Two Inland Northwest entrepreneurs with multigenerational backgrounds in wheat farming are marketing a brand of flour that's made here from grain produced by a regional farmers' alliance using sustainable growing practices.

The two men, Fred Fleming, of Reardan, and Karl Kupers, of Harrington, are pursuing the venture in sustainability through a company they formed called Shepherd's Grain.

Last year, the company milled more than 400,000 bushels of wheat produced by 33 participating farmers, including Fleming, up from 2,000 bushels from six farmers in the company's first milling in 2002, Fleming says.

The company operates out of Kupers' home and has two employees in addition to its founders.

Although a large mill buys the grain, and distributors sell the flour made from it, Shepherd's Grain markets its products through direct contact with the owners and managers of midsized bakeries and pastry shops throughout the Pacific Northwest for use in their retail products, Fleming says. Customers include Seattle-based Grand Central Bakery Inc.; Hoffman's Fine Pastries Inc., of Kirkland, Wash.; and Willamette Valley Fruit Co., of Salem, Ore.

A Grand Central Bakery outlet in Seattle was the backdrop earlier this month for a brief speech by President Obama, who also ordered a turkey sandwich there.

"So, we know the president has tasted Shepherd's Grain," Kupers says.

Much of Shepherd's Grain's marketing revolves around building relationships with customers, by demonstrating the growers' sustainable farming practices.

"We bring customers in to look at what we do and the values we put into the land," Fleming says.

The concept of sustainability is evolving, but generally speaking, it includes emphasis on environmental health, social and economic relationships with communities and consumers, and profitability, he says.

All of Shepherd's Grain's farmers are experienced in no-till techniques, meaning they plant and fertilize without inverting the soils using plows, Fleming says.

No-till farming reduces erosion compared with traditional tilling. "I can't say it's zero impact, but it's close," he asserts. No-till farming also traps carbon in the soil, which helps maintain a healthier soil structure, in most cases reducing the amount of irrigation and fertilization needed to produce a crop, he says.

Because the no-till growing method eliminates steps in cultivation, it requires farmers to use fewer pieces of equipment, which results in reduced labor and fuel costs compared with conventional farming, Fleming says.

Some of the challenges of switching to no-till include the initial cost of the complex multipronged injection device—called a drill—that is used to plant crops and fertilize soil with minimal ground disturbance, learning the growing technique, and controlling weeds, he says.

Shepherd's Grain's pricing structure is derived from a cost-of-production model developed at Washington State University.

"We figure out the cost and put in 15 percent return and then come out with the price," he says. "Our customers see they have stability in the price of flour. Our price isn't subject to the whims of speculators in the marketplace."

As of mid-August, Shepherd's Grain's flour prices were lower than those of flour producers who set prices based on open-market wheat prices, Fleming says. Six weeks earlier, market prices were below the Shepherd's Grain's prices.

Each 50-pound bag of Shepherd's Grain flour is printed with a code that customers can enter on the company's Web site to identify the farmers who produced the grain. Fleming says customers enjoy the ability to pinpoint where their wheat comes from.

"The more they dig into us, the more authentic we become," he says. "Each farmer has a story."

Participating farmers are spread throughout six Inland Northwest counties in Washington and Idaho and two northern Oregon counties.

Kupers and Fleming together own 60 percent of the company, and the 32 other participating farmers own the other 40 percent. Another 28 farmers are on a waiting list to join Shepherd's Grain when the company builds more sales volume, and 10 more have shown interest in joining, Fleming says.

Fleming farms 4,200 acres of land in the Reardan area, including the land his grandfather homesteaded in 1888 when the land was part of the Oregon Territory. Fleming also heads Reardan Seed Co.

Kupers, who has 30 years of farming experience, retired from farming a few years ago to concentrate full time on Shepherd's Grain.

"Karl always had it in the back of his mind to take a production system and turn it into a marketing strategy," Fleming says.

When they decided to form a farmers' alliance, Fleming had just begun the switch to no-till techniques.

"The rest of the farmers we reached out to had to have a 10- to 15-year history in no-till," he says. "They had to have a track record of innovation, and they wanted to be price setters rather than price takers."

They also had to be financially stable, Fleming adds.

"This is not a cash-rich proposition," he says. "It won't save a farm that's at risk."

Archer Daniels Midland Co., a Decatur, Illinois-based global agricultural conglomerate, mills Shepherd's Grain flour at facilities it operates in the Spokane area.

"We might only gross $6 million, but ADM sees value in what we're doing and has opened space in their milling system for our local farmers' group to advance this sustainability aspect," Fleming says. "They must think we're doing something right."

Shepherd's Grain produces seven types of flour from different blends of wheat varieties. Most are blended from varieties of hard red wheat.

"Historically, this has been a soft white (wheat) area, but we've learned to grow hard red," Fleming says.

That has helped meet demand from Pacific Northwest customers, who otherwise might buy flour made from hard red wheat produced in other parts of the country, he says.

"More than 80 percent of the soft white wheat grown here is exported," Fleming says. "We're keeping our wheat here."

Hard red wheat is used for making bread and can be blended with soft wheat varieties to increase protein content.

Soft white wheat generally is preferred for use in products other than bread, such as cakes, pastries, noodles, and crackers, and is lower in protein and higher in carbohydrates than hard red wheat.

Shepherd's Grain, however, also produces cake and pastry flour made from blends of soft white wheat, although that only makes up about 5 percent of Shepherd's Grain's total production volume, Fleming says, adding that he expects demand for the company's cake and pastry flour will grow.