ConAgra, MGPI sign exclusive flour supply deal
November 06, 2008
by Eric Schroeder
OMAHA — ConAgra Mills, a brand of ConAgra Foods, Inc., and MGP Ingredients, Inc. officially signed a long-term flour supply agreement. Effective immediately, MGPI will source flour for its value added wheat protein and starch ingredients exclusively from ConAgra Mills.
The announcement comes just a few weeks after MGPI halted production at its Atchison, Kas., flour mill after signing a non-binding letter of intent for the supply agreement with ConAgra Mills.
"We will focus on customers and our core business moving forward," said Tim Newkirk, president and chief executive officer of MGPI. "Our strategy is to outsource part of the production — including raw materials — in an effort to counter the effects of high input costs and volatile grain markets. Very simply put, wheat milling as a component of our overall ingredient solutions value chain is not a step in which MGPI can uniquely create value. ConAgra Mills is an industry leader in flour production and innovation, and the ideal partner for MGP Ingredients."
As part of the agreement, ConAgra Mills will take over wheat sourcing, production, risk management, quality control, logistics and transportation for the MGPI raw material. In addition, ConAgra will provide flour to MGPI from select facilities in its 23 mill U.S. manufacturing network.
"We have a laser like focus on producing and delivering high quality flour efficiently," said Paul Maass, president and general manager of ConAgra Mills. "We are uniquely able to support MGPI’s effort to simplify their operations while also reducing their cost and commodity risk. This is another example of how ConAgra Mills leverages our creative products and services to add value for our customers."