NEWS LINE

Compiled by Patrick Duffey

Barr interim NCFC president
Terry Barr, vice president and chief economist for the National Council of Farmer Cooperatives in Washington, D.C., is serving as interim president with the departure of President David Graves on Oct.31. The selection of Barr, who has been with the council for nearly 20 years, was announced by Board Chairman Jack Gherty. Meanwhile a search committee has been formed to recruit and screen candidates for the executive post, but no timetable has been set for that decision. Graves, who had served as NCFC president since 1997, departed to pursue other business interests. He will continue to advise and counsel during the transition period.

Scholarships available for
CCA Institute at Louisville
The Cooperative Communicators Association (CCA) is again offering an expense-paid trip for a pair of college students who are studying journalism to attend CCA’s annual institute next June in Louisville, Ky. Applications are available from CCA’s website: www.communicators.coop. Deadline is Dec. 1. The two interns selected will assist with CCA communication activities, working from remote sites via the Internet for five-month internships, running from January through May. They may be eligible for college credit from their participation. The internships are funded by a grant from The Cooperative Foundation.

Former NMPF Exec. Pat Healy
dies; backed Dairy Promo Act
Patrick B. Healy, president of the National Milk Producers Federation at Arlington, Va., from 1969 to 1985, died of cancer Sept. 12. He joined NMPF in 1954 after several years with USDA’s dairy division. During his NMPF tenure, he successfully lobbied for significant increases in dairy price support loans and also backed creation of the National Dairy Promotion Act of 1983 (first national dairy commodity checkoff).

$119 billion in ‘02 sales
notched by top 100 co-ops
The nation’s 100 largest cooperatives representing the agriculture, finance, housing, energy and hardware sectors reported $119 billion in sales in 2002, according to National Cooperative Bank (NCB).

Agriculture co-ops dominate the list, with 41 farmer-owned co-ops accounting for about half of the revenue.

The report is an important indicator of the cooperative business activity across the country, says Charles Snyder, president and chief executive officer of the Washington, D.C. based bank. The 100 cooperatives showed earnings of $346 million, up $50 million from 2001. The entire report is available on the Web at: www.co-op100.coop, or by calling (202) 336-7665.

Topping the list was CHS Cooperatives, the St.Paul based agricultural and food cooperative. The next highest ranked ag co-ops on the list (in descending order) were: Farmland Industries, Dairy Farmers of America, Land O’ Lakes, California Dairies Inc., Gold Kist, Ag Processing Inc., Southern States Cooperative, West Farm Foods, Staplcotn, GROWMARK Inc. and Foremost Farms USA.

“When I look at the revenues reflected in this year’s NCB Co-op 100 list for agriculture and other cooperative sectors, I’m extremely impressed,” Snyder said. “For more than 100 years, America’s cooperatives have not only survived, but flourished prevailing through adversity and economic downturns, bringing fiscal stability and prosperity to millions of people.”

Snyder said the role of co-ops becomes more important as more traditional companies face loss of business revenue and corporate cutbacks. “Rather than being owned by outside investors, cooperatives look inward toward their members, those who use and benefit from the goods and services provided. The focus of cooperatives is to maximize economic returns for members, not top-ranking executives or distant investors,” he said.

“Cooperatives have never been more pertinent. Americans are demanding consistent and secure businesses connected in a real way to their communities and cooperatives offer that dependability to thousands across the nation each day.”

Alto turns dry milk
into cheese for hungry
For the first time since the 1980s, the federal government is including cheese in its emergency food assistance program and a Wisconsin dairy cooperative is involved in the pilot program. Alto Dairy at Waupun recently received a truckload of nonfat dry milk (NFDM) from USDA’s Food and Nutrition Service and converted it into Mozzarella cheese for use in the Hunger Task Force food program. This was the first time government stocks were used in such an exchange. The 20,000 pounds of Mozzarella cheese, enough to top 40,000 pizzas, were designated for use by emergency feeding organizations in Milwaukee.

“It sounds simple, but this unprecedented exchange took years of commitment from our state and federal government officials at USDA and the Department of Health and Family Services, Alto Dairy and our team at Hunger Task Force,” said Sherrie Tussler, executive director of the task force. “This partnership allows us to work with a Wisconsin cheese manufacturer to turn an unpopular dairy product into fresh food for distribution to thousands of men, women and children who rely on us each month.”

The task force will distribute the pilot cheese to 28 Milwaukee area food pantries that serve an average of 20,000 people each month. Alto CEO Rich Scheuerman said he was pleased “to work with the task force in this pilot program to help feed the hungry. I can’t think of a better way for Alto, its employees and farmerowners to help feed the hungry in Wisconsin.”

Agronomy, seed expansions
boost GROWMARK sales
Illinois-based GROWMARK expanded its operating territory and posted improved sales and earnings for fiscal 2003. Speaking at the regional coop’s annual meeting in Chicago, Vice President for Finance Jeff Goldberg reported pre-tax earnings of $26 million from sales of $1.7 billion, both up from 2002. Local member cooperatives will share in patronage of $18.3 million.

Chief Executive Officer Don Davisson said the cooperative had a good year, but must continue to improve in areas such as fertilizer management. Davisson is also board chairman of CF Industries, an inter-regional fertilizer manufacturing and distributing cooperative owned by GROWMARK and a number of other regional cooperatives., Davisson said increasing prices of natural gas were driving up costs for making nitrogen fertilizer applied as anhydrous ammonia.

To reach future growth goals, he said, GROWMARK must increase volume and market share and continue offering new products and services. Part of the current gain stems from increased sales and broadening of its seed lines to complement the FS brands. Expanding into the Northeast, via purchasing 40 agronomy outlets and seed assets from Agway, provided a substantial boost in this area.

Southern States lowers debt,
weighs further asset sales
Staggered by three years of losses, due largely to a stagnant agricultural market, poor growing seasons, increased imports and low farm prices, Southern States Cooperative (SSC), nities and help farmers succeed;

64 percent said that food products produced by farmer-owned cooperatives were of higher quality than those produced by other types of companies.

“The survey demonstrates that consumers know cooperatives by their reputations for quality service and products,” Hazen said. “And those who are already members of cooperatives have an even stronger loyalty to, and preference for them. Regardless of how you measure it,” Hazen said, “in terms of cost savings, value or satisfaction, consumers can get more for their money from cooperatives.”

The challenge, he said, “is in raising consumer awareness of, and access to, cooperatives and to make more information about cooperatives available to consumers.”

When asked how familiar they were with the details of cooperative organization and philosophy, 47 percent said they were familiar with cooperatives, 30 percent were not very familiar and 22 percent were not familiar at all. Familiarity was higher among men in the 45 to 64 age range and among adults in households earning more than $35,000 annually.

When asked to rate cooperatives for 10 possible business attributes, cooperatives outscored investor-owned companies on eight of ten attributes and by wide margins in some cases.
81 percent said cooperatives can be counted on to meet customer’s needs
79 percent said cooperatives were committed to providing the highest quality of service to their customers
78 percent said cooperatives are committed to, and involved in, their communities

Cooperatives in the United States serve 120 million members and operate in nearly every industry. They range in size from those listed among the Fortune 500 companies to single, small local storefronts. About 30 percent of farm products in the U.S. are marketed through 3,200 farmer-owned cooperatives. More than 30 cooperatives have annual revenue of more than $1 billion,while the top 100 co-ops generate combined revenue of about $120 billion.

Electricity is provided to 36 million people by about 1,000 rural electric cooperatives which own and maintain nearly half of the electrical distribution lines in the nation and cover 75 percent of the land mass.

Richmond, Va., is regaining its financial footing by rapidly cutting its debts. SSC has reduced its debtload by 62 percent in 21 months and hopes to see a profit for fiscal 2004.

SSC executives have denied the firm was headed for bankruptcy, although it has had unsolicited offers for parts of the cooperative’s assets. The co-op lost $14.8 million in fiscal 2001 and $68.2 million in 2002. The co-op expects a much smaller loss for 2003.

CEO Tom Scribner indicated sales of assets to further reduce debt would be made by the board later this year. SSC has closed cotton gins in Georgia and South Carolina and shut 21 unprofitable stores across its 23-state trade territory. It has also signed a long-term lease of its grain facilities to Perdue Farms, closed its trucking business in favor of a transportation deal with Overnite Transportation, sold its Wetsel seed and agronomy supply subsidiary and shifted its credit business to John Deere Credit’s Farm Plan. Currently, only three of SSC’s 140 stores are losing money vs. 70 two years ago.

Florida sugar co-op closes
jointly owned refinery
A Brooklyn, N.Y., sugar refinery owned in part by a Florida sugar cooperative will be closed in January due to excessive capacity in the industry. The former Domino plant was one of three purchased by Belle Glade-based Sugar Cane Growers and Florida Crystals Corp. more than two years ago for $180 million. They formed an umbrella organization, The American Sugar Refining Co.

Some products will still be packaged at Brooklyn, but with a sharply reduced staff. The plant had been operating at less than half of its refining capacity. A cooperative spokesperson indicated this plant had been a drain on the system. It is the 15th sugar refinery closed in the past 23 years.

FDA clears lactoferin use
for co-op’s beef products
Months after a similar clearance by the U.S. Department of Agriculture, the Food and Drug Administration has concurred with scientific data indicating use of lactoferin, a milk derivative, is safe even for people allergic to milk. The spray is applied to beef products. The USDA finding was sought by ALF Ventures, a partnership between Farmland National Beef and its successor owner, the U.S. Premium Beef cooperative, and Dutch-based DMV International. DMV, one of the largest producers of lactoferin worldwide, is part of Dutch-based Campina. The endorsement provides the product with “generally recognized as safe” status.

Court confirms tax
on co-op’s fertilizer
Fertilizer stored by Cooperative Agronomy Services (CAS) of Groton, S.D., is subject to sales tax, the South Dakota Supreme Court has ruled, siding with the South Dakota Revenue Department. The cooperative is owned by and serves about a dozen local cooperatives in the Dakotas.

The court contended the storage fees were taxable because CAS was not an auxiliary of the local cooperatives and the $6 per-ton storage fee was a separate transaction from the eventual sale of fertilizer by the locals to their farmer members. The court said the storage was not a tax-exempt agricultural service, noting CAS was not involved in applying the fertilizer or in planting, cultivating and protecting crops. The cooperative contended the storage and sale were a single transaction and tax exempt.

Bargaining co-ops name new leaders
Leadership changes were recently made at the helm of three cooperative bargaining associations. Ronald Schuler, retired manager of the California Canning Peach Association, has agreed to serve as interim chief operating officer for California Tomato Growers Association (CTGA) until the board finds a permanent successor to John Welty, who recently resigned. Schuler is a past chairman of the National Council of Farmer Cooperatives and a director of the California Agriculture Bargaining advisory committee. CTGA has been representing the interests of California tomato growers for more than 50 years. The cooperative has slated its annual meeting for Jan. 21 in Modesto.

At Michigan Processing Apple Growers, Dawn Drake, with 12 years’ experience in the association, succeeds Tom Butler, who has retired. Jack Pressley, manager of the Malheur Potato Bargaining Association in Vale, Ore., died in September. His successor is yet to be named.

New Calcot CEO seeks
return of stability
Calcot, Bakersfield, Calif., has turned to Robert Norris, 60, executive vice president since 1992, to permanently fill the CEO post he had been holding on an interim basis since June. Norris replaces former CEO David Farley, who exited earlier after only nine months with the cooperative.

Norris is only the seventh CEO in Calcot’s 76-year history and the first Californian to hold the job. The board was “looking for someone who could bring stability back into the company and bring Calcot back to the stature it has held over the years.” Norris says he is goal oriented and could work with the staff and growers. Meanwhile, Farley has filed a wrongful termination lawsuit.

Asian imports force
co-op to switch fish
Facing a tide of frozen catfish imports from China and Vietnam produced at half the domestic cost, the Illinois Fish Farmers Co-op at Pinckneyville has discontinued processing catfish at its Prairie Lands Seafood plant and cut its work force to a small, core group. Doug Wojcieszak, the co-op’s executive director, says the cooperative will shift to more profitable fish: hybrid stripped bass, freshwater shrimp, largemouth bass and, potentially, perch, bluegill and walleye. These fish require little or no processing and are destined for the local market or the live-haul and fresh markets.

The Illinois Department of Agriculture saw the new catfish co-op as a potentially important new avenue for southern Illinois agriculture. It contributed $6 million to the venture and USDA provided a $150,000 loan guaranteed by the city and a mortgage on the building.

The processing plant will be sold with the equipment. The cooperative plans to continue to deliver technical services to its members. When the cooperative started in 1999, the state had 12 fish and shrimp farms; now there are more than 60.

Tull’s Anderson says co-ops not just ‘living in the past’

Even after 35 years as leader of the British rock band Jethro Tull, Ian Anderson is not too old to rock’n’roll, and he’s definitely not too old to farm. When he’s not playing flute and singing with Tull or performing as a solo artist, Anderson often occupies himself back home with his farming interests.

For many years, Anderson’s salmon farm in Scotland was Britain’s largest. That’s right, Aqualung does aquaculture. Although he recently sold that operation, he and his wife continue to farm a variety of crops in England. As a result, the Andersons have developed a strong appreciation for the role of cooperatives in helping farmers.

“Co-ops have been a fact of life for us for probably 20 years,” Anderson says. “They not only help in selling [our crops], but also in buying raw materials, animal feeds, diesel fuel or whatever. From an economic point of view, co-ops are a necessity they help us get the kind of buying and selling clout that comes from a combined level of production or purchase,” says Anderson, who has written songs such as “Farm on the Freeway” and “Heavy Horses” that focus on agriculture and changing rural life.

When touring America, as he is currently (a solo tour which extends through November), Anderson and his wife usually drive themselves from city to city and enjoy exploring our nation’s vast, diverse agricultural landscape along the way.

“When we travel around America, we are always looking out the window, saying ‘what the heck was that growing in that field over there?’ Or, ‘what was that 1,000 acres over there planted in?’ We’re always interested in what is growing where and why, and what it’s worth and to whom.”

Agricultural issues are changing rapidly, “not just in America or the UK, but throughout the planet,” Anderson says. “Throw in a bit of global warming on top of everything else, and boy, are we farmers I say ‘we,’ but I don’t depend on farming for a living in a state of flux.”

Farming in Britain is no longer the quaint world pictured in James Herriott’s “All Creatures, Great and Small” books. “There’s even some panic among farmers there. Suicide among farmers in my country is at one of the highest levels [for any occupational group],” says Anderson.

“I guess that may apply in the U.S. for the same reasons people who have grown up with a multi-generational and cultural lifestyle that is threatened by forces that they don’t always understand and which they have no possibility of input or control over. And that really tears a man apart in a way that us folks who play music for a living, or who work in a bank or in construction, don’t understand. That strange and passionate, vital sense of involvement that some people have with the land of their birth, the land of their fathers and land of opportunity, as it must have once been.

“I can feel that when I drive through the heartland of America, just as I do when driving through the English countryside. There are people who are wringing their hands and saying, “I just don’t know how I am going to get through tomorrow.”

When interviewed this summer, the Andersons were feeling a bit of that pain themselves. “We just had maybe five weeks of drought here in the UK, followed by a torrential downpour in the last 24 hours. I haven’t been out to look at our fields today, but I will lay my money that half of our winter corn is laying on its side right now. These are things that happen to farming folks.”

But you would have to be ‘thick as a brick’ not to realize that co-ops can help farmers living through hard times and good.

The NASCAR racing circuit will be a little sweeter this year, with racing star Kyle Petty promoting Sue Bee honey with Sue Bee Honey logos on his racing car and with personal appearances at some marketing events. The Iowabased co-op also will be featuring Petty on in-store promotional posters and on many of its product labels.

November/December Table of Contents