NEWSLINE

Farmer Co-ops Conference focus on strategy, finance The 11th annual Farmer Cooperatives Conference will be held Nov. 18-19 in St. Paul, Minn. “Cooperative Strategy, Structure and Finance” is the theme for the conference, sponsored by the University of Wisconsin Center for Cooperatives.

“Today’s farmer cooperatives must pursue growth opportunities to remain competitive, and simultaneously assume more risk to meet supply-chain cost pressures,” explains Anne Reynolds, assistant director of the UW Center for Cooperatives. “The equity and capital management issues that result are major drivers for a cooperative’s strategic planning and decision-making process.”

This year’s program will explore the innovative structural and financial strategies that cooperatives are adopting to meet these challenges.

The national conference, Reynolds noted, offers a unique opportunity for cooperative board members, CEOs and others doing business with agricultural cooperatives to explore these issues. Experienced cooperative business leaders and knowledgeable experts will share their insights on topics that include: strategies for growth, managing risk, cooperative finance strategies and case studies of equity and finance strategies employed by individual cooperatives.

For more than a decade, the Farmer Cooperatives Conference has provided a stimulating forum for those in the agricultural coop¬erative community to learn and exchange ideas. The UW Center for Cooperatives is assisted by a national planning committee of cooperative scholars and practitioners in organizing the conference.

The annual meeting of NCERA- 210, which promotes and coordinates research on agricultural cooperatives, will follow the Farmer Cooperatives Conference on November 19 and 20, at the same location.

Updates on the conference and registration information will be posted at: www.uwcc.wisc.edu/farmercoops08. Questions about the conference can be directed to Anne Reynolds at (608) 263- 4775, or atreynol@wisc.edu.

Peltier leaving NCFC
to lead grape/wine group
Jean-Mari Peltier, CEO of the National Council of Farmer Cooperatives (NCFC), resigned Aug. 31. Peltier, who had been at NCFC for four and a half years, is leaving to lead the newly formed National Grape and Wine Initiative (NGWI) in her home state of California.

“Jean-Mari has revitalized NCFC during her term as president, and leaves behind a healthier and more vibrant organization than she inherited,” says NCFC Chairman Bill Davisson of GROWMARK. “On behalf of the members of the Council, I thank Jean- Mari for her hard work on behalf of America’s farmer-owned cooperatives, and I wish her well in her new endeavors.”

During her tenure, Peltier refocused the organization, expanding NCFC’s policy agenda to include a broader range of issues affecting cooperatives and their producer members. Under her leadership, NCFC refined its strategic vision to represent the policy and business interests of members, reflecting the changing farmer cooperative business structures and practices in a rapidly changing global marketplace.

“I feel honored to have been able to work for an outstanding organization and a wonderful membership for the past five years,” says Peltier. “While I look forward to returning to California and getting NGWI up and running, I will truly miss the hard-working and exceptional staff at NCFC, as well as the supportive and engaged members of the Council.”

NCFC Chief Economist Terry Barr is serving as interim president as the board searches for the next CEO. Chairman Davisson has named a special committee of the Executive Council to work on the search and will be engaging an outside executive search firm to assist in the vetting process.

Correction: A photo of NCFC’s annual Co-op Country Barbecue at USDA headquarters printed in the July- August issue of Rural Cooperatives incorrectly identified Bill Davisson as sitting next to Ag Secretary Ed Schafer. That is actually NCFC Senior Vice President Randy Jones.

United to expand feed facility
United Cooperative, Beaver Dam, Wis., has approved plans to expand its feed and grain facility in Sauk City, Wis. Additions include a 400,000- bushel grain bin, movement of an existing 20,000-bushel wet bin, a new 4,700-bushel-per-hour dryer, two new 10,000-bushel-per-hour legs and one new grain receiving pit.

“The addition of the 4,700-bushelper- hour dryer offers a total drying capacity of 6,700 bushels per hour at the United Cooperative feed and grain location in Sauk City,” says Mark Wiegel, the co-op’s grain operations manager. “Together, these changes result in larger storage capacity to serve customers, faster unloading for grain customers bringing their harvest into the elevator, and more efficient service to the feed mill.”

“This is an exciting step for our state-of-the-art feed mill in Sauk City,” commented John Scheuers, vice president of feed operations for United Cooperative. “Currently, a feed mill employee has to spend about four hours per day hauling grain from the existing grain bins over to the feed mill for use in animal feed rations. This new equipment will free up that time for other work and offer greater convenience for serving customers in Sauk City, Prairie du Sac, Lodi, Reedsburg, Loganville and surrounding areas.”

The new system should be operational by Oct. 15, 2008.

Formed in 1936, United Cooperative is a full-service cooperative offering feed, grain, agronomy and energy products and services to south-central Wisconsin farmers and consumers.

Cal/West opens new HQ
Cal/West Seeds, the largest memberowned U.S. cooperative devoted exclusively to the seed business, has opened a new headquarters on 70 acres of rural, Sacramento Valley land near Woodland, Calif. Co-op leaders says the 12,000-square-foot complex is a state-of-the-art facility that will keep the co-op on the leading edge of seed science.

Cal/West offers genetics, seed production and conditioning. It started one of the first private forage breeding programs in the United States. The coop’s basic seed production is focused on alfalfa, safflower, clover, sudangrass, dichondra, sunflowers and teff grass. All of the seed subsequent grasses are primarily used for animal forage, or to maintain nutrient levels on farmland where forage grasses are grown.

Long-range goals of Cal/West have been described by company President and CEO Paul Frey as being focused more on biotechnology and growing crops in harsh soils. “We are investing today, realizing there are numerous challenges to overcome both from a scientific as well as a political view,” Frey says.

Virginia to build
seafood market
Plans have been announced to build a 39,000-square-foot Eastern Shore Seafood Market on state-owned land neat Melfa, Va. The new facility, to be built within two years, would be next to the Eastern Shore Farmers’ Market. According to a report in the Eastern Shore News, the facility will include warehouse storage, coolers and two blast freezers.

The nonprofit seafood market will follow the same model as the farmers market, with space leased to shippers and brokers. Watermen also will be able to rent storage space for their catch on a per-package basis, according to the press report.

The idea for a seafood market goes back a decade, when the Eastern Shore Marketing Cooperative board — which is responsible for operating the farmers market — decided watermen would also benefit from the central marketing and storage at a market similar to the farmers’ market, which has since handled more than $100 million in vegetables from local farms since it opened in the early 1990s, the Eastern Shore News reported.

The Virginia General Assembly has approved issuing bonds to fund construction of the $5.4 million project

Webster Scholarship
fund launched
The CHS Foundation has provided initial funding to launch the Ralph K. Morris Foundation’s new Elroy Webster Cooperative Studies Fund, a program which provides a scholarship and honorary award to graduate and law students interested in agriculture and cooperatives. The scholarship program was created in memory of Elroy Webster, a Minnesota farmer and CHS Inc. leader who helped drive historic joint ventures and mergers of U.S. agricultural cooperatives.

Webster established the CHS New Leader Program for farmers and ranchers and created a grant-based funding program for cooperative, agricultural and rural development projects through the CHS Foundation. He was also involved in a wide range of organizations, including FFA, Agriculture Future of America, the Ralph K. Morris Scholarship Foundation and the Agriculture Council of America.

“Elroy Webster was one of the most influential figures in agriculture and cooperatives in the last half century,” says William Nelson, president of the CHS Foundation.

Application forms and additional details can be found on the Ralph K. Morris Foundation website: www.ralphkmorrisfoundation.org.

AGP announces sale
of AGP Grain Ltd.
Marty Reagan, CEO of Ag Processing Inc. (AGP) has announced the sale of AGP Grain Ltd. (a wholly owned subsidiary of AGP Inc.) to Columbia Grain of Portland, Ore. The sale includes AGP Grain Ltd. assets in Minnesota and North Dakota. Terms of the transaction were not disclosed.

“We have worked for many years with Columbia Grain to market grain from the Upper Midwest,” said Reagan. “We have continually looked at ways to best serve producers in this region. Our mutual conclusion is that this agreement will move toward that goal, given Columbia Grain’s direct link to a multitude of domestic and international markets. This transaction will also enable the AGP Grain Group to reposition its grain assets to better serve its customer base.”

Columbia Grain was formed in 1978 and operates 38 grain elevators in the western United States, including an export terminal in Portland, Ore.

AGP Grain Ltd., formed in 1994, operates elevators and terminals in North Dakota and Minnesota, including an export facility in Duluth, Minn. The company also has merchandising offices in the Minneapolis Grain Exchange and in Antwerp, Belgium and Barcelona, Spain.

Gary Olsen, AGP senior vice president for grain, said the sale does not include AGP’s interest in Maple River Grain and Agronomy LLC, in Casselton, N.D.

GROWMARK purchases
fuels terminal
GROWMARK Inc. has purchased the Menard County refined fuels terminal near Petersburg, Ill., from Magellan Midstream Partners L.P. Continued operation of the 10-milliongallon facility, first opened in the 1980s, will enable GROWMARK to ensure a continued supply of refined fuels and solidify the cooperative’s commitment to the energy business, according to Shelly Kruse, the co-op’s Energy Division manager.

In addition to refined fuels, GROWMARK will add biodiesel to the mix of refined fuels available from the terminal.

The Menard Terminal will expand GROWMARK’s supply capacity and facilitate continued growth, Kruse says. “With the addition of the Menard Terminal, we will be able to more easily take advantage of market opportunities and better serve our customers,” she said. Magellan will continue to deliver refined fuels into the Menard terminal via its Midwest pipeline system.

In other action, GROWMARK has also acquired Waterloo (Iowa) Service Co.’s facilities in Waterloo, which it plans to use for an expanded truck shop and bulk lubricant storage and distribution operations.

Illinois & Iowa co-ops
announce mergers
Ludlow Cooperative Elevator Co., Ludlow, Ill., and Danforth-Gilman Grain Co., Danforth, Ill., merged operations on Aug. 1, and will now operate as Ludlow Cooperative Elevator Co. “Both companies have served their area farmers-owners’ grain handling needs for more than 100 years, and we look forward to building on our historical success as we work together to build an even more successful future,” says Bruce Bastert, general manager.

The newly formed company will operate 10 grain elevators in Champaign, Ford and Iroquois Counties. More information about the cooperative is available at: www.ludlowcoop.com.

In northwest Iowa, Midwest Farmers Cooperative and Alceco have signed a letter of intent to merge, according to a report in the Sioux City Journal. Members were to vote on the merger in September.

USDA awards $677 million
to rural electric cooperatives
Agriculture Secretary Ed Schafer in August announced the selection of 20 rural utilities and cooperatives to receive almost $677 million in loans for new electric lines and system improvements in 19 states. “America’s electric co-ops provide a vital service to rural areas, electrifying communities, serving farms, businesses and homeowners,” Schafer said. “Electric co-ops do it with a remarkable track record of reliability. The loans we’re announcing today will help make system improvements that will benefit consumers across the nation.”

The loan funds will finance the construction and repair of over 4,200 miles of distribution and transmission lines benefiting almost 40,000 rural electric cooperative consumers.

For example, East Central Energy in Braham, Minn., has been selected to receive a loan of more than $49 million to serve 4,600 new consumers in Minnesota and Wisconsin. The utility will make system improvements to construct and upgrade over 700 miles of distribution lines.

Suwannee Valley Electric Cooperative in Live Oak, Fla., has been selected to receive an $18 million loan to build or improve almost 325 miles of distribution lines and provide service to almost 3,700 new consumers. Central Electric Cooperative in Parker, Pa., will receive a $17 million loan to build and improve more than 400 miles of distribution lines and provide service to almost 1,400 new consumers.

The funding is being awarded through USDA Rural Development’s Utilities Programs, which Congress authorized under the Rural Electrification Act of 1936.

USDA Rural Development has awarded approximately $28 billion in electric loans since 2001.

Funding of the individual recipients is contingent upon their meeting the conditions of the loan agreement. For a list of all loan recipients, visit: www.rurdev.usda.gov.

CHS Crop Nutrients expands
Texas distribution facility
CHS Inc. is constructing a crop nutrients warehouse/terminal at the company's Friona, Texas, grainhandling facility. The expansion will include a 29,000-ton fertilizer warehouse, two load-out towers for straight or blended orders and additional rail receiving equipment to handle 110-car trains. Plans call for the plant to be completed by late spring of 2009.

“CHS Grain Marketing brings grain to west Texas to serve feedlots and dairies, and now CHS Crop Nutrients will use some of the same assets to position fertilizer imports from its deep-water port in Galveston, Texas, to serve west Texas customers,” says Cheryl Schmura, CHS vice president of Crop Nutrients.

A&P Growers Co-op
acquires Arizona orchards
An irrigation water shortage in California has spurred Tulare, Calif.- based A&P Growers Cooperative to leave the state for additional pistachio acreage. The nut growers’ cooperative has purchased Tucson-based Pistachio Corp. of Arizona for an undisclosed price, according to a report in The Packer, an industry trade journal.

“We had planned to plant additional acres in Lost Hills, but because of the water situation we decided against it,” Jim Zion, managing partner of Meridian Nut Growers LLC, Clovis, Calif., the cooperative’s marketing arm, told The Packer in July. The Arizona company is the state’s largest pistachio grower-shipper, with 700 acres of orchards, Zion said.

Student-designed device may
protect utility workers
Engineering students at Johns Hopkins University in Baltimore have invented a tool that allows utility workers to disconnect power lines from residential transformers at a safe distance, beyond the range of dangerous electrical arcs. Their prototype, built at the request of a local utility company, consists of a lightweight aluminum frame that uses rope and lever-and-pulley system to enable the worker to detach a transformer’s power connector, known as a load-break elbow.

This operation sometimes triggers an explosive arc that can cause serious skin burns and eye injuries. Such arcs can travel as far as eight feet from the transformer, but the students’ device would enable workers to disconnect the line from 10 to 12 feet away.

Johns Hopkins undergraduates Kyle Azevedo of Bridgewater, Conn., Julie Blumreiter of Muskego, Wis. and Doo Hyun Lee of Seoul, Korea, developed the device as part of project in an engineering design class.

For more information, visit: www.me.jhu.edu/.

Knouse to cease applesauce production at Inwood plant Knouse Foods Cooperative Inc. has announced plans to shut down its applesauce production operation at Inwood, W. Va., on Nov. 14. It will maintain warehousing, storage and distribution business there, according to a report in the Hagerstown Morning Journal.

About 90 people work at the Inwood plant. The co-op plans to offer employees positions at other Knouse plants in Pennsylvania.

Co-op President and CEO Ken Guise said the decision was a result of the continued decline of apple supplies in the area and the need for major infrastructure improvements to facilities at the Inwood plant, the Journal reported. “Housing developments now stand where orchards once were, and there’s been a continuing decline in cases produced at the plant, a function of fewer apples received,” Guise said in a press release. He added that Knouse needs to be where their growers and apples are.

Pennsylvania-based Knouse Foods’ 1,500 members grow fruit along the Appalachian Mountains and throughout the Midwest.





Wheat co-op pays record dividends

Editor’s note: The following article
by Dan Wheat is reprinted courtesy
the Wenatchee World.


Central Washington Grain Growers Inc. allocated a record $2.5 million in dividends to its 1,500 grower members for its fiscal year ending March 31, 2008, mainly because of increasing wheat prices, the cooperative's manager says. The dividends were announced and half were paid at the co-op’s annual meeting June 19 in Waterville, attended by 218 members, said Kevin Whitehall, manager.

The remaining half of the 2007 dividends will be paid in future years. Typically, the co-op pays dividends over 10 to 12 years, but currently it is paying on a four-year cycle because of its healthy financial condition, Whitehall said.

The co-op paid off the balance of its 2004 dividends and one third of its 2005 dividends, which totaled $606,507. Combined with half of the $2.5 million, a total of $1.856 million was paid back to members at the meeting, he said.

Over the past seven years, the coop has paid growers $9.9 million in dividends (an average of 10.96 cents on every bushel delivered) while putting $3.68 million into capital improvements and increasing the amount of working capital (cash available) by $2.6 million, he said.

“We’ve done a lot. We've been aggressive in paying back dividends while still doing capital improvements and increasing working capital,” Whitehall said.

The storage and marketing cooperative spent $920,000 in capital improvements in 2007, including a new 247,000-bushel grain elevator in Withrow, he said. The co-op spent $178,000 on capital expenses in 2006.

The cooperative made $2.98 million in net income after taxes at the end of its fiscal year on March 31, 2008, compared with $2.21 million in 2007, Whitehall said. Grain Grower dividends totaled $1.6 million on the 2006 crop, $1.3 million on the 2005 crop, Whitehall said.

Wheat prices climbed to record highs in the past year, largely because of the second year in a row of drought cutting Australia's wheat crop in half, tight world stocks and unusually high market volatility.

The total crop received in 2007 was 13.2 million bushels compared with 14.3 million bushels in 2006, a 10 percent drop due to dry growing conditions, Whitehall said.

This year it looks like the crop will be about 12 million to 12.5 million bushels and will be a week to 10 days late in harvest because of cool weather.

State Rep. Mike Armstrong of Wenatchee was honored as the coop’s “Legislator of the Decade” at the annual meeting for his lead role in saving the Coulee City to Cheney short line railroad operated by Eastern Washington Gateway Railroad, Whitehall said. A past operator planned to close and salvage the line for lack of revenue, but the state bought it in 2006 and kept it open, he said.

The co-op ships about 50 percent of annual production from Grant and Lincoln counties to Cheney over the line. Douglas County production is trucked to Wenatchee and shipped to Portland, Ore., by rail or trucked to the Tri-Cities and barged to Portland.

“Saving the line is a benefit for our growers,” Whitehall said. “It saves them thousands of dollars for many years to come.”







September/October Table of Contents