NEWSLINE

Co-ops form new grain venture
Co-Mark Inc., in Cheney, Kans., has announced the formation of a new grain-marketing venture: Co-Mark Grain Marketing LLC (CGM). The new business was initiated by a group of famer-owned cooperatives to strengthen the value of Kansas-and northern Oklahoma-grown grain through innovative marketing efforts.

CGM now serves as the grain division for 10 local cooperatives, handling all grain merchandising, logistics and accounting under one federal license. CGM anticipates that nearly 40 million bushels of grain will be marketed each year through the alliance.

Key staff members include: David Smith, president/general manager; Delinda Warner, chief financial officer/contoller; and Mark Lyman and Ryan McCoy, grain merchandisers. The office is in Cheney, Kan.

The member co-ops are: Anthony Farmers Cooperative Assoc., Anthony, Kan.; Cairo Cooperative Equity Exchange, Cairo, Kan.; CCGP Inc., Wichita Kan.; Danville Cooperative Assoc., Danville, Kan.; Farmers Cooperative Grain Assoc., Caldwell Kan.; Farmers Cooperative Grain Assoc., Conway Springs, Kan.; Farmers Cooperative Elevator Assoc., Garden Plain, Kan.; O.K. Cooperative Assoc. and Mercantile, Kiowa, Kan.; Two Rivers Consumer Cooperative Assoc., Arkansas City, Kan.; Valley Co-op Inc., Winfield Kan.

CWT Program to be
renewed for 2009
Members of Cooperatives Working Together (CWT) voted in June to continue the dairy farmer slef-help program through 2009. In a unanimous vote, the committee overseeing the management of CWT endorsed a continuation of the program at the present membership-assessment level of 10 cents per hundredweight.

"In this season of important votes, CWT has won reelection in a landslide, as its members have decided that our inudstry is better off with this program," said Jerry Kozak, president and CEO of the National Milk Producers Federation, which manages CWT.

Created five years ago, at a time when farm-level prices were at 20-years lows, Kozak says CWT used a variety of programs to strengthen and stabilize milk supplies, and improve the economic health of the U.S. dairy producer community. In June -- with many dairy farmers struggling with dramatically higher production costs CWT conducted its latest herd retirement to adjust the size of the U.S. dairy cattle herd.

CWT has prodcued a strong return on investment for its members, generating 75 cents per hundredweight just in 2007, according to an independent economic analysis by Dr. Scott Brown of the University of Missouri. Brown's study also showed that the cumulative impact of the CWT herd-retirement and export-assistance programs has helped create an enduring positive effect on milk prices paid to farmers.

Denim mill creates Internet
store for sustainable,
American-made fabric
Purchasing environmentally friendly denim is just a mouse click away, according to American Cotton Growers (ACG) in Littlefield, Texas. A new Internet store has been created for manufacturers of apparel, home furnishings, crafts and fabric retailers that need small volumes of fabrics. Known as SAFEDenim (Sustainable, American and Friendly to the Environment), the fabrics are manufactured by ACG, the world’s only farmer-owned denim mill, and can be purchased online, the company announced.

“The denim mill and its farmerowners are focused on producing highquality denim fabrics with minimal requirements,” Darneille adds. “Today, our fabrics featuring the same quality and reliability are available via the Internet with virtually no minimum impact on the environment,” says Plains Cotton Cooperative Association (PCCA) President and CEO Wallace L. Darneille. PCCA is the parent company of ACG.

“We can produce an average of 37 million yards of denim annually, every yard of which is spun, dyed and woven from the cotton our farmer-owners produce,” Darneille says. “It is American-made denim literally created from field to fabric.

“Until now, ACG denim was available only to manufacturers who could meet our minimum volume requirements,” Darneille adds. “Today, our fabrics featuring the same quality and reliability are available via the Internet with virtually no minimum requirements.”

Established in 1975, ACG is focused on the development and production of value-added fashion-denim fabrics for its customers. ACG also meets or exceeds all regulations administered by the Environmental Protection Agency.

New potato co-op formed
The Red River Valley Fresh Potato Growers Cooperative, based in Grand Forks, N.D., has been formed by 27 growers representing 10,000 acres. It is estimated that the co-op represents about 50 percent of the fresh potato acreage in the valley, the nation’s largest red potato growing region.

The co-op is affiliated United Potato Growers of America, a relatively new national marketing co-op that has grown rapidly in recent years as growers have attempted to bring better balance to the market and avoid the gluts that forced many growers nationally to the edge of bankruptcy.

Dave Moquist, co-owner of O.C. Shultz & Sons, Crystal, N.D., is chairman of the new cooperative.

Pacific Northwest
Farmers Co-op formed
The Genesee Union and Whitman County Growers in Idaho have merged to form the Pacific Northwest Farmers’ Cooperative. The merger is expected to increase revenue for both co-ops, in addition to giving the newly formed company increased storage capacity and more selling power, according to a report in the Moscow-Pullman (Idaho) Daily News.

Manager Bob Holmes told the Daily News the merger was more about creating extra income than slashing costs and lowering overhead. The new co-op’s added size will increase its selling leverage with exporters, he added. PNFC headquarters will be in Genesee, with a branch office in Colfax.

PNFC assistant manager Sam White said both co-ops had been working closely with each other the six months prior to the merger “to hit the ground running.”

USDA staff lead co-op seminar
for United Nations’ panel
James Baarda and John Wells of USDA Rural Development led a seminar about cooperatives for the United Nations’ Commission on Sustainable Development in May in New York City. The session, titled “Business Models for Farmer Marketing, Supply and Credit Cooperatives,” covered a wide range of topics, including cooperative principles and benefits, how co-ops are formed and governed and legal and taxation issues. How co-ops are financed, the Farm Credit System and international efforts to promote cooperatives were also discussed.

Baarda emphasized that a cooperative’s main purpose is to provide and distribute benefits to members. For a cooperative to be effective, he said, decisions — including investment decisions — need to be made collectively in a participatory manner. Besides purely economic benefits of cooperatives, Baarda said they can create significant social and environmental benefits.

He also focused on the role of facilitators and government assistance at different stages of cooperative development. Such assistance can include not only financial, but also technical assistance, education and research support.

A detailed PowerPoint presentation used for the session has been posted on the United Nations’ Website at: http://www.un.org/esa/sustdev/csd/csd1 6/LC/presentations/baarda.pdf.

Baarda also recently conducted an introduction to cooperatives for the University of Arkansas Law School. A two-hour video of the lecture has been posted on the university’s Website: http://www.uacted.uark.edu/ legalesource.

Southeast Milk to buy
Winn-Dixie dairies
Winn-Dixie Stores Inc. has announced plans to sell the two dairies it operates — in Plant City, Fla. and Hammond, La. — to Southeast Milk Inc. (SMI). Both facilities will remain in full production with current employees.

Southeast Milk is a Florida-based cooperative of more than 300 familyowned dairy farms, mainly in Florida, but also in Georgia, South Carolina, Tennessee and Alabama. As the largest operating co-op of dairy farmers in Florida, Southeast Milk supplies milk to most of the southeastern United States.

“Our purchase of these dairies from Winn-Dixie provides a wonderful opportunity for our family-owned dairy farms to better serve consumers throughout the southeastern United States,” said Calvin Covington, CEO of SMI. “Southeast Milk remains committed to providing fresh, locally produced milk to consumers.”

“We have concluded that the sale of our dairies is in the company’s best interest as we continue to sharpen our focus on the retail operation of our business,” said Winn-Dixie President, CEO and Chairman Peter Lynch. Winn-Dixie operates 521 retail locations.

NCBA: Cooperatives get
a boost in Farm Bill
Provisions in the new Farm Bill will benefit cooperatives nationwide and help stimulate job creation in rural America through the formation and expansion of cooperative businesses, according to a statement issued by the National Cooperative Business Association (NCBA). The legislation also directs USDA to continue groundbreaking research on cooperatives, and makes it easier to invest in cooperatives, while keeping them member-owned.

“This action has the potential to reinvigorate cooperative enterprise and rural areas desperate for economic opportunities,” says NCBA President and CEO Paul Hazen, stressing that coops help keep the profits they generate close to home.

One challenge cooperatives face is gaining access to new sources of capital. Most of the capital available for co-ops comes from their members or from lenders. There is no widely available mechanism for the more than 150 million co-op members and others to invest in the co-ops in their communities.

The provisions adopted by Congress allow loan guarantees for purchases of equity shares in cooperatives and in equity funds that invest in co-ops. These loan guarantees are part of the Business and Industry (B&I) Loan Guarantee program, a USDA Rural Development program. This opens the way for more capital investment in cooperatives while maintaining member control, Hazen says.

The Rural Cooperative Development Grant (RCDG) program provides funding for cooperative development centers that provide technical assistance to start or expand cooperative businesses. According to CooperationWorks!, a network of development centers, the centers have helped start or expand more than 400 co-ops, creating more than 5,800 jobs in more than 40 states. NCBA, which represents cooperatives of all types, led the effort to create the small, but effective, RCDG program in the 1980s and works annually to increase its funding.

The Farm Bill includes these changes to the program: The research language included in the RCDG provisions will help fill a substantial gap in government data on cooperative business. It orders USDA to direct research gauging the size of the cooperative business community and its impact on the national economy.

Congress voted $1.5 million for this purpose over the last three years and research under those appropriations is underway at the University of Wisconsin at Madison. The language directs USDA to continue this type of research on a more permanent basis.

“Lack of data on cooperative business has been a major problem in recent years,” says Mary Griffin, senior policy advisor for NCBA. “It makes coops vulnerable to attack by competitors and makes it difficult to get more government support.” The research will also help policymakers determine how co-ops can best tackle national problems like health care and senior housing.

Masterfeeds to purchase
Land O’Lakes Canada’s
Ontario feed business
Masterfeeds Inc., Land O’Lakes Canada Ltd. (LOLC), and GROWMARK Inc. announced an agreement in May under which Masterfeeds will purchase LOLC’s Ontario feed business. Masterfeeds Inc. is wholly owned by Ag Processing Inc.; LOLC is owned by Land O’Lakes Inc.; Agronomy Co. of Canada Ltd. is a Land O’Lakes/CHS Inc. joint venture.

As part of the transaction, Masterfeeds also will acquire two feed mills in Wingham and Peterborough, Ontario, which are currently leased by LOLC from GROWMARK Inc. Licensing agreements that will provide Masterfeeds continued use of certain Land O’Lakes feed brands, as well as access to certain future brands and animal nutrition technologies developed by Land O’Lakes Purina Feeds LLC (a wholly owned subsidiary of Land O’Lakes Inc.).

Masterfeeds President & CEO Rob Flack said the acquisition is “a positive strategic move that enhances our ability to support livestock and poultry producers in the markets we serve. Masterfeeds is committed to strengthening our Canadian feed business through solid acquisitions like Land O’Lakes Canada Ltd. We are very excited about our alliance with Land O’Lakes’ renowned animal nutrition research and development capabilities that will support our operations throughout Canada.

New CEO at
Accelerated Genetics
Joel Groskreutz is the new president and CEO of Accelerated Genetics in Baraboo, Wis. He has been working closely with Roger Ripley, the current president and CEO, to ensure a seamless transition prior to Ripley's scheduled retirement Aug. 1, 2008. Groskreutz will continue to drive the co-op's genetic-improvement programs for the benefit of cooperative members and all producers around the world. He comes to Accelerated Genetics with a vast amount of experience within the agricultural industry, particularly in sales, marketing, product development, budget administration and personnel management.

For the past 14 years, Groskreutz has been employed at Ecolab Inc., a Fortune 500 company based in St. Paul, Minn., where he served as vice president of Midwest and Western U.S. agriculture sales. Groskreutz also worked at Accelerated Genetics early in his career, serving the co-op first as a field representative, then district sales manager, regional sales manager and domestic marketing specialist.

USDA loans $266 million
to nine rural electric co-ops
Agriculture Under Secretary for Rural Development Thomas Dorr in May announced that nine rural electric utilities were selected to receive $266.6 million in loans to help them make system improvements. The funding is being provided through USDA Rural Development’s Utilities Program to finance the construction and/or repair of nearly 3,700 miles of transmission and distribution lines. The work will benefit more than 46,000 consumers in nine states.

“The funds provided through these loans will enable cooperatives to upgrade and modernize their distribution systems, guaranteeing dependable service for years to come,” Dorr said. Since 2001, USDA Rural Development has awarded about $28 billion in electric loans to utilities across the nation.

The funds will be used for a variety of upgrades, including: Other co-ops receiving the loans include: Chariton Valley Electric Cooperative, Iowa, $4 million; Cumberland Valley Electric, Kentucky/Indiana, $15.84 million; Federated Rural Electric Assoc., Minn./Iowa, $3.95 million; Springer Electric Cooperative, N.M., $6.71 million; Adams Rural Electric Cooperative, Ohio, $5.64 million; Prince George Electric Cooperative, Va., $6.38 million.

For more information about USDA Rural Development, visit: www.rurdev.usda.gov.

Capacity boosted
at CHS refinery
CHS Inc. in May marked the completion of a two-year, $400-million project that will increase fuel production at its Laurel, Mont., refinery by more than 20 percent. “At this time of concern over energy supply, we are proud of this investment — the biggest in CHS history — which means more gasoline and diesel fuel to the agricultural producers and consumers who count on us,” Leon Westbrock, CHS executive vice president and chief operating officer for energy, said at an event making the completion of the effort.

The “Bottoms Upgrade Project” made throughout the refinery to incorporate new production units into the existing refinery. While the refinery’s overall throughput remains rated at 60,000 barrels-per-day, the addition of the coker will increase the volume of gasoline and diesel it produces by more than 400,000 gallons per day. In addition, the refinery will produce about 300,000 tons of coke annually.

The refinery project also creates 35 new jobs, bringing the facility’s total workforce to more than 300.

Growers sue Diamond
in pay dispute
Dozens of walnut growers, organized as The Walnut Growers of California, have filed a class-action lawsuit against Stockton-based nut processor Diamond. They claim that they and others were severely underpaid by Diamond Foods Inc. — perhaps by as much as $52 million — for their 2005 and 2006 crops. According to a report in the Stockton Record, the lawsuit, filed in March in San Joaquin County Superior Court, claims “Diamond grossly underpaid its 1,600 growers” under long-term contracts issued shortly after the former Diamond of California growers cooperative converted to a public company in July 2005.

Falcone to lead National Grape Co-op, Welch’s
Joseph Falcone has been named to replace Randy Graham as president of National Grape Co-op and will also act as chairman of the board of Welch Foods Inc., the world’s leading marketer of Concord and Niagara grape-based products. He is one of five new board members.

“In the next three to five years, Welch’s is going to move from being a good company to a great company. That means we’ll be growing in terms of global reach, sales volume, profit and in value of the enterprise,” says David Lukiewski, president and CEO of Welch’s. “With the experience these new members bring to the board, we’re confident they can help guide us in achieving our goals.”

Falcone, of Silver Creek, N.Y. , has held a family membership in National Grape for 54 years. He operates a farm that includes both Concord and Niagara grapes and 1,800 acres of processing vegetables. He is the president of Falcone Farms Inc. and is a standing member of Pro-Fac Cooperative Commodity Committee and the Cornell Cooperative Extension, among many other memberships in ag and food industry organizations.

FFA essay contest winners
focus on co-ops
For essays on the theme of “Understanding Cooperatives,” Sadie Geiger of Alhambra, Ill., Ashley Julka, of Rosendale, Wis., and Clint Hansen of Prairie City, Iowa, have been named winners of a 2008 essay contest for FFA members, sponsored by GROWMARK Inc.

In his contest entry, Hansen said: “Characteristics of the modern co-op are very similar to those of the original Rochdale co-op. They are memberowned and controlled; they are nonprofit; they offer reduced risk; the members receive patronage dividends; and the board is elected by the members.” Hansen is a student at Prairie City-Monroe High School and a member of the Diamond Trail FFA Chapter.

Julka, a student at Laconia High School and a member of the Laconia FFA Chapter, wrote: “Cooperatives have been, and will continue to be, huge role-players in America’s economy. These businesses give farmers the strength to influence others, therefore promoting local products. Cooperatives help farmers become more productive, thus increasing efficiency and boosting the prices they receive for their products.”

In her entry, Geiger wrote: “The combined efforts of committed employees and loyal farmer-owners, coupled with the leadership of an elected board of directors, leads to a financially viable cooperative that will be able to meet new challenges and opportunities held by the future.” Geiger is a student at Highland High School and a member of the Highland FFA Chapter.

The winners each received a $500 scholarship from GROWMARK and their FFA chapters will also receive $300 awards to help future students. Four runners-up in each received $125 scholarships.

This is the 15th year for the program, sponsored by the GROWMARK System and FS member cooperatives, in conjunction with state FFA leaders.

DFA uncovers ‘improper’
payment to former chairman
Dairy Farmers of America (DFA) reported to its members in May that an audit had uncovered “an improper” payment of $1 million made to former board Chairman Herman Brubaker, who retired from the board five years ago. The payment was authorized by former CEO Gary Hanman. The payment was not authorized by the board, President & CEO Richard Smith stressed. Smith succeeded Hanman in 2006.

Once discovered, Smith said the coop moved quickly to secure repayment of the money, plus interest. “However, the return of the funds is not an end to the matter,” Smith wrote in a letter to members, in which he said the co-op was “saddened and disappointed about an improper transaction involving two former senior representatives” of DFA, the nation’s largest dairy farmer-owned cooperative.

“DFA’s past and present boards of directors were not involved in this wrongdoing, and the current board and management only recently became aware of it,” Smith said. A special committee of the board was formed and is looking into the co-op’s financial records to ensure that no similar transactions have taken place. This committee will determine whether any additional standards should be put into place to enhance internal controls.




USDA Rural Development funds
available for disaster relief efforts

Agriculture Under Secretary for Rural Development Thomas Dorr announced in June that funding is available to individuals and organizations hit by natural disasters in several Midwest states. The funds will go to areas that have been designated as Presidentially-declared disaster areas due to the impact of floods and tornadoes.

“USDA is encouraging residents and business owners to immediately apply for funding to help them to begin their recovery from these devastating storms,” Dorr said on June 16. “Rural Development has a number of programs that citizens can use to help them get back on their feet. These programs can literally assist in building a community from the ground up and we stand ready to help our fellow citizens in the affected states rebuild their communities and their lives.”

USDA Rural Development has grant and loan funds available to rural communities to provide housing, public safety, health care and community facilities and business recovery assistance. Communities that have been declared by President Bush as federal disaster areas will receive priority consideration during the application process. Under Secretary Dorr has directed USDA Rural Development staff in the affected states to work with citizens and state, local and other federal officials to explain the type of Rural Development aid that is available.
All applications will be processed expeditiously as they are received in USDA Rural Development state offices.

Further information on USDA’s Rural Development programs, visit: www.rurdev.usda.gov.



























Consumer cooperator achievements recognized

The 2008 Howard Bowers Awards, recognizing excellence in the consumer co-op sector, were presented June 13 during the Consumer Cooperative Management Association conference in Portland, Ore. Honorees included: “Consumer cooperatives across the country are dynamic and thriving businesses, and much of the credit goes to individuals, like these award winners, who provide daily leadership and make extraordinary commitments to the consumer cooperative community,” said Dr. Ann Hoyt of the University of Wisconsin, the coordinator of the CCMA conference.













Washington Organic Farmer wins AFT to award

Nash Huber, of Nash's Organic Produce in Sequim, Wash., has been selected by the American Farmland Trust (AFT) for its annual Steward of the Land Award. Nash and his team grow more than 100 types of produce, pasture-raised pork and seed crops on 400 sustainably managed acres in the Dungeness River Valley. Farm products are sold directly to the public through Nash's Farm Store, a community-supported agriculture program, local restaurants and five area farmers' markets.

He will receive the $10,000 AFT prize for his environmental stewardship and farmland protection efforts. Nash and his wife, Patty McManus, have helped save hundreds of acres of local farmland and important wildlife habitat. Nash is a founding member of the PCC Farmland Trust and Friends of the Fields.







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