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Quarterly Report for Midwest Region
Illinois •  Indiana •  Iowa •  Kansas •  Michigan •  Minnesota •  Missouri •  Nebraska
North Dakota •  Ohio •  South Dakota •  Wisconsin •  Manitoba •  Ontario
Vacant — Chairman
Liana Lee, Ohio— Vice-Chairman
Kurt Markham, Minnesota — Secretary/Treasurer
Illinois Department of Agriculture Bureau of Marketing and Promotion
2002 Report

Illinois AgriFIRST is a $1.5 million grant program for value-added projects that raise farmers' share of profits from the processing of raw commodities. The Illinois Department of Agriculture, Bureau of Marketing and Promotion, oversees the AgriFIRST program. This program allows for two types of grants: technical assistance to hire someone to develop or expand a value added effort for which we require only a 25% match and is capped at $25,000; feasibility studies, competitive assessments and consulting or productivity services to add value are funded with a 50% match and have a cap of $300,000. AgriFIRST is designed to lend economic support to Illinois farmers to capture higher returns for their investment in agriculture initiatives; provide critical economic support to food processors, manufacturers, wholesalers, retailers, agribusiness, and others who work to nurture and expand the food and fiber industry in Illinois; provide grants and technical assistance for new and expanding agriculture-related businesses; help finance feasibility studies, business and marketing plans, technical advice and other types of financial assistance needed for innovative food and fiber enterprises to expand or get off the ground.

The first amateur wine competition will be held in Illinois on April 10 in Springfield, Illinois. The Bureau of Marketing and Promotion will be assisting the Illinois Grape and Wine Resources Council (IGWRC) in hosting an amateur wine competition. The competition is open to those who have not engaged in commercial winemaking. The IGWRC was created in 1997 by the state legislature and has seen rapid growth both in the number of acres of grapes under cultivation and in the number of wineries. We now have 29 wineries including seven new ones that have opened in the last six months, and several more should be opening within the next year.

Plans are already underway for the celebration of the 150th anniversary of the Illinois State Fair on August 9-18, 2002. The Illinois Department of Agriculture, Bureau of Marketing and Promotion will showcase Illinois products at the Agri-Expo area of the fairgrounds. The Agri-Expo will feature companies showcasing their agricultural product lines, kids pony rides, "Illinois Products" food sampling, Watershed Park, a Farmers Market, the Illinois Wine Garden, Antique Tractors, Ancient Athletics and an entertainment stage. Illinois companies will have an opportunity to not only promote their products, but also sell their products to the public. Agri-Expo gives the consumers a chance to see the diversity in Illinois agriculture.



Iowa Department of Agriculture and Land Stewardship's Marketing Bureau

Steps are now underway to launch a new specialty grain report to target some of the growing trade in niche grain markets. There is currently a dearth of good market information available for growers of these crops. As an example, specialty soybeans such as Vinton 81's and HP 204's or many lines of small seeded beans have no reported market. Corn also has a similar situation in that there is virtually no information on high-oil corn (HOC), high protein, white or waxy corn prices. In addition, all of these example crops can be grown under organic certification which can fetch premiums well above non-organic lines of the same product. If anyone is interested in cooperating or has some ideas on the subject, please call.

We participated in the World Ag Expo at Tulare, CA, again this year. Several states were represented and they were all recruiting dairies. The state of Iowa is interested in regaining a part of our dairy industry that has been in decline in recent years. Iowa can also play a role in providing replacement heifers to the Western states' dairies, especially as a place to send heifer calves on a retained ownership basis.

Iowa has also been keenly involved in various transportation issues. The current hot button is the management of the Missouri River. Upper Basin states such as North/South Dakota and Montana want to retain higher permanent pool levels for recreational fishing. Lower Basin states want to retain the Missouri as a viable transportation avenue for Midwest grains. Iowa has joined in a compromise position that will allow for higher permanent pools in the upstream reservoir, but has balked at the notion of a "spring rise and low summer flows" to mimic a "natural hydrograph."

Mandatory Price Reporting is scheduled to begin April 2, 2001. Early indications are that USDA-AMS has some "bugs" to work out yet. The rule of 3-60 may prevent many livestock reports from being issued due to the possibility of proprietary data being released.

Budget cuts being considered will range from 6 † 10%. This may have a potentially devastating impact on what we do. It appears that all of State Government in Iowa will be impacted. Currently, the Livestock Market News Program, which is done in cooperation with USDA-AMS, is scheduled for elimination. This is a 50-year history of joint cooperation that may potentially end.



Kansas Department of Commerce — Ag Marketing Division

The Division will lead a trade mission to Mexico in May. It will be a combination of ag and non-agriculture companies, but will include three of our producer groups.

The Division is just wrapping up a "Value Enhanced Direct Wheat Marketing Project." The project looked at the feasibility of segregating wheat and marketing it directly to a flour mill in Mexico. It evaluated the areas of origination, segregation, transportation, milling and baking. It is a joint project with Commerce & Housing, KSU, 21st Century Alliance and the Wheat Commission.

The Division hosted a Direct Meat Marketing Seminar in April. Approximately 80 producers attended the seminar focused on educating producers on the steps in direct marketing/selling.

The Division is hosting a conference in August entitled "Value-Added Opportunities in Agriculture — Partnering for Success." The conference will be held in Garden City, Kansas, and will include a tour of value-added enterprises, general presentations and break-out sessions.

The Division just received funding to study the feasibility of small-scale dairy processing. The study will take approximately eight months to complete.



Michigan Department of Agriculture Domestic Marketing
2002 Report

The Michigan Department of Agriculture's "Select Michigan" marketing program for Michigan grown and processed food and agriculture products was launched statewide on October 25, 1999. Shoppers can easily identify Michigan-grown, processed or manufactured food and agriculture products by looking for the Select Michigan logo. "Select Michigan — Great Lakes, Great Tastes" is used to promote food products; "Select Michigan — Great Lakes, Great Earth" promotes non-food agriculture products like nursery stock, bedding plants, Christmas trees and wool; "Select Michigan Organic" and "Select Michigan Worldwide" versions of the logo are also available.

Marketing efforts include:

  • sponsorship of the annual Michigan Wine & Food Festival, the Festival of the Sun and other local, regional and statewide events and activities;
  • maintaining a searchable database on the MDA Web site, www.michigan.gov/mda;
  • producing and distributing a Select Michigan Specialty and Processed Foods Directory, U-Pick and Farm Market Directory, and Great Lakes Grown booklet of Michigan-grown commodities;
  • participation at trade shows; and distributing point-of-sale materials to retailers, processors and producers.

Michigan Grape & Wine Industry Council
A legislatively-established organization to promote Michigan's expanding wine and grape-growing industries, the Michigan Grape & Wine Industry Council is administered by MDA. The council funds research and assists the industry in promoting Michigan's award-winning wines. The state has 28 wineries, most of which offer tours of the winery and vineyards.

Export and New Market Development Program (ENMDP)
ENMDP promotes the export of Michigan agricultural commodities, value-added goods and other products. Program staff helps identify and facilitate the development of new domestic and international markets. Exporting is critical to Michigan agriculture, as approximately one-third of the state's agricultural products is sold in foreign markets.

The Michigan Department of Agriculture's "Select Michigan Worldwide" marketing activities include:

Organization of the Midwest wine pavilion at the Prowein trade shows in Dusseldurf, Germany. The activity is open to all Midwest wineries.
Organization of a pavilion of specialty food processors at the Canadian Fine Food Show. MDA is Cooperating with the Michigan Food Processors Association and utilizing MIATCO Food Show Plus program to enhance opportunities for Michigan exhibitors.
Organization by
  • Michigan of a national coalition of apple, blueberry, cherry and cranberry processing industry processors. The coalition applied for and received $79,000 worth of Emerging Market and Section 108 funds. The funds will be used to implement an activity promoting those processed fruits to the Mexican baking industry.
  • As part of Michigan's allocation of specialty crop funds, MI has offered $2.1 million in the form of grants to specialty crop organizations and processors to encourage market development and promotion, and an additional $1.2 million in grants to specialty crop organizations and processors to invest in value-added enterprises


Minnesota Department of Agriculture

During the summer of 2000, the Minnesota Department of Agriculture (MDA) created a new Agricultural Marketing Services Division. In January 2001, Kurt Markham was selected as the first director of that division. Markham will coordinate efforts among farmers, commodity groups, grain companies and trade teams to increase value-added processing. In addition, the Division will be working in coordination with other entities to identify marketing opportunities for producers. Before joining the MDA, Markham spent six years as the manager of strategic development for Commodity Specialists Company, Minneapolis, MN.

The Minnesota Department of Agriculture is working cooperatively with the University of Minnesota to develop a pilot certification project which would provide Minnesota producers with a system for differentiating their products and give them a competitive edge in the marketplace. The MinnCERT program is modeled on ISO 9000. The ultimate goal of the program is to find markets that will pay a premium over commodity production.

The Department assisted over 25 new value-added cooperatives in the last two years. To date, the projects represent almost $5 million in sales and almost a $10 million investment in plants and facilities.

The Department received a grant to assist in the development of marketing clubs in NW Minnesota. As a result, eleven new marketing clubs formed and the participants have averaged a 7.5% increase in revenue.

Missouri Department of Agriculture Market Development Division
2002 Report

At the direction of Governor Bob Holden, Director Agriculture Lowell Mohler established a group of 38 leaders from all facets of agriculture to assess the current climate of agriculture in our state and to develop an agenda for its future. Throughout the spring and summer of 2001, these leaders conferred on issues and held public input forums to develop the scope of the problems and opportunities facing Missouri agriculture. The "One Missouri, One Agriculture" Task Force presented its final report to the Governor in December, 2001 with the following recommendations:

  1. Create a more favorable business climate for Missouri agriculture.
  2. Develop new and expanded product and market development opportunities for Missouri agricultural products, both raw and processed.
  3. Expand access to capital for business creation and expansion.
  4. Create an organizational and communications infrastructure to better serve the needs of the ag community.
Governor Holden also recently appointed a Missouri Livestock Market Advisory Committee to offer advice toward the implementation and rule development process of the Missouri Livestock Marketing Act, and to offer policy suggestions for the development of fair and open markets for livestock sales in Missouri. The Advisory Committee is also charged with offering recommendations to the Director of Agriculture for the creation of new livestock processing infrastructure and the development of additional marketing options for livestock producers.

AgriTourism is an area that has grown exponentially in Missouri. As a result, an AgriMissouri AgriTourism Guide is being developed for Spring distribution. The guide will feature agriculture events and activities of interest. Included will be the familiar agriculture fairs and festivals along with community events, corn mazes, u-pick operations, Christmas tree farms, fee fishing and aquaculture operations, bed and breakfasts, orchards, wineries, colleges and many other points of interest.

We sponsored the very first Promoting AgriMissouri Products Pays Contest for FFA chapters. FFA chapters were encouraged to use AgriMissouri products for marketing and fundraising events. FFA chapters competed for a $1,000 top prize and winners will be announced at the State FFA Convention in April.

The 2001 Infiniti Missouri Wine Awards Tasting was held in September, 2001. The Governor's Cup for the best Missouri wine was awarded to the Held family of Stone Hill Winery, Hermann, for their 1999 Port.

The Market Development is fortunate to have received funding this year from the Federal-State Marketing Improvement Program for 3 projects. Two of the projects are a continuation of the first phases started last year. The third project focuses on direct marketing of organic corn and soybeans to European livestock and dairy farms. Because Europeans are increasingly concerned about their food supply, there is a growing demand for organic feed grains and soybeans needed for milk and meat production. This project will determine price thresholds, quality and quantity requirements, delivery requirements and the supply chain for organic corn and soybeans. An equally important component of the project is identifying a Missouri grain system. The project is intended to conclude how value can be increased at all levels. This approach offers a win-win situation by increasing the marketability of U.S. products while increasing profitability of European farmers.



North Dakota Department of Agriculture — Marketing Services
2002 Report

The Pride of Dakota program remains one of the key focuses of Marketing Services. The program now boasts over 325 members. New initiatives are in the works to make the program stronger such as education programs, innovative promotions and additional marketing opportunities.

One of the most successful promotions in Pride of Dakota is the Holiday Showcases. These three holiday retail shows take place in November and December and draw over 15,000 thousand in attendance. This is an important sales event for a majority of our members.

The www.shopnd.com website continues to grow. During this past year's holiday season the website doubled the sales from the previous year. Advertising and promotion are essential to keep this site successful.

The Department was a co-sponsor of a Value-Added Animal Agriculture Summit in January. The Summit was a success with over 140 people attending. Topics including livestock economic development, regulations, agriculture law, and market opportunities were covered in the two-day summit. A cross-section of the agriculture industry was represented at the Summit, including lenders, producers, commodity council, and rural economic developers.



Ohio Department of Agriculture
2002 Report

The Ohio Department of Agriculture Division of Markets has undergone severe budget cuts in the past year. The FY02 budget was cut by 34 percent from FY01 and the FY03 budget was cut 51 percent from FY01 levels. The OHIO PROUD program also received a cut of more than 25 percent in FY02. Fortunately, further cuts were not taken in FY03. Due to some staff vacancies we will not have resort to layoffs. However, we are now dividing responsibilities for the international livestock program between other staff members and we are not able to replace the OHIO PROUD Program Coordinator.

Even with all of the bad budget news, exciting things are happening here in Ohio. Steve Letson our international trade specialist for the hardwood industry has been working with seven other states that make up the Hardwood States Export Group to coordinate a Cochran activity for a delegation from China and Mexico. This delegation will travel to the IWF show in Atlanta this August. While at the trade show, they will have the opportunity to visit with a number of U.S. hardwood suppliers and participate in educational seminars. Steve is also leading a delegation of seven Ohio hardwood companies to the Furniwood Trade Show in Shanghai this March.

Ohio will host a delegation of Brazilian beef producers in early April and a delegation of Canadian sheep producers in June. These projects and a beef mission to Jalisco, Mexico are possible because of USLGE funding.

Participation in the OHIO PROUD Pavilion at the FMI/USFES and the NRA American Food Fair, has decreased slightly, although we still have 18 booths at FMI this year. We expect that in the coming months, Ohio companies will again be willing to travel both domestically and internationally. The major focus of our processed food and food ingredients efforts will be encouraging companies to apply for branded funds and to participate in MIATCO supported activities.

The Division of Markets has also taken the lead role in coordinating the distribution of the USDA Specialty Crop Block Grant Funds. Applications are due May 1 and award announcements will be made by July 1. Ohio received $800,000 in specialty crop funds. A portion of these funds may remain within the division to fund new specialty crop promotions.



Ontario Ministry of Agriculture, Food and Rural Affairs - Market Develop. Branch

Spring heralds another season for Foodland Ontario, an identity program for locally grown produce. Ontario is a major North American import market with about three-quarters of produce consumed being imported from outside Canada. The program features media (TV, radio and press) and retail in-store promotion.

A full presentation on this long running program will be featured on the Wednesday morning program of this year's NAAMO conference.

This February, a mission of Ontario produce growers visited the Mexico City, Guanajuato and Guadalajara regions to develop an understanding of the Mexican growing and exporting situation as well as to determine if strategic alliance opportunities existed. The mission was very impressed with the dedication to and spending on quality and food safety that existed with the bigger growers/packers. Interestingly, while labor is perceived as a huge advantage to Mexican growers, there are some indications that the economic boom is having an impact on availability and perhaps wage levels as well. On the other hand, in this area, water supply is a limiting factor. Deep wells are the key water source. On average they are 80 meters deep with some as deep as 200 meters with levels dropping two to three meters per year. Pumping costs increase exponentially with increasing depth. There proved to be some commonality of issues that all North American producers seem to face. When one influential grower/packer was asked what is the key factor for his future success, he replied without hesitation that it is the ability of the industry to raise price levels to growers to cover the extra costs of food safety systems required in today's export markets.



Wisconsin Department of Agriculture, Trade & Consumer Protection Agriculture Development Division
2002 Report

A recent name change from the Division of Marketing to the Division of Agricultural Development and a Division reorganization reflects a change in our focus to better serve Wisconsin agriculture. Industry input from farmers, cooperatives, food companies and commodity groups challenged the Division to offer new services, more specialized projects and programs, and devote more emphasis on developing new products and markets for Wisconsin agriculture.

DATCP's Agricultural Development Division is unique among state development programs - it is focused solely on agriculture and the needs of the agriculture industry. While other programs that address business development often overlook the importance of agriculture, the Ag Development Division is only about agriculture. The division accesses numerous federal funding resources, specific to agriculture, to be used for the state's agriculture industry and provides multiple development options that have the flexibility to support a wide-range of development projects. Individual producers and small agricultural businesses that benefit from new development are often too small to afford the necessary research or lack the expertise to commercialize development ideas alone. By linking industry to the state's bounty of agricultural research and expertise, the division is the partner that can meet these needs.

Our new focus will prove vital in our division's ability to leverage maximum support from federal, state and local economic development resources to help farmers and agribusinesses develop, rebuild and grow in a rapidly changing agricultural economy. Through this financial assistance we will provide the business development tools to adequately support agricultural business development. The reorganized division will more effectively apply technical assistance to value-added agricultural projects. The reorganization also affords us the opportunity to provide more aggressive leadership and facilitation in the development process. This shift will allow the Division to concentrate on rebuilding the agricultural economy in ways that tap the entrepreneurial talents of farmers and agribusinesses and help identify and establish growth tracks that assist customers in realizing improved business opportunities.

The Division will continue to place major emphasis on International Development. For the past 36 years, the Wisconsin Department of Agriculture, Trade and Consumer Protection has offered companies assistance in international market and trade development. A key part of this assistance will continue to be the Global Development Team that identifies market opportunities around the world for Wisconsin's agricultural companies and producers. In addition, the team provides technical expertise and market development initiatives to aid in the growth of Wisconsin agriculture through increased exports and the development of partnerships with agricultural industries across the globe. More than 26% of Wisconsin's total exports are agricultural/food products valued at $1.4 billion, which support more than 23,000 jobs in the state.