NEWS LINE

Compiled by Patrick Duffey


AGP sets volume record;
Reagan sees member support
“Our future success lies in the strength of our members and the ability to meet the ever-changing needs of customers,” Ag Processing (AGP) CEO Marty Reagan told members attending the Omaha-based cooperative’s 19th annual meeting. As a result, the soybean-processing cooperative “continues to be profitable, paying patronage and revolving equity to members,” he said.

For fiscal 2002, AGP produced a record volume of refined oil and had sales that topped $1.8 billion; returned $16.5 million in cash in patronage, equity redemption and component premiums; expanded destination markets for members’ grain, including beginning construction on a new West Coast vessel-loading facility, and exported 20 percent of its soybean meal production, mostly to Canada and the Pacific Rim. Members’ equity in AGP stands at nearly $403 million.

“Every business unit we operated last year had capital dollars invested in them, with most of the money earmarked for improved efficiencies, increased capacity and marketing opportunities,” Reagan said. Mike Knobbe, group vice president for grain, said the future for AGP Grain will be enhanced by a pair of developments in fiscal 2002: creation of a new partnership with Farmers Cooperative Co. at Hinton, Iowa, and expanded destination markets made possible by the purchase of 14 grain elevators in the Texas panhandle.

SSC, Farm Plan forge credit pact
A credit alliance has been formed by Southern States Cooperative (SSC) of Richmond, Va., and Farm Plan, a division of John Deere Credit. The pact will allow SSC to concentrate on its core farm supply businesses. Responding to a poll, members said they wanted a credit plan that offered more flexibility, better rates and more simplicity than was available from SSC. After a pilot test in several stores, the program was so well received that SSC converted nearly 200 company-owned and independent retailers to the new plan, affecting 170,000 customers. The cooperative, marking its 80th anniversary, operates a network of 1,200 farm production supply retail stores stretching from Maine to the Gulf Coast.

Wool Growers pick Etcheverry
The Idaho Wool Growers Association has chosen Henry Etcheverry, a range sheep herder from southern Idaho, as its new president. Etcheverry, of Rupert, markets his lambs through the new Mountain States Lamb Cooperative. He says he hopes entities such as this co-op will “stabilize the lamb market and make us more competitive in the marketplace.”

PCP sells canning operation
to focus on food processing
In a move to reduce its overall debt, California’s Pacific Coast Producers (PCP) will concentrate its attention on food processing now that it has sold its can-making operation for $15 million to Silgan Holdings Inc., a major North American can manufacturer. The 140 employees at the cooperative’s Lodi, Calif., can plant will be retained by the new owner. PCP, with annual sales of $350 million, will buy about $35 million in cans a year from Silgan under a 10-year contract.

The cooperative is California’s No. 2 fruit processor, primarily handling peaches, fruit cocktail and tomatoes and has $100 million invested in facilities, including the 1 million squarefoot distribution center at Lodi. PCP employs 4,000 workers during the peak summer season and maintains 750 year round. The sale of the can plant fits into the cooperative’s long-term strategy, said Dick Ehrler, vice president of human resources.

Wyoming Sugar enters
alliance with Cargill
Wyoming Sugar Co., of Worland, has formed a marketing alliance, effective this summer, with Cargill Sweeteners North America to sell and distribute products to food and beverage manufacturers. Cargill reached a similar agreement last fall with Southern Minnesota Beet Sugar Cooperative. Wyoming Sugar, which manufacturers products for fruit juices and other beverages, was formed last June when producers ands investors from Wyoming’s Big Horn Basin and Fremont County bought Holly Sugar’s Worland factory.

Dakota Hay Co-op finds
success in horse market
South Dakota Ag Producer Ventures (SDAPV), near Meckling, S.D., a value- added cooperative formed by South Dakota farmers and ranchers two years ago, is showing early signs of success. South Dakota is the largest forage-producing state in the nation, so the cooperative is working to expand markets for its hay. The cooperative’s upper plains production territory is well suited to growing Dakota Premium Hay, which it is selling as feed for horses in areas of Texas, Florida, Missouri and Colorado. Small bales of alfalfa and other grasses are sold for $5 each and are proving popular with horse nutritionists who want an orchard or timothy grass mixture. Both grasses are plentiful in the eastern part of the state. Major horse breeders are expressing interest. SDAPV is eyeing a national market of 7 million horses.

Kentucky’s catfish co-op
reels in supermarket order
When it comes to fishing, Purchase Area Aquaculture Cooperative in Graves County, Ky., has reeled in a big one. It started last fall when marketing specialists from the Kentucky Department of Agriculture introduced representatives of the co-op, which sells farm-raised catfish, to buyers for grocery store giant Kroger Co. Kroger ordered 84,000 pounds in the form of fillets, nuggets and whole fish for its stores in Kentucky, Tennessee and southern Illinois. State Agriculture Commissioner Billy Ray Smith said the cooperative’s success was attributable to growers “working together to help themselves and each other,” as well as their “hard work, persistence and financial commitment.”

The co-op has 43 employees who processes 15,000 pounds of live weight fish per day, 40 percent of which is actual product, said Manager Bob Zumwalt. It has the capacity to process 25,000 pounds a day, with room for future expansion. The 7,200-square-foot processing plant and adjacent ponds were built in part with grants from the state.

Montana educator develops
co-op business lesson plans
A set of cooperative business lesson plans have been developed by, and are available from, Martin Frick, a University of Montana educator. The topics are based on a cooperative director’s needs assessment that was conducted in North Dakota and Minnesota. Lesson plans cover a wide range of subjects, including: Preparing a Vision and Mission Statement for Your Cooperative; The Economic Justification of Cooperatives; What the Director Does; Legal Foundations of a Cooperative; Cooperative Mergers and Consolidations; Servicing Cooperative Debt; Working Capital Needs of a Cooperative, and Assessing the Effectiveness of the Cooperative Director.

A PowerPoint presentation is available for each lesson plan from which educators can make transparencies. “Lessons have been pilot tested on a regional basis,” Frick says. The plans are available on the Internet at no cost: http://aginterrnational.msu.montana.e du. Then click on the “Co-op Lessons” link.

Meadow Farms Hog Co-op
opens modern Illinois plant
After five years on the project, Jim Burke, president and chief executive officer of Meadow Farms Cooperative, is smiling this summer. Construction on the cooperative’s new, $25 million hog processing plant at Rantoul, Ill., has been completed and it is now operating. Although the bulk of the 200 farmer members are from Illinois, the community’s close proximity to interstate highways draws others from Indiana, Wisconsin and Iowa. For now, the plant will operate on a single shift with a staff of about 200, including administrators and plant workers.

Burke, an attorney, became involved when his farmer-clients started going out of business because of falling hog prices. So, partly to salvage his client base, he began looking at the situation from a marketing approach. Initially, separate groups in northern and southern Illinois were looking to form cooperatives, but financial considerations brought them together. Planning began in 1998, and University of Illinois animal sciences professor Floyd McKeith and other faculty members became involved. The choice of Rantoul over 34 other communities was welcomed by City Manager Gary Adams for bringing jobs to the community and expanding the local tax base.

The state’s Capital Development Board granted the village $1.7 million to construct a pretreatment facility to serve the cooperative’s new plant, which will slaughter 3,000 hogs per day. The facility will treat wastewater at the site before it enters Rantoul’s municipal sewage system. Either the village or the cooperative will operate the facility. The Rantoul operation is considered the first mid-sized, producer-owned packing and processing plant in the nation. The cooperative will sell meat under its Meadow Brook label and also serve hotels, restaurants, institutions and grocery stores. The corporate headquarters will be in Belleville, Ill.

Texas catfish co-op opens
Fresher fish will be the selling point for the new Texas Aquaculture Cooperative (TAC) in Clemville. It will process fish in the morning and have them on dinner plates in Houston, Austin or San Antonia later that day. Manager Jeff Boswell said the nearly $17-million plant being constructed will provide 35 new jobs and process up to 150,000 pounds of catfish per week. The 31 members raise fish on about 2,000 acres in a six-county area. Future plans call for adding another 10,000 acres in 10 years.

Boswell credited the co-op’s rapid progress to the tenacity, ingenuity and hard work of the original members who began the project just over a year ago. All had marketed their fish individually and are achieving “extremely successful” results as a group, Boswell says. The Matagorda County Economic Development Corporation provided a $25,000 grant to the cooperative for construction and equipment. Technical assistance was provided by the Lower Colorado River Authority’s economic development department, the Texas Cooperative Extension Service, Wharton County Electric Co-op and the Texas Department of Agriculture.

NMPF adds three associates
The National Milk Producers Federation (NMPF) has gained two associate members from California and a third from Missouri. The not-for-profit California Dairy Research Foundation at Davis was formed in 1988 to promote research and development activities that benefit the state’s dairy producers in the consumer marketplace. Also joining was California Milk Producers Council at Chino. It advocates the interests of its member dairy producers to enhance the state’s dairy industry. The third newcomer is Dairymen’s Marketing Cooperative of Mountain Grove, Mo. Managed by Don Allen, it has 65 producer-members and markets 81 million pounds of milk annually. NMPF’s membership now stands at 33.

Farmers sue chairman, others
who promoted co-op sale to ADM
A group of farmer-investors of the former Minnesota Corn Processors (MCP) have filed a lawsuit against eight former cooperative executives and the former chairman of the board who led the sale of MCP last year to Archer Daniels Midland (ADM), the nation’s leading ethanol producer from Decatur, Ill., for $175 million. The former shareholders allege members were told of dismal profit expectations and not informed of how those executives would benefit from the sale at the time of the landslide proxy vote last September. The group is seeking class-action status on behalf of the 5,500 shareholders.

The cooperative was formed in 1980 and originally produced corn syrup and later ethanol. It owned plants at Marshall and Columbus, Neb., and 17 regional storage, blending and distribution stations. In 2000, it became a Colorado limited liability corporation. The conflict of interest suit alleges the executives received substantial payments and bonuses after the sale was completed. In 1997, ADM invested $120 million in MCP when it was on the verge of bankruptcy and gained a 30-percent non-voting interest in the company.

Sidney Sugars in supply deal
The first contract to supply sugar to Sidney Sugars Inc., the Montana subsidiary of American Crystal Sugar Co., has been signed with Montana-Dakota Beet Growers Association for 43,000 acres. The two-year contract involves 175 growers. The acreage is similar to the 46,000 acres contracted last year by former owner Imperial Sugar. American Crystal Sugar of Moorhead, Minn., bought the Sidney plant last fall and made it a subsidiary. That deal also included a plant at Torrington, Wyo., which is being leased to Coloradobased Great Western Sugar Co.

Nebraska North Star Neighbors
direct market co-op’s meat
It took a neighborhood of frustrated family farms west of Fullerton, Neb., to find an answer to their collective desire to stay on the land despite depressed prices for their grain and livestock. They found the answer about four years ago, forming the North Star Neighbors Naturally Raised Meats cooperative. By direct marketing their beef, pork, lamb and poultry products, they not only added value but also put profits in their pockets. They were featured on a rural economic development workshop program sponsored by the Nebraska Farmers Union.


By turning to chickens rather than losing money raising corn, they again found profits from their farm operations. Their initial investment was low. They raised 4,000 chicks the first year, followed up with 6,000 the next and then cut back to 3,500 last year. But now the focus is on beef and hogs, their real specialty. During the growing season, members sold meat at weekend farmers’ markets in Omaha, Grand Island and Lincoln and have since expanded marketing year-round with door-to-door deliveries.

They retained existing customers and gained new ones. To meet customer demand, the co-op offered onepound packages of meat, specialty boxes with a combination of meat cuts and a family package plan. Looking ahead, North Star plans to begin marketing beef abroad and expand its membership base to meet customer demands while maintaining its quality reputation.

Foremost restructures in face
of declining Midwest supply
Caught in the midst of declining milk supply volumes in the Upper Midwest and drooping milk prices for dairy farmers, Foremost Farms, the dairy cooperative based at Baraboo, Wis., plans to restructure operations by closing five outlying facilities and centralizing purchasing and transportation functions at Baraboo. Four manufacturing facilities in Iowa and Wisconsin will be closed by the end of the year and operations consolidated elsewhere within the cooperative’s system. A dry-products warehouse will be closed in 2004.

President David Fuhrman said the closings affects 187 salaried and hourly employees. Severance and other transition assistance were developed for them. “The decision,” Fuhrman said, “was driven by economics. While national milk production increased last year, milk volumes in Wisconsin, Minnesota and Iowa declined causing excess plant capacity in the region as well as our production network.” Weak demand and large supplies of cheese, butter and whey ingredients have kept product levels at unprofitable levels for the past 20 months. He said Upper Midwest processors were increasingly pressured to reduce costs and operations to remain competitive with the rapidly growing dairy industry in the western United States. Up to this point, Foremost had operated 24 manufacturing facilities and two milk transfer stations in serving its 4,300 dairyfarmer members.

Ozark Mountain Pork Co-op
source of Missouri Farm Pride
It’s small, localized and relatively new, but a source of pride nonetheless to the 34 Missouri pork farmers who organized and own it. The Ozark Mountain Pork Cooperative raised $790,000 to buy the Mountain View processing plant. Earlier this year, it introduced the new label, “Heritage Acres,” and began supplying Polish sausage, bacon and bratwurst to independent grocers in southern Missouri. The cooperative, the first of its kind in the state, inspired the Missouri Grocers Association to introduce a new marketing stamp called “Missouri Pride” and tested the notification of quality standards on the “Heritage Acres” products. The cooperative was formed under the auspices of the Missouri Farmers Union.

Zwald AMPI’s treasurer
The board of AMPI has selected Greg Zwald, a dairy producer from Hammond, Wis., as its new treasurer replacing Bob Dysthe of Slayton, Minn., who retired from the board. Dave Vander Kooi, Worthington, Minn., has been elected as a new director to serve a 3-year term.

LOL closes research facility
After an extensive study of its seed system, Land O’Lakes (LOL) decided to close its seed research facility at St. Joseph, Minn., which processed , packaged and distributed forages, turfs and alfalfa. The plant closing sidelined 27 employees who were offered relocation within the LOL system or severance packages and outplacement assistance. Customers previously served from St. Joseph will be served by LOL operations in Madison, Wis., Hastings, Minn., and Denver, Colo. In another seed development, LOL and Novartis Seeds, Golden Valley, Minn., have formed a joint venture to develop and market specialty corn products for animal feed and consumer food markets. Novartis purchased a half interest in Wilson Seeds Inc. of Harlan, Iowa. It had been a wholly owned subsidiary of LOL.

NCBA fetes Kaptur, Oxley
A pair of U.S. representatives from Ohio have been honored with cooperator awards from the National Cooperative Business Association (NCBA) for their efforts in supporting cooperatives in Congress and in their state. Rep. Marcy Kaptur was cited for her ongoing support for funding 17 cooperative development centers across the nation. The center developers have been leaders in finding innovative cooperative solutions to the challenges facing farmers and others in rural America. Kaptur serves on the House Agricultural Appropriations Subcommittee which has increased funding for the centers from $700,000 10 years ago to $6.5 million for fiscal 2003. Rep. Mike Oxley was recognized for supporting credit unions both state and nationwide and promoting a bill which provided regulatory relief and enabled credit unions to better serve their members. Oxley is chairman of the House Financial Services Committee. Chuck Snyder, chairman of NCBA’s board, also is president of the National Cooperative Bank which provides financial services to rural and urban member owned and governed credit unions. During NCBA’s business session, all officers were renamed and two new and three incumbent directors were seated. Initially joining the board were Wilson Beebe, president of Thanexus, a New Jersey-based management cooperative for independent funeral homes, and Sherman Hardesty, director of the Center for Cooperatives at the University of California. All the elected directors serve three-year terms.

Meanwhile, People’s Food Cooperative at Ann Arbor, Mich., has been honored with NCBA’s Best.Coop Web Site award. The small cooperative developed a volunteer-designed Web site that is attractive and easy to navigate and educates visitors about cooperatives (www.peoplesfood.coop). The co-op prominently features information about its values, vision, commitment to community as well as frequently asked questions and answers on cooperatives and co-op ownership.

GROWMARK creates seed,
agronomy subsidiaries in NE
A pair of wholly owned subsidiaries have been created to serve farm supply assets in the Northeast recently acquired by GROWMARK Inc. from Agway Inc. The retail agronomy and seed operations in six Northeast states represent $150 million in sales to about 20,000 customers. GROWMARK FS Inc. serves about 40 retail agronomy operations in Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia. The Seedway subsidiary is headquartered at Hall, N.Y. It markets an extensive and diverse commercial vegetable seed product line along with forage, turf and farm seeds.

Ed Rodenburg, vice president of eastern retail operations, conducted a series of winter introductory meetings with nearly 500 new employees. Bob Weller, one of four regional managers, compared GROWMARK’s Midwest operations with those in the Northeast. “Having metropolitan neighbors can apply pressure on farming operations, but the upside is access to a huge consumer market. We have the same challenges that Midwest agriculture does: a tough economy and the impact of consolidation.”

NFU fetes cooperator Swenson
Leland Swenson, president of the National Farmers Union (NFU) from 1988 to 2002, has been recognized with its cooperative service award for leadership and service to agricultural cooperatives and rural economic development. The honor was bestowed at NFU’s recent 101st annual meeting. Swenson was instrumental in helping Farmers Union develop a new economic learning center for farmer cooperatives. President Dave Frederickson cited Swenson for his “service to family farmers and ranchers by assisting in the development and advancement of farmer-owned cooperatives and helping Farmers Union members develop innovative strategies for processing and marketing the specialty crops of cooperatives.”

Co-op community fetes heroes
as four join Hall of Fame
In was dubbed as “the entire co-op community coming together to honor our heroes,” by Pete Creer, executive vice president of the Credit Union National Association. The occasion was the induction of four honorees including a congressman into the Cooperative Hall of Fame in Washington, D.C. Cited were Rep. Doug Bereuter of Nebraska, Rod Nilsestuen, J.K. Smith and Herb Wegner.

Bereuter has supported domestic and international cooperative activities over the years, including help in launching the Farmer-to-Farmer program in 1985 and sponsoring the Overseas Cooperative Development Act. Nilsestuen was honored for his steadfast dedication to cooperatives in 24 years of leading the Wisconsin Federation of Cooperatives. Smith, a rural electric cooperative pioneer of 41 years, was the founder and first governor of the National Rural Utilities Cooperative Finance Co. The late Herb Wegner was acknowledged as a credit union pioneer whose efforts help shape the finance industry today. The award was accepted by his son, Steve, who thanked the many people who worked alongside his father in the credit union community.

Rhode Island dairy co-op
launches own milk brand
The Rhode Island Dairy Farms cooperative, formed two years ago, is introducing its own brand of homegrown branded milk “Proud Cow of Rhode Island” on grocery shelves this summer. Its initial production of 3,000 pounds of milk has now more than doubled. Local dairies will buy back their milk from a processor after it has been pasteurized and homogenized. The cooperative will handle marketing and distribution.

The state has only 22 dairy farms left, including some large ones that have formed in recent years, so the bulk of the state’s supply comes from neighboring states. Like many dairy farmers across the nation, the Rhode Islanders are faced with the lowest prices in 25 years, a frenzied rate of development, much higher production costs and intense competition further aggravated by better herds producing more milk. The cooperative hopes to sell its milk to schools, parades, fairs and farmers markets.

UW offers co-op educational
site for youth, young members
The University of Wisconsin Center for Cooperatives has launched an interactive Web site on cooperatives for high school students and young adult co-op members. Cooperatives have consistently identified improved understanding of cooperative basics, particularly among young people and young adults as a critical need, said Anne Reynolds, assistant director of the center. The Web site addresses that need. It can be found at: http:// www.wis.edu/coops . This one-of-akind site offers learning modules on a number of cooperative issues as well as resources on scholarships for young cooperators. Adding to this repository of information are links to games and other co-op Web sites, Reynolds says.

The program was made possible through funding from CHS Cooperatives Foundation. The site is part of a larger campaign to increase understanding of fundamental principles of cooperatives. “Targeted primarily toward high school students and young adults, the site has three learning modules exploring issues of corporate governance, member relations and types of cooperatives that exist today. These learning modules use simple, easy-to-understand language and contain a wealth of information gleaned from various sources. Making the learning experience all the more fun are tidbits of knowledge, scenarios and quizzes,” Reynolds explained.

“For a long time now, we had been thinking of a site catering to a younger audience,” says Reynolds, the architect behind the Web site. “Our aim was to provide information in an accessible format, and the Web seemed to be the most logical place to start.” Further additions to the site will include more learning modules, case studies, short articles and additional games. Printed copies of the learning modules, activities and other resources will also be developed and distributed to schools, state councils and cooperative organizations. “These materials should benefit the cooperative education field tremendously,” she says.



Professor’s idea blossoms into major
co-op conference for college students

By Leslie Shuler

Editor’s note: Shuler is a marketing communications
intern at CHS Cooperatives.

Nearly 25 years ago, William Nelson, then a professor at the University of Minnesota Waseca, had an idea to create a valuable cooperative educational experience for his students. He wanted to organize a tour of agricultural cooperatives in the Minneapolis St. Paul area. However, like many educators, he had little money in his department budget.

He worked with the Minnesota Farmers Union (MFU) to see if it would support this venture. With a history of providing cooperative education to both its members and the public, MFU proved to be the “right fit” to help Nelson create the cooperative learning experience.

“Over time, MFU, various college professors and other cooperative education leaders recognized the value of providing students with a structured opportunity to learn more about cooperatives and related careers,” said Cathy Statz, conference co-coordinator and Wisconsin Farmers Union (WFU) education director.

By the late-1990s, the program evolved into a threeday conference, closely resembling what it is today: the College Conference on Cooperatives.

“Participants had an opportunity not only to observe cooperatives on location, but to hear from those participating in all levels of the cooperative movement, from employees, management, boards and members, as well as from those involved in cooperative support,” Statz said. “Today, the conference features cooperative speakers, panels and tours from across the cooperative spectrum.”

This year session panelists discussed local cooperative management, co-op careers, consumer cooperatives and challenges facing rural areas. More than 90 students and educators gathered in Minneapolis for the 2003 conference, which was coordinated by MFU and WFU, in mid-February. Delegates represented 13 colleges and universities in Colorado, Iowa, Minnesota, Nebraska, South Dakota and Wisconsin.

“It made me more aware of intern opportunities and careers with cooperatives,” said Nick Einc, a sophomore from Ridgewater College in Willmar, Minn., who plans to transfer to South Dakota State University to major in agronomy. Delegates toured a variety of cooperatives in the Minneapolis-St. Paul area. “As a cooperative educator and program planner, the conference provided information, contacts and curriculum that is essential in planning the programs I oversee,” said Amy Meyer, Rocky Mountain Farmers Union education director, Aurora, Colo.

William Nelson, now president of the CHS Cooperatives Foundation, continues to work with and support cooperative education in this role and embraces the opportunity to assist with the conference. A second conference was added in 2003 for students from North Dakota and Montana, which is led by Jill Inabnit of Montana Farmers Union and Amber Hill of North Dakota Farmers Union.

Next year’s Midwest conference will be Feb. 20-22, 2004, in Minneapolis. For more information, contact Statz, WFU education director, (715) 723-5561, cstatz@yahoo.com; or Jim Tunheim, MFU education director, (651) 639-1223, education.director@mfu.org.












Port OK’S Texas co-op lease

Gulf Compress, a Texas-based cotton marketing cooperative, has become the first tenant in Corpus Christi’s La Quinta Trade Gateway, in what could be a $15.5-million investment in the project. The cooperative’s entry was approved by Port of Corpus Christi commissioners for the Gateway, a planned container terminal on a 1,114-acre tract purchased by the port in 1998. Gulf Compress currently owns land planned for a baseball stadium. The cooperative would lease a site of almost 30 acres from the port for $1,918 a month for 30 years. The port will provide access roads to the site from a major highway, rail access and while the cooperative will add warehouses, roads and a rail spur. Gulf Compress will act as a catalyst for further economic development. Bob Weatherford, co-op president, said the venture would bring jobs to the community. Once the cooperative becomes operational in 2004, it plans to apply for certification in the New York Cotton Exchange .



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