NEWSLINE



Blue Diamond Growers has acquied MacFarms of Hawaii, which markets $30 million with of macadamia nuts annually. Photo courtesy Blue Diamond Growers

Blue Diamond buys MacFarms
Blue Diamond Growers, Sacramento, Calif., is acquiring MacFarms of Hawaii, one of the nation's largest macadamia nut retailers, from Campbell Soup Co. for an undisclosed price. The deal will be financed entirely from the cash flow of MacFarms, which last year generated sales of $30 million, according to Walt Payne, president and chief executive officer of Blue Dia-mond. The purchase includes 3,900 acres of macadamias and a processing plant in South Kona, Hawaii. Payne added that Blue Diamond is no stranger to the macadamia markets. The cooperative has been marketing MacFarms' nuts to businesses world-wide as an ingredient for such food products as cookies and candies for nearly two decades. During that period, MacFarms has become the global leader in ingredient, or industrial sales. Now, as owner of MacFarms, Blue Diamond also will market MacFarms' retail product, which today represents about half the annual MacFarms sales.

John D. Johnson

Cnex Harvest States names new CEO
North Dakota native John D. Johnson is the new president and chief executive officer of the producer-owned Cenex Harvest States Cooperatives. He succeeded Noel Estenson, who retired June 1. Johnson, 51, joined the former Harvest States Cooperatives in 1976 as a feed consultant, later becoming a regional sales manager and finally general manager of the GTA Feeds division. In 1995, he was named Harvest States president and CEO. Johnson became president and general manager of Cenex Harvest States when the co-op was formed in June 1998. Estenson, 61, joined Cenex as a credit manager in 1963 and rose through the ranks to become president and CEO in 1987. He was named CEO of the merged Cenex Harvest States in 1998.

McLean new USDA/RUS leader
Christopher A. McLean has been sworn in as administrator of the Rural Utilities Service (RUS) of USDA Rural Development. McLean succeeds Wally Beyer, who retired October 31, 1999. "Chris McLean is dedicated to the biggest task RUS faces today making sure that rural America is not left behind as we advance into the information age," Agriculture Secretary Dan Glickman said. "He comes prepared to help rural Americans meet their needs for safe drinking water, modem telecommunications and an adequate supply of electrical power." As the administrator of RUS, McLean will oversee financing for rural electric cooperatives, telecommunications and water programs, and administer the distance learning and telemedicine loan and grant program. The RUS loan portfolio contains over $42 billion in investments in rural utility infrastructure. McLean will also serve as governor of the Rural Telephone Bank a public/private lending institution that promotes rural telecommunications infrastructure. Previously, McLean worked in the U.S. Senate for more than 15 years, serving as a legislative assistant and legal counsel to Sen. James Exon of Nebraska, and later as legislative counsel to Sen. Bob Kerrey, also of Nebraska. While at the Senate, he worked on telecommunications, budget, transportation and trade issues. He was instrumental in crafting the universal service and rural provisions of the Telecommunications Act of 1996. McLean received a B.S. and J.D. from Creighton University, Omaha, Neb. He also holds a Master of Laws degree from Georgetown University.

Internet-based meat exchange forms
IBP, Cargill, Smithfield Foods, Tyson Foods, Gold Kist and Farmland plan to invest $20 million to create an Internet-based meat market. The four investor-oriented firms will each control 21.5 percent of the new company while the two cooperatives will each control 7 percent. Buyers on the exchange will pay subscription fees and there will be transaction fees and advertising to cover the cost of the operation. Each of the six companies will still compete through this new channel as well as through traditional channels.

Farmington co-op buys new technology
A small farmington, Maine, cooperative has purchased a portable grain coaster that can process grains, corn and soybeans into a nutritious, tasty animal feed. Maine farmers hope it will translate into large savings so they no longer have to buy processed feeds from other states or Canada. The machine was put through its paces when a truckload of locally grown soybeans was poured through a chute into the gas-powered roaster and heated to 280 degrees. The machine roasts and cools the product to air temperature at a speed of 12 tons per hour. This is the only grain roaster in the state, said John Harker, of the state Department of Agriculture. Farmers looked into buying them, but the cost was prohibitive. This year, grants and loans became available, and the local co-op took the initiative. "Importing feed has been the highest cost for dairy farmers," Harker said. "This machine will reduce their costs and will also give them the opportunity to expand their soybean production." The department contributed a $10,000 grant and a $15,000 low- interest loan toward the $30,000 purchase. The group took out a loan from Finance Authority of Maine, and four farmers in the cooperative pitched in $5,000 apiece.

Citrus World to buy plant
Citrus World Inc., Lake Wales, Fla., has purchased the Sun Pac Foods Inc. citrus processing plant in Bartow for an undisclosed price. "We need the Sun Pac facility to keep up with production of our premium juice products," said Steve Caruso, chief executive officer of Citrus World, parent company of Florida's Natural Growers. "Our plans are to grow this business." The plant employs 80 people and processes about 5.5 million boxes of oranges into juice annually. Citrus World plans to retain current employees and expand the facility sometime in the future. Sun Pac, based in Brampton, Ontario, Canada, had been processing oranges under contract with Citrus World since 1994. Florida's Natural Growers is the largest citrus cooperative in Florida, with 12 member organizations representing more than 1,000 growers and 60,000 acres of citrus groves. It processes more than 20 million boxes of oranges into frozen concentrated and not-from-concentrate juice. It markets under brand names such as Florida's Natural, Grower's Pride, Donald Duck, Bluebird, Adams and Texsun.

Apple cooperative to close
Chief Tonasket, Okanogan County, Wash., closed its apple packing cooperative this summer, putting 80 employees out of work. In the past decade, the 72-year-old co-op went from packing about 90,000 bins of fruit to 27,000 bins last year. "It's very, very sad, but basically the hole was too deep," General Manager Steve Skylstad said. Most of the Chief Tonasket employees were laid off in mid-July after the remaining Red Delicious apples in storage from the 1999 crop were sorted and packed. Most employees were seasonal, but about 12 were full time. Chief Tonasket once packed apples for 80 farmers, but only 15 remain. They will have to find new warehouses. Chief Tonasket's annual payroll is $1.2 million, much of which is spent in local businesses, Skylstad said. Local orchards that were ripped out after the disastrous 1998 apple crop were part of the problem. Also, farmers who raise high-quality fruit left the co-op to get more money at packing-houses in Brewster and Wenatchee. About 80 percent of the co-op's tonnage was in old varieties of Red Delicious apples. Those Reds have brought the lowest selling prices in recent years. No figures are available to show how many of Okanogan County's 29,000 acres of orchards have been removed since 1998, but some industry leaders believe up to 20 percent are no longer producing fruit.

Blueberry tea may just be a hit with consumers it's the right color for kids and it's healthy, which adults appreciate.



N.J. to sell new blueberry products
A new blueberry venture is seeking to create a market for a "JerseyBlues" iced tea. Also hitting fruit stands and some stores this summer is a mashed blueberry spread called pomace. The products are being test-marketed in New Jersey and Japan. They were developed by researchers at Rutgers University as a way to raise blueberry prices, which have been depressed. Project sponsors include Rutgers, USDA and the Pinelands Commission, a state agency that manages the 1.1 million-acre Pinelands national reserve. In 1998, New Jersey farmers produced 36 million pounds of blueberries worth $28.4 million. The 79 cents a pound that farmers received that year was well below the $1 per pound they earned in 1997 and the all-time high of $1.61 per pound in 1978. Sandy and acidic soils of the Pine Barrens, covering 22 percent of the state, are perfect for cultivating berries and have made New Jersey second in the nation in blueberry production, behind Michigan, and third in cranberry production. However, cranberry prices plummeted from $55 a barrel in 1997 to roughly $10 this year, primarily because of a production surge that outpaced static demand. In New Jersey, hundreds of acres of blueberry fields were converted into cranberry bogs. From 1993 to 1998, cranberry farming jumped nearly 600 acres, to 3,980; during the same period, blueberry acreage dropped from 8,100 to 7,500. Blueberry growers then lobbied the state to impose a fee of six-tenths of a cent per pound, in part for research and development. Some money went to the Rutgers project, along with a $95,000 grant from the USDA, $29,000 from the Pinelands Commission, $36,000 from the New Jersey Agriculture Experiment Station, and $5,000 from the state Farm Bureau. To market the products, growers incorporated Blueberry Health Inc. Its goal is to make blueberry juice as mainstream as orange, apple and cranberry juices. Growers predict blueberries could be especially big among consumers because of their potential health benefits they are among the richest sources of certain antioxidants that some studies have linked to slower aging and reduced cancer risk.

Robert W. Honse

Honse to take over Farmland reins
The Farmalnd Industries board of directors has named Robert W. Honse to the position of resident and chief executive officers, effective Sept. 1. At the same time, the board appointed Farmland's current president and CEO, H.D. "Harry" Cleberg, as consultant to Honse from Sept. 1 to Dec. 31. Honse holds a bachelor's degree in chemical engineering from the University of Virginia and joined Farmland in 1973 as project manager at its Lawrence, Kan., fertilizer plant. In 1986, he became general manager at Farmland's phosphate manufacturing operations in central Florida. Since returning to the co-op's headquarters in Kansas City in 1989, House has held a variety of senior management positions, most recently as Farmland executive vice president and chief operating officer.

Upstate Farms expands milk facility
Upstate Farms Cooperative is planning a multimillion-dollar expansion of its milk production and distribution facility in Cheektowaga, N.Y., a change that will trim 2 5 jobs at its Jamestown plant. Relocation of milk processing operations from Jamestown to the cooperative's facility in Cheektowaga, effective Sept. 8, will cut eight jobs from the Jamestown payroll. Another 16 jobs will be cut in June 2001, according to David Crisp, Upstate Farms chief operating officer. Upstate Farms is expanding its Cheektowaga plant by 27,000 square feet, adding more cooling and storage capacity. The cooperative recently purchased a vacant office building in Cheektowaga, which it expects to use for administrative personnel. Upstate Farms, owned by some 400 dairy farmers, produces more than 200 products under Upstate Farms, Bison, Milk For Life and Aahhh! labels. The Cheektowaga liquid products plant employs 175 workers, and its Bison cultured products plant, in Buffalo, employs another 120 in the production of yogurt and chip dip.

States launch inquiry into big dairy
Massachusetts, Connecticut and Vermont have launched an antitrust investigation into the growing market clout of Suiza Food Corp., a Dallas based dairy processor that one study says now controls 70 percent of the region's milk supply. The attorney general's offices of the three states joined forces in the inquiry, officials said. Suiza has rapidly emerged as the major player in the New England milk market through an aggressive strategy of buying smaller dairies. But regulators are concerned that this expanding market share threatens to limit choices for both farmers and consumers. Over the past three years, Suiza has bought Seward's Dairy, Rutland, Vt.; Garelick Farms, Franklin, Mass.; Nature's Best Dairy, Cranston, R.I.; New England Dairies Inc., Hartford, Conn.; and Grant's Dairy, Bangor, Maine. It also has acquired the milk processing facilities of Canton-based Cumberland Farms Inc. in Massachusetts and in New York, and processing plants owned by West Lynn Creamery in Massachusetts. As Suiza has bought milk companies, it has closed four processing plants in New England, a consolidation that effectively limits the market for farmers and dairy co-ops, the states claim. The company's buying spree has already begun to affect some Vermont farmers. In February, the St. Albans Cooperative Creamery learned that it was going to lose its long-time co-packaging customer, Stop & Shop Supermarkets, to Suiza.

LOL sells fluid plants, continues cheese plant study
Illinois-based Dean Foods Co. is buying the Upper Midwest fluid milk operations of Land O'Lakes (LOL) Inc. The companies also are forming a joint venture to market and license some products to expand their reach. Terms of the agreement, closed July 1, were not disclosed. The deal is subject to regulatory approval.

LOL, Arden Hills, Minn., is a food and agricultural cooperative doing business in all 50 states and more than 50 counties. Dean Foods, Franklin Park, Ill., is a processor and distributor of regionally branded and private-label dairy products. The purchase includes four fluid dairy plants in Woodbury, Thief River Falls and Bismarck, N.D., and in Sioux Falls, S.D., as well as a new extended-shelf-life dairy plant at Richland Center, Wis. The division generates annual sales of about $310 million and markets a full line of fluid milk, yogurt, creams, sour cream and cottage cheese, 85 percent of which is sold under the Land O'Lakes brand name. The two businesses will each hold a 50 percent stake in the joint venture that will develop and market cream, half and half, sour cream and extended-shelf-life products.

"the joint venture allows us to extend the reach of our most innovative fluid dairy products, and we will use the proceeds from the sale to build and strengthen our core businesses on behalf of our members," said Chris Policinski, Land O'Lakes executive vice president and chief operating officer of the dairy foods value-added group. Meanwhile, the Midwest would make an excellent home for what would be the largest cheese plant in the eastern United States, according to a feasibility study by LOL and Alto Diary Cooperative, Waupun, Wis. The two proposed building the plant earlier this year. Executives with the cooperatives said the facility would ultimately handle more than 1.7 billion pounds of milk annually, generate more than 100 jobs and include an annual payroll of about $6 million.

The feasibility study said Upper Midwest dairy producers have an advantage is resources, particularly water and crop production. They also have edges in experience, expertise, long-standing production and processing infrastructure, market presence and reputation. Officials with both cooperatives said they would study the possibility of building the plant in Wisconsin, the nation's leading cheese producer. The state lost market shares to newer and larger plants in California and other western states in the 1990s.

But Alto and LOL leaders have yet to decide to build the plant. Besides location, issues include environmental requirements, construction costs, financing options and economic support. No timetable for a final decision has been set.





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