Fessenden Cooperative Association
Fessenden Cooperative Association started in the early 1940s in Fessenden, North Dakota. The Cooperative’s primary services include receiving and shipping wheat, corn, pinto beans, sunflower and soybeans. The company now has eight different locations in central North Dakota. With these numerous locations, the Cooperative has a trade radius of 65 miles in central North Dakota. Fessenden works closely with brokers and depends on the Internet for information to keep the Cooperative running smoothly and efficiently. Making it run smoothly and efficiently also requires making any improvements that are needed, according to manager Mark Hovland.
Fessenden Cooperative Association was a farmer-owned local coop in the early 1940s. The company was started in Fessenden, North Dakota, and soon spread throughout the central part of North Dakota. The company merchandizes corn, wheat, soybeans, sunflowers, pinto beans, flax, bird food, barley, oats and peas. The company processes the pinto beans which they ship to canners and packaging plants. The company sells and custom applies fertilizer and chemicals, as well as cleans seed for planting and sells seed to growers.
Fessenden has grown significantly throughout its nearly seventy years. The company has faced many different challenges; including its most recent challenge in hiring and retaining workers. However, throughout these challenges, there have been many successes, including the success of the pinto bean processing plant.
Being able to hire and retain workers is one major challenge that Fessenden Cooperative Association faces today. Fessenden is a remote rural area. The next closest large town is nearly ninety miles away. As an example, Hovland stated, “You have to drive ninety miles just to go to a Wal-Mart.” Another concern for Fessenden’s is the inconsistent supply of the railroad. Hovland shared that this has caused many headaches with more to come. As with many cooperatives and agribusinesses, the cooperative faces increasing costs of inputs, transportation, inventory, etc. This challenges the cooperative and the increasing capital needs. Within the past five to ten years the cost of nearly everything has increased from cost of the grain the company purchases to inventory inputs for resale and conducting business.
Fessenden Cooperative Association was one of the first elevators in the state of North Dakota that went to fifty car loading in 1980, and then to 100 car loading in the late 1990s. Fessenden has also had success with their pinto bean processing plant. In 2001 Fessenden purchased the Agrow Oils in Carrington, North Dakota. Fessenden made many upgrades in the facility which they turned into their bird food plant, which was the focus of their VAPG grant.
Throughout the years the Fessenden Cooperative Association has aggressively set and reached many of its goals. Much of the focus for the past 70 years has been on the operation of the company, which will continue to be a strategic focus of the firm. As the cooperative looks to the future, they will also be determining strategies for continuous improvement and efficiencies, updating of equipment and additional storage for fertilizer and grain.
Fessenden Cooperative Association spent their 2001 VAPG grant to start their bird food plant business in Carrington, North Dakota. The company used most of the grant money for buying product for the ingredients of the bird food and grain. Additionally the grant was used for additional help and salaries to implement the project. In 2005 the company received another VAPG grant, which was used to brand and bag a line of their pinto beans. Money was also used to upgrade the website and marketing assistance to enhance the business.
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in the coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agricultural producer groups, and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)