Dakota Growers Pasta
1.
Defining economic characteristics of the durum wheat milling and pasta production industry:
According to the case, durum wheat quality criteria continually evolve in response to market pressure and consumer preference. Increasing demand for specific durum wheat quality attributes for different end products requires development of more rapid objective means to grade and classify wheat parcels on the basis of processing potential.
Durum wheat prices rose because of increased demand for pasta. In addition, the increase in milling capacity in the late 1990's had helped increase demand for durum wheat, which increased durum prices.
Industry's standout features:
ability to meet customer specifications with consistent quality
2.
Value added in the durum wheat milling and pasta production industry:
Value-added processing allows farmers to retain most of the profits that are captured by processors who buy raw goods from independent farmers, prepare them according to consumer demand, and sell them to supermarkets at a high markup. The approach makes it possible for farmers to appeal to niche sectors that demand specialty or prepared foods that, at one time, only international or larger corporations could offer.
In 1990, 1,084 North Dakota durum wheat farmers paid for a feasibility study of building an integrated durum milling/pasta manufacturing plant. After receiving positive results and realizing the potential for increased earnings by processing wheat into pasta locally, the farmers went ahead with the project. Their venture met with almost instant success, demonstrating the benefit of turning their raw wheat into marketable pasta.
The economic consequences of processing their crop were clear. Selling durum wheat by the bushel generates $4.65, which translates into $7.76 per 100 pounds. Semolina flour milled from durum wheat sells for $12.60 per 100 pounds. Pasta sells at retail for about $1.25 per pound, or $125 per 100 pounds. The
Defining economic characteristics of the durum wheat milling and pasta production industry:
According to the case, durum wheat quality criteria continually evolve in response to market pressure and consumer preference. Increasing demand for specific durum wheat quality attributes for different end products requires development of more rapid objective means to grade and classify wheat parcels on the basis of processing potential.
Durum wheat prices rose because of increased demand for pasta. In addition, the increase in milling capacity in the late 1990's had helped increase demand for durum wheat, which increased durum prices.
Industry's standout features:
ability to meet customer specifications with consistent quality
2.
Value added in the durum wheat milling and pasta production industry:
Value-added processing allows farmers to retain most of the profits that are captured by processors who buy raw goods from independent farmers, prepare them according to consumer demand, and sell them to supermarkets at a high markup. The approach makes it possible for farmers to appeal to niche sectors that demand specialty or prepared foods that, at one time, only international or larger corporations could offer.
In 1990, 1,084 North Dakota durum wheat farmers paid for a feasibility study of building an integrated durum milling/pasta manufacturing plant. After receiving positive results and realizing the potential for increased earnings by processing wheat into pasta locally, the farmers went ahead with the project. Their venture met with almost instant success, demonstrating the benefit of turning their raw wheat into marketable pasta.
The economic consequences of processing their crop were clear. Selling durum wheat by the bushel generates $4.65, which translates into $7.76 per 100 pounds. Semolina flour milled from durum wheat sells for $12.60 per 100 pounds. Pasta sells at retail for about $1.25 per pound, or $125 per 100 pounds. The