1970s

The new Michigan Agricultural Marketing and Bargaining Act has drawn considerable attention because it is considered the first comprehensive farm bargaining law enacted in the United States. It expires in 1976. Noel Stuckman, manager of the Michigan Agricultural Marketing Association, reviews highlights of the act at the association's 12th annual meeting.
The law requires handlers to negotiate with accredited associations which represent all producers (members and nonmembers) in negotiations with handlers. It also requires producers to pay marketing service fees and establishes an Agricultural Marketing and Bargaining Board. The law also: sets association eligibility standards for accreditation; provides for mediation and arbitration; details unlawful practices by handlers and associations; and limits eligible commodities to perishable fruits and vegetables.

By group action through their livestock cooperatives, Southeast producers can gain sufficient bargaining strength in the marketplace to defend their prices and other terms of sale, according to a new report by the National Commission on Food Marketing. "Livestock producers in many areas have long used cooperatives to extend their influence beyond the farmgate in marketing their animals, but this has mostly occurred in the Midwest, where livestock production is concentrated," observes John Haas of the Farmer Cooperative Service.
Noting the rapid growth in livestock production in the Southeast since World War II, Haas says Southeast farmers sold 20 million head of livestock worth $1.8 billion in 1967, which represented a fifth of their total income. Haas concludes that producers have "failed to take advantage of the opportunities provided by a growing industry to expand their influence in marketing livestock. The highly fragmented cooperative market structure and lack of coordination between associations limit their effectiveness in helping farmers improve their bargaining strength." Many smaller associations need to consider consolidating into larger units to broaden services and reduce cooperative overpopulation, he concludes.

It was up with the new and down with the old as this service station in South St. Paul, Minn., installed its new CENEX sign in 1972 following a name change for the co-op. the same scene occurred throughout its 10-state trade territory. And how about those gas prices?

An advisory report of the Commission on Agricultural Credit, issued to the Federal Farm Credit Board, urges that a study be undertaken which will gauge how the Farm Credit System might provide further assistance in financing development in rural America, including cooperative utility systems, non-farm rural housing and rural community needs. The report urges the Banks for Cooperatives, the prime credit source for agricultural cooperatives, to seek liberalization of eligibility requirements for borrowing associations, broaden their loan purposes, and place greater emphasis on promoting the growth and development of cooperatives.

The nation's transportation system truck, rail and barge - is dictating when, where and how grain will be marketed, according to a new study by USDA’s Farmer Cooperative Service. While trucks and barges are hauling increasing amounts of grain, railroads still remain the principal haulers. So rail rates are the standard by which other charges are measured.
It was once common for a grain cooperative to ship a single 50-ton railcar of grain to a single destination. But now, in 1970, shipment in 5-, 20- or even 100-ton covered hopper railcars in unit trains is routine. However, rate structures require shipments larger than can be provided by the average country elevator, which are often located on branch rail lines. Many of these rail branches are being abandoned. Railroad management is emphasizing large-volume, multiple-railcar shipments from a grain elevator or feed mill located on a main line with the movement fitting into an existing train schedule.

Just like alpine Switzerland, the Cache Valley of northern Utah and southern Idaho brims with some of the world's finest Swiss cheese, produced by Cache Valley Dairy Association at Amalga, Utah. When any of the co-op's eight big vans ease away from the loading dock and head for distant western markets, they tote a cargo valued at nearly a quarter- million dollars. As the largest Swiss cheese plant in the world, the co-op's 200 employees produce 50,000 pounds of cheese from a daily volume of a half million pounds of milk. Several hundred members are constantly being urged to increase milk production from their herds to match the growing demand for the co-op's cheese. The valley is home to 40,000 people and Utah State University. The cooperative is the most important industry in the valley, with a monthly payroll of $90,000.

1970p2.GIF (128960 bytes)

Henry Von Bank, Minnesota Valley breeders Association, places ampules of beef bull semen derived from the cooperative's herd into cryogenic bottles prior to shipping them to one of the cooperative's artificial insemination (AI) technicians. Cooperative pioneered the AI industry.

Assuring farmers a supply of seed corn that was resistant to Southern Corn Leaf Blight required the services of nearly 1,000 teenagers to detassel seed-corn plants during 1971. They rode in buckets hanging from the extended arms mounted on a tractor moving through the field. The teenagers were hired by FS Services Inc.

Agriculture is facing severe challenges in the 1970s and cooperatives must help guide these changes, not just react to them, says Bill Black, agricultural economist from Texas A&M University. "Cooperatives have always generated agricultural leaders, and the future of agriculture will depend upon leadership from within," he says.
Farmers will continue to be guided by the economic laws of the marketplace, and thus must not be blinded by their emotional desire to produce without regard to market demands," he says. Cooperatives can meet the challenges in seven ways: 1) providing marketing leadership; 2) enacting tougher production and quality policies; 3) developing joint ventures; 4) developing cash and contract markets; 5) pursuing new and expanded markets; 6) better research and development efforts; and 7) through strong internal leadership.

Cooperatives looking at ways to help their members become better managers are increasingly turning to computerized business and production records. Dairy farmers with Dairy Herd Improvement Associations (DHIA) for herd management are producing an average of 3,000 to 4,000 more pounds of milk per cow annually than those not using records. However, only 25 percent of the dairy cows in the United States are on DHIA testing. Agricultural Records Cooperative at Madison, Wis., was developed primarily for processing dairy production and business records.
Agri-Tech Analytics Inc., a subsidiary of Dairymen's Cooperative Creamery Association at Tulare, Calif., uses sophisticated techniques to improve herds and farm management practices. Long Meadow Dairy Farms, a cooperative at Durham,. N. C., has joined with local county DHIAs to provide specialized record service to Long Meadow members. The cooperative pays a 10-cent bonus per 100 pounds of Class I milk sold to the dairy plant from herds participating in the DHIA or owner-sampler record plans.

Farmland Industries Inc., of Kansas City, Mo., has become a leading voice for agriculture and those who face a myriad of problems in trying to make a respectable living on the farm. The cooperative is sponsoring a series of full-color newspaper advertisements and a billboard near its headquarters with the theme that "food is a bargain" compared with the prices of other products.
Ernest Lindsey, Farmland's president, wants urban Americans to realize farmers aren't getting rich and often are barely surviving. He also discusses this dilemma in several articles appearing in agricultural journals. The series of ads and articles triggers a flood of favorable reaction both from farmers and from other cooperative organizations.

1970p4.GIF (115058 bytes)

National Grape Cooperative Association's subsidiary, Welch's, introduced a new vitamin-enriched drink for the Caribbean market during the early 1970s.

1970p5.GIF (105080 bytes)

Children in downtown Hong Kong sip a beverage produced by Sunkist Growers of California. The cooperative anticipated sending 15 million cartons of its citrus soft drink into the export market in 1972.

Twenty regional cooperatives, including four from Canada, have formed a joint venture - Cooperative Research Farms (CRF) - which involves a network of eight livestock research farms that test feed formulas to determine cost and conversion efficiency. Participating cooperatives share in the costs and research results. The research program rests only on a gentlemen's agreement outlined in a letter, which says the cooperatives will pay an annual assessment and abide by a majority decision in choice of projects. Total cost for the project is about $500,000 annually. Committees of feed specialists from all participating cooperatives choose the research projects.

There was little or no shock threshing in Watson, Minn., when Watson Farmers Elevator Co. was formed 85 years ago. Most farmers stacked their grain in round stacks in the field. It is believed to be the oldest continually operated grain cooperative in the country. Farmers raised hogs and dairy cattle, but the straw was considered useless and burned in the field. There were no trucks, tractors, school busses, refrigerators, electric lights, gas or diesel motors and no rural electric cooperatives
Now 85 old, the cooperative offers a multitude of services plus grain marketing. It has a feed plant for custom grinding and blending and a fertilizer warehouse and custom blending and spreading services. It cleans seeds, markets a variety of grains, operates two grain dryers and has a storage capacity of 250,000 bushels. Manager Roy Oleson, who is also mayor of Watson, population 300, reports the co-op is handling 1.3 million bushels of grain and has a total business of $1.6 million. In the past year it had $31,640 in net margins.

Land O'Lakes (LOL), of Minneapolis, Minn., will mark a half century in business during 1971. The dairy cooperative was formed by 350 Minnesota dairy farmers as Minnesota Cooperative Creameries Association, Unit No. 1. It was a statewide marketing association that has gained fame for its "sweet not sour cream butter." It started with one borrowed desk, one borrowed typewriter and a loan of $1,000. The LOL brand name and Indian maiden logo first appeared in 1924.
LOL's current strategies, based on goals set by its pioneers, include: to standardize and improve quality through cream grading and proper methods of manufacture; to transport butter and dairy products by car-lot shipping; to provide service in the sale of products through closer cooperation with distribution agencies and whole-market receivers; to cooperatively purchase supplies such as salt, butter tubs, coal and the like in car-load lots, and to cooperatively advertise dairy products.

Connecticut farmer Louis Longo didn't need the background cheerleader for his enthusiastic remarks at a dairy profit seminar sponsored by Southern States Cooperative at its 50th annual meeting in Richmond, Va.

"I have often said that cooperatives have made a great contribution to American agriculture," Earl Butz, President Nixon's new secretary of agriculture, tells delegates to the National Council of Farmer Cooperatives annual meeting. They supply a great deal of leadership to rural America, he says, because of the experience they've gained in running cooperatives.
"This encourages participation in local government and support for good government and fiscal responsibility," he continues. This leadership has helped make our country great and it is needed now more than ever as we move even further from a rural oriented society toward a more unsettled urban-oriented society."


Brynhilde Ringheim holds a pair of lobsters for a customer's inspection in a retail store operated by Chatham (Mass.) Seafood Co-op Inc., on Cape Cod. It was the first seafood cooperative to receive a loan from the new Springfield (Mass.) Bank for Cooperatives.	Long-grain, fresh-market cucumbers are washed, graded and packed by Tri County farmers Association, a vegetable marketing cooperative in eastern North Carolina.

Marking its 41st annual meeting, Farmers Union Central Exchange formally adopts CENEX as the trademark, tradename and general corporate communication identification for this St. Paul, Minn. based cooperative. The organization, however, retains its official corporate name. CENEX becomes the house-brand for all products packaged and branded by Central Exchange. It will also be used as the corporate identifier in the marketplace. The cooperative's sales have just set a sales record of $200 million

Keeping pace with the state's rapidly growing citrus industry, Texas Citrus Exchange (TCX) at Edinburg has erected a $1.7-million frozen concentrate plant at Mission, Texas. Plant capacity is the largest in the state, at 13,000 tons of concentrate per season. TCX, formed in 1968, is a sales agency for five other cooperatives.

A Vermont co-op farmers market extended its fall season a month and generated an extra $68,000 in gross receipts by selling handcrafts.

Better grower returns is the agricultural challenge of the 1970s, so four regional cotton cooperatives - Calcot Ltd., of Bakersfield, Calif.; Plains Cotton Cooperative Association, Lubbock, Texas; Staple Cotton Cooperative Association, Greenwood, Miss.; and Southwest Irrigated Growers Association, El Paso, Texas - have formed AMCOT Inc. to link and strengthen worldwide marketing efforts. AMCOT started with 25 percent of the U.S. cotton production, or about 2.75 million bales of cotton. With the additional muscle provided by the merger, grower returns will improve through broader market coordination and through the economics of combined sales offices.

"There is a big challenge facing us in acquainting the many publics with the role of cooperatives in our American competitive enterprise system," Owen Hallberg, the new president of the American Institute of Cooperation (AIC), says during the 45th National Institute in Cooperative Education. "Constant examination is vital," he stresses.
Special emphasis on membership education should focus on young farmers and youth, many of whom know very little about cooperatives. "We also need well informed and concerned employees who understand what cooperatives are all about, who are enthusiastic about their employer and can transmit this enthusiasm to everyone they contact," he says.
While more education may be possible through better coordination among cooperative organizations, government agencies, state councils and education groups, there are limitations, he says. The main limiting factors are: the "willingness of directors and management to recognize needs; lack of courage by directors and management to envision and plan long-range education programs; and the willingness to work together. We must be big enough to recognize differences in philosophy and practice and be willing to overlook them in achieving our common goals."

In the midst of an international oil embargo, exchanging food for crude oil makes good sense, E.V Stevenson, executive vice president for FS Services Inc., tells delegates attending the 1973 annual meeting of the Midwest-based farm supply cooperative. "We can produce more than enough food for the America people" and still export 50 percent of the soybean crop and 20 percent of the corn, Stevenson says. Total farm exports are predicted to grow to $20 billion by 1980, the same projected value of oil imports by then, he notes.
"To produce for expanded exports, however, we need adequate supplies of fuels and fertilizer. We cannot feed our nation and part of the rest of the world if agriculture is limited to a stick and a hoe and a fish in each hill of corn," Stevenson says. "Making sure there is enough energy for farming has a good payoff ratio. Farming uses less than 5 percent of the nation's oil and 3 percent of the nation's gas. But with that vital percentage, we can produce the products to pay for 50 percent of the oil the nation needs to import. So food for crude makes sense." And if that opportunity knocks, Stevenson says Midwest farmers and their FS cooperative would be willing and able to answer the call.

	On a billboard near its Kansas City office, Farmland Industries advertised that "food is a bargain."
St. Paul Federal Intermediate Credit Bank advertised that "farming is everybody's bread and butter" on bumper stickers.

Like Jack and the Beanstalk, Southern States Cooperative at Richmond, Va., also has its roots in seeds, although in alfalfa and clover, rather than bean, seeds. And instead of a golden egg, co-op members have reaped $91 million in cash refunds over the past half century.
Appropriately, the cooperative's golden anniversary year has been its most successful.
Highlights include: volume is up 18 percent, to $180 million; net savings after taxes total $5.1 million; fertilizer volume is up 11.5 percent, to $30 million; petroleum volume jumped 17 percent, to $22.7 million; seed sales are up 31 percent, to $12.6 million; egg marketing climbed 10 percent, to $4.9 million. As further icing on the cake, the co-op's net worth has reached $55.5 million.

The nucleus for a Texas sugar cane revival has been created by 115 sugar growers who formed Rio Grande Valley Sugar Growers Inc. They built a $30 million processing plant near Santa Rosa. Chartered in 1970, the co-op planted 25 acres of cane as seed crop, added another 250 acres in 1971, then expanded to 2,500 acres for seed by 1972. By late 1973, they had 25,400 production acres of cane to grind into raw sugar. The cooperative has signed a contract to supply the only refinery in Texas.

CF Industries President R.R. Baxter says fertilizer barge shipments are expected to increase five-fold during the next five years, so a barge-shipping cooperative is essential to long-range plans for improving service to member-owners and to reduce shipping costs. Agri-Trans Corporation is an interregional transportation cooperative formed by six cooperatives to do just that. It ships nitrogen and phosphate fertilizer from CF Industries plants in Florida and Louisiana to the Upper Midwest. The ships return with members' grain, destined for Gulf Coast export facilities.
Grain cooperatives face similar transportation pressures, so it was natural for them to join CF Industries in forming Agri-Trans. Other initial owners include Farmer Grain Dealers Association of Iowa, Farmers Union Grain Terminal Association, Illinois Grain Corporation, Missouri Farmers Association and St. Louis Grain Corporation. CF will manage the firm, which gained its impetus from a study by the USDA Farmer Cooperative Service. The study explored the advantages of coordinating north-south flows of grain and bulk fertilizer.

Dairymen Inc., of Louisville, Ky., used its annual report to double as a calendar.

When USDA’s Rural Electrification Administration (REA) was formed in 1935 to provide loans to finance farm electrical service, only 1 in every 10 farms had electrical service. How successful was this effort? Just 40 years later, 99 percent of farms have electrical service. There are more than 1,000 REA-financed rural electric systems serving rural America, including 977 cooperatives. Lines have been strung from above the Arctic Circle in Alaska to the Florida Keys and from Maine to the California desert.

Cooperative associations marketing grain - including barley, corn, oats, rye, sorghum and wheat - gained access to programs of the Commodity Credit Corporation (CCC) in 1977 on behalf of their members. They had earlier been approved to receive CCC loans on cotton, honey, rice and soybeans. Expansion of the program to feed grain and wheat growers gave them the option of not taking a loan, taking a loan as an individual producer, or delivering grain to their CCC-approved cooperative for marketing. Marketing cooperatives handling these commodities were eligible to participate regardless of their size.

Members of the Minnesota Association of Cooperatives (MAC) are joining community leaders to purchase the home of the late Congressman Andrew Volstead at Granite Falls, Minn. They plan to turn it into a museum as a tribute to his impact on the cooperative movement. The will be donated to the city. As chairman of the House Judiciary Committee, Volstead authored what is now known as the Capper-Volstead Act of 1922, which enabled farmers to jointly market their products without being prosecuted for antitrust violations. Museum preparations were expected to take two years.

Concerns over shortcomings in the 1967 Agricultural Unfair Practices Act prompt discussions among managers of fruit and vegetable bargaining associations and legal experts about elements needed in new legislation. The act prohibited discrimination by a processor against a producer because of his membership in a bargaining cooperative or against the cooperative itself. The scope of the act was considered limited and enforcement machinery inadequate.Elements of the Michigan Agricultural
Marketing and Bargaining Act of 1973 are being studied. It, like the Sisk Bill later introduced in Congress, provided that accredited associations represent all producers (members and non-members) in the bargaining unit; all producers in the unit must pay marketing service fees to an accredited association; mediation is optional, but arbitration is compulsory unless, within a given time, the processor elects not to purchase or the association decides not the sell the commodity to the processor. Both the bargaining cooperatives and processors were required to bargain in good faith.

Dr. Randall Torgerson, a staff economist for the administrator of the Agricultural Marketing Service, has been named by Agriculture Secretary Earl Butz as administrator of Farmer Cooperative Service. He succeeds Dr. Ronald Knutson, who joined the faculty of Texas A & M University. Torgerson, a native of Wisconsin, directs the FCS research and technical assistance efforts of 60 agricultural economists and cooperative specialists. While teaching at the University of Missouri-Columbia, he was executive secretary of the Missouri Institute of Cooperatives and executive secretary of the university's Graduate Institute of Cooperative Leadership.

The 1975 observance was dubbed a birthday party because it marked the 50^th anniversary for the Cooperative Marketing Act of 1926. That legislation led to creation of USDA’s Farmer Cooperative Service (FCS). Secretary of Agriculture Earl Butz says one of the greatest challenges of the cooperative movement is to focus on members' interests. "I think there is no better training ground for democracy in this country than in the self-management and operation of these cooperatives. That to me has been the great contribution that cooperatives have made in the past 50 years and I think it will be the greatest contribution they will make in the next 50 years."
Patrick Healy, secretary of the National Milk Producers Federation, calls FCS "A much needed voice within government, deeply appreciated by farmers. Its knowledge of cooperative activity is invaluable in setting the record straight and in countering relentless attacks on cooperatives..." Ken Naden, president of the National Council of Farmer Cooperatives, cites FCS for its business analysis work with cooperatives. He says no other government agency collects statistics and analyzed the books and the method capitalization and distribution of earnings of cooperatives. Dr. Randall Torgerson, FCS administrator, adds that while the agency is Washington-based, it stays close to the operating problems at the grass roots. Three predecessor FCS administrators join the celebration: Dr. Joseph Knapp, 1953-66; Dr. David Angeline, 1966-70, and Dr. Ronald Knutson, 1973-75.

Indian Farm Bureau Cooperative Association marked its 50th anniversary and record sales of $700 million by feeding an estimated 13,300 people in a 4.5 acre dining room.

Regional and interregional grain marketing cooperatives are significantly expanding their storage and processing capacity. By 1976, nearly 60 percent of their grain marketings - or 1.6 million bushels - are headed for the export market. Storage capacity of 18 major grain cooperatives totals 400 million bushels, more than half at inland locations, 50 million bushels on navigable rivers or the Great Lakes, and nearly 60 million bushels at sea ports.
Other improvements include new dust and pollution control equipment and new equipment to increase capacity to receive, condition and load grain - particularly at port terminals at Ama, La., Houston, Texas and Baltimore, Md. Hopper car usage for grain shipments to ports has also greatly expanded, as has the use of tank cars for shipping vegetable oil. Much of the grain shipped by regional is going by barge to port elevators near New Orleans and Portland.
Five Midwest regional grain cooperatives have now joined CF Industries, the interregional cooperative that manufactures and distributes fertilizer, to form Agri-Trans Corp., based near St. Louis. The firm uses seven towboats and nearly 200 barges to ship grain down the Mississippi River to New Orleans and return with fertilizer materials destined for Midwest regional cooperatives.

As a swan song to the 1977 retirement of L.C. Carter, the co-op's president and chief executive officer, Riceland Foods at Stuttgart, Ark., handles a record volume of rice just as it was completing a major buildup of its rice division - increasing milling capacity by a third, doubling parboiling capacity, and adding about 15 million bushels of storage. Marking its 57th year of operations, Riceland's gross sales reached $488 million. Returns to members for grain handled topped the preliminary national average price by $33.9 million.

Farmers and their cooperatives received loans totaling $38 billion in 1977 from the Farm Credit System, an increase of 11 percent from 1976. Gov. Don Wilkinson of the Farm Credit Administration reported a record $42 billion of loans outstanding. Banks for Cooperatives loans were up 9.2 percent to $11.8 billion.

In an effort to encourage its member cooperatives to conserve energy, Agway Inc. of Syracuse, N.Y, has published a 40-page handbook outlining energy management steps and planning tips. The potentials for savings included many projects that require little or no investment. Topic areas included tractors, insulation, household appliances and tillage management.

Nearly 20 cooperatives have come and gone during the past five years at Richland Center, Wis. But financial trouble has not been the cause of their demise. All lasted only nine weeks because they were part of a seventh grade study on American industry at Richland Middle School. The project took place in an industrial arts class taught by Jerry Sims. It combined traditional shop skills with lessons on history, practices and problems of industry.
Students studied the four kinds of industrial ownership, including cooperatives. They formed a cooperative, bought a share of stock, planned, manufactured and marketed their shop projects: foot stools, plastic bowls, billfolds, coin holders, picture frames and stationery. Finally, they dissolved the cooperative and redeemed stock. Community support for the school cooperatives has been excellent.
"That's really why I went with a cooperative approach," Sims says. "The area's [cooperative orientation] dictates it." He had little knowledge or experience with cooperatives so he got information from the Wisconsin Federation of Cooperatives. "A lot came from local cooperative managers. They were fantastic." Sims says he is "pretty satisfied" with the program. It opens the students' eyes. ...One of the biggest problems cooperatives have is education of youth, and this really shows students what cooperatives are."

Member-produced products are moving through the marketing chain from farm to supermarket shelf for the first time, B.J. Malusky, president of Grain Terminal Association at St. Paul, tells participants at the grain marketing cooperative's 39th annual meeting. He is speaking of the earlier purchase of Holsum Foods at Waukesha, Wis. It was folded into GTA’s Honeymead Division, a packer and processor of foods for the dinner table. The firm sells in 22 states through 40 brokers. During the past fiscal year, GTA handled 256 million bushels of grain and showed after-tax margins of $7 million. Now, beginning with its 40th year, GTA will increase its cash patronage refunds from the required 20 percent to 30 percent.

Seald-Sweet Growers of Florida and the Japanese Toyota automaker have completed a historic trading action. When the automaker delivered its cargo to Jacksonville, Fla., aboard a new $28 million vessel - the world's first combination car and refrigerated cargo carrier – it returned to Tokyo with 283,000 cartons of fresh Florida grapefruit and oranges. The shipment of 14 million individual fruits was the largest in the state's history.

A major dairy marketing cooperative has moved closer to becoming a total food company. Land O'Lakes (LOL) of Minneapolis has entered the red meat business by buying Spencer (Iowa) Foods in 1978. LOL soon adds the processing plant at Oakland, Iowa, owned by American Beef Packers, to boost the cooperative's annual processing capacity to nearly 1.5 million head. President Ralph Hofstead says the purchases were made only after efforts failed to organize a "CF Industries" approach with other regionals.

Farmer cooperatives are increasingly using subsidiaries instead of divisions or departments to conduct some services. Of 80 large regionals reviewed, 58 had one or more subsidiaries in 1975-76. Eight cooperatives alone listed use of 195 subsidiaries.

Capital formation, the structure of cooperative growth, expanding product markets and communications are key issues for cooperative leaders in the 1980s, says Randall Torgerson, deputy administrator of USDA’s Economic, Statistical and Cooperative Service. "National issues such as adapting to an energy-short environment, wrestling with rural transportation problems, pricing commodities in thin markets and dealing with complex government regulations will continue, he says. "The decade can well become cooperative's greatest growth period because of farmer and rancher awareness of the important structural role cooperatives play in maintaining access to markets for a dispersed agriculture. Primary areas of growth will be in exporting grain and oilseeds and establishing cooperatives in red meat processing and distribution.