Dr. David Ripplinger, Assistant Professor at NDSU’s Department of Agribusiness & Applied Economics presented the recently filed ‘Corn Wet Mill Marketing Analysis and Valuation’ report at the Golden Growers annual meeting held on March 23rd.
Dr. Ripplinger conducted a SWAT (Strengths, Weaknesses, Opportunities, Threats) analysis for corn wet milling in our region. His research highlighted decreased per-capital HFCS consumption and a shift to alternative sweeteners as threats to the HFCS industry. Increased world consumption, new products, and the renewable fuels standard were considered strengths.
‘Three factors impacting perception and consumption of HFCS stand out,’ writes Ripplinger: 1) a broad popular conception that HFCS is unhealthy and leads to obesity; 2) a large number of consumers avoid products containing genetically modified products; and 3) consumption of sweetened soft drinks has tracked the fall of HFCS consumption in the United States.
Strengths for the region include a competitive cost advantage for corn when compared to the corn belt. In addition, Golden Growers has the advantage of being able to control the supply of corn to the plant. Yet the Cooperative does not have the history or experience in corn mill operations, technology, or food ingredients.
In terms of strategies, the report recommends avoiding products with contradictory attributes (ex: non-GM HFCS) and to identify and pursue natural hedges against the decline of HFCS use (advanced biofuels, reduced calorie sweeteners derived from corn, etc.)
The next step is to build upon that research using Value Added Producer Grant funding obtained from USDA’s Rural Development. Kyle Althoff of Equinox will lead that project in the coming months.
The full NDSU report is available for review and download here (Final Report).