products, as they feel more confident in the quality if they see the whole grain.” Dayton also commented that, although there is a great potential for tapping into the European market, there is a lot Canadian producers can do at home. Just getting product on the store shelves locally and into the larger centres, such as Toronto, would be a huge step forward.

The co-operative will be meeting during the winter months to do strategic planning, which will allow it to set some firm directions in terms of the markets and products they will be looking at in the future. Things to watch for from this co-operative in 2006 include new products under the “Old School” brand, new markets overseas, HACCP certification and, potentially, a new share offering.

To find out more about the Northwest Organic Community Mills Co-operative Limited, contact Brian Reiley or Judy Sherman at (306) 389-2118 or visit their website at www.northwestorganicmills.com.

For more information, contact:

Sherrilyn Phelps, PAg, CCA
Crop Development Specialist
Saskatchewan Agriculture and Food
(306) 446-7475

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