NEWS LINE
Compiled by Dan Campbell
Send items to: dan.campbell@USDA.gov
Pennsylvania food-marketing co-op
completes trade mission to China
The Food Marketing Cooperative
of Pennsylvania (FMCP) — a joint
effort of small to medium-sized food
processors — recently completed their
first trade mission to China. The trade
mission, coordinated by the
Pennsylvania Department of
Agriculture (PDA), represented 13
food manufacturers who have found
that leveraging their resources helps all
of them reach markets that almost
none of them could access individually.
“This trip was a real team effort by
the members of the co-op, the state
and the U.S. Department of
Agriculture (USDA),”
Pennsylvania Agriculture
Secretary Dennis Wolff said, noting
that many of the trip’s costs
were offset by a grant from
USDA. The co-op had an exhibit
at the HOFEX Food Show in
Hong Kong and participated in
retail tours.
“Pennsylvania cannot ignore
China’s market potential for
many of the same foods our own
citizens have come to enjoy,”
Wolff said. “This trade mission
was extremely important in providing
exposure for the commonwealth’s
food products while developing
relationships with quality
importers and distributors in China.”
Ron Davis of Bell Export Foods
Group, representing members of
FMCP, joined John Jantos, PDA’s international
business development division
chief, during the week-long trip to
Hong Kong and southern China.
During the mission, the pair participated
in market briefings by the U.S.
Embassy and Consulate. They also
gained insight and perspective into the
Asian market through a trade show in
Hong Kong and meetings with buyers,
importers and distributors there and in
the southern Chinese city of Shenzhen.
“With a population of more than 1
billion people, there is tremendous
market opportunity for Pennsylvania’s
diverse array of quality agricultural
products in China,” Wolff said. “This
trip was a great step forward in creating
relationships that will soon add
China to the growing list of countries
purchasing Pennsylvania’s agricultural
products.”
The co-op’s expenses for the trade
mission were partially offset through
use of the Market Access Program
(MAP) of USDA’s Foreign Agricultural
Service. MAP funds are available
through four State Regional Trade
Groups (SRTGs), which consist of
state departments of agriculture. The
SRTGs work closely with USDA to
promote international trade. This program
can reimburse businesses for up
to 50 percent of their international
promotion expenses.
In this case, Food Export USANortheast,
the SRTG which represents
ten northeast state departments of
agriculture and the Mid-America
International Agri-Trade Council
(MIATCO), which represents 12
grain-producing states, collaborated on
the China mission to benefit the co-op
and several other agribusinesses from
other states.
Alto forms whey-marketing
partnership
Alto Dairy Cooperative, Waupun,
Wis., has formed a marketing alliance
with Main Street Ingredients,
LaCrosse, Wis., to sell its dried whey
and permeate to the nutritional and
food-processing industries. The
arrangement will not affect Alto’s feed
divisions. “By marketing our dried
whey and permeate through this partnership,
Alto will be able to capitalize
on Main Street’s sales and marketing
expertise — adding value to our members’
milk,” said Rich Scheuerman,
President and CEO of Alto Dairy
Cooperative.
The partnership is one of several
initiatives Alto is working on to bring
higher margins and add value to the
cooperative and members’ milk,
Scheuerman said. In April, Alto
announced its partnership with
Winona Foods to brand and market its
aged cheddar cheese nationally.
In other news, Alto recently hosted
the national Food Network television
show “Unwrapped,” at its Waupun,
Wis., plant, where it was featured in a
special segment on
food toppings. The
show focused on Alto’s
shredded cheesemaking
process and its
110-year history as a
producer-owned cooperative.
Hosted by
Marc Summers,
“Unwrapped” uncovers
behind-the-scenes
details on classic
American food by
exploring test kitchens
and the secrets behind
food companies and
their products.
Alto Dairy manufactures
more than
550,000 pounds of
American and Italianstyle
cheese per day at its Waupun and
Black Creek facilities from a daily
intake of more than 5 million pounds
of milk. Cheese and whey produced by
Alto Dairy are marketed nationwide
under a variety of brand names and
private labels.
Aurora Co-op buying
Cargill’s Grand Island mill
Aurora Cooperative is buying
Cargill’s Grand Island, Neb., feedmill.
“This acquisition is a wonderful
opportunity as it allows Aurora
Cooperative to upgrade its feed services
to current and future livestock
producers,” says Aurora Cooperative
President and CEO George
Hohwieler.
The purchase comes on the heels of
the co-op’s 2005 board retreat, where
the directors “committed to be actively
involved in the feed business for the
long term,” Hohwieler said. The
acquisition also favorably positions
Aurora in response to USDA’s and the
U.S. Food and Drug Administration’s
stance on species-segregated feed manufacturing
operations, he noted. In
conjunction with the asset sale at
Grand Island, Cargill Animal
Nutrition announced that it will double
production at its Duncan, Neb.,
location.
Bin collapse causes
co-op to halt storage
Central Valley Ag Co-op is closing
its grain storage facility in Fremont,
Neb., but will continue to offer
agronomy and petroleum services,
according to the Fremont Tribune. In
November, one of the co-op’s grain
bins collapsed, and the Nebraska
State Fire Marshal’s office and the
co-op’s insurance firm said the storage
bins and the feed mill were a
safety hazard.
At one time the local co-op provided
storage for some 500,000 bushels of
grain. But last November, a 50-yearold
storage bin housing some 70,000
bushels of corn collapsed, spewing
grain into the loading area. Metal
fatigue is the suspected cause.
Rebuilding the storage facility and
upgrading the feed mill would be costprohibitive,
so the board chose to close
them. The co-op will offer members
the option of shipping grain to terminal
elevators under the co-op’s name,
or it will pick grain up on members’
farms.
Calif. dairy co-op
buying Frito plant
California Dairies Inc., Artesia,
Calif., is in the process of buying the
280,000 square-foot Frito-Lay plant in
Visalia that was closed last fall. The
final proposal is subject to the approval
of the cooperative’s membership. The
purchase is also contingent on the
city’s permission to build towers taller
than 100 feet, as well as on receipt of a
conditional-use permit.
The facility may start producing
toward the end of 2007. In the first
phase, 5 million pounds of milk per
day would be processed, and 100
workers would be employed at full
production. In the second phase, the
plant capacity could increase to 10
million pounds of milk per day and
employ as many as 180 workers.
California Dairies’ 680 members
annually produce more than 14 billion
pounds of milk that accounts for 40
percent of the state’s production. The
cooperative is buying the plant to keep
up with its members’ milk production
growth of 3 to 4 percent per year.
Visalia is in Tulare County, which had
$1.4 billion in milk sales in 2004, making
it the No. 1 milk-producing county
in the country.
CF Industries plans stock sale
CF Industries Inc., a Long Grove,
Ill.-based manufacturer and distributor
of nitrogen and phosphate fertilizer
products, plans to raise $700 million in
an initial public stock offering. CF
Industries is owned by eight farmer coops:
CHS Inc., MFA Inc., Growmark
Inc., Southern States Cooperative,
Land O’Lakes, Tennessee Farmers
Cooperative, Intermountain Farmers
Association and Cooperative Federée
de Quebec.
The owners of CF Industries would
receive shares of common stock in the
new company and cash in exchange for
their outstanding equity interests in
CF Industries. CF had an operating
loss of $311.3 million in 2004.
If approved by the U.S. Securities
and Exchange Commission, CF
Industries Holdings Inc. would be
formed to serve as the holding company
for the operations of CF Industries
Inc. Morgan Stanley & Co. Inc. and
J.P. Morgan Securities Inc. will serve as
joint lead managers in connection with
the offering. Credit Suisse First
Boston LLC and Harris Nesbitt Corp.
are serving as senior co-managers.
CHS sells Mexican foods operations
CHS Inc. recently sold its tortilla
and chip operations to Gruma
Corporation. The sale consists of three
plants, located in New Brighton,
Minn., Fort Worth, Texas, and
Phoenix, Ariz. The plants employ
about 250 employees. Gruma is a subsidiary
of Gruma SA de C.V., of
Monterrey, Mexico, which markets
products under the Mission and
Guerrero names.
“As we looked at the future direction
of our operations and our investment
in the value-added food sector,
we concluded that it is in the best
interest of all of our stakeholders that
we divest of our Mexican foods operations
and focus on other areas of our
food and grain processing business,”
said John Johnson, CHS president and
chief executive officer. “CHS remains
committed to its vision of linking producers
to consumers through its other
grain-based food processing and manufacturing
businesses.”
Co-op conference
slated in Minnesota
“Cooperative Opportunities in a
Global Economy” is the theme for the
8th annual Farmer Cooperatives
Conference, to be held Nov. 7-8 at
the Hyatt Regency in Minneapolis,
Minn. The conference has been sponsored
since 1998 by the University of
Wisconsin Center for Cooperatives to
provide co-op directors, managers,
government officials and academics
with information on major trends and
issues impacting agricultural cooperatives.
Presenters and topics are selected
to stimulate critical thinking and
the exchange of ideas. The conference
includes ample opportunities for
interaction and discussion. For more
information, visit:
www.wisc.edu/uwcc/fc/
fc.html, or call (608) 262-3981.
$10,000 land stewardship
prize offered by AFT
Nominations are being accepted
through Nov. 1 for American Farmland
Trust’s 2006 Steward of the Land
Award. The $10,000 prize is presented
annually to a farmer or rancher who
best exemplifies AFT’s mission of
stopping the loss of productive
farmland and promoting farming
practices that lead to a healthy
environment. Nomination kits can be
requested by calling (800) 886-5170,
extension 3011, or can easily be
downloaded on AFT’s Web site:
http://www.farmland.org/
steward/nomination_instructions.pdf .
The 2005 Steward of the Land
Award was recently presented to
Steve Sinton, a wine grape grower
and fourth-generation cattle rancher
from Shandon, Calif. Throughout his
18,000 acres of ranchland and 125
acres of vineyards, Sinton uses a variety
of innovative practices to promote
sustainability and protect the environment.
His efforts have even
resulted in the reintroduction of the
California condor, which nest on
parts of his property. He was also
instrumental at the state level in the
creation of the California Rangeland
Trust, California’s statewide agricultural
land trust.
“The Steward of the Land Award
showcases the diversity of American
agriculture and illustrates the many
benefits farmers and ranchers provide
to the general public, like habitat for
wildlife, a filter for clean air and water
and scenic vistas,” said Sinton.
“I’m a rancher, but I know that past
winners of this award have also been
grain growers, dairy farmers and fruit
growers. There are people in every
aspect of agriculture that are engaged
in good stewardship practices.”
Dairy conference eyes
national marketing agency
Farmers should take advantage of
the Capper-Volstead Act and form a
nationwide marketing agency-in-common
to manage milk shipments and to
allocate milk to end users in the most
efficient manner possible, some speakers
said during a recent dairy conference in Syracuse, N.Y. “Growing the
Northeast Dairy Industry” was the
theme of the conference, held June 1.
New opportunities in the cheese
and fluid markets were discussed, and
young producers saw promising futures
in dairy farming, especially in Western
New York.
However, dairy farming challenges
were also discussed, including: environment
(air, water, odors, flies,
pathogens, etc.), animal welfare concerns,
food safety, milk quality, efficiency
and production costs, decreased
government involvement, international
competition, and financing.
Diamond Walnut to convert
After functioning as a growerowned
co-op for nearly a century,
Diamond Walnut members have voted
to convert the business into an
investor-owned corporation. About 80
percent of the co-op’s 1,735-members
voted for the conversion of the company,
which will become Diamond Foods
Inc.
“We are gratified by the high level
of grower support,” said Michael
Mendes, president and chief executive
of Diamond.
The initial public offering may sell
5.3 million shares at $15 each, possibly
raising $70.9 million. Money will be
used to create new products and markets
to address increasing walnut production
and more competition.
Production for Diamond’s members
has grown about 65 percent over the
past seven years, according to
Diamond’s prospectus, due to factors
such as higher yields per acre and better
varieties.
The company, citing a more competitive
environment, also wants to
work better with large customers such
as McDonald’s, which uses Diamond’s
walnuts in its fruit and walnut salad,
The Fresno Bee reported.
