Newsline

Co-op developments, coast to coast

Consumers pick favorite
farmers markets
American Farmland Trust conducted a contest this summer that allowed shoppers to vote for their favorite farmers market from among 860 nationwide that enrolled in the contest.

The votes were cast in three categories: large, medium and small markets.

The winners were: “By providing us with a place to purchase regional foods, farmers markets help keep farmers on the land so that they can continue to provide fresh food for our tables as well as community economic benefits and a wonderful place for all to gather,” says Gretchen Hoffman, communications coordinator for American Farmland Trust. “Throughout the campaign, thousands of people — along with bloggers and the media — were talking about the contest, helping to promote farmers markets on both the local and national level. We certainly went a long way toward reaching our goal of making a national splash about farmers markets and the farms they support.”

Idaho potato growers pursue
anti-trust case
The Southern Idaho Potato Cooperative has filed a request with the United States Department of Justice seeking an investigation into allegations that a major buyer violated anti-trust laws. According to the Twin Falls (Idaho) “Times-News,” the cooperative, which represents about 300 potato growers in Idaho, alleges that the buyer terminated grower contracts that it approved earlier in the year. At the same time, cooperative officials say, company field men asked growers individually to sign joint-venture contracts that would give the buyer greater control of their operations, undermining the co-op.

The number of independent growers in the state has plummeted 51 percent since 1997, the newspaper reported, noting that some have attributed the rise of a billion-dollar food processing industry — which serves the fast-food industry — as having led to the fall of small, independent growers. Independent growers who sign joint-venture contracts often hand partial ownership of their operations to the potato processor.

Vermont’s City Market named
top U.S. food
cooperative
City Market/Onion River Co-op, Burlington, Vt., was awarded the National Cooperative Excellence Award for 2008 during the Consumer Cooperative Management Associations (CCMA) Conference in Portland, Ore., in June. The award is bestowed to one food retailer each year in recognition of innovative products and services, outstanding member benefits, and service and growth in net sales and earnings.

City Market/Onion River Co-op has grown substantially since 2002, with more than $24 million in sales and more than 10 percent growth per year. The co-op serves more than 2,500 members of all income levels with both natural and conventional groceries, with a particular focus on local products — offering thousands of local products to its customers.

Through innovative agreements with the city of Burlington, the co-op has been called a pioneer in community involvement and social responsibility. Participation in meals for senior citizens, consumer education, dedication to increasing access to healthy food for residents on food stamps, support for the Chittenden Emergency Food Shelf and the Committee on Temporary Shelter (COTS), are among the reasons the Onion River Co-op was called a model for community involvement and services.

“Achieving that level of success in a small community is impressive enough; achieving it while serving the community to such an extent is heroic,” is engraved on the award.

The Howard K. Bowers Fund Cooperative Excellence Award, bestowed during Onion River Co-op’s 35th year in business, was accepted by City Market General Manager Clem Nilan. “This award validates the work that all of the co-op staff has done to effect change in our community and to make our members proud,” said Nilan. “One of the beautiful differences about co-ops is that we operate from a triple bottom line of social good, environmental good and fiscal excellence. Serving the community is not something we do when we have extra profit. It’s our mission.”

The CCMA conference is an annual event organized by Cooperative Grocers’ Information Network (CGIN), a membership organization founded to support the growth and development of food co-ops. The award was presented by Kari Bradley, General Manager of Hunger Mountain Co-op in Montpelier.

Indiana co-ops form
new feed business
North Central Co-op (NCC), Wabash, Ind., and Ag Plus, South Whitley, Ind., have created a 50/50 partnership to renovate and operate the latter’s feed mill in South Whitley as a state-of-the-art facility. The new venture is called Synergy Feeds LLC. Construction is expected to be completed during the summer of 2010.

Brent Tracey, who has worked in the feed divisions of both co-ops, has been named general manager for the new company. According to Tracey, the new facility will be highly computerized and labor efficient. It will manufacture up to 200,000 tons per year of a full line of livestock feeds, including newly added capability to manufacture dairy feed.

“This is going to enable North Central and Ag Plus to be major players in the feed business for a long time,” says North Central CEO Darrell Smith. “In changing times, it’s critical that we be able to manufacture feeds as economically as possible. This new plant will be a great resource for livestock producers, as well as providing a good return on investment for the members of both of our co-ops.”

Ag Plus CEO Jeff Mize adds: “It’s going to be an outstanding partnership that will create opportunities we didn’t have before. By combining our sales teams and equipment and by reducing expenses, it will result in synergies for the feed business of both companies.”

After the new mill is completed, feed manufacturing operations at Ag Plus’s Raber location and North Central’s two current feed mills in Fremont and LaFontaine will cease.

Although the major portion of Synergy’s production will be for large livestock producers, smaller producers will still be able to obtain bulk deliveries by notifying the company at least a day in advance. Bagged feed will also be available at a number of locations. Tracey said that the cost of delivery will not increase.

The new company will be overseen by a board of four governors, two from each co-op. “This is an opportunity to put together a team and build a feed mill we’ll really be proud of,” notes Tracey. “We’ll be able to manufacture high-quality feeds as efficiently as anyone in business today.”

USDA offering $18 million
in Value-Added Producer
Grants
Agriculture Under Secretary for Rural Development Dallas Tonsager is urging farmers, ranchers and business owners to apply for $18 million in USDA grants to help them add value to the commodities they produce. “Last week, Agriculture Secretary Tom Vilsack announced that USDA plans to award approximately $18 million in value-added grants nationwide. We want to ensure that producers file their applications promptly so they can potentially take advantage of this important program,” Tonsager said while attending Value-Added Agriculture Day during the 2009 South Dakota State Fair in September.

The event is an opportunity to inform the public about value-added agriculture and showcase the state's latest developments in the area.

The national application period for USDA Rural Development Value- Added Producer Grants closes Nov. 30, 2009. For more information on how to apply, producers should visit: www.rurdev.usda.gov/rbs/coops/vadg.htm.

USDA will award planning grants of up to $100,000 and working capital grants of up to $300,000 to successful applicants. Applicants are encouraged to propose projects that use existing agricultural products in non-traditional ways, or merge agricultural products with technology in creative ways. Businesses of all sizes may apply, but priority will be given to operators of small- to medium-sized farms operating as a family farm (those with average annual gross sales of less than $700,000).

Applicants must provide matching funds equal to the amount of the grant requested. Ten percent of the funding being made available is reserved for beginning and socially disadvantaged farmers or ranchers. An additional 10 percent is reserved for projects involving local and regional supply networks that link independent producers with businesses, and cooperatives that market value-added products.

Paper applications must be submitted to the Rural Development state office in the state where the project will be located. A list of state offices is available at: www.rurdev.usda.gov/recd_map. html. Electronic applications must be submitted through www.Grants.gov.

Montana landowners to
build wind-power project
Agri Energy LLC, a Montana-based LLC formed by five landowners, has announced plans to build a utility-scale, landowner-driven community wind project in north-central Montana. The landowners are preparing to respond to a request for proposals from Northwestern Energy — the area’s major power distribution utility — for projects that can supply it with 55 to 75 megawatts of renewable energy.

Montana Farmers Union, which played a major role in the formation of Agri Energy, said it hopes that a series of half a dozen community meetings will result in more landowners joining, or forming, similar co-op-type associations to ensure local ownership of renewable energy dollars generated in Montana.

“Right now there is a great deal of concern among farmers and ranchers here about income derived from renewable energy in Montana being lost out of state, while landowners receive only a small fee for land leases,” says Chris Christiaens, Montana Farmers Union project specialist. “This way, all farmers and ranchers within the footprint of a wind project would receive a fair share of the income generated, even if the power lines do not run over their land.”

“When the Montana Farmers Union approached us about the concept of landowner-driven, community-wind projects, we jumped at the chance to become involved,” says Jerry McRae, a spokesperson for Agri Energy LLC. “There is a great deal of confusion in the marketplace surrounding wind resource development, so we decided to take matters into our own hands to control our own destiny.”

With help from MFU, the landowners engaged the services of Praxis Energy Group LLC, based on its history of assisting communities and regions with economic development, job creation and strategic alliances.

Christiaens says the effort to bring wind development to Montana’s rural areas is timely, as farmers and ranchers struggle to stay solvent in the face of high energy and fertilizer prices. “Wind energy and local development is extremely important as a source of income, as well as energy for that farmer/rancher.”

Farmers, ranchers, businesses and towns can form cooperatives to help raise capital for wind power development, which also keeps profits close to home, he says. “It could then be community-owned, and it could be a source of income for the community, for the farmer, and also be providing electricity for them.”

Court approves Humboldt sale
The U.S. Bankruptcy Court in Santa Rosa, Calif., has approved a $19.5- million bid made by Foster Farms Dairy of Modesto, Calif., for Humboldt Creamery. Foster Farms is the largest independent dairy in the state, so the action ends Humboldt’s 80-year history of operating as a producer-owned business.

The move allows Foster Farms to expand its line of organic dairy products. It plans to continue to use the Humboldt Creamery brand.

The co-op’s distressed financial status was discovered last year when longtime CEO Rich Ghilarducci abruptly resigned. The FBI is investigating.

While some in the community said they felt Foster Farms was a good company, others had a hard time accepting that farmers had lost control of their former co-op.

“It's a sad day for Humboldt County,” Dennis Leonardi, former board president, told the “Times- Standard” newspaper. “We’re going to lose an 80-year-old company that’s been part of the bread and butter that this community has been built on down here in Ferndale. ... It’s another oldgrowth tree falling that isn't going to grow again.”

The “Times-Standard” reported that co-op members had initially hoped to put a bid in on the company in an attempt to buy it out of bankruptcy and retain ownership, but were unable to secure financing in a tight credit market.

The creamery had been 75 percent owned by a cooperative of 40 dairy farmers, and 25 percent by Dairy Farmers of America.

CWT accepts third herd
retirement of year
Cooperatives Working Together (CWT) announced Aug. 5 that it had tentatively accepted 294 bids in the third herd retirement of the past nine months. The 86,710 cows and 1.8 billion pounds of milk accepted in this round, combined with CWT’s previous two herd retirements, equal 4.8 billion pounds of milk removed since December 2008.

This is the second-largest herd retirement since the farmer-funded selfhelp program started in 2003. The previous retirement round, completed in July, removed a record 101,000 cows and 1.96 billion pounds of milk.

“These two summer 2009 herd retirements, combined with the USDA’s recent price support increases, should result in very positive movement in dairy farmers’ milk prices,” says Jerry Kozak, president and CEO of the National Milk Producers Federation (NMPF), which administers CWT.

Farmers in 38 states submitted 312 herd-retirement bids last month to CWT. This eighth CWT herd retirement in the past six years was also the first to feature a maximum acceptable bid threshold of $5.25 per hundredweight. It was also the quickest herd retirement following a previous round, which is an indication “that there is still an interest on the part of our members to use CWT to remove more cows, even though the program has been very active in 2008 and to date in 2009,” notes Kozak. This round is removing 3,104 bred heifers.

About 73 percent of the farms selected are located east of the Mississippi River, while 70 percent of the 87,000 cows to be retired come from the Western and Southwest regions.

“The increase in the percentage of farms selected east of the Mississippi in this herd retirement compared to the one just completed is an indication that the financial distress farmers are feeling is not unique to one or two regions of the country, but being felt nationwide,” says Jim Tillison, CWT chief operating officer.

Both the average herd size (296 cows) and the average production per cow (20,884 pounds) are the highest of any of the eight herd retirements CWT has carried out, indicating that “these are not just small farms with low-end cows that would have soon been gone anyway,” Tillison says.

In related action, more than half a dozen U.S. dairy farm organizations met in Chicago in July to review concepts designed to improve dairy farm prices and offer long-term solutions to the economic volatility afflicting farmers across the country. NMPF’s new Strategic Planning Task Force hosted the meeting to look at “both how the current milk price crisis developed, and how best to reduce the chances that a similar situation could arise in the future,” says Kozak.

The Task Force spent much of one day reviewing a plan to manage milk supply growth by assigning production bases to farmers — a program endorsed jointly by the Holstein Association USA, the Milk Producers Council and Dairy Farmers Working Together. Representatives from each of those organizations discussed how such a program would work and how it would have to be implemented legislatively in order to make it mandatory for all dairy farmers.

The Task Force also heard presentations from other farm policy organizations about their perspective on the dairy crisis, including the National Farmers Union, the National Farmers Organization, the American Farm Bureau Federation and Western United Dairymen. The Task Force was to meet again in August.

Ontario groceries form co-op
to promote sale of local food
Five owners of Sobeys grocery store franchises in southwestern Ontario have broken away from Sobeys and formed a co-op in order to buy more local products. “On Co-op,” the newsletter of Ontario’s provincial co-op association, reported that the Independent Hometown Grocers Coop was created after the franchise owners, who operated nine Sobeys grocery stores, decided to go independent in an effort to sell local food. They say Sobeys policies had required the stores to source only federally inspected meat, which came primarily from Alberta and the United States.

“We feel that local food, local presence, is huge in our market and we wanted to take advantage of that,” Dale Kropf, owner of five of the stores, told “On Co-op.” The stores have retained their wholesale relationship with Sobeys for such items as dog food, spices and breakfast cereals, but are now selling provincially inspected meat supplied by area farmers.

Correction
The last name of Albert Iaroi, a sociologist at Kansas State University, was misspelled in an article about the impact of multifunctional agriculture on biofuels development that ran in the July-August issue of “Rural Cooperatives.”

Frederick awarded NSAC's
Silver Bowl
The National Society of Accountants for Cooperatives (NSAC) has bestowed its highest honor, the Silver Bowl award, to Donald Frederick. NSAC awards a Silver Bowl “to individuals who have distinguished themselves over a period of years by services, which have enhanced, to an unusual degree, the image and operations of the National Society of Accountants for Cooperatives and the cooperative community in general.”

Frederick is the 45th recipient of the Silver Bowl in the 49 years since the award was established in 1960. The presentation occurred during NSAC’s Annual Tax and Accounting Conference for Cooperatives, held in Seattle, Wash., in August.

Frederick is a long-standing member of NSAC’s Tax, Small Cooperative, and Education Committees. He was the first chair of NSAC’s National Program Planning Committee. He also held several offices with NSAC’s Capitol Chapter, including president for 1990- 1991.

Frederick served as program leader for Law, Policy and Governance for USDA Rural Development's Cooperative Programs before retiring in 2007. He now supports NSAC in the role of director of education.

New co-op law book published
Charles T. Autry and Roland F. Hall have co-authored a new book: The Law of Cooperatives, which provides insight of cooperative law and how this form of business differs from other business entities. The book, published by the American Bar Association Business Law Section, provides an overview that includes: the history of the cooperative form of business; a comparison of the cooperative entity with other business entities; guidelines about when to use this form of business; discussion of types of cooperatives and cooperative structures; an outline of the operation and governance of cooperatives and tax implications of a cooperative.

“As our economy changes, we’re seeing an increased interest in cooperatives across a wide range of industries, from healthcare and renewable energy to broadband services,” says Autry.

As a founding partner of Autry, Horton & Cole of Atlanta, Ga., Autry has focused his career for the past 30 years on representing cooperatives, with an emphasis on electric cooperatives and their natural gas affiliates. He serves as counsel to several cooperative boards. Hall’s practice includes representing electric cooperatives and related entities regarding corporate law; finance and regulatory matters, among other legal areas.

USDA grants help
handicapped farmers
U.S. Agriculture Secretary Tom Vilsack has announced that USDA is awarding $4.1 million in grants to 22 states to help farmers with disabilities through the AgrAbility program, which helps thousands of disabled people overcome barriers to continuing their chosen professions in agriculture.

In Wisconsin, the University of Wisconsin-Madison's AgrAbility program will receive $199,000. “Given the right resources, farmers with disabilities can run productive and profitable farms,” Vilsack said. “The AgrAbility program can provide the resources and tools producers need to enhance their quality of life and be successful.”

USDA’s Cooperative State Research, Education and Extension Service awards the funds to land-grant universities that have joined with nonprofit disability organizations to address the specialized needs of AgrAbility’s customers. Projects include educating professionals on how to assist those with disabilities and directly training disabled agricultural workers. The program has improved customers’ financial stability, access to life activities and the ability of states and regions to deliver timely services to those with disabilities.

Since initial funding in 1991, CSREES has awarded grants to more than 30 states resulting in on-farm assistance to more than 12,000 farmers while educating thousands of professionals on how to accommodate those with disabilities in agriculture.




Generosity by local farmer
cooperative is appreciated

Editor’s note: this editorial is reprinted from, and courtesy of, the Walla Walla (Washington) “Union-Bulletin.” This local co-op’s action epitomizes the co-op principle of co-ops giving back to their communities.

By the Union-Bulletin Editorial Board Folks who live in the Walla Walla Valley are generous. That’s demonstrated every day as neighbors reach out to each other in so many ways.

Still, what Northwest Grain Growers—a farmer-owned cooperative—did to celebrate a successful financial year is pretty special.

The Grain Growers, which had its best financial year, donated $100,000 to a variety of organizations and nonprofit groups.

The donations are needed now more than ever because of the current economic downturn. Money is tight all over and some folks are losing their jobs and houses. Local charities are feeling the pinch.

The Grain Growers put about 60 percent of its donations toward local agencies, most of which help those in need. About 40 percent was earmarked toward programs that directly benefit farmers.

A committee appointed by the NWGG board of directors decided how to divide $59,900 among various local agencies and groups. Those receiving a donation were: the Blue Mountain Action Council, Blue Mountain Chapter of the Red Cross, Children’s Home Society of Walla Walla, Christian Aid Center, Helpline, The Cardinal’s Nest of Waitsburg, Walla Walla Council of Campfire USA, Walla Walla Community Hospice, Center at the Park and YWCA.

The NWGG board earmarked $40,100 for education programs that help farmers. The money went toward seed-breeding programs at Washington State University and Oregon State University and a commercial driver-training program for farmers at Walla Walla Community College.

The donations given by the Grain Growers will benefit its members, but it will also benefit the community.

The Grain Growers’ members, of course, don't expect praise for their generosity. Nevertheless, they deserve it.

NWGG’s gift to so many during these difficult economic times will certainly help people get back on their feet and ultimately prosper. Northwest Grain Growers is a great neighbor.





September/October Table of Contents