PAGE FROM THE PAST
From the archives of Rural Cooperatives
and its predecessor magazines
50 Years Ago…
From the April 1956 issue of News for Farmer
Cooperatives
Florida Citrus Co-ops Look to Exports
“A group of Florida citrus men (mostly co-op
representatives) recently made a 10-day tour of
European markets. This trip was unusual for several
reasons. It was made in the midst of the busy citrus
season, not during the usual summer holiday. This
afforded an opportunity to witness the sale of competing
fruits in the markets of Europe. Furthermore, this
trip represented a new approach to expanding markets via an
industry committee — a cooperative approach.” Participants
included representatives from Florida Citrus Mutual,
Waverly Growers Cooperative and Seald-Sweet, among
others.
Challenge to Marketing Cooperatives
Can marketing cooperatives keep pace with the rapid rate
of changes occurring in the business world? Yes, says Joseph
Knapp, administrator of the Farmer Cooperative Service.
“But they cannot afford to allow themselves the luxury of
complacency.” He examines the question against a backdrop
of a nation “enjoying unparalleled prosperity” while farmers
“struggle with a cost-price squeeze.” Knapp says marketing
co-ops must be able to affirmatively respond to four questions:
Can they reduce farmers marketing costs? Can they
help farmers find and develop markets? Can they help farmers
improve their bargaining power? Can they help farmers
increase their shrinking returns?
Should Co-ops Rotate Directors?
“Periodic rotation of directors can inject new enthusiasm,
new ideas and new perspectives on old problems. Some proponents
of rotation advocate specific bylaws stipulating that a
director may not succeed himself for more than a specified
number of terms in office. But others feel that arbitrary termination
of board membership may cost the cooperative
dearly. It is one thing to be able to eliminate unwanted directors,
but quite another to force a good man out of office.
Automatic rotation runs this risk.
30 Years Ago…
From the April 1976 issue of Farmer Cooperatives
High Milk Costs? Try Doing it Yourself!
Alan V. Lambert, communications director for the
National Milk Producers Federation, takes over the Guest
Editor’s Corner column to argue that milk is still a bargain
for consumers. “In the Washington, D.C. area, the farmer is
currently getting 47 cents per half gallon of raw milk,” he
notes. If it were feasible for consumers to buy directly from a
farm, they would have to drive about 50 miles, then would
need a home pasteurizer and would likely have to forgo
homogenization, etc. Ultimately, such a do-it-yourself
approach would wind up costing the consumer about $5.47
per half gallon and a lot of time and convenience, he calculates.
“So the next time you buy a half gallon of milk for 82
cents, think about the services the dairy co-op and milk
processor have provided for your convenience.”
Securities Situation Concerns Farmer Co-ops
A lengthy article notes that ag co-ops that issue “investment
paper” have generally been considered exempt from
registration under the Securities Act of 1933, and under the
“blue sky” laws of states in which they operate. “But recent
developments have raised some doubt as to whether all paper
issued by ag co-ops is, in fact, entirely exempt from the 1933
act or the blue sky laws. The whole area of paper issued by
cooperatives has come under closer scrutiny during the past
few years.” The article goes on to examine the issue in detail,
including what is involved in registering with the SEC and
state securities commissions. It says the process is long and
expensive, and that most co-ops that have done so have the
luxury of an in-house attorney on staff.
Farm Credit System Loans Top $30 Billion
Farm Credit System loans to farmers and farmer cooperatives
in 1975 soared 10 percent from the year before, to a
record $30.2 billion. Despite the 10-percent increase in loans,
farm borrowing slackened in 1975 compared with the pace in
recent years. Loans increased 16.5 percent in 1974 and 40
percent in 1973. FCA Governor W.M. Harding attributed
the moderating loan demand primarily to farmers’ use of
funds accumulated in the good years of 1973 and 1974.
10 Years Ago…
From the Jan./Feb. and March/April 1996 issues of
Rural Cooperatives
Co-op Share of Farm Marketings Hits 14-Year High
U.S. farmer co-ops had sales of $65.5 billion — accounting
for 31 percent of the nation’s crop,
livestock and milk sales — in 1994.
That was up from 29 percent in 1993 and matches the
previous record set in 1975 and last matched in 1980.
U.S. co-ops also sold $20.8 billion worth of major
farm production supplies, accounting for 29 percent
of the nation’s total, up from 28 percent in 1993.
Business Is Cooking for Plains Co-op Oil Mill
Its cotton seed volume has outpaced processing
capacity in recent years, so Plains Cooperative Oil
Mill — which processes cooking oil from cotton seed
— has been forced to sell whole seed to other processors.
The co-op’s board has thus made a decision to
expand its own operations. “However, we couldn’t
expand on this location,” says PCOM Manager
Wayne Martin, so it is scheduled to break ground in
the spring on a major new expansion about 2 miles
from its existing plant in Lubbock, Texas. The new
oil mill will boost the co-op’s maximum annual production
from 500,000 tons of seed to 675,000 tons — double its
capacity of 15 years earlier.
Biotechnology and implications for ag co-ops
“As of December 1995, 12 genetically engineered crops
have been approved for commercial sale. Perhaps the most
important impact plant biotechnologies will have on cooperatives
is to increase the amount of vertically integrated contacting,”
says the first of a series of three articles on the topic.
“Under vertical contracts, the processor owns the product in
production, while the contractee generally furnishes the labor
and facilities for production. Private companies that own a
biotechnology can control how and to whom they contract
their product. Thus, cooperatives may face new obstacles in
gaining access to intellectual property rights for biotechnology.
Co-ops and other “outsiders” may have to resort to new
forms of vertical coordination to secure biotechnologies for
their members.
