Kellogg Company sees Louisiana Rice Mill, LLC as a ‘strategic supplier’
By Carroll Smith
Editor
For any industry to run smoothly and profitably, each facet has to understand the roles and goals of all the other facets. And the rice industry is no different. For example, breeders develop varieties; farmers grow the crop; millers mill the grain and sell it to industrial buyers, who, like Kellogg Company, produce products that consumers want and trust.
According to John Morgan, vice president of Louisiana Rice Mill, LLC in Crowley, Supreme Rice Mill, which was bought by Louisiana Rice Mill in 2007, had a very long history with Kellogg, dating back to the 1940s when Joseph Doré, Sr. started Supreme Rice Mill. Bill Doré, who represents the third generation of the family, stayed on board after Louisiana Rice Mill acquired Supreme Rice Mill and, today, is the vice president of sales and manages the entire Kellogg’s relationship.
As food cleanliness and security standards have increased, especially after 9/11, mills are required to have certain certifications, often costly ones, in order to sell rice to their customers. Louisiana Rice Mill’s Crowley location is American Institute of Bakers certified, which is a requirement to service its larger U.S. customers and gives the Louisiana rice industry access to prestigious companies such as Kellogg. In 2011, Kellogg changed the requirement to Safe Quality Food Program (SQF) certified. SQF is administered by the Safe Quality Food Institute. Louisiana Rice Mill in Crowley is now the first rice mill in the South to be SQF certified.
“With this certification, we can sell more rice to Kellogg and have become a strategic supplier by working closely with them on variety development, sustainability and any other issues the company may have,” Morgan says. “Kellogg, whose cereals traditionally are rice-based, is a consistent buyer, pays good prices, and we are able to do a lot of pre-contracting so farmers will know what they are going to get for their rice before they even plant it.
“Because they are making cereal with this rice, they want certain, more value-added varieties,” he adds. “It’s not that one variety is better than another, it’s that Kellogg is looking for consistent quality, consistent characteristics and stability in the variety, meaning that it will be around for a while.”
Kellogg: High Standards, Own Specs
Kellogg’s variety approval process begins with Louisiana Rice Mill sending the company a five-pound sample. The next step is to send a 300-pound sample, followed by a truckload so Kellogg can begin plant trials. Finally, the mill sends Kellogg a couple of rail cars of the particular variety it is testing so it can run even larger trials prior to granting approval.
Rice varieties that are currently on Kellogg’s “approved” list include CL161, CL131, CL151, CL111 and CL261 – Clearfield’s first medium grain release. Kellogg likes to buy medium grain rice because it is used in Rice Krispies. The long-grains are used in what Kellogg calls its complex flakes like Special K.
The company also has its own specifications to gauge if the rice that it orders from the mill is acceptable or unacceptable when it arrives. “Take chalk, for example,” Morgan says. “It’s not chalk as defined by USDA, but chalk as defined by Kellogg. The farmers who sell us rice still get the FGIS grades, but when we ship rice to Kellogg, we ship it based on their specs, not FGIS specs. We actually put the Kellogg grades on our rail cars.”
A Fit For Growers And Buyers
The Louisiana miller also is quick to point out that getting varieties approved according to Kellogg’s high standards is only part of the equation. The other part is that farmers have to be interested in growing the varieties and realize a profit.
“If the farmers don’t make money, then they won’t be here, and we won’t have a supply,” Morgan says. “Our interest in Clearfield varieties, like any variety, is tied to the interest in the producer wanting to grow it and the end user wanting to buy it.”
Christian Richard, who farms in southwest Louisiana, primarily grows Clearfield varieties and was particularly pleased with how CL151 performed for him last year.
“We almost hit 60 barrels per acre in 2011, which was the third year that I have grown 151,” Richard says. “It’s been the highest yielding rice on my farm.”
During that time, the Louisiana farmer has adjusted some of his production practices related to CL151, including reducing his nitrogen units from 160 units per acre to 145. He also used to use straight urea, but is using more zinc now and applying 80 percent of his fertilizer pre-flood.
“I’m also using seed treatments,” Richard says. “I used to drain my fields to control rice water weevil, but now the seed treatments take care of that, and I can conserve water, which is a precious commodity.”
Although Richard is planting 400 acres of CL151 again this year, he is putting 625 acres into CL111 because, he says, it has good quality and is bringing a premium price at the mill.
Mark Pousson, who also farms in southwest Louisiana, had several Clearfield notill stale seedbed test plots on his farm in 2011, including CL111, CL151, CL152 and CL162. He also planted Jazzman, Cocodrie and CL261, which is a medium grain.
“The advantage of growing test plots is that they allow me to see how they perform along with the current varieties under the same weather conditions,” Pousson says. “They also showed me that I don’t have to count on one variety. There are a lot of options out there with the Clearfield technology. To me, one of the biggest advantages of the Clearfield system is that the fields are real clean. We did not find any red rice, and the other common weed species were taken care of, too.
“Last year, I pre-contracted my CL261 with Kellogg through Louisiana Rice Mill and the Jazzman rice with Jazzmen Rice LLC – a niche, aromatic market,” he adds.
Sustainability: A Common Goal
In addition to working with Kellogg to get varieties approved that farmers want to grow and Kellogg wants to buy, Louisiana Rice Mill, along with the entire U.S. rice industry, is addressing the issue of sustainability, about which Kellogg is very serious. In fact, Kellogg’s Web site says its Chief Sustainability Officer and Board of Directors’ Social Responsibility Committee “set guidelines for our sourcing activities, including our agricultural ingredients, and set measurable goals for reducing our emissions, water and energy use and waste.”
The U.S. rice industry also is on top of this issue and has been for a long time as described in a press release distributed by LSU AgCenter in June 2011. As Dr. Steve Linscombe, director of the LSU AgCenter Rice Research Station, pointed out to Kellogg and Walmart representatives at a field day last summer, “This station has been working for the past 102 years toward sustainability. And some of the greatest progress toward becoming more sustainable has come in the past 20 years.”
Jennifer James, who is an Arkansas farmer and chair of the USA Rice Sustainability Task Force says sustainability has been an important consideration in agriculture. She points out that farmers have contributed checkoff dollars to research that has reduced soil erosion, water usage and fertilizer use while providing an improved environment for waterfowl.
James goes on to say that a FieldPrint Calculator computer program will be available for farmers to determine the environmental impacts of their individual operations.
Environmental Indicators Report
In 2010, the USA Rice Federation released an Environmental Indicators Report, showing that U.S. rice production efficiency has increased over the past 20 years, relying on fewer inputs to produce more rice. Following is a summary of the national resource indicators for U.S. rice production from 1987-2007:
• Land use: Twenty-one percent less land used per unit of rice production.
• Water use: Thirty-two percent less irrigation water used per unit of rice production.
• Soil loss: Thirty-four percent less soil lost per unit of rice production.
• Energy use decreased by 52 percent.
• Climate impact net of soil methane (greenhouse gas emissions): Forty-two percent per unit of rice production.
• Soil methane: (greenhouse gas emissions): Twenty-nine percent per unit of rice production.
Also, according to the report, the U.S. rice industry is moving toward meeting increased demand while achieving lesser environmental impact per hundredweight of rice produced.
“If you look at rice’s track record and how efficient the crop has become, especially over the past 20 years, the USA Rice Sustainability Task Force has a good story to share with Kellogg and other buyers,” Morgan says. “In working toward sustainability, it has taken a collaborative effort on the part of the entire U.S. rice industry to achieve a common goal – grow rice more efficiently to continue lessening the impact of rice production on the environment.”
Contact Carroll Smith at (901) 767-4020 or csmith@onegrower.com.
Kellogg, Walmart & Louisiana Rice Farmers
Share Goals During Field Day Event
Last June, representatives of the Kellogg Company and Walmart saw firsthand how Louisiana rice farmers are using sustainable agricultural practices to produce a crop profitably in an environmentally friendly manner.
The field day at the LSU AgCenter Rice Research Station was a follow- up to a planning meeting held in February 2011 for a Master Rice Grower program in collaboration with the Louisiana Master Farmer program, Kellogg and Louisiana Rice Mill.
Steve Linscombe, director of the LSU AgCenter Rice Research Station, said the event allowed farmers to demonstrate how they are good stewards of Louisiana’s natural resources.
The field day “was very well received by all participants,” Linscombe says. “It provided an excellent opportunity for Kellogg to obtain a much better understanding of Louisiana rice production and, perhaps more importantly, a much greater appreciation of how good our rice producers are at what they do.
“The field day also allowed our rice producers to develop a greater appreciation of the justification and overall goals of Kellogg Company’s sustainability effort,” he adds.
Kellogg U.S. Morning Foods president David Denholm said he was amazed by what he saw and heard. “We have a real opportunity to help consumers understand the importance of the sustainable agriculture advancements being made here.”
Denholm said Walmart sold 50 million pounds of Kellogg’s Special K cereal that uses rice and 20 million pounds of Kellogg’s Rice Krispies, the rice for which is grown by Louisiana farmers.
“Kellogg is the single most important customer for rice in Louisiana,” says Bill Doré of Louisiana Rice Mill, based in Crowley.
Consumers have become more conscious about buying products with environmentally sound origins, said Diane Holdorf, Kellogg vice president of environmental stewardship. “They want to know they are doing the right thing.”
At the same time, Holdorf said, feeding the global population of nine billion people by 2050 will require three times the present natural resources worldwide. Kellogg is well on its way to achieving goals to reduce its environmental impact by 20 percent in 10 years.
Sustainability is not a new concept for rice farming and research, Linscombe told the Kellogg and Walmart representatives.
“This station has been working for the past 102 years toward sustainability,” he says. “And some of the greatest progress toward becoming more sustainable has come in the past 20 years.”
Water quality is a concern in rice production, and more use of farming practices such as drill seeding has helped farmers address that issue, Linscombe said. “Rice does an excellent job of improving water quality.”
LSU AgCenter rice specialist Johnny Saichuk showed the group a rice field farmed by Buck Leonards and Sam Theunissen. The field was drill-seeded, a practice that was revived with the Clearfield rice technology developed at the Rice Research Station. Drill seeding was once the dominant planting technique in Louisiana, but it was replaced by water-seeding with the use of aircraft. Saichuk said drill seeding uses less water and can be used with conservation tillage methods.
LSU AgCenter agronomist Dustin Harrell told the group about the benefits of laser leveling and a new soil test for nitrogen that has the potential to allow farmers to reduce the amount of fertilizer needed for a crop. Harrell is conducting a trial of the new test on the Zaunbrecher Brothers farm. He said the goal is to obtain the best yield with the least amount of fertilizer. – Bruce Schultz, LSU AgCenter
Dr. Steve Linscombe addresses field day attendees.