February 2, 2004

Identity Preservation an Alternative for Small Farms and Elevators

For producers looking to increase income while reducing or maintaining the number of acres they farm, producing identity-preserved crops may be an attractive option, according to Cole Gustafson, North Dakota State University agricultural economist.

In some cases, customers are willing to pay a premium for grains that have unique characteristics, such as corn with high oil content. In order to market these grains for maximum profitability, farmers must keep them separate from other crop varieties. This concept is known as identity preservation (IP).

“I see the marketplace being driven by IP in the next 10 years,” says Rudy Radke, agriculture diversification specialist with the NDSU Extension Service. He notes that food safety issues will play a large role in this conversion.

Radke and Gustafson say there are tremendous IP opportunities in North Dakota. “There are contracts available for commodity crops, as well as specialty crops,” Radke says. Gustafson adds that there is a growing interest in organic production.

Radke also views IP as an option for small elevators that are closing because of overwhelming competition. An elevator operator can make his or her facility cleanable like a seed operation and then enter into IP contracts and markets. The enterprise provides more dollars with less volume.

Although the profits can be high, Gustafson points out that there is a great need for extensive planning in any type of IP enterprise. “There are a number of issues to face including promotion, negotiation, liability and risk,” he says. “The key is to take the time to identify markets. Know what consumers are looking for and how crops are being used.”

More information about IP will be provided at two public meetings scheduled for upcoming weeks. The first will be held at the Emmons County Courthouse Auditorium in Linton, from 10 a.m. to 3 p.m., on Friday, Feb. 13. Gustafson and Radke will be presenting, and marketing IP crops will be the focus of the day. For additional information on this event, contact Mike Hanson at (701) 254-4811.

The second meeting will be held in Fargo at the Holiday Inn, from 9:30 a.m. to 3 p.m., on March 5. Highlights will include information on markets, cost of IP, farm alliances for IP and new technology for running containers on the rail without having full intermodal facilities. More information can be obtained by contacting Radke at (701) 356-0222.

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Sources: Cole Gustafson, (701) 231-7096, cole.gustafson@ndsu.nodak.edu
Rudy Radke, (701) 356-0222, rudolph.radke@ndsu.nodak.edu
Writer: Teresa Oe, (701) 231-8371, teresa.oe@ndsu.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu

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