NEWS LINE

 Nation's largest local co-op to reorganize
Problems associated with rapid growth through consolidations and mergers during the past decade have forced Farmers Cooperative Association (FCA) the largest cooperative in Kansas and probably the largest local co-op in the country into Chapter 11 bankruptcy. However, the co-op's continued operation has been assured by a federal judge.

FCA, based in Lawrence, Kan., filed its reorganization plan with the U.S. Bankruptcy Court Judge John Flannagan in Kansas City, Kan. Contributing to the co-op's financial problems were the depressed agricultural economy, dwindling federal subsidies, elimination of crop-storage programs and declining sales. The co-op's sales totaled $76.2 million in 1997, $62.7 million in 1999, and will drop further for 2000.

CoBank the co-op's largest creditor, holding $10 million of the co-op's $20 million in debt appointed Don Dumler as FCA chief operating officer and president after his predecessor was dismissed in June. Dumler said the cooperative already has sold some of its facilities and will eliminate or transfer some of its 130 employees.

At one point, the cooperative had to stop buying grain for lack of money to pay for it. But limited purchases from FCA's 3,500 members in northeastern Kansas have resumed, to the extent that cash has been available. The co-op reported having 3.5 million bushels of grain in storage and $30 million in assets. Reorganization is expected to take months to accomplish.










Gold Kist offers skillet meals
Gold-Kist, an Atlanta-based poultry processing cooperative, has introduced a new line of "Dish in a Dash" skillet meals. The fully cooked dinners feature all-natural chicken with vegetables, gourmet sauce and rice or pasta. "The nutritious, single-step dinners are convenient meal solutions that today's consumer demands," says John Bekkers, Gold Kist president and chief operating officer. The dual servings in a 24-ounce bag can be prepared in minutes in a skillet or microwave.

Sugarbeet co-op eyes purchase of Western Sugar
Rocky Mountain Sugar Growers Cooperative (RMSGC) has signed a letter of intent to pay $78 million to buy Western Sugar Co.'s six sugarbeet processing plants. Western Sugar is owned by a subsidiary of Tate and Lyle LLC, an Engish firm that purchased the plants in 1980 from the holdings of the bankrupt Great Western Sugar Co.



Rocky Mountain Sugar Growers is pursuing the purchase of six Western Sugar plants.

RMSGC growers say with sugar prices depressed this year, they hope owning the plants that process their crop will help them farm more profitably. "This is a pretty bad time for us," Frank Eckhardt of La Salle, Colo, told the Denver Post. "Prices are down, and we're looking at some way to help ourselves," added Eckhardt, treasurer of the Colorado Sugarbeet Growers Association. The purchase plan hinges on the co-op obtaining financing and getting enough crop delivery commitments from growers to keep the plants operating at near capacity.

The co-op will have to find bank financing for about $52 million, with grower members investing the remaining $26 million, based on payments of $180 per acre.

Western Sugar currently has 185,000 acres of sugarbeets under contract in four states and 600 employees. About 1,000 family farms are represented in the five participating beet-grower groups in Nebraska, Wyoming, Colorado and Montana who plan to conclude the sale within six months, pending financing and grower investment.

The plan mirrors an earlier cooperative effort to buy Great Western Sugar in 1973. That plan failed amid opposition from North Platte Valley growers. Great Western was forced to seek bankruptcy protection in 1985. Sugar beet prices have plummeted since December 1999 due to over-production.

Fremont Co-op joins AMPI
Members of southern Minnesota's Fermont Cooperative voted to merge with Associated Milk Producers Inc. (AMPI), New Ulm, Minn. The merger added about 36 million pounds of milk produced by 40 farmers to AMPI's 5.1 billion pounds of milk produced by 5,000 members.

Dan Olson, Fremont board chairman, said the merger resulted from changes in the dairy industry. A dairy producer from Lewiston, Minn., Olson said his cooperative had been serving farmers for nearly 10 years. "AMPI will provide a stable market for our milk, member services, and secure our cooperative's equity," he said. Milk from Fremont will be shipped to AMPI's manufacturing plant at Rochester, Minn. Last October, Glencoe (Minn.) Butter & Produce Association merged with AMPI.

Meanwhile, AMPT broke ground for a $3 million expansion of its cheese cutting, wrapping and processing operation at Portage, Wis. When completed next spring, it will increase the plant's cooler pallet capacity by 85 percent and add 25,000 square feet to the facility. Each month the Portage plant converts about 13 million pounds of bulk cheese into processed cheese loaves, cheese slices, shredded cheese and natural cuts.


Youngdahl new CEO at Blue Diamond
of directors at Sacramen-to-based Blue Diamond Growers has chosen Doug Youngdahl as its seventh president. He will assume responsibilities Feb. 1, 2001, when current President Walt Payne retires from the 90-year-old California almond marketing cooperative.

Youngdahl has been with the cooperative since 1997. He said he is "committed to making Blue Diamond the world's premier tree-nut company in terms of growth and return on investment to our growers." Currently, Youngdahl is director of the Americas Industrial Business and served on the Almond Board of California. The new executive was expected to discuss his plans for the cooperative with members attending their 90th annual meeting November 30.

Michigan blueberry co-op launches venture with Chile
MBG Marketing, a berry marketing cooperative in Grand Rapids, Mich., is joining with Hortifruit, Chile's largest berry grower, in a new joint venture. MBG and Hortifruit have formed a new fresh marketing venture called Global Berry Farm LLC. It will supply berry markets around the world. Global Berry will exclusively represent growers from the United States, Chile, Mexico and Guatemala. The firm will be based at Naples, Fla., and market fresh blueberries, raspberries, blackberries, strawberries, and golden raspberries under both companies' existing labels. Requested photo or logo.

Agri-Mark opens plant
"Our goal is to squeeze every drop of in every drop of milk we market for our farmer-owners," stressed Paul Johnson, Agri-Mark's president and chief executive officer, during the October grand opening of the cooperative's $20 million whey processing plant at Middlebury, Vt. The facility is adjacent to the largest of the cooperative's two cheddar cheese plants.
The cooperative has been scrambling for whey markets ever since Vermont Whey closed its plant two years ago. "Rather than paying to dispose of cheese whey, we are now producing valuable whey protein isotopes that will add profits in years to come," said Carl Peterson, Agri-Mark's chairman from Delano, N.Y.

Growing Cabot cheese sales is forcing Agri-Mark to operate its cheese production plants six or seven days a week. With more cheese production comes more whey, the natural by-product of the cheesemaking process. So the cooperative signed an agreement with Century Foods International, Sparta, Wis., which will purchase and market all the whey proteins and de-proteinated whey powders Agri-Mark can produce. Century Foods is the largest manufacturer and distributor of whey-based products in the United States. It also markets products in more than 46 foreign countries.










Agri-Mark's new plant is isolating, drying and packaging lacto-ferrin from proteins found in whey, the natural by product of the cheesemaking industry. Photo courtesy Agri-Mark


Minn.canola co-op looks to Mexican market
Equipped with a small plastic bag containing some seed meal, Art Brandli, a farmer from Warrod, Minn., recently joined several dozen Minnesota businessmen on a trade mission to Mexico. During a stop at a Guadalajara egg processing plant, Brandli, chairman of FarmConnect, a new Minnesota service cooperative, heard canola mentioned. Out popped his plastic bag containing a seed sample so his hosts could see how productive their chickens would be dining on northern Minnesota canola meal.

It was a perfect meeting for both the farmer and his new cooperative. The Mexican egg plant manager asked if Brandli could supply 2,000 metric tons per month throughout the year. Brandli handed him his businesses card and told him that FarmConnect members should be able to grow and ship product that would meet the processor's specifications.

The trade mission was headed by Minnesota Governor Jesse Ventura and included Carl Wittenburg of Northern Pride, a turkey processor at Thief River Falls, Minn. Wittenburg said the doors opened by the trade mission put him in contact with Mexican companies that may offer joint venture opportunities. While the cooperative already sells dark turkey meat in Mexico, Wittenburg said Minnesota's labor shortage and Mexico's low wages suggested that a Mexican-based processor would benefit both sides of the border.

Washington growers lose credit co-op
Apple growers in Washington state are loosing a creditor that has served their industry for the past 55 years. Growers Credit Cooperative will close this winter. The Spokane office of CoBank told the cooperative this summer that it would no longer finance its operation. Manager Ron Ward said many growers hadn't made a profit for three years and more than half of the 150 members were delinquent on payments after the disastrous 1998 season. The co-op had a loan carryover of more than $2 million from 1997, another $5.5 million from 1998, and an estimated $2 million for 1999. A number of growers may turn to USDA's Farm Services Administration, considered a lender of last resort on commercial financing, but its local loan cap is $200,000.

Faulty co-op ventures worth 'post mortem'
New business supporters believe their ventures will succeed. But if they don't, there's a tendency to avoid talking about it. A Colorado attorney who has worked with cooperatives for the past 20 years believes it's worth re-examining failed ventures to learn valuable lessons for the future.

Writing in the Colorado Cooperative Council's newsletter, Attorney Ted Svitavsky believes management and the board could benefit from conducting a "post mortem" on a failed, or less than successful, venture.

Svitavsky said successful ventures are periodically "rolled out to tout cooperatives working together." But discussions are avoided about failed enterprises.

"One of the harsh realities of today's world is that there are very few people who care whether a cooperative enterprise succeeds or fails. And, in fact, quite a few people would like to see cooperatives fail at whatever they do. It should be apparent to all of us who do care that cooperatives must take care of themselves. Cooperatives have a legitimate interest in taking care of each other and making sure the infrastructure that has been built survives," Svitavsky said.

He suggested one way was to "critique, not criticize" ventures that cooperatives have begun but which did not meet expectations, in order to learn from those experiences."

For those cooperatives that may have stumbled while trying to better themselves, the attorney cited President Theodore Roosevelt's observation: "It is not the critic who counts, not the one who points out how the strong man or woman tumbled, or how the doer of deeds might have done them better. The credit belongs to the man or woman who is actually in the arena, whose face is marred with sweat, dust and blood; who strives valiantly; who errs and comes up short again and again; who knows the great enthusiasm, the great devotions, and spends himself or herself in a worthy cause; and who if he or she fails while daring greatly his or her place shall never be with those cold and timid souls who know neither victory nor defeat."

Wisconsin co-ops sponsor joint seminar for young producers
A group of Wisconsin cooperatives have banded together to offer a joint co-op education seminar for young producers. Backing the effort are: Equity Live-stock Sales Association and Foremost Farms USA, both of Baraboo; the state's four local Farm Credit Services associations; Cenex Harvest States, St. Paul; Cooperative Resources International (CRI), Shawano; Alto Dairy Cooperative, Alto; and the Wisconsin Federation of Cooperatives (WFC), Madison.

The Young Producer Cooperative Leadership conference, "Achieving the Heights The Power of Cooperatives," is set for Feb. 15-17 at Wisconsin Dells. A panel of progressive cooperative leaders is scheduled to speak, including Rod Nilsestuen, WFC; Dave Lull, Richland-Grant and LaValle Telephone Co-ops; Jim Henion, CRI; Roger Chamberlain, CoBank, Anya Firszt, Williamson Street (grocery) Co-op; and Ben Brancel, co-op member and secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection.

The conference goal is to provide young farmers an opportunity to net-work with their peers, learn about the cooperative way of doing business, and develop their leadership and communication skills.

Record revenue for Southern States
Record revenue topping $1.5 billion was reported by Richmond-based Southern States Cooperative (SSC) for fiscal 2000. That's a 13-percent gain from 1999. The cooperative also reported net savings for its members of $4.96 million for fiscal 2000 vs. a $2.1 million loss in 1999. SSC has expanded its farm supply business in recent years and moved into livestock marketing. Earlier this year, it reached an agreement with Agway, based in Syracuse, N.Y., to handle its 500 dealer operations. A fish marketing program also was initiated.

Electric co-ops to study clean-burning coal
The nation's rural electric cooperatives are sponsoring a research project aimed at a cleaner burning coal, the main source of electricity production in the United States. Coal plants co-produce electric power, hydrogen from fuel cells and commercial chemicals, all with little or no emissions. The ultimate goal is to have power plants that generate no air pollutant byproducts and negligible emissions of carbon dioxide, a gas implicated in global warming.

Lupinacci resigns from Sunkist
Sunkist President and CEO Vincent Lupinacci has resigned following 2Y years at the helm of the nation's leading citrus fruit marketer. He cited "personal and family" reasons for his decision, but the past several years have been very challenging for the co-op and its members. In 1998, the California orange crop was devastated by a freeze, and fruit quality problems the next year caused prices to nosedive. More recently, the decision by the coop to market South America lemons has been quite controversial with members.

Sunkist Board Chairman James H. Mast has been named as acting president while the co-op searches for a permanent president. Sunkist represents about 6,500 citrus growers and 60 packers in Arizona and California.

"Coop" new Internet domain
The international body that manages the Internet has approved the use of coop as one of seven new internet domain suffixes. The National Cooperative Business Association, which spearheaded the effort to create the new domain, hopes co-ops currently using .com for their Internet address will switch to.coop, or use it as a second address. "Today's decision by ICANN [the internet Corporation for Assigned Names and Numbers] will give cooperatives instant recognition on the Internet and help consumers find the business they trust online," says NCBA President Paul Hazen.

NCBA had also sought to register .co-op (with a hyphen, as is commonly used in America), but that suffix was not approved, based on common international usage. The proposed registration fee for use of coop will be $75, higher than many of the other suffixes charge, but it will allow NCBA and the International Cooperative Alliance to screen applicants to make sure they operate as true cooperatives. For more information, call NCBA at (202) 383-5456.








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