N E W S L I N E

USDA Secretary Dan Glickman hails the first shipment of California oranges to China in 20 years . At left is Bill Lyons, secretary of the California Department of Food and Agriculture. At right are Charles Barshefsky, ambassador/U.S. trade representative, and Sunkist President Vince Lupinacci.

Photo courtesy Sunkist

Sunkist cheers opening of China

The first shipment of California oranges to Shanghai and Beijing in 20 years were sent to China this spring after the Chinese government issued long-awaited rules opening its market to U.S. citrus fruit. The rules mark the last step in implementing an agreement reached between the United States and China almost a year ago that allowed citrus, meat and wheat into that country, a major step toward cementing U.S.-China trade relations. Sunkist Growers, a cooperative of 6,500 growers in California and Arizona, estimated the deal will mean almost $500 million in new business for its growers over the next five years. "China has all the potential to be a huge market for us, as citrus is very popular with Chinese consumers," said Vincent Lupinacci, the cooperative's president. U.S. Agriculture Secretary Dan Glickman and U.S. Trade Representative Charlene Barshefsky hailed the action in a joint statement, saying it gives U.S. farmers and ranchers a "tremendous opportunity to significantly increase export sales to the world's most populous country." It was the first time California growers shipped to China since 1980, when their fruit was quarantined because of Mediterranean fruit fly infestations. It's welcome news for California citrus growers, who have struggled with lower prices and increased competition from imports in recent years.

USAD, NFU spur Michigan co-ops

The Michigan state office of USDA Rural Development has signed an agreement to work with the National Farmers Union (NFU) and Michigan Farmers Union (MFU) to promote and use programs aimed at starting new agricultural cooperatives and developing rural businesses. "By working cooperatively with USDA Rural Development state and area offices, we are further equipped to assist producer groups in the preparation of various projects involving agricultural cooperatives, value-added processing, rural business development, and in launching a variety of innovative co-ops," says NFU President Leland Swenson. "These agreements unite the shared missions of our organizations to serve rural America and help family farmers and rural citizens succeed through the promotion of economic and cooperative development, particularly the formation of value-added processing and marketing cooperatives," adds Carl McIlvain, MFU president.

Iowa egg co-op, Nuzum awarded

The Iowa Area Development Group (IADG),West Des Moines, awarded the "Outstanding Business of the Year Venture Award" to Southwest Iowa Egg Cooperative, Massena, Iowa. The IADG is the economic development office for Iowa's member-owned rural and municipal electric utilities. Its Venture Award program honors businesses that contribute to Iowa's economic base through investment, expansion and job creation. The cooperative began operations in 1999 and expects to produce 14 million dozen eggs annually. Meanwhile, Bruce Nuzum, IADG vice president of finance, was recently named the National Rural Electric Development Association (NREDA) "Economic Developer of the Year." His role is to assist member rural electric cooperatives, municipalities and rural communities with USDA development loan and grant applications. He also strategically assembles many players to work as a team in securing funding for rural development projects. Those players include federal, state, local and private funding sources. Bruce's hard work and accomplishments with USDA emphasize how important that organization and its programs are to revitalize rural America. Over the past 15 years, Iowa has realized over $2.2 billion in capital investment and 26,000 new jobs through over 800 JADG projects. According to national statistics, Iowa's electric cooperatives now lead their counterparts throughout the nation in average commercial and industrial monthly electric utilization. The 1ADG includes Iowa's rural electric cooperatives, Iowa Farm Bureau Federation, Iowa Department of Economic Development, and USDA Rural Development.

Spring Wheat Baker loads first train

Earlier this year, Spring Wheat Bakers cooperative shipped its first 26-car unit train of identity- preserved wheat from an AGP elevator in Valley City, N.D., bound for a Cargill flour mill in Chattanooga, Tenn. Flour milled from this wheat was then trucked to a Spring Wheat Bakers plant outside Atlanta, Ga., to make partially baked frozen bread and roll products. Last year the cooperative

Spring Wheat Bakers

announced the selection of McDonough, Ga. for its first production facility. Feasibility studies indicated placement of the plant there would give Northern Plains farmer's superior distribution logistics to regional customers. Mike Hardy, director of grain operations for Spring Wheat Bakers, said about 24 farmer members provided grain for the first train, averaging about 3,600 bushels each. "We bid it out to shareholders on a first-come, first served basis and limited it so that more people could be involved," Hardy said. "Some people came quite a ways out of their trade area just to be involved in this first identity-preserved wheat shipment." The co-op has since shipped grain out of five other locations to Chattanooga while developing additional spring wheat shipments for domestic and export markets. All grain shipped is identity preserved.

Dakota ranchers opening feedlots

A new group of cattle feeders North Dakota Barley Feeders is asking North Dakotans to invest in cattle that can be custom-fed in existing feedlots around the state. The Agricultural Products Utilization Commission gave $12,500 to the project in 1999. The North Dakota Barley Council kicked in $5,000 and another $2,500 each came from the Carrington, N.D., Development Corp. and the Carrington jobs Development Authority. The program, structured as a limited liability limited partnership, asked a minimum of $5,000 per person with a goal of $2 million. The group expects to borrow another $4 million to buy and feed out 8,000 to 10,000 cattle annually. Initially, the group may feed cattle in existing larger feedlots in the region, including Butts Feedlot of Carrington; Polries of Sykeston, N.D.; Larson in Carrington; and Amundson in Jamestown, N.D.

Iowa pork producers endorse co-op

Delegates to the Iowa Pork Producers Association annual meeting endorsed the formation of a producer owned cooperative that would help hog producers capture more of the consumer pork dollar. Heavy financial losses suffered by Iowa hog producers last year led to the formation of a task force to create a cooperative enterprise. The task force launched Iowa Premium Pork Co. as an entity separate from the producers association.

5 in Co-op Hall of Fame

Five people earned the highest honors when they were inducted into the Cooperative Hall of Fame this spring in Washington, D.C. The inductees were (from left) Edgar Callahan, Dave and Erma Angevine, Richard Magnuson and Glenn Webb. Established in 1974 by the National Cooperative Business Association (NCBA), the hall honors distinguished individuals whose contributions to cooperatives have been genuinely heroic. Callahan is president and CEO of Patelco Creidt Union, San Francisco. He also served as chairman of the National Credit Union Association in the early 1980s. The Angevines, from Virginia, began their careers at the Consumers Co-op Association, now Farmland Industries. They then worked for the Cooperative League of the USA, now NCBA. Their contributions include service to the National Rural Electric Cooperative Association, The Farmers Cooperative Service and the start-up of a worldwide volunteer program for co-op development. Magnuson, an attorney at Doherty, Rumble & Butler in St. Paul, Minn., has provided legal assistance to cooperatives for more than four decades. He is only the second attorney to be named to the Hall. A Tunnell, Ill., farmer, Webb is chairman and president of GROWMARK. He also has been a leader at CF Industries, CoBank and the Federal Farm Credit Banks Funding Corporation.

Corn co-op rebounds, but no dividends

The Golden Growers Cooperative, Fargo, N.D. is gaining strength despite a $5 million loss this past fiscal year, Board Chairman Pat Benedict reported at its annual meeting. "If there's good news about those losses, it's that (they) are behind us," he said. His faith did not extend to some growers who had held out hope the cooperative might pay out small dividends this year. But Benedict said continued losses at the ProGold corn processing plant in Wahpeton, in which Golden Growers is a partner, prevented any return to producers. "No, you will not receive a dividend check this year," Benedict told growers. "Believe me, my dearest wish would be to tell you otherwise." In its fiscal year ending in August 1998, Golden Growers recorded losses of $5.1 million, down considerably from the $11.7 million lost in 1997. As in 1997, a large part of the loss was attributed to Golden Growers' investment in ProGold. The $261 million corn sweetener plant opened nearly three years ago as a partnership among Golden Growers, American Crystal Sugar Co. and Minn-Dak Farmers Cooperative. Golden Growers owns 49 percent of the plant. ProGold has not made a profit since opening, and officials have blamed a slump in the high-fructose corn syrup market. The partners decided last year to lease the plant to Cargill for 10 years, believing the arrangement with the large corporation would reduce losses. Brian Ingulsrud, assistant treasurer, said the deal paid off. Golden Growers' share of losses at the plant fell from $14.8 million in 1997 to $ 4.3 million last year. He said the cooperative is confident it will not have lost money on the ProGold plant in fiscal 1999. However, he said the 1,900 members of Golden Growers should not expect significant profits, either. Mark Dillon, the cooperative's executive vice president, understands some members are frustrated at the losses. But he said patience will eventually pay off.

Prairie Farm sales top $1 billion

For the first time in its history, sales at Prairie Farms Dairy Inc., Carlinville, Ill., topped $1 billion, reports Lenoard J. Southwell, executive vice president and chief executive officer. Sothwell reported that 1999 total earnings for the cooperative, which were slightly over year-earlier earnings, were $50.2 million. Sales totaled $1.045 billion. "Of course, this does not include the various joint ventures which we are involved in", Southwell said. Earnings and sales were at all-time highs in 1999, and the board of directors voted to distribute 60 percent of the 1999 patronage refunds in cash. This marks the 16th year the cooperative pays members cash for 50 percent of more of its patronage income. Total patronage paid to members for the past five years is $110.4 million. Southwell reported that Prairie Farms is debt free, financing all operations from earnings. "It is highly significant that a cooperative engaged in fluid milk distribution is able to essentially operate from earnings," says Randall Torgerson, deputy administrator for the Rural Business-Cooperative Service of USDA Rural Development. "Further, this cooperative returns retained equity to members on a seven-year basis a very quick turnaround."

TVG regaining profitability

With his plans firmly in place and a new software system halfway there, Tri Valley Growers is on pace to return to profitability in 2001, Chief Executive Officer Jeff Shaw says. The cooperative is addressing the internal problems and the inventory buildup that led to losses of $165.2 million during the past two years. Shaw says the more doubters question Tri Valley's financial stability, the more determined he gets about turning the cooperative around. "There's not a day when I come to work when somebody doesn't call and say, 'I hear you're going out of business, "' Shaw said. By rebuilding the company, he thinks he can convert the naysayers. Shaw said the co-op has rebuilt the financial and marketing departments, secured new loans, and launched a sales and operating plan. It is halfway into installing its new computer software program. By reducing inventory through big sell-offs, the company eliminated $100 million in debt, he said. "All that cash was being stored in our warehouses." At one TVG plant, $8.6 million in cost savings were realized.

Associated gins one-millionth bale

Associated Cotton Growers, a 26 year-old co-op north of Crosbyton, Texas, has ginned its one-millionth bale. "I think it's quite an accomplishment," says Donny Wheeless, assistant manager for the past 14 years. He believes customer loyalty contributed to the gin's accomplishment. Manager Randy Arnold agrees. "We have lots of long-term customers who are here with us through the thick and the thin," says Arnold, who has headed the co-op for five years. The record-setting bale was produced on the C.R. Marsh farm. Marsh, a farmer for about 30 years, was informed of the event after it happened. The co-op, which has ginned an average of 53,000 bales per year the last five years, was only 1,3 00 bales shy of the record when its 1998 season ended. Termed a "super-gin," ACG began in 1973 as Crosbyton, Wake and McAdoo co-op gins consolidated to enhance the grower's ability to make a profit by increasing volume. This mission was enhanced by the co-op Working with the Plains Cotton Cooperative Association, Lubbock, Texas, to create its own marketing pool and to test what later became the common practice of moduling cotton to separate the harvesting and ginning functions. When ACG opened, it was the largest cotton gin in the world. Still one of the largest gins on the South Plains, ACG has the ability to gin up to a thousand bales per day.

Carry new Amalgamated CEO

After the announcement that Amalgamated Sugar Co. Chief Executive Officer Allan M. Lipman would step down, it was announced that Larry Corry, president of Amalgamated Sugar, was named CEO of Amalgamated and president of the Snake River Sugar Cooperative, positions previously held by Lipman. Corry joined Amalgamated in 1968 and served in various positions. The coop owns Amalgamated. Lipman was part of Idaho's sugar beet industry for 25 years. Under his leadership, Amalgamated became the second-largest sugar beet processor in the nation. It won the Arthur Anderson 1998 international best practices award for "unleashing the power of technology. "Allan's leadership has made an extraordinary impact on Amalgamated and on the nation's sugar policy," Terry Ketterling, Amalgamated board chair, said at Snake River's annual meeting. Amalgamated supplies almost 14 percent of the nation's beet sugar production.

This new hog research facility has been opened by Cooperative Researc Farms in Iowa to conduct trials to breed healtheir livestock.

Photo courtesy CRF

CRF opens new hog research facility

Cooperative Research Farms recently completed a new state of the art 1,000 head swine research nursery. The facility built at the Land O'Lakes Answer Farm near Fort Dodge, Iowa is designed to conduct trials on high-health-status pigs and provide CRF membership with proprietary swine starter nutritional and management-related information. CRF is an innovative, multinational organization of eight regional cooperatives from the United States, Canada, and France. CRF members have worked together for more than 45 years conducting livestock and poultry nutrition- and management-related research for the benefit of their farmer-owners. CRFs members are Agway, Syracuse, N.Y.; Co-op Atlantic, Moncton, New Brunswick, Canada; Cooperative FederEe de Quebec, Montreal, Quebec, Canada; Federated Co-operatives Limited, Saskatoon, Saskatchewan, Canada; Land O'Lakes, St. Paul, Minn.; Southern States Cooperative, Richmond, Va.; Tennessee Farmers Cooperative, LaVergne, Tenn.; and UNCAA Division Productions Animales UCAAB, Chateau Thierry, France.

Farmland sells hog plant, introduces branded bread

Farmland Industries, Kansas City, Mo., the nation's largest farmer-owned cooperative, sold its Dubuque, Iowa, pork processing plant to Virginia-based Smithfield Foods, the world's largest hog producer and packer. Terms of the cash purchase were not disclosed. The plant was part of Farmland's refrigerated foods group, headed by Bill Fielding, who said the sale was "the first step in an overall plan to strengthen our pork operations. After a detailed analysis of the needs of our producer-owners, we have determined that, as a cooperative, our limited capital would be better spent on improvements and expansion at other Farmland facilities." The deal will result in the elimination of 1,000 jobs when slaughter operations cease. Hog producers also must scramble because they no longer have a local buyer. Meanwhile, Farmland is testing its transferability to grain-based products with the introduction of its own branded bread line. "Bread is the perfect item for us to see how the brand will work on new food products," said Ken Thomas, director of the co-op's grain processing division. "Think about what you eat with meat. Some type of bread is always involved. We're going to leverage the brand recognition that Farmland has in another part of the supermarket. If marketing Farmland branded bread works, it well tell us a lot about the potential market power of the brand." Farmland's bread venture is the result of a partnership with Gerard's, a Longmont, Colo., bakery owned by Mountain View Harvest Cooperative. The farmer-owned cooperative got into the bakery business to link its producers - mainly eastern Colorado wheat growers to consumers.

Canadian, U.S. potato farmers work together

U.S. and Canadian potato growers have voted to create an alliance designed to help them survive an unsettled agriculture market and get the best possible prices for their product. Representatives from major production areas in the United States and Canada met recently in Boise and voted unanimously to unite. "The main reason we all got together is that the contracts are just so low," said John Thompson, the communications director and acting president of the Potato Growers of Idaho. "Everybody is right at breakeven or just hanging in there," he said. "The average grower return right now is probably $5.25 to $5.75. We see all the increases with fuel and interest rates, seed prices were more this year. All that says it will cost more to produce potatoes in the next two years than it ever has." Thompson said the growers agreed to work together and share knowledge instead of competing and trying to undercut each other. The Potato Marketing Association of North America, Potato Growers of Idaho bargaining associations, bargaining cooperatives, and state and provincial grower associations agreed to create a communications network and share information, help each other in contract negotiations, hold regular meetings and actively support the efforts of the Potato Marketing Association of North America. The organizations also agreed to have each growing region determine its production costs and the impact increased oil prices have on production expenses, then meet and evaluate the information. It will be used when negotiating the 2001 potato processing contracts. Organizations involved in the agreement are Potato Growers of Alberta, Potato Growers of Washington, Malheur Potato Bargaining Association, Red River Valley Potato Growers Association and Wisconsin Potato and Vegetable Growers, among others.

USDA co-op resources on the Web

Looking for quick information, rural economic development resources or details about how USDA can help coooperatives? Contact these Internet websites:

Homepage: www.rurdev.usda.gov/rbs/coops/csdir.htm

What we do: www.rurdev.usda.gov/rbs/coops/cswhat.htm

Organizational structure: www.rurdev.udsa.gov/rbs/coops/csorg.htm

Special initiatives: rurdev.usda.gov/rbs/coops/csspec.htm

Rural Cooperative Development Grant Program: www.rurdev.usda.gov/rbs/coops/rcdg.htm

National Sheep Industry Improvement Center: www.rurdev.usda.gov/rbs/coops/cssheep.htm

Appropriate Technology Transfer for Rural Areas (ATRA): www.rurdev.usda.gov/rbs/coops/attra.htm

Research on Rural Cooperative Opportunities and Problems via Cooperative Agreements: www.rurdev.usda.gov/rbs/coops/rrcop.htm

Publications: www.rurdev.usda.gov/rbs/pub/newpub.htm

Rural Cooperatives Magazine: www.rurdev.usda.gov/rbs/pub/openmag.htm

Cooperative Information Report: www.rurdev.usda.gov/rbs/pub/cooprpts.htm

Research Reports: www.rurdev.usda.gov/rbs/pub/research.htm

Service reports: www.rurdev.usda.gov/rbs/pub/service.htm

Miscellaneous reports: www.rurdev.usda.gov/rbs/pub/miscell.htm

Contact index for State Office Cooperative Specialists: www.rurdev.usda.gov/rbs/coops/cscontact.htm

There is a large selection of USDA Rural Business-Cooperative Service co-op information, research and service reports. "Direct Marketing today: Challenges and Opportunities" is now available on the Web in PDF format at www.ams.usda.gov/directmarketing/DirectMar2.pdf This publication, in cooperation with Cornell University Extension, discusses the results of focus groups (with producers and facilitators) about direct marketing hosted by USDA. A print publication will be available soon and can be ordered in advance from Velma Lakins at velma.lakins@usda.gov

"Small Farmers Success Story" are four bulletins that describe a project through which a group of limited-resource growers in the northern Florida area formed a co-op to market fresh produce to local school districts. The bulletins outline the experiences of the New North Florida Cooperative, now in its third school year of operation. They are available in PDF format at www.ams.usda.gov/tmd/mta/publications.htm

Jude says permit properly granted to Golden Oval

District Court Judge Artis 1. Reis ruled that a state construction permit was properly granted to Golden Oval Eggs' new laying and processing facility in Winnebago County, Iowa, the Renville, Minn., company announced. A citizen group had filed a lawsuit in August 1999 seeking to block the egg facility. It challenged the permit granted by the Iowa Department of Natural Resources (DNR). The judge dismissed the case and assessed costs to the citizens group, Citizens Against Golden Oval. Cooperative officials said construction continues at the Winnebago site. The operation eventually will use 7 million chickens, making it the largest animal confinement facility in the state. Golden Oval is a farmer owned cooperative. Its production site in Renville has about 2 million hens and produces about 55 million pounds of eggs annually.

Co-op communicator Reuweed dies

Dan Reuwee, 56, director of cooperative communications and media relations at Diary Farmers of America (DFA), Kansas City, Mo., died April 2 due to complications after a recent surgery. Reuwee earned a Bronze Star while serving in the Army in Vietnam. In 1969, he earned a master's degree from Ohio State University. Before the formation of DFA, Reuwee was director of communications for Mid-America Dairymen, Springfield, Mo. He also had worked with the American Soybean Association and Future Farmers of America. He was an active member of the Cooperative Communicators Association and the communications committee of the National Milk Producers Federation. Reuwee is survived by his wife, Barbara, Liberty, Mo.; and two children: Laura, New York City; and Brian, a junior at the University of Missouri, Columbia; as well as his mother and sister, both in his native Ohio.

Delta-Montrose installs first propane fuel cell

The Delta-Montrose Electric Association made history this spring with the startup of a 10-kilowatt propane-powered fuel cell system at DMEA's headquarters in Montrose, Colo. This prototype, built by H Power of Clifton, N.J., is reputedly the first in the nation outside of a laboratory that runs on propane, a fuel readily available in areas served by rural electric cooperatives. "We're proud to be in the vanguard of fuel cell installations nationally," said Dan McClendon, DMEA's general manager. "Sixty-two years ago our cooperative was formed to bring electric power to rural areas at a time when for profit utilities were not interested in providing electric service to our communities. Fuel cells represent an exciting way to continue our mission of providing power to areas not currently served through traditional means." DMEA's propane fuel cell is the first of a series of units which will be installed by rural electric cooperatives working with Energy Co-Opportunities (ECO), a national cooperative created to assist electric distribution cooperatives in diversifying into new energy services. ECO recently entered into a partnership with H Power, a world leader in fuel cell technology, to bring residential and small commercial fuel cells to rural electric cooperatives and their members. "The installation at DMEA's building will help sharpen the cutting edge of this technology and hasten the time when ECO fuel cells will be available to members of DMEA and other cooperatives across the nation ," said Bill Cetti, ECO's vice-president of distributed generation solutions. "We appreciate DMEA's leadership and hard work in making this historic event possible".

Rural Cooperatives such as Delta-Montrose in Colorado are leading the way with the installation of a 10 kilowatt propane-powered ruel cell system.