Living with Sprawl
As farms give way to subdivisions and traffic lights,
America’s rural cooperatives struggle to adjust
By Catherine Merlo
Editor’s Note: Merlo is a freelance writer based in Bakersfield,
Calif., with extensive experience working for, and writing about,
cooperatives.
im Roskam used to head out each morning
along the Rivertown Parkway to his job as general
manager of Farmers Co-op Elevator Co.
in Hudsonville, Mich. Along the way, he passed
a dozen flourishing corn and bean farms and
not a single traffic light.
That was 15 years ago. Today, that same route would take
Roskam past new subdivisions, one of
Michigan’s largest shopping malls, 12 traffic
lights and not a single farm.
Roskam is not alone in his transformed
commute. Across the United States,
increasing suburban development of farmland
is not only altering the rural landscape,
it is forcing many rural cooperatives
to take a hard look at their future operations
and customer base.
Between 1992 and 1997, the United
States paved over more than 6 million acres
of farmland, an area roughly equal in size
Maryland, according to American Farmland
Trust (AFT), a private, nonprofit farmland
conservation organization. AFT recently
released a study, “Farming on the Edge:
Sprawling Development Threatens America’s Best Farmland.”
“The problem is getting worse,” says Ralph Grossi, AFT
president. “America developed twice as much farmland in the
1990s as it did in the 1980s.”
While business and community leaders, futurists and professors
debate the pros and cons of urban sprawl the loss of
prime farmland, the apparent random, unplanned nature of
urban expansion rural cooperatives are on the frontline
coping with the challenges caused by sprawl.
Some co-ops have found their membership and customer
base so affected by suburban development, they have been
forced to close whole divisions. Others have merged with
neighboring co-ops in an effort to survive. Others have
refocused their efforts on new services targeted at a more
suburban customer base. Still other co-ops, especially rural
utilities, are thriving as a result of the increased population
that suburban development is bringing to their once-rural
territories.
New customers, new services
In Roskam’s case, more urbanization has compelled the
Michigan co-op he manages to expand its services in at least
three areas. Farmers Co-op Elevator, a traditional grain marketing
and farm supply cooperative formed in 1917, serves a
2,500-square-mile territory between Holland and Grand
Rapids. In recent years, the co-op has branched out beyond
its shrinking base of traditional farmermembers.
“Rather than complain about increased
development in our area, we’ve diversified
to make things happen,” says
Roskam.
In addition to providing farm supplies
and services for farmers, Farmers Co-op
Elevator now targets homeowners, greenhouse
growers and nurseries. It also focuses
on the turf and ornamental business,
such as lawn and garden care, golf courses
and city municipalities.
“At 640, our membership is the largest
it has ever been,” says Roskam. “Our gross
sales grew from about $6.5 million in 1989
to $19 million in 2002 by diversifying.”
Only 30-40 percent of Farmers Co-op Elevator’s membership
now is represented by traditional farmers. The
rest, says Roskam, are suburban customers and retired or
part-time farmers.
The shift from its old ways hasn’t been without some pain.
Between 1998 and 2000, Farmers Co-op Elevator closed a
full-service agronomy and feed service facility that once
catered to traditional farmers. It curtailed the operations of
several service stations that pumped gas for customers. And it
closed a portable feed-grinding division that delivered onfarm
services.
“As a co-op, we have to shift and change gears to continue
to roll with the urban growth,” Roskam says.
Customer shift in Minnesota
At Federated Co-ops in central Minnesota, a similar transition
is taking place. Built by local growers in 1914, Federated
Co-ops serves 14 counties in Minnesota and six in
Wisconsin. Subdivisions and hobby farms are sprouting up
across the land, where property values now range from
$3,000 to $24,000 per acre.
Today, Federated Co-ops counts more than 35,000 customer-
members, only 2,000 of whom are conventional growers.
“This was once a traditional dairy area with between 2,500
and 3,000 dairy farms,” says Tim Kavanaugh, general manager
of Federated Co-ops, based in Princeton, Minn. “That number
is declining at the rate of about 200 dairy farms per year.”
Replacing them are cash-crop operations, mostly with a
corn-soybean rotation, and part-time farmers.
“Our traditional feed business is disappearing,”
Kavanaugh says. “We’re seeing more growth in the hobby
farms with small animals, horses and pets.”
As a result, Federated Co-ops has shifted its product line
to more bag feeds. It’s opened two Country Stores in the past
year, and expects to open two more within the next two years.
These retail stores offer feed, animal health products, pet
supplies, lawn/garden supplies and equipment.
As further proof of how suburban its customer base has
become, Federated Co-ops’ propane home-heating business
has become its fastest-growing and most profitable operation,
with 25,000 accounts.
Kavanaugh doesn’t downplay the challenges of refocusing
the co-op’s efforts on a new customer base. In particular,
marketing to reach consumer business is different from traditional
farm customers, and is often more difficult.
“We’re reacting to this shift, but we don’t have all the
answers,” says Kavanaugh. “Some ventures are successful,
some are not. We honestly don’t know where this will all go
from here. But with land values increasing and more people
coming in, we have to figure out a way to capture more business
from more people. The future is bright if we can do that.”
He adds, “Local cooperatives must become more entrepreneurial.
Those that do will adapt; those that don’t will
disappear.”
An old-time Ohio co-op disappears
Perhaps few co-ops have felt the impact of urbanization as
profoundly as Ohio’s Medina Landmark Cooperative.
Formed in 1934, the co-op no longer exists in its original
form. In January 2003, it merged with three other Ohio farm
co-ops, becoming part of Town & Country Co-op Inc., based
in Ashland, Ohio, about 65 miles southwest of Cleveland.
Medina Landmark had been located in northern Ohio’s
Medina County, one of the state’s fastest-growing counties.
About 20 years ago, Interstate 71 was built through Medina
County, connecting Cleveland and Columbus. About 12
years ago, houses began popping up almost overnight as the
area became a bedroom community for Cleveland. Oldtimers
pinpoint the arrival of Interstate 71 as the beginning
of Medina County’s urbanization and the end of Medina
Landmark Co-op.
“Medina Landmark’s market had become extremely
urbanized, which made the merger with Town & Country
very attractive to us,” says Bill Rohrbaugh, former general
manager of Medina Landmark and now vice president of feed
and energy for Town & Country Co-op. “Our territory had
become so inundated by urbanization that we had trouble
taking care of our farmers.”
The co-op could not justify the costs of handling fertilizers,
crop protectants and other products for its 250 members,
a number down sharply from the 1,000 members the co-op
counted in its heyday. “It was starting to negatively impact
our bottom line,” says Rorhbaugh.
The merger was an attempt by the four co-ops to stay
afloat in a market with diminishing numbers of farmers. In
fact, Town & Country’s name was retained from one of the
four merging co-ops to reflect its urbanized market. Now
one of Ohio’s biggest co-op’s, Town & Country expects its
sales to reach $75 million this year. But its achievements have
not come without difficult decisions.
Closing traditional business
In February 2003, Town & Country closed the grain sorting,
crushing and milling operations that once had been bread-andbutter
services for Medina Landmark Co-op. While members
can still take their grain crops to other mills nearby, the closure
marks the end of an era for the area, Rohrbaugh says.
Like Roskam at Michigan’s Farmers Co-op Elevator,
Rohrbaugh has seen prime farmland turn into shopping centers
and housing tracts. While Town & Country Co-op still
has enough farm base to support its farm supply business, it
too is looking for ways to adapt to and survive the suburban
development Rorhbaugh says is “inevitable.”
“To survive, we need to look at other business areas,” he
says. “We recently bought a convenience store and have
started to expand our petroleum business.”
Town & Country’s 14 retail farm stores now target suburban
shoppers. The largest feed seller is no longer dairy feed
but horse feed, followed by dog and cat food. Alpaca feed is
No. 3. Town & Country’s agronomy division has also begun
focusing on Medina County’s 28 golf courses, which use
plenty of fertilizers and other products.
“Farmland values have skyrocketed to as much as $10,000
an acre in Medina County,” Rohrbaugh says.
“You can’t blame farmers who want to sell; it’s
hard not to sell.”
But with low commodity prices and high
production costs, farmers often find land at
$10,000 an acre just too expensive to buy.
“They just can’t make the numbers work,”
Rohrbaugh says.
As a result, many farmers will sell a 200-acre farm to a developer, “hitting the jackpot,”
says Rohrbaugh. Then they pull up
stakes and move their farming operations to
southern Ohio or nearby Indiana or Iowa,
“where they can buy a farm three times that
size at $2,000 an acre,” he says.
Adds Rohrbaugh, “At the present growth
rate in Medina County, there will come a
time, maybe 25 years from now, when every
available piece of property will be taken and
there’ll be no more vacant land.”
Still, rising land values aren’t all bad news
for farmers.
“Rising real estate prices create greater
farmer equity,” says James Miller, vice president of finance with First Pioneer Farm Credit, which provides
financing services to 10,000 customers in six New
England states.
“That can give a farmer a stronger balance sheet and create
the opportunity to borrow and expand his operations or
invest in new ones,” Miller says. “The urban area offers a
huge consumers’ market for farmers, especially in retail and
horticultural products.”
Rural utilities find opportunity
New housing tracts, giant shopping malls and more
schools can be good news for some rural cooperatives.
Numerous rural utilities have found opportunity in the
shift from farmland to suburban development. Many have
pursued diversification of operations, while others have
refocused their efforts on a new customer base.
For example, when upscale suburban developments began
spreading out from Indianapolis in the 1990s, several electric
distribution cooperatives that served the once-rural area took a
fresh look at their new residents. What they saw was not the
traditional co-op customer but rather a new group with dual
professional incomes, high performance expectations and experiences
with competitive Investor-Owned Utilities (IOUs).
In 1996, five electric distribution co-ops that circled
Indianapolis formed Circle City Group (CCG), a limited
liability company formed to respond to their growing and
changing customer base. CCG is helping its five co-ops
obtain economic advantages by consolidating services and
sharing costs. The alliance is composed of Boone REMC,
Hendricks Power Cooperative, South Central Indiana
REMC, Johnson County REMC and Central Indiana
Power. Together, they represent almost 90,000 electric
customers and 7,800 miles of line.
Working together through CCG, the co-ops have
achieved numerous benefits that not only allow them to serve
their customers, but significantly reduce operating costs.
They have implemented automated meter reading (AMR)
equipment, remittance processing, a meter lease program and
an underground location service new operations the co-ops
might not have been able to afford on their own.
“Along with improved customer service, our meter reading
costs have been reduced by 30 to 40 percent,” says Dale Geiselman,
president and CEO of Boone REMC. “Remittance processing
costs have dropped 30 percent. We also achieved a 30-50 percent reduction in AMR meter conversion costs.”
CCG’s efforts in advertising and communications also
have contributed to a more positive image for the co-ops.
“We have definitely seen an increased awareness and an
improved image of the CCG systems,” Geiselman says.
A sense of urgency and loss
As farmland gives way to housing tracts, shopping centers
and busy streets, some effort is taking place to slow the development,
or at least to plan it better. A sense of urgency compels
farmland conservation groups as they work at local,
regional and national levels to develop and implement
farmland protection programs. AFT is working to increase
funding for ag conservation easements at all government levels.
It targets conservation funds to threatened ag areas and
supports effective planning and smart growth to steer development
away from the nation’s best farmland.
But, for now, rural cooperatives are largely on their own in
dealing with the challenges of suburban development. The
stakes remain significant for them and the eroding farm base
on which they stand. While most co-ops in the path of development
realize they must adapt to and change with the marketplace,
some are nostalgic for the days before the city
moved in.
“I’ve been in the traditional agriculture business for 25
years,” Town & Country’s Rohrbaugh says wistfully. “It’s not
what it used to be. I miss it.” 
Farming with 8.5 million neighbors
“Farming with 8.5 million neighbors is not easy,” says
John Rigolizzo, Jr., a fifth generation farmer in Berlin,
N.J.
Rigolizzo, who farms 400 acres in Camden County in
southern New Jersey, should know. He has seen and
felt the impact of suburban development firsthand.
“New Jersey is the nation’s most densely populated
state, with more people per square mile than any other
state,” says this former state Farm Bureau president.
Rigolizzo says 8.5 million residents live on 25 percent
of New Jersey soil, while 9,000 growers farm just 1 million
acres or 20 percent of the state’s landscape. It’s
getting harder
and harder
to operate
with suburban
neighbors,
who
complain
about the
dust, smells
and pesticides
associated
with farming. He has worked, sometimes successfully, to
help bring about farmland preservation programs, but
his patience has worn thin.
A brand new housing tract sits just 100 yards behind
Rigolizzo’s farmhouse. Since the tract 85 houses on 50
acres was built, Rigolizzo has encountered problems
with vandalism, theft, kids and dogs.
“I never know what batteries are going to be stolen
from my equipment, what gasoline siphoned from my
tractors,” he says. “I have 17 tractors; more than once,
I’ve found them all out of gas.”
Many of his new neighbors give no thought to another
person’s privacy, says Rigolizzo. “The kids ride their
recreational vehicles over my fields and rows of
pipeline,” he says. “It costs me thousands of dollars for
their trespassing
and
vandalism.
For them to
have their 10
minutes of
fun in the
afternoon is
aggravating
and costly for
me.”
Rigolizzo
scoffs at New
Jersey’s designation
as
“The Garden
State.”
“We’re losing
that moniker quickly,” he says. “New Jersey is an
expensive state to live in, let alone farm in. Our higher
production costs are a disincentive to stay in farming.”
A member of nearby Vineland Cooperative Produce
Auction and Landisville Cooperative, which buys and
sells produce, Rigolizzo says area co-ops have suffered
from the impact of urban sprawl. “In the last 10 years or
so, we’ve lost 10 to 12 co-ops in a 40-mile radius of
where I live,” he says.
The future for farmers may not be so different. “It’s
just a matter of time for farmers in New Jersey,” Rigolizzo
says.
By Catherine Merlo
Orange Empire bows to urban sprawl in Southern California
Urban sprawl has been a fact of life for Southern
California growers and their cooperatives since the
1950s. The Los Angeles area once called the Orange
Empire but now known as the Inland Empire has been
called the worst stretch of sprawl in America. It was
once the center of U.S. citrus production in the West
and the birthplace of Sunkist Growers but that
changed long ago.
In the years after World War II, a population explosion
in Southern California led growers in Los Angeles
County and Orange County to bulldoze out their citrus
groves to make way for new houses, factories, schools
and freeways.
After selling their farms in Southern California at
profitable prices, many citrus growers began looking for
new lands to farm. They found them in California’s San
Joaquin Valley, and further south in the desert areas of
the Coachella Valley. They also found new opportunity in
Arizona. Many Sunkist farmer-members, as well as their
packinghouses, picked up stakes and moved to largeracreage
operations on the abundant new land.
Packinghouses took the hardest hit from urban
sprawl. The local, member-owned associations once
numbered in the hundreds throughout California. Due to
the urban shift, as well as modernization, those numbers
have dropped dramatically. In Orange County alone,
where 20 packinghouses once operated, only one
remains today. Sunkist Growers, the nation’s largest citrus
marketing co-op, has seen its packinghouse members
drop from 115 in 1968 to just 52 today.
Yet, for Sunkist, the shift in its production areas
proved positive. The opening of new lands for its members
boosted its supply channels. The San Joaquin Valley
is now one of California’s major citrus-producing
regions. In 1981, Sunkist Growers built a new processing
plant near Tipton, in the heart of the valley. Not far away,
in Visalia, Sunkist now operates a centralized sales
office.
While consolidation to fewer but larger-acreage
growers resulted in a membership drop from about
12,000 in the 1950s to about 6,000 in California and Arizona
today, Sunkist Growers has adapted to the change.
“Due to our members’ geographical shift and more
concentrated plantings, the total numbers of citrus
acres under cultivation actually remained the same, and
our volume increased,” says Mike Wootton, vice president
of corporate affairs for Sunkist Growers, based in
the urban setting of Sherman Oaks, Calif.
The geographical shift also has provided Sunkist with
three major citrus-producing districts with harvests that
occur at different times. Having members in the Central
Valley, California’s coastal areas and the desert areas of
southeastern California and Arizona gives Sunkist, a
leading international citrus supplier, a steadier stream of
citrus and an edge in the market.
By Catherine Merlo
