GRAND FORKS — Jason Rayner, his wife and two sons farm nearly 5,000 acres of land near Finley, North Dakota. About half of it is corn — so it’s hardly a surprise that Rayner, like corn farmers throughout the region, is excited for Fufeng Group Limited to bring a huge new corn milling plant to Grand Forks.
That plant was announced earlier this month by top City Hall and economic leaders. The topline prediction: 233 new jobs, coming as soon as 2024 or 2025, and a plant that will consume as much as 25 million bushels of corn a year.
For Rayner, it’s a huge boon, on par with new local hog farms and ethanol producers that generate local demand for his farm. That’s a big deal for farmers, who earn more on local sales and less when they have to ship their corn to Manitoba, the Pacific Northwest or farther.
“All these things help increase demand,” said Rayner, who is also the chairman of the state Corn Utilization Council. “And the closer the demand is to the product, the better the price to the farmer.”
And it’s not just prices that make a sweet deal for farmers: It’s the potential for a long-term relationship with another big-time buyer — one whose new facility could bring stable contracts for growers in the region. Jean Henning, the Corn Utilization Council’s executive director, points out that North Dakota’s annual corn output is about 400 million bushels of corn, all of which needs a market once it leaves the farm field.
“This facility in Grand Forks is going to be huge, especially for that area — the farmers in that area,” said Henning. “That’s going to provide a direct market for those farmers to sell to.”
Grand Forks city leaders’ announcement offered a broad description of the plant, but left some questions unanswered. It is expected to occupy a 370-acre site in the northern end of the city, near other manufacturers such as J.R. Simplot and Philadelphia Macaroni. Construction could begin as soon as the spring. Fufeng Group, which is headquartered in China, makes a range of food additives (from proteins to sweeteners), but it’s still not clear what their potential investment is worth, or precisely what products would be made at the facility.
And there’s still a long way to go before the facility arrives. City leaders have said Fufeng Group officials will visit Grand Forks this month to negotiate terms of its arrival — which leaders have already revealed are likely contingent on discounting property taxes for the first 20 years of the plant’s life. The plant will need significant infrastructure support, from roads to water supply, costs of which are expected to be borne by the city.
So while the plant is expected to materialize, the deals that will make it happen aren’t quite done yet.
Area economic experts universally say the plant is good news — how could it not be? — but precisely what unfolds in coming years is still an open question, too. In today’s labor crunch, how difficult will it be to find 1,000 workers to build the plant? The Economic Development Corp. has said more than 500 indirect jobs could come to the region. How accurate will that final number be?
Frayne Olson is a crop economist and a marketing specialist with North Dakota State University Extension. He points out 25 million bushels of corn is a big amount — at an estimated yield of 150 bushels an acre, that’s something like 167,000 acres, or a corn field roughly 16 miles on each side.
It’s enough that it could change the local flow of corn, some of which has been heading up to feed Manitoba hog farms, he said. While he stressed that the news was good for corn growers, he wondered what the long-term effects would be for hog farmers competing more for regional corn, and what would happen to the regional market if farmers, in turn, decide to grow more local corn.
“Economics is a lot like physics. For every action, there’s a reaction,” he said. The key difference, of course, is that physics is a set of scientific principles. In the open market, everything is up to fallible, unpredictable human beings.
“In economics, it’s not that clean and simple.”
Rayner said he doesn’t know if he’ll grow more corn in the future, citing crop rotation concerts.
“But you can see a future, as they come up with more uses for corn — you can see sustainability,” Rayner explained. “That’s what every farm is trying to do. They’re trying to come up with more ways to sustain themselves.”