Wheat profits to grow if durum farmers, Pasta Montana cook deal

Pasta Montana plans to begin buying durum wheat directly from Montana producers, offering production contracts that could help growers pocket more money for their grain.

Officials from Pasta Montana and Schulz Grain and Trading Co. began pitching the contracting plan to producers this week at the Montana Grain Growers Association convention in Great Falls. Schulz Grain is acting as an agent for the Great Falls manufacturing plant.

By JAMES E. LARCOMBE Tribune Business Editor

http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=/20041203/BUSINESS/412030328/1046

Officials said the contracting process will be similar to that used by Anheuser Busch and International Malting Co., which buy malt barley from Montana farmers.

While winter and spring wheat are the most common grain crops grown in northcentral Montana, durum is not new to some producers.

"I know farmers in the Conrad area that have raised durum for the last 50 years," said Brett Wilson of Schulz Grain. "It’s nothing new."

But Pasta Montana is seeking a new variety of durum, called Alzada, that will be new to most producers. Alzada durum produces pasta with a richer, golden color that has proven popular in Japan, a key market for Pasta Montana.

Pasta Montana is owned by Nippon Flour Mills, a Japanese company. About half of Pasta Montana’s annual production currently goes to Japan.

"This color of pasta goes much faster, especially in Japan," said Dan Schulz. The Alzada variety "is going to achieve the quality of pasta that the Japanese consumer wants."

Developing pasta products from one durum variety and using strict quality standards is a crucial part of the business strategy at Pasta Montana, said Tony Flagg, the company’s president.

"We are looking for a way to differentiate ourselves in the marketplace," Flagg said.

Pasta Montana and Schulz Grain officials were working to drum up interest in Alzada production at the annual convention. Potential producers will be asked to make acreage commitments by Feb. 1, 2005.

Wilson said Schulz Grain hopes to contract between 6,000 and 8,000 acres of durum in 2005.

The deal with farmers will be the first direct link between producers and Pasta Montana, which has typically bought durum from large grain merchants.

"Now that they’ve found the variety they want, they want to get closer to producers," said Schulz.

Pasta Montana typically uses about 1 million bushels of durum per year. In 2004, Montana farmers produced about 17.9 million bushels of durum.

Northeast Montana is the state’s leading producer of durum. In 2003, Montana durum averaged about $4.07 per bushel and amounted to a $58.9 milllion crop.

The Alzada durum often grows shorter than other durum varieties, allowing harvest with a combine, Wilson noted. In tests, Alzada has produced higher yields than some other durum varieties.

Flagg said it was important to find a variety of durum that would be "agronomically attractive" to producers in northcentral Montana.

"In that sense, it’s definitely a win-win situation," he said.