NEWS LINE



Aurora Co-op pursuing new
ethanol, ag-bio multiplex projects
The Aurora Cooperative, Aurora, Neb., and Aventine Renewable Energy Holdings Inc. have signed a letter of intent to develop a new ethanol plant one mile west of Aurora. In its first phase, the plant will produce 100 million gallons per year, but plans call for later expansion to 220 million gallons annually. The ethanol plant is to be constructed on a 135-acre site, called Aurora West, adjacent to the Nebraska Energy LLC ethanol plant, of which Aventine is the majority partner/owner. The plant will be owned by Aventine, while Aurora Cooperative will be the exclusive grain supplier to the new facility, as well as the exclusive marketer of syrup and wet distiller’s grain with solubles (WDGS). A starting date is still to be determined.

In addition to the ethanol plant, the project will include what co-op President and CEO George Hohwieler calls “the first ag-bio multiplex in North America.” The site will include a state-of-the-art grain-handling facility, a fertilizer complex and a double-loop railroad system to accommodate grain, fertilizer, ethanol and DDG shipments accessing the Burlington Northern- Santa Fe (BNSF) mainline railroad. The multi-million bushel grain facility will receive and deliver area producers’ grain to end users in the ethanol, feed and food industries. The fertilizer complex will have the ability to expand, based on the continued market growth Aurora Cooperative is experiencing.

Aurora West will also be home to a 75,000-square-foot warehouse leased by Syngenta Seeds Inc. which will occupy six acres and have capacity for 500,000 units of seed corn. “The Aurora West project, with its contemporary, multidimensional uses, has the possibility of becoming the cornerstone for a visionary, ag-bio research and development campus that Congressman Tom Osborne has supported for years,” Hohwieler added. Total value of the multiplex could exceed $250 million.

Wisconsin governor vetoes
new state cooperative law
Wisconsin Governor Jim Doyle vetoed Assembly Bill 327, which would have created a new form of corporate organization, the unincorporated cooperative association. “I agree with the intent of the legislation — to help cooperatives raise needed capital through non-patron investment partners,” Doyle said. “However, the bill creates a tax consequence that was unintended by the authors and supporters of the bill. Although unintentional, I cannot sign a bill with consequences such as these.” Doyle said he will be working with the state legislature and supporters of the bill to pass a version in the current session that achieves the goals of the proposal, without the creation of this tax consequence.

The Wisconsin Federation of Cooperatives (WFC) says it is disappointed by the governor’s veto, which it said would create a second Wisconsin cooperative law modeled after laws recently enacted in Minnesota and Iowa, among other states. The bill was intended to provide an opportunity for new business development in Wisconsin. “While we do not agree with the position taken by the Department of Revenue, WFC appreciates Governor Doyle’s commitment to pass a new version of the bill in the remaining days of the 2006 Legislative Session,” WFC said in a statement issued by President Bill Oemichen and Chairman Ed Brooks, of Foremost Farms USA.

The Wisconsin Farmers Union has been leading the opposition to the bill. WFU President Sue Beitlich, a dairy farmer in Vernon County, says the bill “would allow cooperatives to form with as little as one patron and as much as 70 percent financing from corporate investors...The proposed change in coop law cuts the heart out of the member-controlled cooperative,” she wrote in an editorial posted on the WFU website, adding that it “contains no protection for existing cooperatives and could open the door for foreign investors to sink cash into patronowned cooperatives.”

CWT fee raised to 10 cents
to counter surging milk supply
To generate more funds to address a surge in U.S. milk production that is beginning to depress farm-level prices, members of Cooperatives Working Together (CWT) have voted to double the program’s five-cent per hundredweight assessment. The higher assessment will begin on July 1, 2006, and run through 2007.

“We’ve demonstrated in the past three years that CWT can help dairy farmers address a supply-and-demand imbalance, but we need more leverage as we look ahead into 2006 and 2007,” said Jerry Kozak, president and CEO of the National Milk Producers Federation (NMPF), which manages CWT. Milk production was up 3.5 percent last year and continues to grow rapidly in 2006. Kozak said that the farmer-funded self-help program “risks being irrelevant in the marketplace if we don’t have sufficient resources to do what farmers expect of us.”

CWT’s current budget does not contain sufficient revenue to fund additional herd retirement rounds, Kozak said. The higher assessment, to be collected starting in July, will bring in the additional money needed over 18 months to continue both the herd retirement program and the ongoing export assistance program. Even with the higher assessment, Kozak expects the level of overall participation in CWT will remain at 74 percent of the nation’s milk supply.

“Every one of CWT’s 49 member cooperatives, along with the hundreds of individual farmers paying into the program, recognizes that the stakes have gotten higher as the extent of the supply/demand imbalance has grown,” he said.

In addition to voting for a higher assessment, CWT’s members also modified several other of the program’s features, including: Sun-Maid girl turns 90
with digital TV ads
The Sun-Maid Girl, famous for her red bonnet and for holding a tray of freshly picked grapes, is receiving a digital make-over on her 90th anniversary. This American icon is taking on an animated form in nationwide television commercials, print advertising and on a newly designed website: www.sunmaid.com. It was 90 years ago that a young girl named Lorraine Collett posed for the raisin and dried fruit co-op’s trademark in Fresno, Calif. Her likeness would become one of the world’s best known trademarks and the cornerstone of Sun-Maid’s packaging and advertising.

“Set to turn 90, the Sun-Maid Girl deserves a new look for the new century and our continued mission of sharing the benefits of naturally delicious raisins and other dried fruits with consumers,” says Barry Kriebel, president of Sun- Maid, in Kingsburg, Calif. “We’re excited with the resulting television commercials, which put a modern spin on our message that raisins are “just grapes and sunshine.”

The animated Sun-Maid Girl and the new television commercials are the work of Synthespian Studios, North Adams, Mass. Founded in 1912, Sun-Maid Growers is the world’s largest producer and processor of raisins and other premium quality dried fruits. Sun-Maid’s raisin sales of over $200 million and 200 million pounds annually are approximately half “Sun-Maid” retail consumer products and half ingredient products for such items as cereals, breads, and a variety of other food products.

USDA announces $43.7 million
in rural broadband system loans
USDA Rural Development has issued three loans totaling $43.7 million to provide broadband service to an estimated 41,000 rural households and businesses in four states. “Broadband service provides an economic engine for rural communities, which opens the door for business development, improved health care and additional educational opportunities,” said Thomas Dorr, agriculture under secretary for Rural Development. “The infrastructure built with these funds is an investment in the future of these rural communities.”

The loans were made to Broadband South, which will serve 64 communities in southeastern Georgia and Florida; to Jaguar Communications Inc., to serve eight counties in Minnesota; and to Mid-Hudson Cablevision in New York State to bring improved and advanced service to seven rural communities.

The Rural Development Broadband Access loan program authorizes USDA Rural Development to make loans to deploy broadband service to communities with a population of 20,000 or less, with first priority going to communities without broadband service. The loans are low interest and allow for the technology to be market driven.

The Rural Development Broadband Access Program has made 56 loans for more than $868 million since the program was created in 2002.

DFA re-opens Michigan
dairy processing plant
Dairy Farmers of America Inc. (DFA) has re-opened a dairy processing plant in Adrian, Mich., previously owned by Diehl Inc. City officials and DFA employees celebrated the plant’s opening March 13 during a special ribbon- cutting ceremony. The plant, which has been idle since October 2005, received its first delivery of milk on March 14. The plant will create 25 new jobs.

“Adrian is a great processing location because it is located in an area where milk production is increasing,” says Glenn Wallace, chief operating officer of DFA’s Mideast area. “DFA member milk production in Michigan has grown 9 percent a year for the past two years, and we expect that trend to continue.” DFA plans to process more than 16.5 million pounds of milk into condensed milk, cream and non-fat dry milk powder each month at the plant. A processing capacity of over 60,000 gallons per day will help to balance the growing supply of milk being produced by DFA dairy farms in Michigan.

The plant will allow DFA to process the excess milk that is produced during the spring and summer months. Previously, the milk had to be hauled out of Michigan to customers as far away as Kentucky or Wisconsin. Wallace says that the cooperative and its members should realize significant savings in transportation costs.

Kansas co-op director on Today Show
Larry Hoobler, a board member for Farmers Union Cooperative Business Association in St. Mary’s, Kan., and his wife Diane, were featured on NBC’s Today Show on April 27. They participated in a “City-Country Life-Swap” segment, which contrasted life in the Big Apple (Manhattan, N.Y.) with the Little Apple (Manhattan, Kan.)

Trying out country life was Sarah DiMuro, a New York City-born and raised woman in her twenties, who had never spent time out of the city. While on the farm, she milked a cow, sheered sheep, rode in the tractor and planted sweet corn. Meanwhile, the Hooblers navigated the subway system and went to a New York City nightclub. They also took over some of their counterpart’s work duties as a personal assistant.

How did they get so lucky? The Kansas Cooperative Council reports that four years ago the Hooblers were included in an MSNBC show on the 9/11 terrorism attacks on America, and how they affected agriculture. The producer, who spent time at their farm to prepare for the show, is now a producer for the Today Show. When this story came up as an idea, he said he knew just who he wanted to cast!

California’s Central Valley
losing best farmland fastest
Most counties and major cities in California’s Central Valley are failing to make significant progress at preserving farmland in one of the nation’s most important agricultural regions, according to a new American Farmland Trust (AFT) study. Many of the high-value fruit, nut and vegetable crops grown here cannot be grown anywhere else in the United States. “Though local land use plans are well-intentioned,” said Edward Thompson, Jr., AFT’s California director, “the best farmland is being paved over the fastest, and the land is being developed very inefficiently in terms of the amount of land used for each new resident. It’s a waste of a precious resource.”

The AFT study, covering 11 counties from Sutter to Kern, found that during the 1990s, 53 percent of the 97,000 acres that were urbanized was high-quality farmland, and that for every eight new residents, an entire acre of land was developed. Urban development in the Bay Area is about twice as efficient, and in Southern California it is almost three times as efficient. AFT also found that “ranchettes,” rural residences on large lots, are a particular threat to agriculture. This fragmentation poses a serious risk to agriculture, not only because of the potential for conflict with intensive farming operations, but also because it helps to drive the price of farmland above what farmers can afford, the AFT report notes.

Current building trends will lead to the loss of another 900,000 acres of farmland, more than doubling today’s developed area. By 2040, the loss of agricultural output due to land conversion could top $860 million per year. Though there is still an opportunity to save a significant amount of farmland, AFT warns that, unless counties and cities encourage more efficient development, the Central Valley will reach a “tipping point” beyond which it will become too difficult to reach that goal. “The political will to change,” said Thompson, “becomes harder every day that the status quo prevails.”

The AFT study titled “The Future Is Now: Central Valley Farmland at The Tipping Point?” is available only on the Internet at: www.farmland.org.

Overseas investors purchase control
of farmer-owned ethanol plant
Members of Lakota, Iowa, ethanol producer Midwest Grain Processors Cooperative, the majority owner of MGP LLC, voted in late March to sell 60 percent of the business to Global Ethanol Holdings of Brisbane, Australia. The vote was 717 to 348 in favor of the sale, a vote which represented 83 percent of the co-op’s nearly 1,300 members in10 Midwestern states.

This $100 million sale will provide shareholders with $3.23 per share now and another 20 cents a share within two years, and marks the first time an Iowa farmer-owned ethanol plant has been sold to a foreign investor, according to a report in the Des Moines Register. The offer sparked concerns about the state losing control of a home-grown industry. The Register quotes David Nelson, a Belmond farmer and MGP chairman, as saying the sale will clear the way for more outside money to come into Iowa’s ethanol industry.

The company plans to double or triple the 100-million-gallon ethanol plant at Lakota and a 57-million-gallon plant under construction in Riga, Mich., according to a statement issued by MGP on March 30. The company is also pursuing construction of a 100-million-gallon plant in Illinois. Nelson said farmer owners have an opportunity to continue to grow their investment in the business alongside Global Ethanol. Those who voted against the sale note that the crucial difference will be that farmers will no longer be in the drivers’ seat, and much of the profit from operations will go overseas, rather than back into the rural Iowa economy. The opponents of the sale said they didn’t have enough time to convince other investors that the deal wasn’t good enough to give up local control.

Foremost Farms USA
earns $4.8 million in ‘05
Foremost Farms USA had net income of $4.8 million in 2005, down from $28.3 million in 2004, on total sales of $1.4 billion — the same total as in 2004. “The dairy industry is confronted with some severe economic challenges,” said Duaine Kamenick, the cooperative’s vice presidentfinance. “Commodity prices continue to fall as milk production is increasing. This combination will likely result in lower prices for manufactured products in 2006, which will drive lower prices paid to milk producers.”

Foremost President Dave Fuhrmann said, “2005 was certainly a very different year than 2004. However, Foremost Farms’ balance sheet is strong and we are in a position to meet challenges facing the dairy industry.”

The cooperative’s current ratio was $1.45 in current assets to $1 in current liabilities. Member-owners who marketed their milk through Foremost Farms USA during 2005 will receive a patronage allocation of $5.2 mill.

Foremost, based in Baraboo, Wis., manufactures many varieties of cheese, whey and whey ingredients, packaged fluid milk, sour cream, butter and chilled, ready-to-serve fruit juices. In addition, the cooperative sold milk to fluid milk handlers in four federal milk marketing orders.

Lansdale new CEO for
Oregon Hazelnut Growers
Hazelnut Growers of Oregon (HGO) has named Compton Chase- Lansdale as its new president and CEO, who replaced retiring president and CEO Len Spesert in March. “Compton brings to HGO a deep general management and marketing background, having worked with both domestic and international agribusinesses and food manufacturers,” said Jeff Koenig, HGO chairman. “He has held executive positions with corporations such as the NutraSweet division of Monsanto, the Pantaleon S.A. sugar refining group of Guatemala, and most recently AVEBE of Holland, a large farmers’ cooperative and the dominant potato starch manufacturer globally.” Koenig noted that the new CEO possesses the mix of management skills, cooperative knowledge and international expertise HGO needs “to continue our strong financial performance and global market growth.”

LO’L Finance Co. turns 25
with 11th year of loan growth
Land O’Lakes Finance Co. recently marked a quarter century of providing financing to agricultural producers. The wholly-owned subsidiary of Arden Hills, Minn.-based Land O’Lakes opened its doors Dec. 17, 1980, to help finance agronomy receivables for local cooperatives, as well as offer financing for LO’L dairy and poultry producers. Serving a growing base of customers has been the goal of the business ever since.

Dennis Bottjen, president and CEO, says the company had loan volume of $177 million in 2005, and that loan volume has increased in each of the past 11 years. The company has been profitable in all 25 years of its existence. The company’s customers reside in 28 states, stretching from New York to California. Swine makes up the largest segment of the company’s loan portfolio. Cattle and dairy comprise the next largest industries, respectively. The company’s portfolio also includes customers involved in aquaculture and poultry.

CHS director Keppy
named to FSA post
CHS Inc. board member Glen Keppy — who represents the co-op’s members in Iowa, Missouri and Arkansas — has been appointed by President Bush as associate administrator for the USDA Farm Service Agency (FSA). In his new position, Keppy will oversee management of FSA farm and farm loan programs and commodity operations.

“Glen’s expertise in agriculture will make him a valuable member of the USDA team,” said Johanns. “I look forward to welcoming Glen, a fellow Iowa native, and I’m confident he will advance USDA’s commitment of service to our farmers and ranchers.”

Keppy and his family have owned and operated a diversified crop and livestock family farm in eastern Iowa for 34 years. He brings both local co-op as well as international perspective to FSA, having traveled extensively to promote U.S. agricultural exports in various foreign markets.

Keppy, who has been a CHS director since 1999, will submit his resignation from the CHS board, at which time a decision will be made on how to address the vacancy. Keppy has also served as chairman of National Pork Board’s Foreign Trade Commission; president of the National Pork Producers Association and vice chairman of the Iowa Ag Value Committee, among others.

Book examines life of
Wisconsin co-op leader
“Truman Torgerson, Leadership Straight from the Shoulder” is the title of a new book about the co-op leader whose efforts played a key role in the formation of the Lake to Lake Dairy Cooperative. It also focuses on “an intense period of dynamic organizational change in American agriculture” and documents Torgerson’s efforts to “constantly seek institutional improvements in governance and representation of farm interests.”

In addition to his work with Lake to Lake, Torgerson was also a board member of Land O’Lakes, the Wisconsin Council of Agriculture and the National Milk Producers Federation, where he exercised his leadership in defining successful principles, practices and policies for continuing operations and the betterment of the industry. Written by his son, Randall Torgerson, the former leader of USDA’s cooperative program, the book includes remembrances from more than 95 contributors. For more information, visit: www.AuthorHouse.com.

Farm labor co-op signs
agreement with UFW
The Agricultural Labor Cooperative of America (ALCA), a cooperative recently formed to provide laborers to its members, signed an agreement in Seattle on April 11 with the United Farm Workers of America (UFW) and Global Horizons Inc. (a Los Angelesbased farm labor contractor), under which the three organizations will cooperate to provide laborers to farmers. The agreement “creates a franchise that will allow our member farmers to have access to productive, accountable and reliable agricultural labor,” ALCA President Pat Grant said in a statement issued following the event. “We believe that this new franchise, PAR Labor, formed from H2A workers who will be UFW members, is a giant step forward in helping mitigate the shortage of farm labor in the United States.”

Grant said ALCA believes that the United States faces a shortage of as much as 500,000 farm workers for the current growing season. The goal of the agreement, he said, is to simplify the process of securing laborers who are “highly trained, process-focused and compliant with all current immigration regulations.” Workers will “know that their wage and benefits condition meets and exceeds all the requirements set forth in the current H2A visa temporary worker program.”

National Beef to acquire
Brawley Beef LLC
National Beef Packing Co. LLC, Kansas City, Mo., and its majority owner, U.S. Premium Beef LLC (“USPB”), have entered into a nonbinding letter of intent to acquire Brawley Beef LLC. Brawley Beef is an alliance of cattle producers in Arizona and California who supply its meat packing operations with more than 400,000 animals per year. The company produces upscale custom cuts to retail customers. Brawley Beef was formed by its suppliers in 2001 and operates in Brawley, Calif., with a new state-of-theart beef processing facility.

National Beef is the fourth largest beef processing company in the United States.



Four named to
Co-op Hall of Fame


Four cooperative business leaders were inducted into the Cooperative Hall of Fame in May during a ceremony at the National Press Club in Washington, D.C. The Hall of Fame recognizes those who have made “heroic” contributions to cooperative enterprise. The newest inductees are: The Cooperative Hall of Fame was established in 1974 by the National Cooperative Business Association and is housed at its offices in Washington. It can also be visited on the web at: www.heroes.coop.






May/June Table of Contents