NEWSLINE


Cass-Clay, AMPI propose merger
North Dakota-based Cass-Clay Creamery Inc. and Minnesota-based Associated Milk Producers Inc. (AMPI) announced plans in February to merge, which would create a dairy co-op with more than $1.1 billion in annual sales. The boards of directors of the two dairy cooperatives approved the merger, which will require approval by Cass-Clay members.

Together, the cooperatives would provide a complete line of dairy products to a regional and national marketplace. Based on Hoard’s Dairyman data for 2005, after a merger, AMPI would rank sixth nationally in milk production, nearly equal with No. 5 Dairylea.

“This merger is an exciting development for the farmer-owners, employees and customers of Cass-Clay,” says Keith Pagel, Cass-Clay president and general manager. “It will position us for long-term success in the dairy industry through gained efficiencies and the ability to offer a complementary line of dairy products to the marketplace.”

Known for quality fluid milk, ice cream and cultured products such as yogurt and sour cream, Cass-Clay® is a recognized dairy brand in the upper Midwest. AMPI is a private label manufacturer of consumer-packaged cheese, butter, instant milk and shelfstable dairy products.

“To compete in a rapidly consolidating food industry, Midwest dairy farmers and their cooperatives must look for new ways to work together,” AMPI General Manager Mark Furth says.

“This merger further illustrates our commitment to Midwest dairy farmers,” adds Paul Toft, chairman of the AMPI board and a Rice Lake, Wis., dairy farmer. “AMPI is solely focused on making the Midwest the best place to produce milk.”

To finalize the merger, the dairy farmer-owners of Cass-Clay must approve the transfer of assets to AMPI. The vote on the merger was to occur in March.

“Both cooperatives have outstanding reputations on the farm and in the marketplace,” says David Glawe, chairman of the Cass-Clay board and a Detroit Lakes, Minn., dairy farmer. “It’s good to be part of a merger that’s farmer-driven, farmer-controlled and a positive step for both cooperatives.”

Cass-Clay Creamery has more than $100 million in annual sales. The cooperative’s 200 farmer-owners operate dairies that produce about 300 million pounds of milk in North Dakota, South Dakota, Minnesota and Montana. The farmer-members of Cass-Clay also own two manufacturing plants and the Cass-Clay® brand, under which fluid milk, ice cream and cultured products are marketed.

AMPI is owned by more than 4,000 members who produce 5 billion pounds of milk annually. The co-op generates $1 billion in annual sales. Members operate dairy farms in Wisconsin, Minnesota, Iowa, Nebraska, Missouri, South Dakota and North Dakota. They own 13 manufacturing plants and market a full line of consumer packaged dairy products.

Cass-Clay would extend AMPI's product lines to a range of “soft products,” including ice cream, ice cream mix, sour cream, dips, cottage cheese and yogurt. Cass-Clay also makes specialty cheese, such as Romano and Parmesan, for the food ingredients industry and brings the co-op expertise in marketing branded consumer products.

USDA announces $90 million
in electric loans in 10 states
Agriculture Secretary Mike Johanns in January announced that $92 million in electric loans will be provided to electric cooperatives in 10 states. An estimated 14,093 new customers will be served and 850 miles of distribution lines will be constructed with the funds, which are being provided through USDA Rural Development's Electric Program.

"The Rural Electric Program is an important tool as we continue to upgrade the nation's power grid and provide for the needs of rural residents," said Johanns. "Reliable electric service is a key to developing rural economic opportunities and other infrastructure."

The rural utilities receiving the loans are in: Colorado, Georgia, Iowa, Indiana, Kentucky, Minnesota, Missouri, Montana, Nebraska and Wyoming. Examples of these projects include: A complete list of the loan recipients is available at: www.rurdev.usda.gov. Since the beginning of the Bush Administration, USDA Rural Development has made 1,134 electric loans valued at more than $23.9 billion.

Indiana co-ops to merge
Ag One Co-op, Anderson, Ind., and Harvest Land Co-op, Richmond, Ind., have voted to merge into a co-op that will have sales of more than $200 million annually. The two farm supply and grain co-ops are owned by 7,300 farmer-members. The merger is to be effective Sept. 1.

“Hoosier Ag Today” reported that the cooperatives will continue to use the Harvest Land Co-op name and will be headquartered in Richmond. Keith Applegeet, current CEO of Ag One, will serve as CEO of the merged co-op. The co-op will operate facilities in 45 communities throughout eastern Indiana and western Ohio.

In another Hoosier state merger, members of the Gibson County Co-op, the Dubois County Co-op in Huntingburg, the Warrick County Coop in Chrisney and the Spencer County Co-op voted to approve a merger to gain greater buying power. The new coop was to begin operations March 1 under the name Superior Ag Resources Cooperative Inc., with the Huntingburg Co-op office serving as the headquarters.

Annual sales of the merged co-ops will be more than $100 million, according to a joint press release from the four organizations. The co-op will have a 15-member board, with six directors from Dubois County and three each from the Gibson, Spencer and Warrick Co-ops.

LOL sales top $7.3 billion
Strong fourth-quarter performance for Land O’ Lakes Inc. (LOL) contributed to 2006 net earnings of $88.7 million and net sales of $7.3 billion. That compares to net earnings of $128.9 million and sales of $7.6 billion in 2005. Net earnings for 2005, however, included a $69.7-million gain on the company's sale of its ownership position in CF Industries Inc. Excluding that gain, net earnings were up 50 percent.

LOL’s long-term-debt to capital ratio was 40.1 percent at the end of 2006 vs. 41.6 percent at the end of 2005. The company reported strong financial liquidity, ending the year with a combination of cash-on-hand and unused borrowing authority of approximately $451 million.

MMPA returns $1.6 million
in cash patronage to members
Michigan Milk Producers Association recently paid more than $1.6 million in cash patronage refunds to its dairy farmer members. This cash allocation represents approximately 30 percent of the $5.4 million allocated net earnings generated by the cooperative in fiscal year 2006. The cash patronage returned includes 100 percent of the farm supply earnings and 25 percent of the milk marketing earnings. All members who marketed milk through MMPA for fiscal year 2006 will be receiving a portion of the patronage returns.

MMPA members received other cash payments in May 2006 of more than $6.2 million through retirement of the cooperative’s remaining 1996 equities and all of the 1997 equities. In October 2006, MMPA members received $2 million in cash payments in the form of a “13th” milk check. With the current payment of $1.6 million, cash payments in the last 10 months total more than $9.8 million.

Since 1987, MMPA has operated without an equity capital retain, relying on the Association’s plant operations, milk marketing and member dues to fund the cooperative. MMPA serves nearly 2,400 dairy farmers in Michigan, Indiana, Ohio and Wisconsin.

Southern States board
elects new chairman
John East, a Leesburg, Ala., grain, cotton and beef producer, is the new board chairman of the Southern States Cooperative Inc. East was elected to succeed Wilbur C. Ward of Clarkton, N.C., during the board’s last reorganization meeting in Richmond, Va. East served as vice chairman during Ward’s three years as chairman, and has been on the co-op’s board since 1999. Elected to succeed East as vice chairman was Eddie Melton, who raises grain and beef cattle in the Sebree, Ky., area. Melton has served on the Southern States board since 2000.

East is a member of the Alabama and Cherokee County Cattlemen’s Associations and the Alabama Farmers Federation. Last year, he received the Distinguished Cooperator Award from the Alabama Council of Cooperatives and in 2004 the Farm-City Committee of Alabama named East Farms the state’s Farm of Distinction. The new board chairman also serves on Congressman Mike Rogers’ Agricultural Advisory Committee. East and his family have a diversified, 2,500-acre operation that includes cotton, corn, soybeans and hay, as well as 500 acres of timberland and 650 acres in pasture for some 400 beef cattle.

Missouri Farmers Union
marks centennial anniversary
In March 1907, farm and rural leaders gathered in West Plains, Mo., to attend the founding convention of the Missouri Farmers Educational and Cooperative Union, the organization now known as Missouri Farmers Union. This past Jan. 26-27, Missouri Farmers Union celebrated its rich rural heritage with a centennial convention in West Plains.

In 1907, farmers were concerned about the low prices of cotton that threatened their family livelihood. They joined the farm organization that started in Point, Texas, in 1902 and was then sweeping the south with new chapters forming every day. This organization offered hope for the depressed farm economy through legislation to help family farmers; its innovation is assisting farmers in starting cooperatives and providing educational resources for rural area.

Today, Missouri Farmers Union continues to work on the same issues: legislation, cooperation and education. In the past seven years, the organization has helped Missouri farmers form valueadded cooperatives to market their products. The Farmers Union continues to advocate for fair prices and increased market access for farm products.

Grain co-op specialist Charles Hunley dies
Charles "Chuck" L. Hunley — a USDA agriculture economist known for his work with many of the nation's grain cooperatives — passed away on March 3. Mr. Hunley, who worked for USDA for about 30 years, joined what was then the Agricultural Cooperative Service (now the Cooperative Programs office of USDA Rural Development) in 1982, where he worked with grain, rice and tobacco cooperatives. Prior to that, he had worked in the Grain Market News section of USDA's Agricultural Marketing Service, which he joined in about 1964. Mr. Hunley retired from USDA in 1994.

Mr. Hunley provided technical advisory assistance to cooperatives producing wild rice, dry beans, domestic rice and other grains. He authored or co-authored a number of research reports, including: "Cooperative Involvement, Adjustments and Opportunities in Grain Marketing" in 1984, "The Role of Cooperatives in Tobacco Marketing" in 1988, "Cooperative Marketing of Pulses" in 1992 and "Marketing and Transportation of Grain by Local Cooperatives" in 1983.

NMPF seeks data on ethanol
impact on dairy economics
Many dairy farmers are feeling the pinch of higher corn prices resulting from demand for ethanol production. Because of concerned about the impact of biofuel production on the economic health of dairy farmers, the National Milk Producers Federation (NMPF) is asking USDA to investigate the overall implications of the rising production of biofuels on food production in the United States.

While NMPF understands the need to develop alternatives to imported petroleum fuels, “We think it is important for both sides of this story to be evaluated, and that is why we are asking the Agriculture Secretary to form a working group to study the implications on food producers of the emerging biofuels industry,” says Jerry Kozak, president and CEO of NMPF.

In the letter, NMPF, along with five other organizations representing the livestock sector, ask Secretary Mike Johanns to assemble a working group within the USDA Chief Economist's Office to study the emerging biofuels economy and its full implications for milk and meat producers, as well as consumers of those products. The other groups are the American Meat Institute, the National Cattlemen's Beef Association, the National Chicken Council, the National Pork Producers Council and the National Turkey Federation. They share concerns that producers may face challenges in sustaining their operations alongside a robust and growing ethanol economy.

“Ethanol production will have an economic impact on the U.S. livestock industry; good for some, and bad for others,” says Kozak. “Given that corn prices are the major feed input cost for dairy cows, and that corn is expected to reach record prices levels in 2007, USDA needs to do more homework on the implications of the ethanol gold rush on milk and meat costs. What's good for energy prices may not be so good for food prices, and we don't want the viability of the biofuels sector to come at the cost of losing the viability of our dairy industry.”

USDA marketing grants available
USDA’s Agricultural Marketing Service is offering $1 million in competitive grants to support farmers markets and other direct marketing projects. The money is available under the Farmers Market Promotion Program (FMPP) for 2007.

Agricultural cooperatives, local governments, nonprofit corporations, public benefit corporations, economic development corporations, regional farmer's market authorities and Tribal governments may consider proposals for these grants. The allocation of grants will be carried out in a single round of competition. The maximum amount of any one proposal is $75,000.

To read the complete notice of funding availability, visit: www.ams.usda.gov/FMPP/FMPP/ FY-07/NOFA.pdf.

American Sugar Refining
acquires Redpath Sugar
American Sugar Refining Inc. (widely known as "Domino") has agreed to acquire Tate & Lyle Canada Ltd. ("Redpath"). Domino is owned 64 percent by Florida Crystals Corporation and 36 percent by Sugar Cane Growers Cooperative of Florida, an ag co-op owned by 49 sugarcane growers. Florida Crystals is a subsidiary of Flo-Sun Inc.

The acquisition will make Domino more competitive, its leaders say, and enhance its ability to serve its customers, many of whom have operations in both Canada and the United States.

Redpath operates Canada's largest cane sugar refinery in Toronto. Its sugar is marketed under the Redpath trademark, one of the oldest and most recognized trademarks in Canada. Domino markets its products under the Domino and C&H sugar brands. It owns and operates sugar refineries in Yonkers, N.Y.; Baltimore, Md., Chalmette, La., and Crockett, Calif.

UK merger would create
world’s largest consumer co-op
The boards of the Co-operative Group and United Co-operatives have agreed to recommend to their members that approval be given to a merger of their two societies. If approved, the new co-op would begin operations in late July and would be the world’s largest consumer co-op, with annual turnover of more than 9 billion pounds. Meetings of members to consider the recommendation will take place in April and May.

The two co-op boards have also announced that the new society's enlarged Trading Group would be headed by Peter Marks, currently chief executive of United Co-operatives, with David Anderson continuing as chief executive of Co-operative Financial Services, the Group's financial arm which embraces the Co-operative Bank and Co-operative Insurance.

In a joint statement, Bob Burlton, chairman of the Co-operative Group, and Bill Hoult, president of United Cooperatives, said: "We are delighted that our two boards have given the green light to the merger. If approved by our members, it will be the most farreaching [meger] in the history of the co-operative movement in the UK, creating the world's largest consumer co-operative. The financial strength of the new organization is good news for members, staff and customers. In the highly competitive markets we operate in, it will help ensure the continuing growth and profitability of our businesses so that we can reward our members and fulfill our social goals in the communities we serve."

Commenting on the boards' decision, Marks said: "The business case for merger is overwhelming. The two societies activities are geographically complementary and together account for over 80 percent of co-operative retail trade in the UK. The merger would, for the first time, better enable the new organization to effectively manage the co-operative brand — one of the most trusted in the UK — across all its business activities."

Noted dairy scientist to head West Central research team
West Central Cooperative in Iowa has announced that former USDA researcher Dr. Jesse Goff was to assume duty March 1 as the cooperative’s director of research and new product development. He will focus attention on the co-op’s two dairy products: SoyPLUS® and SoyChlor®. Goff comes to West Central after more than 20 years working at USDA. He also taught at Iowa State University’s Veterinary College. Goff’s research has focused on various issues within the dairy industry, most recently on metabolic diseases and mastitis immunology.

Dr. Goff earned his bachelors degree from Cornell University. He went on to receive his master’s degree, DVM and Ph.D. from Iowa State University in Ames, Iowa. His graduate studies have primarily focused on nutrition and physiology.

“We’re thrilled to have a world-renowned researcher on our staff,” says Milan Kucerak, West Central’s executive vice president of soy processing and nutrition.

West Central is one of the 20 largest grain companies in the United States, with 3,148 stockholders, and handled 80.9 million bushels of in-bound grain in 2006. The company provides members with agronomy inputs and further processes soybeans into a variety of value-added products.



SkillsUSA prepares students
for trade, technical careers

By Anne Todd
USDA Rural Development

Farm, utility, retail and other types of cooperatives interested in helping to ensure America has the type of skilled workforce it requires may want to consider becoming involved with SkillsUSA, a national, nonprofit organization helping to turn today’s young people into tomorrow’s skilled workforce.

The SkillsUSA program assists high school and college students who are preparing for trade, technical or skilled service careers. The program is carried out through a partnership among participating students, teachers and industry representatives, who all work together to help the students excel in their chosen field of study. In coordination with their vocational training, SkillsUSA also helps students develop their employability and leadership skills so that they can become well-rounded workers and citizens.

Today, SkillsUSA membership stands at over 283,000. There are more than 14,700 SkillsUSA professional educators providing hands-on high school- and college- level classes for students using curricula spanning 130 different trade, technical and skilled service jobs. The SkillsUSA program is offered in more than 17,000 classrooms in about 3,700 public schools and colleges in all 50 states, the District of Columbia and the three U.S. territories. SkillsUSA chapters are available in high schools, career and technical schools and two-year colleges.

Founded in 1965, SkillsUSA (originally known as VICA, the Vocational Industrial Clubs of America Inc.) has developed more than 9.2 million workers through active partnerships between employers and educators. Furthermore, hundreds of American industries have turned to SkillsUSA as a source for highly trained and able employees.

SkillsUSA sponsors several competitions to encourage student development and growth. The premiere event is the “SkillsUSA Championships,” through which students compete to showcase the knowledge and abilities they have acquired. Competition begins at the local level, continues at the state level and culminates at the annual national championship held in Kansas City, Mo. Additionally, SkillsUSA represents the United States in the WorldSkills Competition, an international biennial event.

SkillsUSA also offers students specialized programs designed to meet the evolving needs of industry and emerging trends in education. For instance, “CareerSafe” is an online training course about workplace safety provided through the U.S. Occupational Safety and Health Administration. Skills- USA’s “Professional Development Program” – developed by the organization in conjunction with private industry – helps students learn employability skills such as the ability to communicate, work collaboratively on a team, resolve conflicts, address ethics challenges, and manage their time and assignments. SkillsUSA is about to release the online Career Skills Education Program (CSEP) to teach employability skills to college age students.

Reminiscent of the cooperative business model where members mutually own, control and benefit from their business enterprise, local SkillsUSA chapters are run by the students themselves, with adult guidance. Participating students elect officers, and plan and carry out their own community service, professional development, employment, public relations and competition activities.

SkillsUSA provides training to students in dozens of subjects that are related to the agriculture sector, and are needed for the successful delivery of U.S. Department of Agriculture (USDA) programs and services. Examples include: computer maintenance, networks and programming; communications; diesel equipment technology; telecommunications; electronics; entrepreneurship; environmental control technology; food management, production and nutrition; forestry; horticulture; industrial electricity; meat cutting; office technology; power equipment technology; public service occupations; and total quality management.

Cooperatives and other rural businesses can benefit from working with, supporting, and exploring recruitment opportunities available through SkillsUSA. To learn more, contact SkillsUSA at: SkillsUSA, P.O. Box 3000, Leesburg, Va. 20177- 0300; Phone: (703) 777-8810; Fax: (703) 777-8999; Web site: http://www.skillsusa.org.





March/April Table of Contents