NEWS LINE



Western Sugar Co-op pays
$85 million for six plants
Sugar beet growers in four western states have seized control over a major segment of the U.S. sugar industry with the launch of Western Sugar Cooperative. The cooperative was born at the end of April after 2 years of difficult negotiations by its predecessor, Rocky Mountain Sugar Cooperative. The talks finally culminated in a deal to pay $85 million for six sugar beet processing plants, storage facilities and a host of other support facilities and equipment belonging to Tate & Lyle North America. The new cooperative will also assume payment of the $100 million inventory debt to the Commodity Credit Corporation.

Not even a deep freeze in early May that impacted 20 percent of its members’ acreage could deter the start of the new co-op. With seed supplies ample, growers moved quickly to replant the 30,000 lost acres. Crop planting had already been delayed by drought conditions in much of its territory: Nebraska, Wyoming, Colorado and Montana.

The drawn-out negotiations went through three agreements and five previous closing dates before a final settlement was reached. To maintain market identity, the cooperative adapted the name of the old company.

Tate & Lyle had owned the plants since 1985, when it purchased them from the bankrupt Great Western Sugar Co. Efforts to complete the sale had been stymied in recent months, partly because capital markets had been affected by the Sept. 11 terrorist attacks and the national economic recession.

Two USDA Rural Business-Cooperative Service programs played a key role in financing the sale. Through USDA’s Cooperative Stock Purchase Program, more than 480 growers financed their purchase of $200-peracre equity stock in the co-op. That guaranteed $10 million in Wells Fargo bank loans to cover the producers’ equity. The bank will share the investment with a dozen banks in the participating states after closing loans for the growers. USDA also provided the coop with $14 million in Business and Industry Program loan guarantees.

Initially, 143,500 acres were committed to the cooperative and more are expected, now that the purchase has been completed. Growers earlier had been assured of a contract for the 2002 season regardless of who would own the firm. So, despite the extended negotiations, sugar beet planting moved ahead as quickly as weather conditions in the region permitted.

Meanwhile, Inder Mathur, a former chief financial officer for Western Sugar Co., has been named chief executive officer of the new cooperative, according to Rick Dorn, board president and a sugar beet grower from Hardin, Mont. He said Mathur would be a good match for the cooperative because “he knows the system and has the respect of other employees.” Dorn said he was “delighted that the growers now own Western.” He said the new farm bill will “bring stability to our industry and contribute to our success as owners.” He invited all area growers to “join with us in building a strong cooperative for our own benefit.”

Frank Bush will continue as marketing director for the new Western Sugar. Key management staff are being retained at all six plants. The Denverbased cooperative will operate all the plants this season. They are located in: Scottsbluff and Bayard, Neb.; Billings, Mont.; Lovell, Wyo.; and Fort Morgan and Greeley, Colo. After this season the co-op will assess the future of each plant.

Simultaneously, grower and community- based groups have been negotiating the purchase of Holly Sugar plants at Torrington and Worland, Wyo. The growers would operate as limited-liability companies. Torrington is on the Wyoming-Nebraska line and near the new Western Sugar Cooperative’s refinery at Scottsbluff, Neb. Holly’s parent, Imperial Sugar, has reorganized after earlier declaring bankruptcy and earlier this year sold sugar plants in Michigan to a new cooperative.

Dakota Pasta co-op
converts to corporation
Members of Dakota Pasta Growers Co., widely looked to as a successful model of a new-generation cooperative, have voted 693-146 to convert from a cooperative to a regular corporation. Some observers say the vote reflected the reality that the member-farmers who own the business were no longer supplying the majority of durum to the plant, raising legal and tax questions about whether it could continue to operate as a cooperative. As a corporation, it need not get the majority of its durum from members, and it will be able to sell stock to the public.

Board Chairman Jack Dalrymple, also North Dakota’s lieutenant governor, said that with the change the business will seek new stockholders to raise additional funds. “This (conversion) is about this business and is in no way a referendum on the cooperative structure,” Dalrymple told the Associated Press. Critics of the move say they will be watching to see if farmers can maintain long-term control of the business now that it has converted.

With processing plants in Carrington, N.D., and New Hope, Minn., Dakota Pasta has 115 employees and is the third largest pasta maker in the United States, processing about 1.5 million pounds daily. Farmer-members will no longer be required to supply durum to the company, although they will still hold a special class of stock that gives them preference in selling to their former co-op.

Raymond Crouch, DFA editor,
killed in Texas airplane crash
Raymond Crouch, director of member publications and media relations for DFA, was killed May 20 in the crash of a light aircraft near Stephenville, Texas. Also killed in the accident was the pilot, Kelly Wilson, 43, a Tarleton State University professor. Crouch, 54, was taking aerial photos for an article for an upcoming issue of the DFA “Leader” newspaper, of which he was editor, when the Beech Bonanza 35 aircraft went down.

“This is a profound loss for the dairy industry, his family and his friends,” said Agnes Schafer, DFA’s executive director of corporate and public relations. “Raymond was passionate about farmers working together in the marketplace for a better future, and used his love of the printed word and the photographic image to communicate the stories of the American dairy farm family.”

Crouch’s roots were in the dairy industry, and he spent most of his life working for it. He was born into a dairy family and grew up in Denton, Texas, where he began his career as a photographer and writer for the Denton Record Chronicle. He later worked in the banking industry before becoming communications director for the Southern Region of Associated Milk Producers Inc., where he remained for nine years. When AMPI merged into DFA, Crouch moved to Kansas City and took the position with DFA. He won numerous professional honors for both his writing and photography, and a number of his photos have appeared in this magazine.

Canadian dairy co-op buys
Indiana cheese plant
Agropur cooperative, the most important Canadian cheddar cheese producer and a leading manufacturer and distributor of cheese, is making its debut in the U.S. market with the purchase of the Deutsch Käse Haus Inc. (DKH) cheese plant in Middlebury, Ind. DKH mainly markets colby, colby- jack and pepper-jack cheese. The plant operates in the heart of an Amish community which provides the milk supply and labor force. Agropur is owned by 4,700 dairy farmers and employs more than 3,100 people.

Resource library for co-ops
dedicated at DC University
A resource library for cooperatives on the campus of the University of the District of Columbia (UDC) in Washington, D.C., has been dedicated to C.H. Kirkman, Jr. Kirkman served as a senior cooperative education specialist for 31 years and worked on many cooperative programs while with USDA’s Agricultural Cooperative Service (now part of USDA/RBS). He retired in the 1980s. Last year, he established an endowment to support the center.

The library was established in 1996 by Kirkman and UDC officials to support cooperative education and research efforts of the university by providing a repository for research and reference materials related to the history and aims of agricultural and consumer cooperatives and their associations. He and family members donated funds to establish the library. Both he and USDA contributed books and other cooperative information materials. This is the first such library on the East Coast and third in the nation.

Australian Farley
to lead Calcot
The board of Calcot Ltd., one of the world’s oldest and largest cotton marketing cooperatives, has chosen David D. Farley, 45, an Australian farm executive, as CEO and president. Farley, only the fifth CEO in the history of the co-op, succeeds Tom Smith, who had been president since 1977. Farley will work with Smith through the end of September and then assume full duty on Oct. 1. Smith will continue as a consultant for a year.

Board Chairman Bruce Heiden said Farley would bring “an outside perspective and energy that should be of great benefit to the continuation of successful marketing of members’ cotton.” Farley is the former chief executive officer of Colly Farms in Australia, the largest vertically integrated cotton buyer, ginner and marketer in the country. He brings a wealth of experience to the cooperative. Farley said he expects to spend his first four months meeting growers, gin managers and buyers of the cooperative’s cotton. He said he would look for ways to return growers to profitability, which will benefit both the cooperative and the cotton industry. Calcot, Bakersfield, Calif., has annual sales of 1.4 million bales of cotton.

Davisson heads CF Industries
The new chairman of the board of CF Industries Inc., the Chicago-area based fertilizer manufacturing and distributing cooperative, is Bill Davisson, chief executive officer of GROWMARK Inc., Bloomington, Ill. He succeeds John Gherty, president and chief executive officer of Land O’Lakes, Inc., whose term expired. Both regional cooperatives are among nine U.S. and Canadian farm supply cooperatives that own CF and secure fertilizers from it. Through thousands of member-owned sales outlets of these cooperatives, CF’s nitrogen and phosphate fertilizers reach more than 1 million farmers and ranchers in 48 states and the Canadian provinces of Ontario and Quebec.

Moser joins LOL board
Bobby Moser, vice president of agricultural administration and university outreach executive dean of the college of food, agricultural and environmental sciences at the Ohio State University, has been named as an advisory member to the Land O’Lakes board of directors. LOL Chairman Jim Fife said it was a tribute to the $6 billion dairy cooperative to gain an advisory member of Moser’s stature.

SV buys Rochester Cheese
Rochester (Minn.) Cheese Co., with plants at Spring Valley and Delbo, Minn., has been purchased and will become a wholly owned subsidiary of Swiss Valley Farms, Davenport, Iowa. The Rochester headquarters facility includes a cold storage warehouse. The company ages, grates and customblends cheese for food companies nationwide and packages parmesan and romano cheese for retail and ingredient markets. The firm’s annual sales are about $100 million. Gene Quast, Swiss Valley CEO, said the expansion effectively broadens the cooperative’s line and enables it to offer a complete line of quality dairy products to its customers.

Montana elevator, long trains
boost farmer wheat prices
Mountain View Co-op’s new $6 million grain elevator and the 110-car trains it accommodates are bringing farmer-members another 8 to 10 cents per bushel for the wheat they sell to the cooperative at Collins, Mont. The facility’s 800,000-bushel capacity is enough to nearly fill a couple of the long trains. Better still, the train can be loaded by a crew of only three, instead of the 12 workers the job would take at a standard elevator. The first loading took only 13 hours vs. the standard two days. Manager Bruce Clark said he hopes to cut the time to just nine hours. The lure is a $400-per-car freight discount, prompting a number of these super elevators to appear across Montana.

Similarly, in North Dakota, Kindred Grain and Oil has merged with Cenex Harvest States at West Fargo, leading the way for construction of a multimillion dollar elevator at Kindred to accommodate 100-car trains. Elsewhere, an elevator and two miles of sidetrack are under construction at Highmore, N.D., and should be ready for the fall harvest season. The unittrain facility will be served by the Dakota, Minnesota and Eastern Railroad. CHS Cooperatives and the local Farmers Union Co-op elevators at Kennebec, Reliance and Chamberlain are participating in the project.

Fla. timber co-op formed;
poplars focus of Minn. co-op
A handful of small timberland owners in Florida have formed a cooperative to help cope with a depressed timber market. Similarly, a small farmer cooperative in west-central Minnesota is looking to make hybrid poplar trees part of its members’ cash crop mix.

In Florida, trees on co-op members’ land were dying, rotting and being infested by the southern pine beetle. Five members signed a contract with Harrington Logging Inc., of Brewton, Ala., and sold timber from 142 acres in Oskaloosa and Walton Counties. Extension agents in the two counties even pitched in to help form the cooperative. Almost immediately, landowners got 50 percent more money per ton than if each had dealt separately with the industry.

A contractual clause specifies what type of harvesting equipment will be used to ensure that the land would remain in good condition and stumps cut at specified levels. Some landowners have expressed interest in forming another cooperative. Even the timber companies are excited about the arrangement because it saves them time and travel between tracts and makes scheduling crews easier.

President Dennis Gibson of the Minnesota Agro-Forestry Co-op, Benson, Minn., is encouraging members to work on developing a market for farmraised, hybrid poplar trees and is hoping to attract the interest of venture capitalists. That would require planting enough acres of the trees to ensure a steady supply for a prospective market. The 40-grower cooperative was formed in 1996. Members are encouraged to plant hybrid poplars as windbreaks and other conservation uses, with an eye toward eventually harvesting a profitable tree crop. On his farm, Gibson uses as mix of hybrid poplars and cottonwoods as windbreaks to reduce erosion and improve water quality. They also boost corn and soybean yields by reducing wind stress on them.

NCB income hits $12.5 million;
Snyder to head NCBA board
Net income for fiscal 2001 reached $12.5 million for the National Cooperative Bank (NCB) in Washington, D.C., a credit source for many of the nation’s non-agricultural cooperatives, President Charles Snyder reported at the bank’s most recent annual meeting. The bank’s total capital hit $344.7 million and net assets reached $1.1 billion. The bank is owned by 1,841 borrowercooperatives throughout the nation.

million and net assets reached $1.1 billion. The bank is owned by 1,841 borrowercooperatives throughout the nation. award to the National Cooperative Business Association’s (NCBA) dot- Coop team for its efforts to propose, develop and launch the new .coop toplevel Internet domain. Only cooperatives and cooperative support organizations are eligible to register names under .coop. “Dot Coop will identify and unify us as cooperatives on the Internet and around the globe,” Snyder said. “It weaves together cooperation and the communities we serve.”

Snyder’s bank was one of the founding members of dotCoop. He was subsequently elected chairman of the NCBA board, succeeding Pete Crear. The bank has registered more than 200 dotCoop addresses by 82 affiliated cooperatives and recently revamped NCB’s Web site and launched it under the new address: www.ncb.coop. “For NCBA members, cooperatives and communities nationwide, we have a special opportunity to combine our forces to reach NCBA’s bold goal of creating a strong, distinct cooperative sector.”

Kansas fetes Gwin, Williams
Two inductees, Francis “Fritz” Gwin and James Williams, have joined the Kansas Cooperative Hall of Fame. Gwin was manager of Farmway Co-op in Beloit and also served as chairman of the board of Farmland Industries. Williams, retired president of the Wichita Bank for Cooperatives, devoted 27 years to providing credit services to agricultural cooperatives while serving on the board of directors of numerous regional and national cooperative organizations.

Extended courting pays off
It took 18 months of courting to ice the deal, but New Vision Co-op at Worthington in southwest Minnesota recently shipped 75 railcars of soybeans about 270,000 bushels to an oilseed crushing company in Jalisco (near Guadalajara), Mexico. An agricultural merchandising firm that represents about 200 cooperatives in the Upper Midwest helped arrange the sale. The shipment marked the first direct sale by Minnesota farmers to a foreign customer under a state program promoting exports.

Talks are underway for the sale of more soybeans and possibly corn. While the $1 million sale was big for the cooperative, it was a small part of the state’s annual total exports of $681 million in soybeans and soybean products. Almost 2 years ago, Gov. Jesse Ventura headed a trade mission to Mexico and mutual visits followed by Minnesota farmers and state agricultural officials from Mexico. ative sector,“ Snyder said.

Illinois sheep co-op launched
Sheep producers in Illinois have decided to pool their resources in an effort to make more money through Illinois Value-Added Wool Producers Inc. The state’s 2,400 producers operate small flocks and the grade of wool is not the best. So the cooperative is exploring value-added products, such as stadium blankets with the colors and logos of Illinois colleges and universities and bio-filters for hog confinement facilities. Currently, the price of wool in that area does not even cover the cost of shearing. The cooperative is designed to link sheep producers with each other and final alternative markets for the state’s wool supply.





July/August Table of Contents