NEWSLINE

Tri Valley Growers appoints new president and CEO

        Tri Valley Growers (TVG), a leading U.S. food processor, has appointed Jeffrey P Shaw as president and chief executive officer. Shaw comes to TVG from Green Bay, Wis.-based Dean Foods Vegetable Co., where he had served as president since 1992. There, he significantly raised shareholder value and changed the company into a team-based, results-driven, high-performance culture. Shaw successfully acquired and combined five companies to expand Dean Foods Vegetable division to a $650-million business.
        "We are very excited that Jeff has joined us. He brings a wealth of experience to the president and CEO position," said Jaswant Bains, chairman of TVG, a 500-member California-based cooperative. Shaw joins TVG following seven months of interim management led by CEO R.D. Cook and president Timothy R. Barron. They had replaced president and CEO Joseph Famalette, who departed in August 1998.
        Prior to joining Dean Foods, Shaw served as president of Richard A. Shaw, lnc., a Watsonville, Calif.-based food company. He holds a bachelor of science degree in accounting from San Jose State University and a master of business administration degree in taxation from California State University, Hayward.

Two California fruit co-ops form alliance

        Mayflower-TCLA and Blue Anchor Inc., two California fruit cooperatives, have formed an alliance to strengthen market position, reduce costs and open new opportunities.
        "It is certainly no secret that the continued consolidation by major retailers demands some form of consolidation by shippers," said alliance president John Dubendorf. "The Mayflower-Blue Anchor alliance is a natural, with a complementary product base that enhances the ability to service all customers, including major chains. We hope other shippers will be interested in the concept."
        Mayflower Marketing Corporation (a subsidiary of Mayflower-TCLA) will be responsible for marketing the two firms' wide variety of fruit. Mayflower-TCLA was formed in 1966 with the merger of Mayflower Fruit Association, a premium shipper of plums, persimmons and table grapes, and Tulare County Lemon Association, a long-established citrus packing house. All citrus items will continue to be marketed by Sunkist. Blue Anchor Inc. is a 200-member marketing cooperative of grapes, pears, peaches, plums, nectarines, apricots, cherries, kiwifruit, various specialty fruits, and Chilean fruit.

Sunkist revenues top $1 billion

        Sunkist Growers sold 90 million cartons of fresh citrus, the largest volume in its 105-year history, during 1998, president emeritus Russell Hanlin told some 1,000 members gathered for the cooperative's annual meeting Feb. 5 in Visalia, Calif.
        For the seventh consecutive year, total revenues for Sunkist, the oldest and largest citrus marketing cooperative in the world, exceeded $1 billion, Hanlin said. The $1.069 billion revenue figure was just $27 million under the all-time record set in 1995.
        "Most importantly," said Hanlin, "returns to our 6,500 grower-members reached $861 million, the second highest total in Sunkist's history and just under the all-time record of 1997.
        It was also a good year for Sunkist's processing operation, which handled more than 700,000 tons of citrus. Memorable for more than its financial results, 1998 was also the year the cooperative said farewell to Hanlin, its president and CEO for the past 20 years. His replacement is Vince Lupinacci, who discussed these challenges and the evolution taking place in the citrus industry:

        Lupinacci also updated the audience on the Christmas freeze and its effect. He noted that while estimates of crop damages were still a moving target, they indicated there was still a substantial amount of fruit to sell this season.

NCFC chairman highlights association's achievements

        National Council of Farmer Cooperatives' (NCFC) outgoing chairman Ron Schuler emphasized the trade association's achievements throughout the past year, despite concerns over the agricultural economy, at NCFC's 70th annual meeting in San Antonio, Texas, in January.
        "NCFC's efforts this year have contributed billions of dollars in benefits that go directly to the bottom line of farmer cooperatives, including helping bring forth a significant farm assistance package that is beneficial to many cooperatives and their farmer members as we position ourselves for the new millennium," said Schuler, president and CEO of California Canning Peach Association.
        Other NCFC accomplishments Schuler highlighted were: 

        "It has been my privilege to work with a trade association that can be described as both flexible and responsive," Schuler noted. He acknowledged NCFC's ability to adapt to the rapid pace of change in the agricultural industry throughout his term, which has enabled it to stay ahead of the competition and provide unique benefits for its members. New NCFC chairman is Noel Estensen, president and CEO and Cenex Harvest States.

Farmland, Cenex Harvest States win communications honors

        Farmland Industries Inc. received the Best In Cooperative Communications (BCC) Award, and Cenex Harvest States had the highest cumulative point winnings to take top honors in the National Council of Farmer Cooperatives' (NCFC) 1998 Cooperative Information Fair.
        Farmland Industries, Kansas City, Mo., was awarded the BCC Award for a Product/Service Marketing video titled "Farmland Food Marketing and Overview." The award is presented annually to the entry the judges consider best overall in the 45 classes of the annual communications competition.
        With 98 points, Cenex Harvest States had the highest cumulative point winnings in the Fair competition. Blue Diamond Growers, Sacramento, Calif., was runner-up, with 84 points. They were followed by: Farmland Industries, with 77 points; Diamond Walnut Growers Inc., Stockton, Calif., with 70 points; and Southern States Cooperative, Richmond, Va., 63 points. Twenty-nine agricultural cooperative organizations participated in the 1998 Information Fair competition.
        The Cooperative Information Fair has been conducted annually since 1946 to evaluate communications materials produced by NCFC member cooperatives and their affiliates. It includes publications, writing, photography, advertising, promotional and educational materials, audio-visual presentations, public relations, and communications programs.

California dairy co-ops explore merger

        Three California dairy cooperatives representing 44 percent of the state's milk production are exploring the possibility of a merger. The cooperatives involved are San Joaquin Valley Dairymen, Danish Creamery Association and California Milk Producers. The three co-ops have a combined membership of 700 dairy farmers. The merger is being seen as a way to expand product lines, increase efficiency and open up new export markets. It would create one of the largest milk-producing associations in the nation. Co-op members are expected to vote on the merger proposal this summer.

Prairie Farms Dairy reports record earnings for 1998

        Prairie Farms Dairy Inc., Carlinville, Ill., reported all-time-high earnings of slightly more than $50 million for the fiscal year ending September 30, 1998. The record yearly earnings reflected an increase of 13.5 percent over the previous year, according to Leonard J. Southwell, the co-op's executive vice president and chief executive officer. Dollar sales of $933 million also hit an all-time high, and reached $50 million above the previous year.

Tree Top finalizes Seneca acquisition

        Tree Top has finalized the acquisition of Seneca Foods Corporation's processing facility in Prosser, Wash. The plant began operation as a Tree Top facility Feb. 1. The acquisition also gave Tree Top an exclusive license to the Seneca brand for all apple sauce products and Seneca's non-branded specialty fruit concentrates business. The purchase comes at a time when the volume of processing apples in the Pacific Northwest is at a near-record high. Seneca had been processing apples for Tree Top during much of the acquisition negotiations. The plant's processing capacity will assist Tree Top in accommodating the continued large volume of processing fruit projected for the future.
        The exclusive license of the Seneca label for all apple sauce products gives Tree Top the No. 1 and No. 2 selling sauce brand in the Northwest and solid sauce distribution in its major markets. For the time being, Tree Top will produce apple sauce under both the Tree Top and the Seneca labels. The specialty fruit concentrates produced in the Prosser facility will provide additional revenue for Tree Top, enhancing the cooperative's non-member business earnings. Earnings from non-member business provide necessary working capital for the cooperative, allowing member earnings to be distributed in full in the year they are recorded.
        The Prosser location in the southeastern corner of Washington State provides Tree Top with a facility geographically closer to its Oregon and Idaho grower-members.
        In other Tree Top news, the cooperative has signed a letter of intent to purchase Watermill Foods, Inc., Milton-Freewater, Ore. Founded in 1975, Watermill is a quality manufacturer of frozen cherries, apples and plums and one of the largest employers in the Milton-Freewater area. "Tree Top views Watermill and its customer base as a potential outlet for additional peeler fruit," Tom Stokes, chief operating officer, said.

CoBank reports '98 net income of $150 million

        CoBank, a $20-billion financial services institution specializing in U.S. agribusiness and rural America, reported net income of $150 million for 1998. Earnings increased slightly from the 1997 total of $147 million. Celebrating its 10-year anniversary in 1999, CoBank has seen its agribusiness base grow to $9.1 billion at year-end 1998.
        Agribusiness continues to account for the bank's largest customer segment. Business with rural utilities in the past decade tripled, increasing from $1.6 billion in loans outstanding in 1989 to $4.5 billion in 1998. CoBank also expanded its presence in international markets, financing $2.3 billion in agricultural exports at year-end 1998, and a total of $27 billion since the bank began its international program. CoBank is pursuing a merger opportunity with the St. Paul Bank for Cooperatives of St. Paul, Minn., to further increase its capacity to serve rural America.

International cooperative book available

        The World of Cooperative Enterprise 1999, a collection of articles from international authors, features an in-depth look at issues and developments shaping the future of cooperatives. Major themes in this year's edition include the debate over converting co-ops to other business structures, contractual rights and obligations of membership and innovations in cooperation. The book can be ordered by contacting the Plunkett Foundation, 23 Hanborough Business Park, Long Hanborough, Oxford OX8 8LH, U.K. Telephone is (01993) 883636. Fax is (01993) 883576.

USDA streamlines DLT loan and grant program

        Agriculture Secretary Dan Glickman has announced proposed changes for the 1999 Distance Learning and Telemedicine (DLT) Loan and Grant Program, making it more user friendly. Changes in the program will separate the application for the loan, loan/grant combinations and the grant-only portions of the DLT assistance. DLT is USDA's program that provides loans and grants to rural areas to use new technology for improving educational and medical services.
        "The proposed changes improve the DLT loan and grant program by targeting three types of assistance, enabling the program to be more responsive to the needs of education and health care providers in rural areas," said Glickman. "The ability of rural communities to access these funds to improve the quality of education and health care is key to the development of rural America."
        "The 1999 DLT program will make available $150 million in loans and $12.5 million in grants to rural education systems and health care providers," said Under Secretary Jill Long Thompson of USDA Rural Development, the agency which administers the program. "The Distance Learning and Telemedicine Program, a major administration initiative, has helped rural America be a part of the Information Revolution."
        The changes will remove some of the previously required steps in the application process for loans and will expand the uses of loan funds. Applications for grants will go through the competitive process and poverty levels will be used for scoring purposes, instead of grant eligibility. Applications for loans may be accepted now through USDA Rural Development state offices or through the USDA Rural Utilities Service national office in Washington, D.C.
        The DLT program complements the discount rate program, called the E-rate, that was developed in the Telecommunications Act of 1996 to ensure rural schools, libraries and health care providers would be able to connect to the Internet at a reasonable cost.
        Since the DLT program was started in 1993, it has funded 252 projects in 43 states and two U.S. territories, for a total of $68 million. The funding has helped more than 1,000 schools and learning centers provide increased educational opportunities to rural students and residents. It has improved health care at more than 725 hospitals and rural health care clinics.
        The proposed changes are published in the March 25 Federal Register. Detailed information on the DLT program can be obtained from visiting the Rural Utilities Service website at www.usda.gov/rus/dlt/dlml.htm.

Agway expands into retail store

        Agway Inc. of Syracuse, N.Y., has expanded its traditional farm supply retailing business into a new type of store format called Cultivations. Agway introduced its new retail format in November 1998 in Lansdale, Pa., about 25 miles northwest of Philadelphia. The store, featuring an outdoor garden for seasonal displays, covers 8,000 square feet with a 4,000-square-foot greenhouse.
        Designed to appeal to middle- to upper-income women aged 30-50, Cultivations blends the look of an interior design studio, housewares retailer, coffeehouse and flower shop. In addition to offering farm store staples such as plants and garden implements, the store sells its own line of bath and body oils, candles and clothing.
        Over the next 10 years, Agway will launch 10 more Cultivations in the Philadelphia market. The co-op hopes to have about 50 of these stores across the nation within five years. Each store is expected to generate annual sales of between $2.5 million and $3.5 million and employ about 15.

Honse Picked for Farmland leadership positions

        Bob Honse, a 25-year employee of Farmland Industries, has been named executive vice president and chief operating officer of Farmland. In his new position, Honse will oversee all Farmland operations, including the ag inputs, meat and livestock, and grain divisions. He will report directly to H.D. "Harry" Cleberg, president and CEO for Kansas City-based Farmland. Honse has extensive experience in agribusiness management. He joined Farmland as project manager at Farmland's fertilizer manufacturing plant in Lawrence, Kan., and was later promoted to plant manager. He subsequently is served as general manager for phosphate manufacturing at Bartow, Fla.; vice president and general manager for fertilizer and ag chemicals; and executive vice president, agricultural operations. Before being named to the new position, Honse was executive vice president, ag input businesses, which encompasses the company's crop production and petroleum businesses. He received his bachelor's degree in chemical engineering from the University of Virginia.

Farmland enters alliances with MFA, Cenex Harvest States

        Farmland Industries and MFA Inc. have finalized an agreement to form a feed manufacturing and marketing alliance. It combines the Farmland and MFA sales staffs and milling capacities in Missouri, which will increase the efficiency and effectiveness of both cooperatives' feed businesses. Farmland will procure feed ingredients for the alliance, while MFA will manage feed marketing personnel. Each cooperative will manage its respective feed mills. MFA brings 14 feed mills to the alliance while Farmland brings one mill located in Centralia, Mo., which will eventually be converted to a swine-dedicated facility.
        Farmland's America's Best Pork and Farmland Supreme Beef Alliance will be marketed alongside MFA's livestock marketing programs through MFA retail stores and both companies' feed sales staffs. MFA's feed sales staff and livestock production specialists will work together with the Farmland feed sales staff. Each cooperative will maintain its respective relationships with current customers, and the alliance sales force will represent products and programs instead of locations or companies. Both cooperatives' logos will appear on alliance feed bags.

Cenex, Farmland exploring grain venture

        In a separate action, Farmland Industries and Cenex Harvest States have announced plans to explore combining certain aspects of their grain operations. Farmland and St. Paul-based Cenex Harvest States already have many common owners and customers across multiple lines of business and are involved in several joint ventures together. After considering business direction and strategic fit, the boards of both cooperatives have directed that these discussions proceed on an aggressive schedule.

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