Co-op Brands Gain Market Share; Livestock, Tobacco, Cotton Co-ops Expand
National Grape Buys Welch
The transaction was five years in the making and of a magnitude that
had never before occurred in U.S. agriculture. But to the 4,600 Concord grape
grower-members of National Grape Growers Cooperative at Westfield, N.Y, who invested $15
million, it meant buying the top name brand in the business: the Welch Grape Juice Co.
Even though the association was formed in 1945, it took until 1952 for the idea of owning
the processing company to jell.
To finance the transaction, growers received cash for their grapes from Welch at above market prices. They received an additional 10 percent of net sales in the form of allocation certificates due in 20 years, retroactive to the 1951 crop. When the fund reached $15 million, the cooperative exercised its option to purchase. The cooperative gave Welch a mortgage for about $13.5 million to cover net current assets, including supplies, grape juice and other products ready for sale, improvements to plants, two new plants acquired since 1952, plus goodwill and trademarks. Growers applied 10 percent of the net sales to begin paying off the mortgage.
Cooperative Fertilizer Market Grows
Fertilizer programs of cooperatives have come a long way since the days of the first car-door delivery of plant food materials to farmer members. During 1950-51, supply co-ops grossed $256 million from fertilizer sales. Steady growth in this sector means that today, in 1953, 65 cooperatives own 111 fertilizer facilities. Of these plants, 21 manufacture normal super-phosphate. They range in size from small dry mixing plants of 5,000 tons up to plants with a capacity of 80,000 tons or more. The growth of regional cooperatives such as Central Farmers Fertilizer Company of Chicago (later CF Industries) gave farmers a foothold in the production of the primary sources of nitrogen and phosphate.
Cooperatives Integrate Petroleum Operations
After the initial growth of local petroleum retail cooperatives and the first cooperative refinery in 1939, 11 refineries are being operated by 13 regional cooperatives in 1957. Total crude distillation capacity is 155,700 barrels a day. Total thermal cracking capacity of nine refineries was 25,925 barrels a day, or 1.2 percent of the total national capacity.
|Checking on feed bags at the Progressive Farmers Co-op at Sumter N.C. which opened its new building in 1954. The 100-member cooperative also handled other farm tools and supplies, fruits, vegetables, appliances and groceries.||Compact 50-pound bales of cotton helped Calcot Ltd. of Bakersfield, Calif, cut air freight cost by a third.|
Michigan Elevator Exchange used 146 electric-eye sorting machines to sort beans at its Port Huron facility.
Apple of the Eye: Lucky Leaf
T'was more than luck that put the Lucky Leaf brand of fruit products on the dinner tables from Maine to California and more returns into the pockets of growers. Planning, hard work, cooperation and merchandising knowledge have made Knouse Foods Cooperative Inc., of Peach Glen, Pa., one of the four major apple processing firms in the United States. While net earnings have been distributed annually since the cooperative was formed in 1949, peak returns of nearly $1 million were made in 1954. Fruit growers in the four-state area of the southern Appalachian fruit-belt market their foods in many forms, ranging from apple sauce and red sour cherries to peaches and fruit pie fillings.
Co-op Tobacco Warehouses Flourish
Cooperatives were new to the North Carolina tobacco country when some of them formed in the late 1940s. The Growers Cooperative Warehouse at Wilson, 40 miles east of Raleigh, is the world's largest brightleaf tobacco market and was the first to be formed. To supplement start-up capital invested by producers, the cooperative negotiated a loan with the Columbia Bank for Cooperatives to purchase an 11-acre tract and build its warehouse. In each of its four years of operation, the co-op led the Wilson market in pounds of tobacco sold from a single warehouse floor. During the 1951 season, it handled 7.8 million pounds of tobacco worth $5.2 million.
Farmer Cooperative Service Is Born
Congress had been appropriating funds to support the development of agricultural cooperatives for 40 years. Now, in 1954, it has formalized this assistance with the creation of the Farmer Cooperative Service (FCS) as part of the U.S. Department of Agriculture. This action comes on the heels of the Farm Credit Act of 1953 and the reorganization of USDA. The Farm Credit Administration, which had contained the cooperative program, is now an independent entity outside the government. FCS programs are carried on by divisions for marketing, purchasing, management services. "News for Farmer Cooperatives," a magazine, and other bulletins and reports are edited and issued by an information division of the Farmer Cooperative Service. The agency's new administrator is Dr. Joseph Knapp.
MFA Sees 40 Years of Progress
William Hirth, editor of the "Missouri Farmer and Breeder"
magazine in the early 1900s advocated the need to remedy a "sickening agricultural
situation" by encouraging Missouri farmers to increase their bargaining power through
cooperatives. As a direct result, seven farmers formed the foundation of Missouri Farmers
Association (MFA), which is marking its 40th anniversary in 1953. MFAs business volume has
reached $300 million and the cooperative serves 150,000 members.
Dairy products are disbursed from MFA creameries strategically located throughout the state. Farmers purchase nearly $2.5 million in farm production supplies annually from MFA and it is the largest producer and processor of certified seed and the largest distributor of seed corn in the state. A substantial portion of commercial fertilizer used by Missouri farmers is manufactured and distributed by MFA. The cooperative operates 47 bulk fuel plants and more than 67 service stations that distribute oil, gasoline and grease. It operates two refineries that produce petroleum products. More that $23 million in grains is sold through MFA Grain and Feed Co. MFA also provides marketing services and a hatchery for poultry and egg producers.
|This cartoon illustrated a magazine article titled "Employees Produce More When They Share More."|
|Copies of "Today's Farmer" magazine, published by the MFA cooperative, roll off press.|
|Studio lights brighten the set so that television cameras can broadcast a demonstration of how Co-op Glow Candles are made by the Pacific Supply Cooperative at Walla Walla, Washington|
Hayburners Gone, But Florida Citrus Rolls On
Waverly Growers Cooperative of Florida -founded four decades ago -
originally transported the citrus of its members by old, reliable "hayburners"
(horse-drawn wagons) which often had to delve through deep sands. In time, the hayburners
were replaced by powerful trucks and trailers which haul fruit to modern packinghouses.
Crop volume has expanded from 9,725 boxes annually in the co-op's early days to 2.5
million boxes. Grower equity has grown from almost nothing to $2.4 million.
By its 40th birthday, Waverly joined with five other citrus cooperatives to form Florida Canners Cooperative at Lake Wales. This cooperative provides cost-saving orchard caretaker service for about 90 percent of member groves and has perfected a seasonal pooling plan. The co-op obtains crates from a cooperative with sawmills and large timber holdings in Florida and Georgia. Through Associated Cooperatives at Sheffield, Ala., it secures manufactured fertilizers. It helped organize Florida Citrus Mutual, with a membership of 7,000 growers representing 80 percent of the Florida citrus crop.
Wheat Co-op Responds to Bakers
The Farmers Cooperative Commission Co. of Hutchison, Kan., a regional cooperative serving 121 local cooperative elevators, has tuned in to what the baking industry is saying: "The variety of wheat your members produce for high yields is not suited to our needs for gluten-strength flour, which affects our baking results." Today, in 1954, the cooperative is meeting the problem head on with an experimental mill to test wheat qualities for baking qualities. It is giving growers a better market by telling millers how well members' wheat will perform for the baker after milling.
Potato Growers Lure Buyers With Co-op
A cooperative formed by 16 potato growers in the north of lower Michigan is succeeding in attracting new buyers an expanding markets. With help from their county extension agent and staff of Michigan State College, the growers formed Emmet County Growers Cooperative, Inc., at Petosky. Previously, their location put them at the end of the buying chain, or even shut them out of the market. The cooperative is enabling them to produce and market a uniform, high-quality "Straits" brand potato, demand for which is high. Net returns are increasing because their product attracts higher than average prices for that area. Member ranks have quickly swelled to 38 growers.
|This cartoon from 1955 contrasted the differences between cooperatives in the 1920s and the 1950s|
Diamond Walnuts Called "Brand of Choice"
Like many food products developed by farmer-owned cooperatives, the quality walnuts sold under the Diamond brand lead the industry for customer demand. The California Walnut Growers Association of Los Angeles, now 40 years old, has tied product quality to an aggressive marketing program. It took seven years to develop the machine that stamps the Diamond brand on each first-grade walnut shell. The association represents 25 local cooperative associations, 11,000 growers and 80 percent of the walnuts grown in California.
One-Stop Service for Texas Farmers
Although the Brownsville (Texas) Cotton Gin has never bought a bale of
cotton, it has sold more than 43,000 bales since it was formed in 1947, or nearly 92
percent of the bales ginned by the association in its seven years of operation. The
marketing service was started by the original board of directors. Farmers agreed to pay
$150,000 for a modern gin that they knew wouldn't be paid off unless existing local
cooperative marketing practices were improved.
Annual ginning volume averaged 7,000 bales. A second gin plant was added in 1951 to handle increasing member volume and increasing facility investments to $1 million. The cooperative also has $64,360 invested in Valley Co-op Oil Mill at Harlingen, Texas, and it buys pure certified seed from the Texas Planting Seed Association, of which it is part owner.
Home Freezers a Boon to Locker Plants
Frozen-food locker plants are expanding marketing efforts by
provisioning home freezers. A survey of 10,553 frozen food plants by the Farmer
Cooperative Service has revealed that about 1,700 qualify as frozen food provisioning
plants. These plants extend credit for more than 60 days for bulk food purchases of their
Half of the freezer provisioning plants are in communities of more than 5,000, while only a quarter of the locker plants were in towns of that size. The majority of both types of plants are individually owned. Cooperatives are less likely to include a home freezer provisioning feature in their operations.
United Farmers of New England, headquartered in Boston, introduced "pitcher pour" half-gallon cartons of milk in a media blitz that included streetcar advertisements and store promotions in 1954.
Land O'Lakes used "milk automat" vending machines to market half-gallon cartons of milk.
Southern States Cooperative, Richmond, Va., used a "mobile dairy" in the 1950s to demonstrate its line of milking equipment
Pure milk Association introduced a one-third quart of milk concentrate on the Chicago market, which attracted a large amount of media attention.
Co-op Credit Increases About 10 Percent
Farmers and their cooperatives borrowed more than $3.3 billion in 1957
from the nationwide Farm Credit System, setting a new record by increasing the amount 10
percent, or $368 million, from 1956. R. B. Tootel, governor of the Farm Credit
Administration, says the growth of credit is due to "the continued rise in farming
costs and farmers' efforts to improve the efficiency of their operations by developing
optimum, family-size mechanized farming units."
More than 2,400 marketing and purchasing cooperatives borrow from the banks for cooperatives. At the end of 1957, their loans outstanding from the banks totaled $454 million compared with $457 million in 1956.
Poultry Co-ops Benefit from Trucking Rules
Lower rates and better service are the principal benefits arising from
the interstate trucking of fresh and frozen processed poultry products under the
agricultural exemption clause, according to a nationwide survey of poultry processors and
motor carriers conducted by the USDA. The exemption refers to the Motor Carrier Act of
1935, as amended. In a pair of court decisions, the latest in 1956, the U.S. Supreme Court
affirmed a decision by a Texas district court that both fresh and frozen dressed poultry
came under the agricultural exemption clause.
Cooperatives have an interest in the exemption because they market 6 percent of the entire U.S. volume of broilers and other poultry except turkey. In 1956, this amounted to 213 million pounds (fresh-cooked weight). Farmer cooperatives also marketed 16 percent of the total U.S. production of turkeys in 1956
Broiled lamb chops were promoted as food that should appeal to weight-conscious consumers in a 17-week ad campaign launched by Producers Livestock Association of Salt Lake City, Utah. The co-op claimed it helped spark a 68-percent upsurge in demand in areas where it ran
Taft Benson: Co-ops Must Adjust to "Stupendous Changes"
Speaking at the 30th annual American Institute of Cooperation at
Pennsylvania State University, Secretary of Agriculture Ezra Taft Benson outlines the
importance of tasks facing cooperatives in an age of "stupendous change and
continuing breathtaking challenges." These include the need to maintain producer
control over farming, preserving the family farm and exerting effective bargaining power.
"Farmers must mold economic integration themselves to make sure it adequately serves farm interests. They must create new opportunities for themselves through joint efforts," he says. Benson warns against complacency despite notable progress in integration and consolidation. He outlines a four-part program: 1) Build your cooperative bigger in membership, resources, research and services you render; 2) Be satisfied with nothing less than top-notch leadership in directors and management; 3) Bring about more cooperation between cooperatives; 4) Build a better press and public relations program.
Benson says it is almost impossible to over-estimate the value of farmer cooperatives. "Those of us who believe in farmer cooperatives must be vigilant to see that the public is fully informed... Farm people have come a long way in cooperation with one another. Working together, they can exert effective bargaining power and maintain control of farming. They can preserve the traditional family farm."
Wisconsin Livestock Co-op Blazes Trail
For a state that had a dearth of livestock cooperatives despite its
long history as a leading co-op dairy state, the new Equity Cooperative Livestock Sales
Association at Milwaukee has set a torrid pace in its first 18 months. It set up five
livestock auctions around the state - a first for Wisconsin - even though auctions were
prevalent elsewhere in the country. C.M. Chalfin, Equity's general manager, and Milo
Swanton, executive director of the Wisconsin Council of Agriculture Cooperatives, led the
fight to get the brucellosis control law on Wisconsin's books amended so cattle going to
slaughter could be sold at an action without this test. It allowed the state's farmers to
keep pace with those in neighboring states.
Establishing the auctions involved member relations, public relations and the cooperation by the Agricultural Extension Service and many others in the state. Equity representatives held township meetings across a 10-county trade territory for the pilot auction at Richland Center. County meetings were conducted with key farm groups. Cooperative staffers, district extension men and county agents participated. They spoke at co-op annual meetings and other farm meetings, service clubs and vocational agriculture classes. They also used the cooperative's monthly newsletter to spread the word. Existing cooperatives were used as allies. Farmers selling at the cooperative livestock auctions are getting better prices, have fewer shipping losses and get paid for quality and merit.
Equity also has been selling purebred Wisconsin Holstein heifer calves for air shipment to dairymen in distant states such as Idaho, Tennessee and Kentucky for dairy herd replacements. It is air-shipping mature dairy cattle to locations as far away as South America.
Ohio Expanding Co-op Education Efforts
Teamwork among farmer cooperatives, agricultural extension agents and
vocational agriculture teachers in Ohio is resulting in popular and effective ways of
showing young people why cooperatives are so important to farmers and ranchers. More than
1,500 members of 4-H clubs and Future Farmers of America chapters participated in 16 field
days held on farms around the state. At each event, students learned from producers and
cooperative representatives why co-ops are vital to farmers.
The idea came from Max Drake, president of the Ohio Council of Farmer Cooperatives, following discussions with extension and agricultural education staff at Ohio State University about the need to develop more effective methods to teach cooperative principles to young people.
All Ohio cooperatives were invited to send representatives to district meetings of extension agents and teachers to present field day plans. The area events were first staged during the summer of 1952. Farm radio directors throughout the state serve as masters of ceremonies and interview host farm families and representatives of each cooperative, stressing how co-ops bring modern business services to the farm.
Another state council education program, also conducted in cooperation with Ohio State University, involves creating more contacts between cooperative managers and vocational agricultural instructors - 40 percent of whom have been on the job three years or less. Very few of these teachers learned anything about cooperatives in college and many have had only limited experience with co-ops. A recent survey shows that 90 percent of these teachers are giving some instruction on cooperatives, but only 12 percent are visiting these associations or inviting managers to talk to their classes.
USDA's Farmer Cooperative Service distributed 4,300 copies of cooperative publications from this booth at the 1955 American Institute of Cooperation at Purdue University.
Dairy Co-op Promotes Bulk Milk Tanks
The bulk system of handling milk to supply the Washington, D.C.,
market, is being advanced by the Maryland and Virginia Milk Producers Association Inc.,
which has represented producers for 32 years. During the past two years, the cooperative
has been developing bulk pickup of its members' milk.
The cooperative helps producers adjust to this big change and even helps finance the initial investment by buying farm bulk tanks in carload lots to lower the price.
Co-op fieldmen are providing individual assistance to producers to help them make the switch to the new system. Pickup routes have been reorganized as more bulk tanks come into service. More than 120 farms receive daily tanker pickups. Average herd size for the co-op's 1,800 members is 40 cows, although some milk 100 cows or more. Members produced an average daily milk volume of 800 pounds in 1951. Tanker trucks serve an average of nine patrons on each route, which average 100 miles, round trip.
The bulk milk system first appeared in the Los Angeles area in 1948, and gradually has become well established in at least 16 other states. Twenty-one dairy cooperatives currently use bulk pickup to some degree.
Livestock Service Co-ops Gaining
About one million livestock farmers and ranchers have banded into
cooperatives for marketing services. Both membership and volume of livestock marketed by
cooperative have been gaining during the past decade. Cooperative interest is also
stirring in the South, where beef production has outstripped marketing facilities. Cotton
Producers Association of Atlanta opened a livestock department in 1952. It plans to lease
or purchase local stock-yard facilities at strategic points in Georgia or build new
facilities and bring them into the central organization. The Mid-South Cotton Producers
operates a livestock department at South Memphis (Tenn.) Stockyards.
Meanwhile, western stockmen gained another cooperative livestock market when Producers Livestock Marketing Association of Salt Lake City, Utah, opened facilities in Billings, Mont. The cooperative has six branches covering 11 western states.
The livestock cooperatives are still riding the tide of decentralized marketing that began in the 1920s. New local markets were opened by several Corn Belt cooperatives in 1952. Farmers now have memberships in 38 large-scale, regional and terminal marketing associations operating on 29 livestock markets of the country. Fifteen of the cooperatives operate 100 branches at other terminal and country markets, making a total of 129 markets served.
With a little help from Miss Super-cargo of the Day, Priscilla Keays, Sunkist Growers of California shipped 135,000 boxes of Valencia oranges to Europe.
Avocados from Calavo Growers of California were used in a fall fashion display show at a major department store in Washington, D.C. Fashions were, naturally, mostly in avocado green.
At the 40th anniversary in 1955, Waverly (Fla.) Growers Cooperative featured women in Civil War-era clothing at its headquarters.
Co-op Gin One Man's Idea
Sometimes all it takes is the perseverance of one person to spark
development of a cooperative. Grant Cotton Gin Cooperative at Marion, Ark., is largely the
dream of John Gammon, who resigned from the Resettlement Administration (forerunner of
Farmers Home Administration) to operate his father's cotton farm and led efforts to build
a $70,000 cooperative gin. The cooperative started in the late 1940s with 54 holders of
common stock, each of whom who invested $10. Another 45 shareholders paid $100 per share
for preferred stock. Five years later, the co-op was still paying a dividend on preferred
stock and making an annual profit. The gin averages 2,000 bales per year and pays an
annual refund or rebate of $3.50 per bale to participating producers.
A fire in 1951 ravaged the original $130,000 gin of Mound Bayou (Miss.) Gin Association, the brainchild of three producers, but due to wartime restrictions on building materials, a new gin couldn't be built. So the board looked around and purchased, moved and improved an old gin located in Earl, Ark. It was partially financed by a loan from the New Orleans Bank for Cooperatives. Despite its small membership, the cooperative has never missed handling a single crop. And it has steadily gained new business.
|The food research lab at Sunkist Growers, Inc. plays an essential role in helping the co-op develop quality food products.|
|"Ma has parked her shoes, but keeps up with Pa and the 'young fry' in a 'grand right and left' at a family camp sponsored by the Consumers Cooperative Association, Kansas City, Mo."|
REA Loans Modernize Farm Phones
Many farms now have modern, dial-telephones thanks to legislation passed in 1948 which made loans available from the Rural Electrification Administration (REA) to modernize the phones used by farmers. The share of American farms with telephones passed 42 percent by 1952 and was growing. Well over 200 rural telephone associations had obtained REA loans to install dial equipment. In 1953, a cooperative in New Mexico had completed the first part of a system serving people who previously had to travel 70 miles to access a telephone.
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