News Release

January 25, 2001
Dakota Growers Pasta Company signs memorandum of understanding with Prairie Pasta Producers

Carrington, N.D. - Officials from Dakota Growers Pasta Company and Prairie Pasta Producers signed a memorandum of understanding outlining how the two durum grower-based cooperatives will work together in building a dynamic, international, farmer-owned, value-added pasta company. The memorandum is a starting point of how American and Canadian farmers can come together for the betterment of their future.

The partnership is a proactive approach positioning Dakota Growers Pasta Company in an increasingly competitive global pasta market. "We're trying to do what is right for the farmer. This is not an action that will allow the dumping of Canadian durum into US markets," said Tim Dodd, president of Dakota Growers Pasta Company.

Perry MacKenzie, board chairman of Prairie Pasta Producers, a grower-based cooperative in Saskatchewan, sees the preliminary understanding as a positive opportunity for Canadian durum producers. "Together, Prairie Pasta Producers and Dakota Growers Pasta Company can work toward developing a level playing field for durum producers in North America."

Dakota Growers Pasta Company now can allow non-United States entities and associations of agricultural producers join the cooperative. "It is very important to our members that this company remains farmer-owned, stated Dodd. New associations that apply for cooperative membership must be grower owned and require board approval. "Our mission is twofold, but is very simple: providing our customers with premium quality pasta products; and maximizing returns to our grower-members."

Dodd embraces the idea of including all durum producers from the durum triangle region of the northern plains to create a single producer-owned pasta company. "The pasta industry is in the state of over capacity. We have quadrupled our pasta capacity and milling needs over the last seven years. Enrolling Canadian farmers into our cooperative provides a broader base to select durum that meets the quality needs our customers have come to expect. By working together with the Canadian farmers, we can accomplish more than working against one another."

The over capacity market issue has been clearly identified by Prairie Pasta Producers in their feasibility study and business plan as well. The group has recognized that building a "greenfield" plant presents tremendous risk at a time that the pasta industry is fighting for market share at less than desirable prices. This agreement would allow them to work together with their fellow durum producers in Dakota Growers Pasta Company rather than against them in a highly competitive market.

The next step for the two organizations is to develop a definitive agreement that can be submitted to the Saskatchewan Securities Commission.

Dakota Growers Pasta Company, owned by nearly 1,100 durum wheat farm families, began operations in 1993. It is the only pasta company in the world to grow its own No. 1 Hard Amber Durum wheat to ensure premium quality pasta from the field to the plate.

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