BISMARCK (AP) - Profits at North Dakota's state-owned flour mill fell by half, to $8 million, during its last budget year, the mill's chief executive said Monday.
Despite the drop, the Grand Forks mill's annual earnings rank as the third best in its history, said Vance Taylor, the mill's general manager.
The state Industrial Commission was briefed on the mill's finances Monday. The commission is made up of Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, and serves as the mill's board of directors.
In its 2011 budget year, the mill recorded a record profit of $16.1 million. At the close of its most recent budget year on June 30, it recorded $8 million in earnings.
The mill's margins have been squeezed by higher costs for hard red spring wheat and durum. Its principal product is high-protein bakery flour made from hard red spring wheat.
"The higher grain prices did have an effect" on the most recent results, Taylor said.
He described the previous year's profits as the result of an unusual confluence of good fortune.
"Market focus came together in a way that allowed us to maximize profits throughout the entire year," Taylor said. "Some years we have some months that are better than others. (Last year), we had good market conditions for the entire year."
Dalrymple said he was not bothered by the profit decline, saying flour milling was a cyclical business. Its outlook for next year is good, the governor said.
"We're entering a new crop year now, and by all accounts, the North Dakota state wheat crop was outstanding, possibly the highest yields we've ever seen," Dalrymple said.
The Grand Forks mill's annual reports showed a 1 percent increase in flour sales volume, to 11.6 million hundredweight.
Most of the mill's flour is sold in bulk to bakeries, although it also markets five- and 10-pound bags in grocery stores. "Family flour" shipments make up about 2 percent of its sales.