N E W S L I N E
Earnings double for AGP
Favorable market conditions which gave the Ag Processing Inc. (AGP) cooperative of Omaha, Neb., a substantial boost in earnings for fiscal 2001 are expected to continue into 2002, CEO Marty Reagan told delegates attending the cooperative's annual meeting. The world's largest cooperative soybean processor showed pre-tax earnings of $46 million, more than double the 2000 rate. Sales of $1.8 billion were up 9 percent, not counting the result of sold operations. After taxes, net income reached $26.9 million, up 61 percent from $16.6 million in 2000. AGP will also return $14 million in cash patronage to its local and regional cooperative members.
Nebraska perch co-op helping
meet demand
$3 billion each year in Mississippi. Although it's aquaculture industry is much smaller as this point, Nebraska has good natural water resources and its young aquaculture industry is supported by 50 fish farms. The perch cooperative grew from discussions about economic development options in the traditional Sand Hills ranching areas. Pollution, over fishing and predators have left the Great Lakes fishery, which used to provide 1 million fish per week, in dramatic decline. Producers from Nebraska, Tennessee and North Carolina are part of the trend to send fingerlings to Wisconsin and Michigan for fattening. The cooperative's future plans include securing a processing plant to fillet the perch with less waste. It also plans to secure portable sorting tanks to separate fish by size for shipment.
Dairy industry aids
victims of terrorist attacks
Victims of the Sept. 11 terrorist attacks will benefit from $83,300 in dairy industry contributions to the American Red Cross Liberty Fund. Dairy farmers supported the relief effort via the National Milk Producers Federation, in conjunction with Dairy Relief Inc.
The largest contribution of $45,500 came from Dairy Farmers of America, followed by United Dairy-men of Arizona, $13,799, and California Dairies with $10,000. Other co-ops have contributed many tens of thousands of dollars through other relief funds.
Koligian resigns from
raisin association
Vauglua Koligian brought to an end his 12-year reign as chief executive officer of the Raisin Bargaining Association based at Fresno, Calif., with his resignation in late December. The resignation came even though the board had earlier extended his contract for 3 years. Koligian had successfully negotiated annual prices with packers for more than a decade, but last year's negotiations were extremely contentious, and binding arbitration was invoked for the first time in the association's 34-year history. A world raisin surplus has resulted in low prices, but many in the industry have credited Koligian for making the best of a difficult situation.
Reports at press deadline for this issue were that Glen Gotto has been selected to replace Koligian. Gotto works for a handler, Pacific Sourcing, and serves on the Raisin Administrative Committee (RAC) as a medium-size handler member. He is also chairman of the RAC's Reserve Sales Subcommittee.
Sen. Grassley launches
ag marketing center
A new agricultural marketing center at Iowa State University (ISU) in Ames dedicated to collecting and distributing information to promote value-added agriculture was formally launched Jan.9 with the presentation of a $5 million check from USDA Rural Development. Iowa Sen. Charles Grassley said the center will play a crucial role in helping farmers earn more from their crops and livestock.
"Farmers know that to remain competitive, they must capture more income through value-added processing of their commodities," Grassley said. "Timely flow of information will be critical to the success of such efforts, and this center promises to play an exciting part in the exchange of crucial ideas."
The center will be supported by a multi-state consortium that includes Iowa State University, Kansas State University, Oklahoma State University and the University of California Davis. Mary Holz-Claus of ISU Extension, will administer the grant. The partnership will provide resources to support marketing initiatives of value-added cooperatives throughout the United State, said Randall Torgerson, deputy administrator of USDA's Rural Business-Cooperative Service. Accepting the $5 million ceremonial check was ISU President Gregory Geoffroy.
Lamb processor partners
with Wyo. producer co-op
Wyoming's Mountain States Lamb and Wool Cooperative (MSL&W) has announced it is partnering with B. Rosen & Sons Inc. (Rosen), a leading supplier of fabricated lamb meats and products. Under the terms of an agreement, MSL&W and Rosen will join forces as Mountain States/Rosen, LLC. MSL&W will supply its highest quality lambs to existing Rosen processing and distribution facilities in New York, N.Y., and Greeley, Colo.
The new entitv will continue to use Rosen's labels and trademarks, including the "Cedar Springs" line of lamb products. New product lines, capitalizing on the "Mountain States" and "producer-owned" images will be developed in the near future.
Golden Growers shows profit
A North Dakota corn processing cooperative, once on the brink of bankruptcy, has extended its profitability record to 3 years, according to chairman Carl Larson. For fiscal 2001, Golden Growers Cooperative reported earnings of $2.9 million. Shareholders, however, will not receive dividend payments, although the stock value increased about 19 cents per share.
The co-op lost $16 million in its first 2 years of operations due to plummeting corn fructose prices. In 1997 it entered into a joint venture with Cargill to manage its facility.
Golden Growers represents 1,900 corn growers in North and South Dakota and Minnesota. It joined American Crystal Sugar Co. and Minn-Dak Farmers Cooperative in building the $261 million ProGold processing plant near Wahpeton in 1996. Current profits, said executive vice president Mark Dillon, represents lease payments and plant improvements more than corn syrup sales. However, the processing plant has increased corn prices about 10 cents per bushel above local elevators in the region to ensure a supply for the plant which consumes 85,000 bushels of corn every day.
West Liberty Foods expands
The community of Mount Pleasant, Iowa will gain 225 jobs when a meat-processing plant owned by a poultry cooperative opens in 2003. West Liberty Foods is owned by Iowa Turkey Growers Cooperative, which supplies 90-million pounds of meat to the food industry, including Subway Sandwiches. The cooperative will invest $7 million to buy an existing building and add an annex to suit the operation. The new plant will be named Mount Pleasant Foods. West Liberty Foods also operates Sigourney Foods.
Oregon farm supply
cooperative to close
In sign of further fallout from troubles in the Northwest fruit and vegetable processing industry, the 445-member Eugene (Ore.) Farmers Co-op has opted to close. The 67 year old local supply cooperative hopes to gain some limited return on a sale of assets. Factors contributing to the closure were low crop prices being earned by members, fewer farmers and the earlier demise of Agripac, a vegetable processing cooperative.
Pro-Fat co-op pays dividend
A dividend of 43 cents per share was paid in late October by Pro-Fat, the agricultural marketing cooperative based at Rochester, N.Y, to its Class-A preferred stockholders. The cooperative has more than 600 member-growers who process their fruit, vegetables and popcorn through Agrilink Foods, Pro-Fat's wholly owned subsidiary. The food cooperative, with $1.3 billion in annual sales, owns a number of nationally known brands, such as Birds-Eye and Veg-All.
LOL, DFA shifting
milk to Kraft plant
Both Land O' Lakes (LOL) and Dairy Farmers of America (DFA) are shifting milk supplies to the former Kraft Foods cheese plant at Melrose, Minn., which they jointly purchased last year. The shift in supplies is resulting in altering of operations at some of the two co-ops' smaller plants. LOL closed its cheese manufacturing operations at Perham, Minn., in February while continuing to focus its operations on high-potential, high-value whey proteins. Cheese production had earlier been cut back at Perham due to reduced milk supply.
"The adjustments in product mix will enable us to improve milk utilization in our Upper Midwest operations," said Fernando Palacios, LOL vice president for dairy foods operations and supply chain. DFA earlier stopped cheese production but continued whey operations at Fergus Falls, Minn.
Welch's shifts staff
from Westfield
Welchs, the standard bearer in the grape processing industry, has ended a traditional presence in Westfield, N.Y, which began more than 100 years ago when the company founder moved the operation there. In a move to save money and blend its corporate office operation into its headquarters staff at Concord, Mass., Welch's pulled its 93 employees from Westfield, offering some an opportunity to relocate and others telecommuting jobs. Welch's parent firm, the National Grape Cooperative, will retain a staff of 12 in Westfield plus another 25 at a processing plant.
Concord and Niagara grapes used in the operation are still grown in the area. When Welch's moved its corporate offices to Concord in 1983, it had 380 employees at Westfield. The original Welch's plant, built in 1897, still exists. During its tenure in the community, the company and its employees were deeply involved with local school, contributing both time and money. In 2000, company employees founded a Junior Achievement chapter at the middle school and last fall Welch Treasurer Steve Robbins received the district's Friend of Education award.
DFA gains plants from
Suiza/Dean merger
Diry Farmers of America (DFA) will increase its holdings as a result of facility spinoff required by the merger of Dean Foods' and Suiza Foods. Suiza was already the nation's leading dairy processor and distributor prior to the merger, and the new company (to operate under the "Dean" name) will have annual sales of about $10 billion.
To satisfy justice Department concerns about competition in particular areas, 11 dairy plants in eight states Alabama, Florida, Indiana, Kentucky, Ohio, South Carolina, Virginia and Utah are being sold to National Dairy Holdings LP (NDH). The newly formed partnership is half owned by DEN, which earlier joined with the same three partners to purchase six dairy plants in Southeast and Midwest areas where Dean and Suiza over-lapped. While DFA will not operate any of these new plants, its members will benefit from their sales.
Meanwhile, members of Minnesota based Land O'Lakes (LOL) gained about $44 million from the sale of five milk processing plants in 2000 to Dean Foods. LOL members continued to sell milk to Dean which, under a licensing agreement, markets milk, yogurt, sour cream and cottage cheese under the LOL brand. The two firms formed a joint venture to develop and sell convenience-oriented dairy products, including the Grip n' Go line of single-serve milk bottles.
New directory shows
Wis. co-op diversity
providing a useful snapshot and guide to the state's diverse cooperative sector, the University of Wisconsin's Center for Cooperatives has published a 2001 co-op directory, the first update since 1993. Dr. Robert Cropp, center director, says the state has nearly 800 cooperatives which serve almost 2.7 million members, although many people belong to more than one cooperative. Funding or the report came in part from the U.S. Department of Agriculture's Rural Business-Cooperative Service.
In Wisconsin, "cooperative" may only be included in the name of companies incorporated under Chapter 185 of the state's statutes. During the 1990s, the state saw the greatest resurgence of cooperative development since the 1920s. Despite the declining number of farms and farmer cooperative members, significant growth is coming from other areas, such as rural electric and telephone service, natural food cooperatives and credit unions. Today, they are marketing themselves as "financial cooperatives," even though they are organized under different statutes.
"They still share the democratic control principles and are user owned and controlled," said Cropp. "Their identification as cooperatives re-establishes a link that was long neglected."
The oldest cooperative, Mount Horeb Farmers Co-op, still exists as part of Premier Co-op. Eleven of the 309 original telephone cooperatives in 1912 still operate and serve more than 44,000 members.
Today, 25 rural electric cooperatives provide electricity to almost 190,000 members and their families. In 1938, 89 years after Anne Pickett pooled her neighbors' milk, a group of Waukesha County farmers chipped in $50 per cow to form Golden Guernsey Dairy. Today, the brand is marketed by Foremost Farms, one of the regional dairy cooperatives which together in 1999 generated $2 billion in sales in Wisconsin. Good Earth Co-op of Algoma, a food cooperative incorporated in the summer of 2001, is the newest entry.
"As these events suggest, cooperative history is dynamic and continues to be written," said Cropp. Copies of the directory may be obtained from the University of Wisconsin Center for Cooperatives, Room 230 Taylor Hall, 427 Lorch St., Madison, Wis. 53706.
Soybean cooperatives on rise
Interest in soybean processing cooperatives is on the rise, from Kansas to Minnesota, and North Carolina to Wisconsin. In some cases, producers are turning to soybeans as a replacement for lost tobacco markets. In others, animal feed and oil for conversion to diesel fuel are the goals.
Jim Dunphy, a soybean specialist with North Carolina State University, helped a dozen Tar Heel grain farmers form Grain Growers Cooperative. The impetus came from national tobacco settlement funds. Small, thin-coated Nato soybeans are popular in certain areas in Japan. The hefty premiums they are willing to pay are attracting grower interest, although no contracts had been signed at the time. Earl Hendrix, cooperative president, said farmers needed a number of similar niche markets to replace lost tobacco income.
Minnesota Soybean Processors Cooperative plans to build a 100,000-bushels-per-day crushing plant at Brewster. If construction begins this summer, production could start in 2003. The plant will be managed by South Dakota Soybean Processors, which operates a successful plant at Volga. Since 1996, it has paid more than $10 million in dividends to its members.
In Wisconsin, a steering committee is using an updated 1998 feasibility study to explore development of a similar facility. Wisconsin is the only major soybean-producing state that lacks a major processing plant. Crushed soybeans there would be used for livestock feed and the oil would be converted to biodiesel fuel.
At Grinnell, Kan., Co-Ag Cooperative is studying construction of a $1 million plant to extrude 760,000 bushels of beans per year that could be operational for the 2002 soybean harvest. Co-Ag supplies feed for hogs in eastern Colorado and cattle and sheep in northwest Kansas.
Swiss Valley Farms
wins NMPF honors
Both the Swiss cheese and Web site of Swiss Valley Farms, in Davenport, Iowa, were honored at the annual meeting of the National Milk Producers Federation. The cooperative's wheel of Swiss Traditions Swiss cheese was considered the most out-standing in the annual contest. In addition, the Web site launched last spring was rated tops in the communications competition.
New grain venture
named Horizon Milling
CH S Cooperatives and Cargill Inc. have chosen Horizon Milling as the name of their wheat-milling joint venture. It will combine the capacity of five CHS mills and 16 Cargill mills to give the firm a leadership position among U.S. millers. It will offer a broader, more consistent and reliable source of flour varieties. Cargill is the managing partner.
