Page from the Past

From the archives of Rural Cooperatives

From the June 1960 issue of
News for Farmer Cooperatives

Farmers Exchange grows steadily over 30 years
Thirty years ago, in March 1930, 400 farmers organized the Farmers Mutual Exchange, Durham, N.C., with $1,400 in operating capital and a $10,000 line of credit. Since renamed Central Carolina Farmers Exchange Inc., this cooperative in 1959 did over $21 million worth of business for its members and patrons. Marketing services accounted for $10 million and purchasing for $11 million of its business.

Over the years, the Exchange has added services to meet its members’ needs. Through its eight service stores, farmers market hundreds of thousands of dollars worth of grain every year. These farmers own a total of 200,000 bushels of grain storage at Durham, Oxford, Roxboro and Siler City. They own and operate three feed mills: one at Durham, one at Siler City and a new custom-grinding and grain-storage mill at Oxford with push button operation.

In 1959 the co-op sold more than $2.2 million worth of livestock for its members. At its well-equipped livestock market, it also operates an approved slaughter house and refrigerated chilling services.

Its hatchery, with a capacity of 200,000 chicks a week, furnishes over $1 million worth of hatching eggs a year and supplies over 8 million chicks to broiler and market egg producers. Net investment of the 12,000 farmer members of the Exchange amounts to nearly $3.6 million.

From the May/June 2000 issue of
Rural Cooperatives

Saving an industry: plant closure leads
Michigan growers to form turkey co-op

When the 25 turkey growers supplying the Sara Lee plant in Zeeland, Mich., received notice that they no longer had a market for their birds, tough decisions had to be made. With no local market, these growers had to act quickly or suffer great losses due to transportation costs.

Like most farmers, these growers had weathered tight times in recent years. For some, the closure notice was the final hurdle and they left the business. But for 15 of them, this was just another challenge — another chance — to gain control of their business.

“It was really a blessing in disguise,” says Dan Lennon, chief executive officer and plant manager. “Many of the growers knew they would be better off and have more security if they owned their own processing facility. But until they actually lost their market, the option wasn’t seriously considered.

“Transportation is tough on the birds,” he explains. “They needed a plant close to their farms. We saw a significant mortality loss when the birds were hauled to facilities in other states.”

Forming a cooperative was the first step in creating a producer-owned processing business. In October 1998, just four months after receiving their cancellation notices, the growers formed the Michigan Turkey Producers Cooperative. The 15 members operate 40 farms in west Michigan and farm more than 15,000 acres.

Michigan State University (MSU) poultry economist Allan Rahn supplied necessary market analysis and feasibility studies. The Michigan Farm Bureau, MSU Extension, the Michigan Department of Agriculture and USDA Rural Development also stepped forward to help the cooperative.

Rahn reported that in 1998, western Michigan turkey growers had $30 million invested in farm-related assets and were growing nearly 8 million birds a year. It is estimated that the turkey industry in western Michigan has an economic impact of $60 million. Ernie Birchmeier, Michigan Farm Bureau commodity specialist, says feed consumption for 4 million turkeys each year equates to 50,000 tons of soybeans, estimated at $6.5 million annually, and more than 4 million bushels of corn, valued at $8.6 million annually. Additionally, more than 200 people are employed on the farms and 300 at the plant with a combined payroll of $10 million. Over $6 million a year is spent on purchasing poults.

The group received a $95,000 grant from USDA Rural Development to conduct feasibility studies. The grant was part of USDA’s Rural Business Enterprise Grant Program.

This program is designed to help public bodies, non-profit corporations and federally recognized Indian Tribal groups finance and facilitate development of small and emerging private business enterprises located in rural areas.

Taking processing into their own hands was a good thing for the producers, says Harley Sietsema, the co-op’s board chairman. “It forced us to look at where we were in the food chain. I think it was just a matter of time, and we needed to do this anyway.”

Currently the facility is equipped for strictly raw processing. The products from the Michigan plant will be marketed under the name “Legacy,” or Golden Legacy for top products such as breast meat; Silver Legacy for secondtier products, such as thighs and drumsticks; and Legacy for the ground products.

Accompanying the brand and logo is a history of the cooperative and the name. This story captures the long history of turkey production in Michigan and lists the members of the cooperative.

“I don’t think people realize how close this industry was to being extinct in Michigan,” Lennon said.” Without the diligence and the commitment of the turkey growers to raise additional capital, this dream never would have become a reality.

May/June Table of Contents