NEWSLINE



MD/VA Milk Producers
buy Giant Foods milk plant
Maryland & Virginia Milk Producers Cooperative, Reston, Va., has agreed to purchase Giant Food’s dairy processing plant in Landover, Md., effective March 25, 2006. In addition to the plant and 11 acres, Maryland & Virginia secured a long-term supply agreement to provide Giant Food stores with fresh milk. When the deal is finalized, Maryland & Virginia’s combined fluid milk processing business will have more than $270 million in total sales and nearly 800 employees.

Currently, the Giant Landover plant processes about 21 million pounds of milk per month, caters to 191 grocery stores and employs 97 people. Maryland & Virginia, which had 2004 revenues of $821 million, has been the sole raw milk supplier there for more than 30 years, so few operational changes are expected.

“Maryland & Virginia has a vested interest in making sure consumers have a fresh, local milk supply; the Giant Landover operation is a perfect complement to our existing fluid processing business and our local members supplying the milk,” said Jay Bryant, the cooperative’s general manager, “ adding that the co-op has served the D.C. metropolitan area with milk and dairy products since 1920.

“The co-op has been in the fluid milk business for decades and is committed to the plant and the dairy farmers,” said Bill Holmes, executive vice president of Giant Food. “Giant consumers will continue to enjoy the same fresh quality milk that they have come to expect when shopping at Giant.”

The plant will be operated as Marva Maid of Landover, the name of the cooperative’s private milk brand, which is already available in northern Virginia. The plant will continue to produce Giant’s private-label milk, according to the cooperative’s new supply agreement with Giant Food. Owned and operated by 1,500 dairy farm families from Pennsylvania to Georgia, Maryland & Virginia is a milk marketing and processing cooperative providing consumers throughout the Mid- Atlantic and Southeastern United States with fresh milk and dairy products. The co-op also owns and operates two fluid processing plants, Marva Maid in Newport News, Va., and Maola Milk and Ice Cream Co. in New Bern, N.C., a manufacturing plant in Laurel, Md., and an equipment warehouse business in Frederick, Md.

Stacyville Cooperative Creamery
merges with Foremost Farms USA
Cooperative Creamery in Stacyville, Iowa, merged with Foremost Farms USA on Jan. 1. Stacyville’s members approved the merger on Dec. 12, whereby Foremost Farms will assume the equity investments of all Stacyville members. Stacyville Cooperative, in Mitchell County in north-central Iowa, formed in 1916 and has 66 members whose farms border the western edge of the Foremost Farms membership area.

“Our members’ equity in Stacyville Co-op Creamery will be matched dollar for dollar by Foremost Farms,” Stacyville Manager Randy Stephenson said. “Foremost Farms is one of the most financially stable cooperatives in the U.S. dairy industry, with a diversified product base and comprehensive member services. We are proud to be joining forces with a cooperative that is fiscally responsible and recognizes our members’ investment.”

Foremost Farms Chairman Ed Brooks, Reedsburg, Wis., said, “We welcome the opportunity to grow our milkshed in Iowa, and look forward to working with the new membership.” Foremost Farms, headquartered in Baraboo, Wis., recently marked its 10th anniversary. It operates 20 manufacturing facilities and one milk transfer station for its 3,600 dairy farmer-members. Its brands include GG Golden Guernsey Dairy and Morning Glory.

Johanns featured speaker
at Co-op Summit in D.C.
Agriculture Secretary Mike Johanns will be the featured speaker at the National Co-op Summit, an unprecedented gathering of up to 400 cooperative business leaders May 3 in Washington, D.C. USDA has vast influence over cooperatives of all types, including utility, housing and farmer co-ops. USDA Rural Development is the only federal agency with a cooperative services office, which provides coop research, education (including Rural Cooperatives magazine), technical assistance, statistics and development. Johanns will be the Summit’s lunch speaker.

Earlier in the day, former Congressman Glenn English, now chief executive of the National Rural Electric Cooperative Association, will provide the keynote address. Other confirmed speakers include Pauline Green, former European Parliament member and current head of Co-operatives UK, and Stephanie McHenry, board chair of the National Cooperative Bank.

Breakout sessions will cover the hottest co-op issues, including: marketing, ethics and governance, finance and equity, co-op conversions, domestic and international co-op development, crosssector issue alliances, and co-op solutions for disaster recovery. The Summit will conclude with a panel of co-op sen- ior leaders discussing the top challenges and opportunities facing the community.

“The Summit will bring together representatives of every type of co-op from across the nation,” says Paul Hazen, president of the National Cooperative Business Association (NCBA), which is organizing the Summit with help from the nation’s leading cooperatives and their trade associations. The event will also mark NCBA’s 90th anniversary. “Attendees will come away with the sense that they are part of something much bigger than their co-op or even their sector. The Summit also will help them be more successful and reveal how co-ops can improve their communities.”

The Summit will take place in the Ronald Reagan Building and International Trade Center in downtown Washington.

The May 3 date dovetails with other co-op events in Washington, including the Cooperative Hall of Fame Banquet and Induction Ceremony and key meetings for electric, housing and student co-ops and credit unions. NCBA’s annual meeting will follow the Summit by one day.

For additional information or to register on-line, visit: www.ncba.coop. Media interested in attending should contact Art Jaeger at 202-383-5462 or ajaeger@ncba.coop.

Iowa turkey co-op to market
for Norbest, Moroni co-ops
Sales and marketing operations for Nebraska’s only turkey processing plant and its widely known Norbest label will move from Utah to Iowa, effective May 1. The Omaha World- Herald reported that the Nebraska Turkey Growers Cooperative and its sister cooperative, Moroni Feed Co. in central Utah, are merging sales efforts with processed meat, poultry and cheese manufacturer West Liberty (Iowa) Foods LLC. Iowa Turkey Growers Cooperative is majority owner of West Liberty Foods. Norbest products will continue to be processed by the plant in Gibbon, Neb., which employs 250 people, and by two plants in Utah that employ a total of about 800 people.

About 22 people selling and marketing Norbest products out of Midvale, Utah, will be laid off or offered new positions in Iowa, Paul Reed, director of marketing for the Norbest label, told the World-Herald. The Norbest label was created by the Northwestern Turkey Growers Association, founded in 1930 in Utah. Members of that first cooperative have changed over the years, and the organization has evolved into Norbest Inc. Marketing, based in Utah for 75 years.

Norbest products are sold across the United States as well as in Mexico and the Caribbean, Middle East and the Pacific Rim.

Norbest and West Liberty will benefit from the coming change, Reed said. West Liberty gains the national Norbest brand familiar to grocery shoppers and Norbest gets an expanded ability to produce sliced luncheon meats and other products, he said.

Dairy Development Grant awarded
to Accelerated Genetics
Accelerated Genetics, Baraboo, Wis., has been awarded a Dairy Development Grant by the state of Wisconsin to develop a handheld computer software program for reproductive management on dairy farms, otherwise known as the Accelerated Synchronization Assistance Program (ASAP). Funds are being provided under Wisconsin’s Local Dairy Development Pilot Grant program, which helps small dairy producers and cooperatives develop new strategies, products or ideas.

Accelerated Genetics says it demonstrated that ASAP technology can dramatically improve reproduction performance and quality of life for Wisconsin dairy producers, and that the coop has the technology, network and human resources to succeed with the project. The co-op says ASAP will fill a tremendous need for simplified reproductive management by providing an easy-to-use, versatile record-keeping system. ASAP is already assisting producers in breeding their cows on time and increasing pregnancy rates.

Co-op members already using the ASAP systems praise it for helping them maintain better records for shots, breeding and herd health checks. Portability means they can carry it everywhere and synchronize heifers. The grant was awarded for development of ASAP within the state of Wisconsin. Accelerated Genetics has already made a major investment in the program from software design, personnel, employee and customer training, ASAP kit hardware and in advertising. Accelerated Genetics is a global provider of bovine genetics and research, reproductive services and solution-based animal health products.

CoBank earnings, patronage up in ‘05
CoBank reported 2005 year-end
earnings of $298 million, an increase from $275 million in 2004. This represents an 8-percent increase that was driven largely by a lower provision for credit losses, reflecting improved credit quality and a lower level of losses on debt prepayments, which more than offset a decline in net interest income.

“CoBank has once again closed the year with higher earnings than ever before,” says Douglas D. Sims, CEO of CoBank. “We also increased our capital, maintained strong credit quality, continued to improve the effectiveness of core business processes and expanded our relationship with other Farm Credit System institutions.”

For 2005, CoBank will pay a patronage distribution of $168 million to its customer-owners, of which $116 million will be in cash and the remainder in stock. Patronage represents a 15.8 percent return on average invested capital for customer-owners. “Our success is built on their (customer) success, and we share our financial success with our customer-owners through patronage,” Sims said. For the past 5 years, CoBank customer-owners received an average of $151 million per year in cash as a result of their investment in the bank.

CoBank’s capital remained stable at $2.9 billion, and assets increased to $33.8 billion from $30.9. Total loans and leases outstanding to U.S. and international customers increased to $26.3 billion, from $24 billion at the end of 2004. This growth was primarily due to increases in agribusiness loan volume, lending to Farm Credit associations and loans to rural energy customers.

Countrymark secures financing
for clean-diesel fuel complex
Indianapolis-based Countrymark Cooperative, Indiana’s largest supplier of biodiesel fuel, has secured a $50-million line of credit to complete construction of a $45-million, clean-diesel fuel complex. Countrymark will also use some of the financing to upgrade existing facilities. The financing was arranged through Chicago-based LaSalle Bank NA. Countrymark supplies roughly 85 percent of the state’s biodiesel, most of which is used for agricultural applications. Countrymark hopes more municipal and school bus systems start using the technology.

“We see tremendous air quality benefits,” says CEO Charlie Smith. “If you think about the average school kid waiting in line, breathing diesel air emission, and then think about inhaling biodiesel air, there is a significant difference.”

Barth to lead Dakota Pride
Leland “Judge” Barth, a former marketing specialist with the North Dakota Wheat Commission and the state Agriculture Department, has been hired as the first executive director of the Dakota Pride Cooperative. Dakota Pride was formed in 1998 by North Dakota Farmers Union members. It markets specialty crops grown by co-op members based on buyer specifications. Barth will oversee day-to-day operations and market development, and also will work with producers. “This will take us to the next level in connecting growers to end users,” said co-op President Richard Schlosser.

DFA expands stake
in Keller’s Creamery
Dairy Farmers of America Inc. (DFA) has acquired all of the ownership interests in Keller’s Creamery LP, the nation’s second largest manufacturer of butter for retail, food service and industrial uses. Keller’s was formed in 2000 as a joint venture between DFA and Frank Otis and Glenn Millar, the former management team of Sodiaal North America Corporation. DFA now becomes the majority owner of the partnership in the butter business and will oversee the management of Keller’s warehouse and office operations in Harleysville, Pa., and the butter processing plant in Winnsboro, Texas.

Keller’s Creamery has been producing dairy products for more than a century. In 2003, the Texas plant churned cream into more than 100 million pounds of dairy products, including premium and bulk butter, butter oil, nonfat dry milk powder and other dairy ingredients. Mark Korsmeyer, president of DFA’s American Dairy Brands (ADB) division, will manage Keller’s marketing, sales and manufacturing functions.

USDA awards $21 million
for energy projects
Agriculture Secretary Mike Johanns has awarded 14 grants and one loan guarantee totaling more than $21.6 million to increase energy production or improve electrical service and energy efficiency in communities in five states. “Increasing domestic energy production, including the development of farmbased energy sources, helps to strengthen the economy of rural America and reduces our dependence on imported oil,” Johanns said while in Ames, Iowa. “These funds will also help to promote energy efficiency by improving our existing electrical infrastructure.”

In Clinton, Iowa, a USDA Rural Development Renewable Energy Systems loan guarantee of $3.22 million will be used to partially fund construction and operation of a biodiesel production plant with a yearly capacity of 10 million gallons (see page 35). The plant will use over 7 million bushels of Midwestern-grown soybeans per year. It is the first production facility to be located in a new, 233-acre industrial park in Clinton.

Pioneer Electric Cooperative in Greenville, Ala., will receive $855,000 under the High Energy Cost Grant program to install energy-efficient heating systems and appliances and to weatherize the homes of low-income customers, cutting energy costs by as much as 40 percent. The Alaska Village Electric Cooperative will receive a grant of $1.15 million to construct a wind turbine in the fishing community of Hooper Bay, reducing the demand for diesel fuel for electrical generation by 24 percent.

The Sacred Power Corporation will receive $1.9 million to provide hybrid solar power stations to individual homes on the Navajo Reservation in the Cameron, Ariz., area that have no electrical service and currently use gasoline generators. Other grant awards will be used for hydro project repairs and electrical service improvements. The grants are awarded under a USDA Rural Development program intended to upgrade service and reduce energy costs in communities where the cost of power is at least 275 percent of the national average. A complete list of the grant recipients is available at: http://www.rurdev.usda.gov.




FCS report sees
expanding rural
opportunities

While the number of farmers and communities that rely on agriculture for their economic well-being have declined, the future of U.S. agriculture remains bright. Future possibilities are expanding, not contracting, according to Farm Credit

HORIZONS, a comprehensive, nationwide-research study released by the Farm Credit System, the nation’s producer-owned farm lending network. Facing a rapidly changing global marketplace and structural change, American farmers, ranchers and rural entrepreneurs need reliable access to a broad range of financial services and expertise in order to capitalize on emerging growth opportunities, the report finds.

“Today’s rural entrepreneurs, including farmers and ranchers, are on the leading edge of a global agricultural economy,” says Wayne Lambertson, a Maryland farmer who serves as chairman of the Farm Credit Council board of directors. “As this research makes clear, rapid change requires greater flexibility on the part of the institutions that U.S. agriculture and rural America rely on. Yesterday’s ways of doing business simply will not work to ensure the continued success of agriculture and America’s rural communities.”

The report describes the need for policy solutions that will help farmers, rural businesses and rural communities succeed in the emerging marketplace. The HORIZONS project has helped identify how incremental changes to the Farm Credit System can provide agriculture and rural America greater access to additional capital that can be used to expand agriculture’s contribution to rural prosperity.

The HORIZONS report contains the following key findings: Copies of the HORIZONS final report may be downloaded from: http://www.fchorizons.com. To request a printed copy, contact the Farm Credit Council by mail: 50 F St., N.W. Washington, D.C. 20001.





March/April Table of Contents