N E W S L I N E
Kansas cotton co-op thrives
Members of a Kansas cooperative are proving that growing cotton isn't limited to southern states. Producers in south-central Kansas are ginning a crop once unheard of in their state. "We're seeing some high-quality cotton grown in irrigated land this year," said Gene Latham, manager of the South Kansas Cotton Growers Cooperative. Latham began working with cotton at age 15 and subsequently added entomology to enrich his background.
Kansas is free of boll weevils and even with prices at 30-year lows 1,000-pound-per-acre cotton harvests can generate more income than a 200 bushel per-acre corn crop (a corn yield that is hard to sustain). Top cotton yields this year reached three bales or about 1,500 pounds per-acre, Latham said, with 45,000 acres planted. Last year, when 40,000 acres were planted, the state generated $6 million in production value.
Riceland Foods shipping rice to hurricane hit Cuba
The first shipments of U.S. rice sold to Cuba in nearly 40 years were heading to Havana in December after leaving Riceland Foods at Stuttgart, Ark. The cooperative is joining several other major food processors to ship relief supplies to the country, devastated Nov. 4 by Hurricane Michelle, which destroyed crops and thousands of homes. Terry Harris, Riceland's marketing vice president for Latin America, was in Havana in late November to seal the deal.
Cuba declined a U.S. offer of humanitarian aid after the hurricane,but instead Alimport, its import company, proposed a one-time cash purchase of American food and medicine. In 2000, Congress approved food exports to Cuba without U.S. financing of the transactions. The country has been under a U.S. trade embargo since 1961.
Richard Bell, Riceland president, said it expected to provide at least one half of the rice supply, primarily the long-grain variety. Last year, the rice processing cooperative donated 20 tons of rice to Cuba to help its residents in an area devastated by drought.
Florida's Natural opens new visitor center
Florida's Natural Growers' recently dedicated a new visitors' center, called "Grove House," just west of its processing facility in Lake Wales, Fla. The 5,200-square-foot building will help consumers learn more about the co-op, its products and Florida's citrus industry, says Frank Hunt, the co-op's president. Among the exhibits are historical displays about the co-op, founded in 1933, and a documentary film which traces how orange and grapefruit juices are made, from grove to glass. A working citrus grove borders the center, where visitors and school groups can learn more about citrus production. The co-op has 1,100 member-owners with 60,000 acres of citrus. Its Lake Wales juice plant employs 1,000 and can process 10 million pounds of fruit every 24 hours in peak season.
Financial picture improving for Farmland Industries
Despite a S90 million net loss for fiscal 2001, Farmland Industries,the nation's largest agricultural cooperative, continues to make progress toward regainingfinancial strength, CEO Bob House told more than 2,500 members, employees and business partners attending the cooperative's annual meeting, Dec. 6, in Kansas City.
Honse said it was a year of rebuilding. Farmland cut its debt by $268 million, slashed corporate expenses by more than half, improved food company operations, increased pre-tax operating income $566 million and reported a one-time, principally non-cash, restructuring charge of $80 million.
Honse said work will continue to strengthen agricultural marketing joint venture companies, namely Agriliance,ADM-Farmland and Land O'Lakes Farmland Feed. The cooperative closed two inefficient pork plants and opened three new pork and beef case-ready facilities in 2001, altering plant configurations to meet changing consumer needs. The co-op also invested in advertising and promotion to build national recognition of its Farmland brand pork, beef and catfish products. Further cost reducing moves in Farmland's food companies will be made in 2002, House said.
Harry Fehrenbacher, a grain and livestock producer from Newton, Ill., was elected chairman. He is president of the Effingham (111.) Equity cooperative. New directors elected to the board include Douglas Kuhlman from St. James, Minn., and Larry Shriver from Los Alamos, Colo.
Petroleum operations fuel doubling of CHS' income
A big jump in petroleum income helped CHS Cooperatives' net income surge to $178.6 million for fiscal 2001, more than double the $87.4 million income reported the year before. Value-added products also helped contribute to the income gains.
"Our grain-based agricultural foods cooperative is well on the way to adding economic value for our producers, from the field to the consumers' table," John Johnson, CHS president said in his address to 2,500 delegates at the co-op's annual meeting Nov. 29 in Portland, Ore.
Net sales of $7.8 billion dipped 9 percent from the $8.5 billion reported last year. The cooperative will return 50 percent, or $72.2 million, in 2001 earnings, after tax adjustments, to member-owners in equity redemptions and cash patronage.
Other CHS highlights of the past year included: focusing on destination delivery of grain at home and abroad; the upcoming groundbreaking (in April) on Harvest States' soybean processing facility at Fairmont, Minn.; repositioning wheat milling in a joint venture with Cargill to serve bakery customers nationwide; expanding ownership of Ventura Foods and acquiring additional Mexican foods production facilities; improving its petroleum refinery at Laurel, Mont.; planning changes to meet federal environmental standards at National Cooperative Refinery Association at McPherson, Kan.; and purchasing Farmland Industries' share of the Country Energy joint venture.
New directors elected to the CHS board include Dennis Carlson, Mandan, N.D., a third-generation co-op member who growers wheat, sun-flowers and runs a cow-calf operation. He is chairman of Farmers Union Oil Co. of Bismark, N.D. Also elected was Randy Knecht, of Houghton, S.D., who farms 4,000 acres of corn, beans, wheat and alfalfa, and operates a 450 head cow/calf operation. Current Chairman Steve Burnet of Moro, Ore., and all other current officers were re-elected to serve during 2002.
USDA offers paid summer intern jobs
The U.S. Department of Agriculture (USDA) is looking for summer interns for 2002. A catalogue has been published listing jobs available for students currently enrolled in a college or university and pursuing a bachelor's or graduate degree. The paid jobs provide students an opportunity to work as assistants in scientific, professional and technical fields. The jobs may provide selectees with a head start toward acquiring a career position with USDA. For more information, check the following Web site: http://www.usda.gov/ da/employhtm Or call Junius Scott (202) 692-0199, or Marilyn Jenkins (202) 720-7168.
Illinois pork processor co-op picks Rantoul for plant site
An east-central Illinois site in the village of Rantoul has been chosen by American Premium Foods Inc. a new pork-processing cooperative owned by 250 producers as the site for its new $25 million plant. Rantoul is near Champaign-Urbana, home of the University of Illinois. Twenty communities competed for the facility.
The Rantoul village board approved an incentive package that included discounts on utilities, a multi-year tax abatement, a waiver of permit fees and a pledge to maintain stable wastewater rates. Closure of an Air Force base left the community with ample water supplies. Still ahead is closing on a 40-acre site and a final engineering study. Ground breaking is slated for the spring, followed by 15 months of construction and anticipated operations by the summer of 2003.
Chairman Jack Rundquist said the firm initially will employ about 200 people. About 2,000 hogs will be processed daily into bacon, chops and other pork products and marketed under the Meadowbrook Farms brand. Jim Burke will manage the cooperative. In June, American Premium Foods received a $500,000, value-added agricultural market development grant from USDA Rural Development.
NMPF,dairy experts eye new market opportunities
Dairy marketing experts from National Milk Producers Federation (NMPF)are joining their counter-parts from Dairy Management Inc. and the U.S. Dairy Export Council on a task force examining both threats and opportunities facing the nation's dairy industry. NMPF Chairman James P. (Tom) Camerlo recently met with the other organization chairmen and key staffers to discuss market threats that may displace U.S. produced milk in products such as cheese and ice cream.
"We formed the task force to create a strategic plan to identify ways to remedy these potential threats," Camerlo said. "The team will examine emerging technologies, trends in imports and trade policy, the use of non-dairy ingredients and the challenges to the current dairy standards of identity. All of these areas could detrimentally impact the use of domestic milk and prices paid to American farmers." The team seeks to develop a domestic milk protein concentrate, increase use of alternative dairy-based ingredients and examine marketing methods for products marketed by the U.S. dairy industry.
"We are at a critical juncture," Camerlo said, "and need to embrace new technologies that make our industry more efficient and productive, while maintaining the integrity and quality of our dairy products. We must be mindful of the impact of these technologies on producer prices. It will be critical in shaping the activities of this organization in the future."
Six new directors were named to the NMPF board: David Fuhrmann of Foremost Farms USA; Peter Kappelman of Land O' Lakes; Randy Mooney, Ed Schoen and Bill Siebenborn, all of Diary Farmers of America; and Bob Swenson of Ellsworth Cooperative Creamery.
Southern States restructures to build future business
An executive restructuring at Southern States Cooperative (SSC) based at Richmond, Va., is paving the way for reorganization plans that will alter the company's business structure. Wayne Boutwell, SSC's chief executive officer, said the change resulted from an assessment of the cooperative and trends in the agricultural industry.
"We will be focused on our customers and better able to optimize our buying power," Boutwell said. "Our ability to cross-sell products and services also will be enhanced. Over time, members will benefit because our resulting efficiencies will boost our ability to compete and build the business for the future." As an example of the change, crop inputs and services, animal feed, petroleum products and farm supplies will be marketed under a common umbrella, rather than through four separate divisions.
Four executive vice presidents will now report to Boutwell: Gene McClung, chief administrative officer; Tom Scribner, chief merchandising officer; Joe Koch, chief operations officer; Jonathan Hawkins, chief financial officer. Senior vice presidents also reporting to Boutwell will be Hopper Ancarrow, legal officer, and C.A. Miller, information systems officer.
.coop Internet domain to launch Jan.30
The new, top-level Internet domain for cooperatives will be launched Jan. 30, 2002, by National Cooperative Business Association (NCBA) and its partners, Poptel of the United Kingdom and International Cooperative Alliance of Geneva, Switzerland. Agreement to begin offering the new domain through NCBA's subsidiary, DotCooperation LLC, has been reached by the Internet Corporation for Assigned Names and Numbers.
"This new Internet domain gives co-ops a unique opportunity to finally get the names they wanted but couldn't buy under .com," said Paul Hazen, NCBA president. "It provides them with important competitive advantages their ability to differentiate their business in a sea of .coms and benefit from the consumer trust cooperatives have built over the past 100 years." He urged co-ops eligible to reserve names before the launch. So far, more than 2,400 of the 12,000 eligible have prequalified with domain names. On Jan. 30, all co-ops around the world will be able to purchase .coop domain names.
