NEWSLINE
Income, revenue climb at
Riceland Foods
Riceland Foods Inc., Stuttgart, Ark.,
had $947 million in revenue for 2007
(its fiscal year ended July 31), an
increase of $10 million from 2006.
Income before distributions was $549
million, up $60 million from the
previous year. The co-op reports that
more than 98 percent of the earnings
were returned to farmer-members as
seasonal pool settlements or cash
payments for grain.
Speaking at Riceland’s 87th annual
meeting in Jonesboro, Ark., President
and CEO Danny Kennedy said the
farmer-owned cooperative had met its
three performance targets of providing
competitive crop returns, protecting
farmer-members’ investments in assets
and providing a high level of service.
Riceland’s 2006-07 marketing pools
returned $4.38 per bushel for longgrain
rice and $5.28 per bushel for
medium-grain rice, both of which
compared favorably with other
marketing opportunities.
The return for Riceland’s soybean
marketing pool was $6.85 per bushel,
compared to the harvest price of $6.11.
The wheat marketing pool returned
$3.74 per bushel, compared to a harvest
price of $3.45.
Kennedy said that the cooperative’s
balance sheet continues to reflect solid
performance. Total assets stood at $525
million, while permanent assets were
$262 million. Members’ equity,
including base capital and retained
earnings, was $205 million, he said.
Long-term debt was $57.5 million and
working capital was $59 million.
“We understand that our members
evaluate us at the end of the year on
how our final settlements come out, but
that must be in balance with service,
which comes at a cost,” Kennedy said.
Scott Gower, vice president for
commodity operations, said Riceland
received 116 million bushels of grain
during the 2006 fiscal year, and expects
to receive approximately 119 million
bushels from the 2007 crop.
Carl Brothers, senior vice president
for international rice, said that U.S. rice
exports from the 2007 crop are
expected to increase 14 percent
compared to the previous year. Rice
carryout at the end of the 2007-08
marketing year is expected to be 30
million bushels, down 52 percent from
the previous year. “The low carryout,
along with rice competing for acreage
with other grain prices, has created a
friendly, if not bullish, marketing
situation for U.S. long grain rice this
season,” Brothers said.
USDA currently projects the 2007
rice crop average price for all types
(long, medium and short) in the midrange
of $4.73 per bushel, 35 cents
higher than USDA’s current projection
for the 2006 rice crop, he said.
Riceland introduced two new valueadded
products: a quick-cook wholegrain
parboiled brown rice that cooks in
half the time of regular brown rice and
a yellow rice mix which foodservice
chefs can use to create a variety of
ethnic dishes.
Brian Furnish to lead
Burley Tobacco Co-op
The Burley Growers Cooperative
Association has chosen Kentucky native
and farmer Brian Furnish as its new
general manager. Furnish, who has a
1,000-acre tobacco and beef cattle
operation, says tobacco has a strong
future ahead.
“As a young tobacco farmer myself, I
believe there are a lot of opportunities
for our members,” he says. “We all
need to work together to communicate
and figure out ways to make money for
the co-op and our farmers.”
Furnish has served as marketing
director at the Kentucky Department of
Agriculture and then as deputy director
of the Governor's Office of Agricultural
Policy. He also worked previously in
government relations for the Burley
Tobacco Cooperative.
“Brian brought to the board ideas
and enthusiasm to help move the
organization forward,” said Roger
Quarles, president of the Burley
Tobacco Cooperative Board. “He is a
proven winner and we think he is a
perfect fit for us at this time.”
GROWMARK, FS Seed
Support Ag in the Classroom
The FS Seed Division of
GROWMARK has renewed its
commitment to Illinois Ag in the
Classroom programs with a
check for more than
$50,000. This year’s
contribution brings the coop’s
four-year total
contribution to the
program to nearly
$235,000.
“Many children have
lost the connection to the
farm and aren’t aware that
real people grow the food
that ends up on their plates
at the dinner table, and
that real people raise the
corn and soybeans and
other products that are
turned into the renewable
fuels that run their parents’
cars and other vehicles,”
says Bill Davisson, CEO of
GROWMARK, the
regional agricultural supply
and grain marketing
cooperative comprised of
FS member cooperatives.
“Through the Illinois Ag in
the Classroom program, we’re working
to make sure they know where their
food and related products come from.”
Florida’s Natural squeezes out
record revenue
Florida’s Natural, the nation’s third
largest seller of orange juice, had record
revenue of $401.5 million for the 2006-
07 season, despite a 7-percent drop in
juice volume. The co-op reported that
returns to its growers were 5 percent
higher than the citrus industry average
for the 2006-07 season. It was the coop’s
highest grower return since 1984,
following a major freeze, according to
The Ledger.
The improved returns came after a
two-year program of cost-cutting that
included selling a processing plant in
Bartow and a packaging plant in
Fullerton, Calif. Florida's Natural also
trimmed the number of different
products it offered by about 30 percent
to concentrate on the most profitable
lines, The Ledger reported.
Record earnings for CHS
CHS Inc., an energy and grain-based
foods cooperative, had record net
income of $750.3 million for fiscal 2007
(which ended Aug. 31), up from $490.3
million for fiscal 2006. Revenue for
fiscal 2007 was $17.2 billion, also a
record, and was up 20 percent over
$14.4 billion for fiscal 2006. The 2007
results mark the fourth consecutive year
of record earnings for the producerowned
cooperative and reflected strong
performance by every CHS operating
unit. The company issued a record $253
million in cash patronage, equity
redemptions, preferred stock and
dividends. Another record cash return is
expected during 2008, based on fiscal
2007 results.
Once again, refined fuels earnings
led overall results, largely due to strong
margins generated by the two CHS
refineries. CHS is the nation’s largest
cooperatively owned refiner. Record
revenues were attributed to increased
renewable fuels volumes, and higher
values and volume in grain.
While earnings were led by the
performance of the company’s Energy
segment, CHS also achieved strong
results in its Ag Business and Processing
segments and corporate business
solutions operations. Ag Business
earnings — which include agronomy,
grain marketing and retail operations —
were led by both strong domestic grain
markets driven by increased renewable
fuels demand and continued growth in
export markets, along with increased
energy sales and grain movement at the
retail level. Agronomy earnings were
boosted by a shift to corn acreage which
drove demand for crop nutrients and
increased margins.
Processing performance improved
significantly over fiscal 2006 for oilseed
crushing earnings. CHS also reported
improved earnings from its share of the
Horizon Milling LLC wheat milling
venture and strong performance from
its share of Ventura Foods LLC, a
vegetable oil-based food manufacturing
and packaging business. CHS also saw
record performance in its corporate
business solutions operations, which
include its insurance, risk management
and financial services businesses.
Pappajohn drops plan
to acquire ethanol plants
Iowa businessman John Pappajohn
has shelved his plan to buy a controlling
interest in as many as 10 farmer-owned
ethanol plants, which he planned to
operate as a single, publicly owned
company. He had hoped to raise about
$800 million from investors to buy
control of the plants, according to the
Des Moines Register. The sharp drop in
ethanol prices in recent months dried
up investor interest, making his plan
unfeasible. “At some point you need to
acknowledge the market isn't there,” he
told the newspaper.
NCBA awarded $8 million grant
to help Mozambique farmers
The National Cooperative Business
Association (NCBA), through its
CLUSA international development
program, is the recipient of an $8
million grant from the Bill and Melinda
Gates Foundation to improve the
livelihoods of 60,000 small-scale cotton
farmers in Mozambique. The grant will
fund The Cotton Value Chain
Improvement Project, a five-year project
aimed at increasing Mozambican
farmers’ cotton yields and profits
through improved efficiency.
The project brings together the
CLUSA International Program with
business partners Dunavant
Mozambique, an international cotton
trading company wholly owned by
Dunavant Enterprises Inc. of Memphis,
Tenn., and GAPI, Sarl, a Mozambican
financial services company that
promotes investment in small- and
medium-sized businesses. GAPI will be
providing much-needed credit and
financial management service to the
project’s farmers.
“We believe that the combination of
NCBA’s long experience in organizing
farmers, plus Dunavant’s progressive
management approach, production
expertise and long-term commitment to
the African farmer and GAPI’s unique
approach to value chain lending in rural
areas, will create a successful model that
can be replicated in other regions or
countries,” said NCBA President and
CEO Paul Hazen.
Blue Diamond sales
hit $658 million
Blue Diamond Growers,
Sacramento, Calif., had $658 million in
sales for the 2006-07 marketing year,
the second highest in the co-op’s history
and just $16 million less than the 2005
crop year. Speaking at the co-op’s 97th
annual meeting, Board Chairman
Clinton Shick attributed much of the
co-op’s success to its ability to develop
new markets, offer innovative product
solutions for health-conscious
consumers and partner with leading
almond users.
Shick reminded growers that the
most powerful tool for producing a
“top-quality, safe and nutritional food is
the power that we, as growers, wield
when we pull together in a cooperative
relationship to deliver to the biggest
and most versatile marketer." He called
Blue Diamond’s co-op business model a
dynamic one that identifies “leadingedge
technology systems and processes
that provide the best quality almonds to
consumers worldwide.
“As owners, we provided our
cooperative with almost 90 percent of
its short-term borrowing needs through
the investment certificate and deferred
payment programs,” said Shick, who is
beginning another three-year term as
chairman. “This is not only a powerful
indicator of grower confidence in Blue
Diamond, it also lowers our cost of
operating capital.”
Blue Diamond had earnings of $3.4
million from non-patronage business
other than from almond sales. This
reduces the need for retained earnings
traditionally used to offset costs and
provides for additional capital
investment in the business, Shick said,
adding that almond demand has
increased 5.4 percent compounded
annually for the last 25 years.
With 150,000 new almond acres set
to bear record crops over the next three
years, Shick cautioned growers to
protect their investment with a handler
who plans and invests long-term in
markets and innovative product mixes
that increase customer demand.
Frederick named
‘Honored Cooperator’
The National Cooperative Business
Association has presented Donald
Frederick the Honored Cooperator
Award for his long career working with
cooperatives while at the U.S.
Department of Agriculture (USDA),
including his efforts to make the
Internal Revenue Code and regulations
relating to cooperatives more accessible
and comprehensible.
“His knowledge and efforts regarding
law, tax policy and governance have
benefited cooperatives and cooperative
advisors and will have a long-lasting
effect on cooperatives,” said NCBA
President and CEO Paul Hazen.
In addition to his co-op tax reference
books, Frederick is the author of some
of the mostly widely read co-op primers
in the world, including “Co-ops 101”
and “Do Yourself a Favor, Join a Coop”
(both of which are available from
USDA Rural Development). He also
wrote the popular “Legal Corner”
column in USDA’s cooperative
magazine, Rural Cooperatives.
The Honored Cooperator Award
gives national recognition to
outstanding individuals, including
public figures, co-op employees and
volunteers, who have worked to
develop, advance and protect
cooperatives. Frederick recently retired
from USDA and now works part time
with the National Society of
Accountants for Cooperatives.
South Central Grain
to merge with CHS
South Central Grain in North
Dakota has voted to merge with CHS
Inc. The co-op includes elevators in
Napoleon, Kintyre, Wishek and
Hazelton. The vote was 154 for the
merger and 25 against it, according to a
report in the Bismarck Tribune. South
Central Grain and CHS already jointly
operate a shuttle grain-loading facility
at Sterling.
CHS has been leasing the four
elevators based on a depreciation
schedule. The elevator leases with CHS
were set to expire at the end of 2008.
The expiration will be accelerated and
the merger formalized by the end of
2007, the Tribune reported.
Florida sugar co-op and partner
purchase Veracruz sugar plant
American Sugar Refining Inc. —
owned by the Sugar Cane Growers
Cooperative of Florida in Belle Glade
and by Florida Crystals Corp. of West
Palm Beach — purchased a sugar mill
and refinery in Veracruz, Mexico, less
than a month before the final phase-in
of the North American Free Trade
Agreement. The purchase of Ingenio
San Nicolas S.A. de C.V. gives the U.S.
company a refinery that produces
75,000 tons of refined sugar annually,
according to a report in the Palm Beach
Post.
On Jan. 1, all sweetener trade
restrictions with Mexico were set
to disappear, and trade among the
U.S., Canada and Mexico will be
open. The Post article notes that
some in the sugar industry are
worried that a glut of sugar could
be coming into the United States
from Mexico, while others say the
open borders present an
opportunity. “It is a two-way
street,” sugarcane farmer Fritz
Stein Jr., a member of the Sugar
Cane Growers Cooperative, told
the newspaper. “Come Jan. 1, we
can go south and they can come
north. I don't think they are
going to destroy our market up
here.”
Sunkist to consolidate
citrus juice and oil units
Sunkist Growers is
consolidating its citrus juice and
oil operations, which process
citrus fruit into juice and other
byproducts. The lemon
processing operations currently housed
in Ontario, Calif., will move to Sunkist’s
state-of-the-art processing facility in
Tipton, Calif., which currently focuses
on processing oranges and tangerines.
“By consolidating the two operations
in the heart of the San Joaquin Valley
citrus-growing area, we achieve greater
economies of scale and increased
efficiencies,” said Ted Leaman, vice
president of Sunkist’s juice and oil
business. “The Tipton facility is a
newer, more modern facility.”
The shortage of lemons caused by
the freeze last January makes this the
optimum time for Sunkist to
accomplish this consolidation, Leaman
notes. The bulk of the current season’s
lemon crop will be sold into the fresh
market, leaving very little fruit for
byproducts. Sunkist will contract for
what processing capacity is needed until
March 2008 when the new lemon lines
are expected to be up and running at
Tipton. Post-processing functions are
expected to continue at the Ontario
plant for about a year, until the move is
complete.
The Sunkist plant has been a fixture
for many years, anchoring a large
portion of Sunkist Street in east
Ontario. Built in 1926, the complex is
home to the plant that processes citrus
juices, oils and aromas, and — until
recently — Sunkist’s research facilities,
where many of the innovations found in
today’s citrus packinghouses were
invented. The Tipton facility was built
in 1981, and its operations have been
continually upgraded.
Sunkist Citrus Juice & Oil is a
leading supplier of value-added citrus
products and has staked out a successful
niche in its line of citrus byproducts.
“Not-from-concentrate (NFC) orange
juice is a key market,” said Leaman,
“and Sunkist supplies fresh quality juice
to the major brands — with a West
Coast shipping advantage.”
Walton EMC returns
$3 million to members
Customer-owners of Walton Electric
Membership Corporation (EMC),
Monroe, Ga., received a capital credit
on their December bills totaling $3
million for all members. That
brings the co-op’s 20-year total for
capital credits issued to members
to more than $31 million.
Capital credits are the
customer-owners’ portion of
money left over once all expenses
are paid. Walton EMC holds
margins as a reserve to retire debt,
build equity and to prepare for
emergencies. Once sufficient
reserves are accrued, additional
money is returned to the
customer-owners as capital credits.
The amount each customerowner
gets is determined by the
amount of electricity he/she
bought during 1983, 1984 and
2006. Walton EMC serves 116,000
accounts over its ten-county
service area between Atlanta and
Athens.
Minn-Dak revenue tops
$278 million
Minn-Dak Farmers
Cooperative, Fargo, N.D.,
reported revenue of nearly $278.6
million in 2007, up from about $177
million in 2006. The co-op made
payments to members (net of unit
retains) of $140.6 million, up from
$71.6 million in 2006. Patronage of
$7.8 million was credited to member
accounts.
The co-op’s growers harvested 2.2
million tons of sugarbeets from more
than 107,000 acres. Average sugar yield
was 20 tons per acre.
Speaking to members at the co-op’s
35th annual meeting in Fargo,
Minn–Dak President/CEO Dave Roche
said the 2006 crop was the largest in the
co-op’s history. Despite increases in the
prices of other crops, Roche urged
growers to keep their acreage planted in
sugarbeets.
Doug Etten, Foxhome, Minn., was
elected chairman, succeeding Mike
Hasbargen, Breckenridge, Minn., who
stepped down from the post but
remains on the board. Brent Davison,
Tintah., Minn., was elected vicechairman.
‘Energizing Rural America’ theme
of USDA Ag Outlook Conference
Crucial farm and rural development topics, including forces influencing
renewable energy development, will be in the spotlight when USDA hosts the 84th
annual Ag Outlook Forum, Feb. 21-22 at the Crystal Gateway Marriott Hotel in
Arlington, Va., just outside Washington D.C. The forum attracts about 1,500 people
annually, and is widely considered the nation’s foremost conference for those
with an interest in farm and rural issues.
The title for this year’s conference is “Energizing Rural America in the Global
Marketplace.” Speakers include a wide array of national leaders from private
industry and government. “Getting it Right: Responding to Market Forces” is the
title of a panel talk that will follow the secretary of agriculture’s address. Jean-
Mari Peltier, president and CEO of the National Council of Farmer Cooperatives,
will moderate the panel, with members that include: C. Larry Pope, president and
CEO of Smithfield Foods; Thomas E. Stenzel, president and CEO of United Fresh
Produce Assoc.; and Paul Schickler, vice president and general manager of
DuPont and president of Pioneer Hi-Bred.
There will be 25 other panel talks in the following six topic tracks: Rural
America, Energy and Technology, Policy and Trade, Food Risk and Security,
Conservation, and Commodities. There will also be additional luncheon and dinner
speakers.
Rural Development track panel topics include: “Innovative Business Models
for Rural America” and “Innovative Financing for Rural America,” among others.
Energy and Technology track sessions include: “Ethanol: Is it a Sustainable
Alternative?” “New Sources for Biofuels: What Are They?” and “Solar and Wind
Technologies Coming of Age,” among others.
For a program preview, roster of session topics and speakers, and to register,
please visit: www.usda.gov/oce/forum. Registration is $300 for those who register
by Jan. 11, and $350 after that. For updates on the meeting, send your e-mail and
postal address to agforum@oce.usda.gov, or write to: 2007 Outlook Forum, Room
4426 South Building, USDA, Washington, D.C. 20250-3812.
