North Dakota's Mill and Elevator lost $16.2 million this year because of its difficulties in the grain futures markets, including $1.35 million that has not yet appeared on its financial statements, an accounting firm says.

Most of the losses have already been reflected in the mill's quarterly results. The mill reported a $12 million loss during July, August and September, and the Eide Bailly LLP report estimated that hedging losses accounted for $11.5 million of that amount.

The report, which North Dakota's Industrial Commission reviewed Friday, estimated that the mill absorbed another $2.65 million in losses in October and November, including $1.35 million that it attributed to problems with futures contracts.

Those numbers will be part of the mill's next quarterly report, which will include financial results from October, November and December.

The Grand Forks flour mill has hired Eide Bailly and William Wilson, a North Dakota State University professor who is an expert on commodity markets, for advice on how to overhaul its risk management practices. Wilson says the mill is likely to be facing more volatile grain markets for up to five years.

Vance Taylor, the mill's general manager, said the mill's hedging difficulties can be traced back to early spring, when hard red spring wheat stocks were running low and prices shot above $20 a bushel. The mill buys hard red spring wheat to grind into bakery flour.

Taylor said Friday that problems arising from those decisions have worked themselves through the mill's books.

"We do expect gains in the second half," Taylor said. "What those numbers are, and how large those gains will be - a lot of that will depend on our level of business going forward."

Taylor said the present flour market is sluggish, and January through March is normally "our slowest period."

"We have a gut feel that it's not going to drop off as much as it has in the past. We feel we're kind of operating close to the minimum level of demand already," Taylor said. "If we see some nice (flour) volumes in the second half of the year, we'll have some nice gains."