Rur Coop Nov/Dec04 V4Regardless of the pros and cons of the proposed sale, it appears that there was...

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lCOOPERATIVESCOOPERATIVESUSDA / Rural Development November/December 2004

2 November/December 2004 / Rural Cooperatives

When Farm Credit Services ofAmerica (FCSAmerica) pulled the plugon its proposed sale to Netherlands-based Rabobank in mid-October, itcame as welcome relief to many.Opposition to the sale was loud,adamant and rapidly building steamnationally, not just in the four-statedistrict (Iowa, Nebraska, South Dakotaand Wyoming) served by FCSAmerica.

At a Congressional hearing inWashington (see page 13) on Sept. 29,Myron Edleman, a South Dakota cat-tleman and president of the grassrootsgroup Farmers for Farm Credit, testi-fied that the opposition among his fel-low member-borrowers was “over-whelming.” A number of major farmerorganizations — the National FarmersUnion and National Association ofWheat Growers among them — alsoweighed in against the deal.

Regardless of the pros and cons ofthe proposed sale, it appears that therewas a serious failure to communicatehere. It was incumbent upon the boardto make its case to members and to getsome read on their reaction to liquidat-ing the co-op before plowing forward.Indeed, for a step as radical as selling aco-op, there should be substantial sup-port before taking any such action.

While members would have eventu-ally been asked to vote on the propos-al, this was a classic case of putting thecart before the horse. Many co-ops areattractive takeover targets for outsidefirms, and Rabobank obviously saw thisas an opportunity to enter farm lend-ing in America’s heartland. It shouldserve as a wake up call to other co-opsto be vigilant.

Widespread concern has also beenexpressed that the sale of FCSAmerica

could pull the first thread that wouldeventually unwind the entire FarmCredit System (FCS). All farmers havea stake in this debate, since the exis-tence of FCS forces other lenders tobe more competitive. Thus, the FCSsystem benefits even non-members inthe same way ag marketing and supply

co-ops have a beneficial impact onprices and services for both membersand non-members.

The hearing turned the spotlight ona much broader area than just theRabobank deal; it showed sharplydivergent viewpoints regarding theneed for, and role of, a cooperative sys-tem of farm lending in rural America.Commercial banking industry tradegroups say “mission creep” has beengoing on for years, and that the FCS isno longer serving its intended farmniche. As such, FCS should have itscharter yanked, or at least severelyscaled back, they say.

The FCS and its backers’ stance isthe polar opposite: they say the charterneeds to be expanded to allow it to

serve more rural Americans with moreservices.

Given the uproar over just the pro-posed sale of one of its member institu-tions, the odds of Congress yanking theFCS charter seems remote, to put itmildly. Some have speculated that thereal strategy of the banking groups inmaking these arguments is to keep FCSfrom gaining increased lending flexibil-ity, not taking away what it already has.

The commercial bankers say theyare more than willing to meet any andall farm credit needs in America, butthe track record shows that when thegoing gets rough for farmers, so doesthe interest of too many of theselenders. The farmer owned and direct-ed FCS, on the other hand, will alwaysbe there, through good times and bad,with its mission to serve farmers, notoutside investors.

Some have commented thatFCSAmerica was an inviting target fortakeover because it has accumulatedlarge unallocated reserves. This situa-tion has been at least partially addressedby a recent announcement that the co-op is allocating some of these fundsback to members.

The Congressional hearing was a keyevent for co-ops in the early years of the21st century. It showed how fervent pro-ducers still are about controlling theirfate through cooperatives that they ownand direct. Among the nation’s networkof farmer-owned cooperatives, none ismore vital than their FCS associations.Any actions taken that could directly orindirectly raise farmers’ cost of capital,or reduce its availability in times of eco-nomic stress, would be precisely thewrong step at the wrong time. ■

— Dan Campbell, editor

C O M M E N T A R Y

Through good times and bad

The Congressionalhearing showed howfervent producers stillare about controllingtheir fate throughcooperatives that theyown and direct.

Rural Cooperatives / November/December 2004 3

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Ann Veneman, Secretary of Agriculture

Gilbert Gonzalez, Acting Under Secretary,USDA Rural Development

Peter Thomas, Acting Administrator, Rural Business-Cooperative Service

Pandor Hadjy, Acting Deputy Administrator,USDA Rural Business-Cooperative Service

Dan Campbell, Editor

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Have a cooperative-related question?Call (202) 720-6483, orFax (202) 720-4641, Information Director,

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COOPERATIVESCOOPERATIVESNovember/December 2004 Volume 71 Number 6

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F E A T U R E S & N E W S

4 Biodiesel with altitude Colorado's Blue Sun Co-op grows rapeseed for diesel production By Stephen Thompson

7 Co-op completes purchase of Virginia turkey plant By Michael Leach

10 27 co-ops among recipients of USDA funding

13 Rabobank proposal sparks debate on FCS role By Dan Campbell

17 Four leaders selected for Co-op Hall of Fame

22 Co-ops help keep rural towns alive By Annie Baxter

24 USDA providing $6.3 million in grants for rural co-op development

25 Survey shows dairy co-ops in generally strong financial state By Carolyn Liebrand

31 1890s Land Grant Institutions use USDAfunds to promote business growth

D E P A R T M E N T S2 COMMENTARY8 VALUE ADDED CORNER

18 IN THE SPOTLIGHT 20 LEGAL CORNER29 MANAGEMENT TIP32 NEWSLINE 36 2004 ARTICLE INDEX

O n t h e C o v e r :

Members of the Blue Sun Cooperative are growing rapeseed (a close cousinof canola) in Colorado’s San Luis Valley and High Plains to produce high-quali-ty biodiesel. About 45 percent of the weight of rapeseed is oil, compared to 20percent of soybeans. See page 4. Grant Heilman Photo


By Stephen Thompson, assistant editor

[email protected]

thanol is being embraced nationally by farmers lookingto add value to their crops, but biodiesel has gotten offto a slower start. Most U.S. biodiesel producers are rel-atively small operations that use soybeans or recycledcooking grease as their feedstock. Now there’s some-

thing new under the sun: the Blue Sun Producers Cooperative and itsLLC partner, based in Colorado’s high altitude San Luis Valley.

Blue Sun’s approach to biodiesel production differs from that takenelsewhere in the United States to date. Its feedstock is a special varietyof rapeseed bred to do well in the arid climate of southern Colorado.The biodiesel produced is blended at a 20-percent ratio with conven-tional petroleum diesel to produce a high-quality fuel, known as B20.

Blue Sun Producers, which currently has more than 40 member-producers from Colorado, will be offering memberships this year tofarmers throughout the region as far north as Montana. Blue Sun hasan affiliated co-op exclusive to Nebraska which is actively seekingmore members from that state. This year, the co-op harvested its firstbig rapeseed crop — more than 3 million pounds.

The cooperative’s affiliate, Blue Sun Biodiesel LLC, recentlyopened a major state-of-the-art distribution terminal in Alamosa,Colo., which lies 7,544 feet above sea level and is surrounded by theSangre De Cristo and San Juan mountain ranges. In May 2005, itwill open a processing plant and refinery co-located with the trans-portation facility. Both openings will be welcome events in Alamosaand the surrounding San Luis Valley, an area of southern Coloradothat has been hurting economically, in part due to low commodityprices and drought conditions.

Rapeseed widely used in EuropeRapeseed, some varieties of which are used to make mustard and

others to make canola oil, is the preferred biodiesel feedstock inEurope. About 45 percent of the weight of rapeseed is oil, as com-pared with only 20 percent for soybeans. It can be planted and har-vested with the same equipment used for small grains. In addition, itsoil offers certain advantages in the production of biodiesel.

The seed for Blue Sun was planted when former Duracell Batteriesexecutive Jeff Probst came to Colorado looking for an opportunity tostart a new business venture in the energy sector. Among other new

Biod iese l wi th a l t i tudeColorado’s Blue Sun Co-op growsrapeseed for biodiesel production

E


product and technology projects,Probst had worked on Duracell’sworldwide objective to replace theenvironmentally hazardous mercurybattery. He was attracted to biodieselbecause, he says, he wanted his neweffort to help the environment as well.

B20 fuel has many environmentaladvantages over straight petroleumdiesel. Its exhaust is cleaner, especiallywhen it comes to soot particulates thatform the black smoke often seen com-ing from the stacks of diesel-poweredvehicles.

Breathing diesel soot has beenlinked by some to illness among chil-dren, including asthma, bronchitis,pneumonia and, in adults, even cancer.In addition to being healthier, theexhaust generated by biodiesel orbiodiesel blends doesn’t have as muchof an objectionable smell as does theexhaust from 100 percent petroleumdiesel.

Is rapeseed the answer?Probst soon concluded that buying

feedstock, such as soybeans, on theopen market would be risky for theoperation because of wide price fluctu-ations.

“Feedstock is 85 percent of the costof 100 percent biodiesel,” he says. “So,we felt that we had to have our ownsource. We can always go to the com-modity markets if we lose a crop orhave a shortfall.”

In 2002, Probst spent months talk-ing to farmers in the San Luis Valleyarea and elsewhere. “It was difficult,”he says. “In the early days, we’d drivelots of miles just to talk to four farm-ers.” What he found was that farmerswere interested in finding a crop thatwas outside the commodity markets.Soybeans and other commodity cropsposed too many risks involving gov-ernment price supports and other fac-tors.

On the other hand, they were waryof the risk of sinking money into a newcooperative. Local service and otherco-ops hadn’t paid dividends in 10years. Further, recent weather condi-tions had damaged crops and hurt

farmers financially, making them dou-bly cautious.

Despite farmers’ caution, Probst feltthat if they were presented with a well-thought-out business model, a value-added co-op could fly.

From idea to realityAfter talking with agronomists at

several universities, Blue Sun decidedthat rapeseed was the best choice forfeedstock. They began working withresearchers at Colorado StateUniversity and other universities toidentify the most suitable varieties.

Meanwhile, Probst turned tolawyer Mark Hanson of Lindquist andVennum, an advocate of the new-gen-eration co-op movement, for assis-tance. “He gave us a lot of help andencouragement,” says Probst. “Hecame to the office, looked at our busi-ness plan, and told us it could be madeto work.”

Hanson helped with the legalpaperwork needed to set up the pro-ducers’ cooperative, which would holdequity in the manufacturing and dis-tribution company, and advised thatthe corporate side of the operationchange status from a regular corpora-tion to a limited liability corporation(LLC). The reason was simple andvital: to allow the profits to get to theproducers without first being taxed.They both agreed that producers hadto be paid first if the venture was to besuccessful, Probst says.

With the legal groundwork done,Blue Sun began actively recruitingmembers for the co-op. One of thefirst farmers to join was BrianStarkebaum, who grows wheat, cornand millet on his land in Phillips

County, in northeast Colorado. Amember of his local conservationboard, he sat through a Blue Sun pre-sentation at one of the board meet-ings. Starkebaum was impressed, hesays, because of their willingness toinvest in rural Colorado. Afterward,he volunteered to set up a meeting ofproducers.

Adding value a necessityfor family farmers

Starkebaum was interested in value-added ventures because, he says,“Value-added is the only way family-sized farmers are going to survive. It’soften the money from an outsidesource that makes the differencebetween breaking even and making aprofit.”

However, ethanol production, cur-rently the most popular value-addedactivity, didn’t attract him. “Ethanolhasn’t been doing as well around hereas it was billed,” he says. “They over-sold the idea.”

The rapeseed producers’ co-opoffers farmers not riches, saysStarkebaum, but a way to mitigate risk,and to earn some extra money abovethe price of the crop.

“With the rapeseed, we’re promiseda known, consistent price, and we alsomake money on the ‘back side’through the value-added activities,”Starkebaum says. Blue Sun is alreadyplanning to make its first dividend pay-ment to co-op members.

Starkebaum agrees that generatinginterest among farmers has been chal-lenging. “It’s been a battle,” he says.“Asking people to give $5,000 (therequired minimum equity stake lastyear) is hard, especially with currentfarm conditions. Farmers want to seeother people try it first, to see if it’llwork out.”

Blue Sun is planning to split thestock for current farmers, providingthem with twice the amount of unitsthat they can sell, lease or increasetheir acreage planted. In addition, theminimum investment will be reducedthis year to one unit at $1,000 vs. fiveunits at $5,000.


Organizing efforts are not helpedby the fact that local traditional co-opshaven’t been paying dividends, saysStarkebaum. “It’s hard to get guys tounderstand [the concept of] not mak-ing all your money back with the crop,but instead getting a return on yourshares with dividends.”

“It’s going to be tough,” saysStarkebaum, “But the retail and busi-ness side has been set up well.”

“We’re gaining momentum. First it

was hard to get their attention,” addsProbst. “Now they’re asking us tocome out and talk to them.”

Commodity, or branded product?If the rapeseed-biodiesel model

works, and a market is created for BlueSun’s fuel, they expect to see competi-tors springing up to take advantage ofthe market. How, then, can Blue Sunavoid becoming just another commodi-ty supplier?

Probst thinks he has the answer. “Iwanted to do better than the standard.I wanted us to have an advantage.”That advantage would be selling BlueSun biodiesel as a differentiated prod-uct — a product perceived to haveadvantages over other diesel fuels.That meant aggressive innovation,marketing and quality control.

Having control over the processingand distribution infrastructure is thebest way to assure quality, which is the

route Blue Sun is taking. Although thefirm still has to use a contractor to doits seed crushing, all the productionand blending will soon be done in BlueSun’s Alamosa plant.

Depending on when the minimumamount of acreage is achieved in theValley, plans will move forward for acrushing facility at the same location.And Blue Sun retail pumps are alreadyin operation in a growing number oflocalities, most recently in Santa Fe,N.M.

Overall, says Probst, the firm isspending close to $4 million on theplant, aided by a $500,000 RenewableEnergy Systems grant and a $450,00Value-Added Producer Grant fromUSDA Rural Development. “USDAhas given us major help in gettinggoing,” he says. “When the Value-Added Producer Grant was announcedin the fall of 2003, it really helped ourcredibility in the farm sector.”

Improving biodiesel Blue Sun has decided that establish-

ing its brand will center aroundimproving on biodiesel’s advantages. Itcontinually researches new ways toimprove its fuel, working closely withdiesel manufacturers, especiallyCummins, to develop new additivesand blends.

Scott Bentz, vice president forOperations and Marketing with

Cummins Rocky Mountain, was skep-tical when Blue Sun approached forhelp. “Diesel manufacturers have tradi-tionally been hesitant about biodiesel,”he says. “There’s so much variabilitywith the feedstocks, and quality controlhasn’t been that good.”

But Blue Sun’s commitment to qual-ity has made him a believer, saysBentz. “I’m really impressed with theirquality control. They control the qual-ity from the source to the pump.They’ve developed their own infra-structure for blending and distribution,so they can eliminate most of theopportunities for problems. And theymake a superior product.”

Many school districts have switched,or are contemplating a change, tobiodiesel for their school buses toreduce what they perceive as a healthrisk to their students. Municipal bussystems are beginning to adopt thenew fuel as well.

Denver, with its serious air-pollu-

tion problem (often caused by airinversions), offers a big potential mar-ket. Says Starkebaum, “Denver’s transitsystem is already running 10 buses onBlue Sun as a test. If they decide torun their entire fleet on it, they coulduse our entire production — 10 mil-lion gallons per year!”

Biodiesel and B20 also offer signifi-cant advantages to operators of diesel

Part of Blue Sun’s new transportation facility arrives, prefabricated, at the construction sitein Alamosa, Colo. Blue Sun Biodiesel is spending $3.2 million on a combined transportationand blending facility, slated for completion this May. Photos courtesy Blue Sun

Jeff Probst, CEO of Blue Sun Biodiesel LLC,had to drive long distances at first to talk toa few skeptical farmers about setting up arapeseed co-op. Now, he says, “they’reasking me to come out and talk to them.”

continued on page 34


By Michael Leach,

USDA Rural Development

he newly formed,Virginia PoultryGrowers Cooperative(VPGC) has acquired thePilgrim’s Pride turkey

processing operation in Hinton, Va., inthe heart of the Shenandoah Valley, forabout $35 million. The newly formedco-op will keep the plant, which canprocess 8 million birds annually,operating under farmer ownership.Also purchased as part of the dealis a feed mill in Broadway, Va.

Producers are using a combina-tion of equity they raised amongthemselves and outside sources,grants and low-interest loans fromfederal, state and local govern-ments, and financing from FarmCredit of Virginia to buy the plant.The remainder of the financingwas close to being finalized at pressdeadline in late October, withCoBank expressing strong interestin the deal.

The plant was closed temporarily inmid-September, but the co-op plans tohave it back in operation by the end ofNovember.

Last April, Pilgrim’s Prideannounced plans to close the facilityunless a buyer was found by Oct. 1,which sent an economic tremor rum-bling throughout the region. If theplant were shut down, it would haveleft a $200-million dent in the econo-my of the Valley. Lost annual wagesfor the plant’s 1,300 workers alonewould have been about $38 millionannually, and up to 200 farmers were

faced with the prospect of bankruptcy.While not all the jobs are being saved,the co-op hopes to hire back more staffin coming months as plant volumeincreases.

Co-op President Sonny Meyerhoffersays VPGC had to do in a few monthswhat typically takes at least 18 monthsto accomplish. Organizers had to accel-erate the takeover process — includingforging a solid business plan in a matterof weeks — because the window of

opportunity was so limited. “Thedream is alive,” Meyerhoffer said at aco-op meeting.

“It’s almost a miracle that they wereable complete a fairly complex deal insuch a short amount of time, but it’salso evidence of just how crucial thisplant is to the poultry industry and theeconomy of the region,” says NormHyde, a spokesman for the VirginiaFarm Bureau Federation. “It wouldhave been a crushing economic blowhad it closed.”

Rockingham County, Va., where theplant is located, is considered to be the

birth place of the modern turkey indus-try, Hyde noted. Additionally, inrecent years it has been the largestturkey-producing county in the UnitedStates.

Texas-based Pilgrims’ Pride said itwanted to sell the plant, whichprocesses whole birds and turkeybreasts, to focus more on value-added,deli turkey products. The co-op will bephasing in de-boning operations toproduce more processed parts. A posi-

tive sign of the co-op’s prospectsin the marketplace came when astrategic partner in the high-endmeat processing business agreedto purchase turkey breasts fromVPGC.

Cooperative members hadinvested $2.6 million by earlyAugust. USDA RuralDevelopment provided an $8million grant — through itsRural Economic DevelopmentLoan and Grants program — tothe Shenandoah Valley ElectricCooperative, which in turn madea low-interest loan to the turkey

co-op. The state of Virginia’sDepartment of Agriculture andConsumer Services provided the co-opwith a $500,000 grant, and WestVirginia provided a $250,000 grant.Rockingham County also chipped inwith a $100,000 grant.

When delivering the grant fromVirginia, VDACS CommissionerCarlton Grant said the farmers whoformed the co-op “represent the truespirit of American agriculture; they arepeople who look adversity square inthe eye, brace harsh reality and thenband together to find a solution.” ■

Co-op completes purchaseof Vi rg in ia tu rkey p lant

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USDA Rural Development presents the new Virginia PoultryGrowers Cooperative with a grant during a ceremony inHinton, Va.


By Mark Berry

Editor’s note: Berry is media relationsmanager for Battelle Co., a research andtechnology company based in Columbus,Ohio. This article is provided courtesy theOhio Soybean Council.

ost U.S. consumershave so far turned acold shoulder to tofu.However, the big chillmay be ending. The

development of a new, frozen tofuproduct shows that a thaw in this rela-tionship may be just around the corner.

Recent product testing shows con-sumer interest is growing for this high-ly adaptable, protein-rich food that is astaple in many Asian nations. Thekey is a new technology thatallows the soy-based product to befrozen while maintaining all of thecharacteristics of fresh tofu.

That news should warm thehearts of soybean farmers every-where.

“Based on information andanalysis from previous projectsexamining this opportunity, thefinancial projections appear to bequite attractive,” says John Lumpe,new-use development director forthe Ohio Soybean Council (OSC).“This technology can benefit theOhio soybean industry by increas-ing the use of soybeans as a foodproduct.”

If a USDA-assisted marketingstudy and research ultimately

shows a strong likelihood ofsuccess, the OSC hopes theproject will be pursued by a coop-erative of Ohio soybean growers.

The new technology wasdeveloped by a major foodprocessor using a patented,flash-freezing process thatallows storage of frozentofu for up to a year.Fresh tofu can bestored no more thanseven to ten days.

Frozen foods lesscommon in Japan

Tofu is much more popular inJapan and other Asian countries thanin the United States. Frozen tofu has

beenavailable

in Japan forseveral years,

but it remainslittle more than

an afterthought for Japanese con-sumers. The reasons range from thequality of the product — it is inferiorto fresh tofu, according to thedemanding standards of Japanese din-ers — to cultural habits and marketlogistics.

While U.S. consumers rely heavilyon frozen foods, the Japanese do not.The country doesn’t have the largefleet of freezer trucks that allow easytransportation of frozen products inthe United States.

Also, Japanese houses are smallerand so are their refrigerators. TheJapanese are much more likely to buyfood daily for same-day meals becausethey lack the storage room for largequantities of frozen foods. It’s a funda-mental difference in cultures and buy-ing habits.

Warming up to co ld to fuOhio soybean growers study entry into emerging frozen tofu market

V A L U E - A D D E D C O R N E R

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Amy Sigg Davis, vice chair of the Ohio SoybeanCouncil, checks out some of the tofu food productsduring a recent market research trip to Japan. Thecouncil is using grants from USDA to help gaugethe market for frozen tofu made with Ohio soy-beans. Photos courtesy Ohio Soybean Council


All of those factors that workagainst the frozen tofu market in Japanmake the product attractive in theUnited States.

“Simply put, U.S. consumers areused to frozen food. Japanese con-sumers aren’t,” says BhimaVijayendran, senior research leader andvice president for technology commer-cialization at Battelle. “The advantagewith frozen tofu is they can buy a half-pound and use just a small amount,then put the rest in the freezer foranother time. They can’t do that now.”

Vijayendran, Lumpe, Amy Davis,vice chairman of OSC, and SteveMiller, chairman of OSC, were part ofa group commissioned by the OSCthat traveled to Japan in March 2003to study the technology and researchJapanese consumer habits as they per-tain to fresh and frozen tofu. Amongthe conclusions they reached was thatthe convenience of frozen tofu, whilenot a terribly important factor inJapan, could make the product a viablealternative in the United States. A sec-ond study mission to Japan is plannedfor the near future.

VAPG grants help council gaugefeasibility, develop business plan

USDA Rural Development has pro-vided $200,000 in grants for the pro-

ject under its Value-Added ProducerGrants (VAPG) program (see page 10of this issue for more on this pro-gram). The grants are helping OSCstudy the technical feasibility and mar-ket viability of a commercial frozentofu plant in Ohio.

In 2002, USDA awarded the councila $50,000 VAPG to investigate the fea-sibility of such a plant. In 2003, itreceived a second VAPG for $150,000to develop a business and marketingplan.

Product convenience would makelittle difference to consumers if theproduct was deemed inferior. Unlikethe product on the market in Japan, anew freezing process doesn’t compro-mise quality.

Recent food tests of tofu with focusgroups of consumers in Chicago andNew York City triggered “very favor-able” responses, says Vijayendran. Theconsumer groups could not tell the dif-ference between the frozen tofu andthe fresh tofu they typically eat.

The chef, who prepared a wide vari-ety of meals with tofu — including sal-ads, soups and pasta — confirms theenthusiastic response.

“I do a lot of work with soy foods ingeneral, so this is an area of specialty,”says Christopher Koetke, associatedean of the School of the Culinary

Arts of Kendall College in Evanston,Ill. “The frozen tofu performs wonder-fully. It behaves surprisingly like freshtofu. It has a soft texture to it. It’s verypleasing and not rubbery at all. Thegroups loved it.”

Performance and convenience aretwo huge steps in the right direction,but tofu remains a marginal product inthe United States. So consumer educa-tion is key to the success of frozen tofuin America. Consumers do not knowmuch about the product or its manypositive characteristics.

Not many vegetable proteins are asrich in protein as soy. There are spe-cific health benefits for menopausalwomen and people with high choles-terol. Whereas soy alternatives usedto be displayed separately from themore traditional products, soy milkcan now often be found in the dairysection.

Tofu in the United States is a slowlygrowing market, “but it’s gaining trac-tion here,” says Vijayendran. Soy pro-tein is recognized as a good, nutritiousalternative.

Obviously, it’s an emerging market,says Vijayendran. “The health-con-scious are early targets. At first, itprobably will be more attractive onthe West Coast than Chillicothe,Ohio.” ■

The Japanese have never had much of a yen for frozen tofu, but new technology that produces a superior product may help change that.


Agriculture SecretaryAnn M. Veneman inmid-October announcedthe approval of 97 Value-Added Producer Grants

(VAPG), totaling more than $13.1 mil-lion, in 34 states. Farmer-owned coop-eratives were awarded 27 of the grants.The grants will help farmers andranchers increase their economicopportunities through the develop-ment of new products and markets foragriculturally based products.

In support of President Bush’s 2001energy plan, 16 percent of the propos-als selected will support biomass/renewable energy-related ventures.“The Bush administration continues toplace a high priority on creating newsources of renewable and biomassenergy through such grant programs asthe value-added producer grant pro-gram,” Veneman said. “Creating anenergy independent nation, throughutilization of our nation’s naturalresources, is a valuable investment inAmerica’s future.”

“These grants are critical to help-ing America’s farmers and ranchersincrease markets for their commodi-ties and to increase their profitabili-ty,” added Agriculture Acting UnderSecretary for Rural DevelopmentGilbert Gonzalez. “President Bush iscommitted to helping more rural fam-ilies live the American Dreamthrough the creation of new businessventures that employ more ruralAmericans. This program is a signifi-cant investment in the future of rural

families and communities.”Authorized as part of the 2002 Farm

Bill, the VAPG program provides anopportunity to refine agricultural com-

modities and products to increase theirvalue in the marketplace.

Of the $13.1 million announced,$2.1 million will fund 16 proposalsranging from determining the feasibili-ty and creating a business plan for har-nessing wind energy in Colorado, todetermining the feasibility of market-ing ethanol from a 50-million-gallon,dry-grind ethanol plant in Illinois, todetermining the feasibility of convert-ing dairy biogas into purity pipeline orautomotive quality fuel in Idaho.

VAPG is a highly competitive grantprogram that attracted nearly 400applications. An independent reviewof applications is conducted to ensurethat selected proposals are scoredbased on the criteria established in theannouncement of the funding avail-ability. Funding of selected applicantswill be contingent upon meeting theconditions of the grant agreement. Following is a list of the co-ops thatreceived a VAPG. A complete list ofthe selected grant recipients can befound posted on at the USDA RuralDevelopment Web site at:http://www.rurdev.usda.gov.

USDA Rural Development’s mis-sion is to deliver programs in a waythat will support increasing economicopportunity and improve the quality oflife of rural residents. As a venture cap-ital entity, Rural Development pro-vides equity and technical assistance tofinance and foster growth in home-ownership, business development andcritical community and technologyinfrastructure. ■

27 co-ops among rec ip ients o f$13 mi l l ion in USDA Rura lDevelopment VAPG fund ing

A

Sunsweet Ones — individually wrappeddried plums — are being aimed at theyoung adult market. Sunsweet Growers will be using VAPG funds from USDA RuralDevelopment to help establish the market.Photo Courtesy Sunsweet Growers


Cooperative recipients of 2005 Value-Added Producer GrantsRecipient State Amount Description

1Soy Missouri $95,000 Grant funds will be used for a feasibility study, business and marketingplans for marketing soy flour for use in premium soy food products tar-geting health-conscious American consumers.

Burnett Dairy Cooperative Wisconsin $150,000 Grant funds will be used for working capital expenses for marketingdeli cheese and individually-packaged string cheese products.

Cloverdale Growers' Alliance North Dakota $20,000 Grant funds will be used to study the economic feasibility of marketingfresh and processed pork products to retail grocers under a producer-owned label in partnership with Cloverdale Foods Company.

Country Side Cooperative Nebraska $415,000 Grant funds will be used to evaluate the feasibility of marketing soy-bean meal and soybean oil.

Darigold Inc., West Farm Foods Washington $249,000 Grant funds will be used to evaluate the feasibility of marketing wheyfractions and ultra-filtrated milk products and to develop business andmarketing plans for the venture.

Diamond Walnut Growers, Inc. California $450,000 Grant funds will be used for working capital expenses for expandingthe market for Diamond culinary and in-shell walnuts in U.S. retailmarkets by creating new healthy lifestyle packaging and point-of-pur-chase materials.

Farmer's Cooperative of El Campo Texas $209,484 Grant funds will be used for working capital expenses for marketingidentity-preserved sorghum that has been evaluated using NearInfrared technology to determine the nutritional value of the product.

Gateway Beef Cooperative Missouri $249,140 Grant funds will be used for working capital expenses associated withexpanding domestic and export markets for CAB kosher and non-hor-mone-treated beef products.

Golden Ridge Cheese Co-op Iowa $500,000 Grant funds will be used for working capital expenses for marketingblue cheese.

Heartland Corn Products Minnesota $279,000 Grant funds will be used for planning activities associate with addingvalue to the by-product stream of ethanol.

Kearney Area Ag Nebraska $130,700 Grant funds will be used to conduct a feasibility study and develop abusiness plan that identifies alternative products for processingand/or markets for alfalfa byproducts at a lutein-extraction plant.

MaxYield Cooperative Iowa $50,000 Grant funds will be used to conduct a feasibility study to determine theviability of developing a community-based advanced bio-waste recy-cling and energy generation system, capable of recycling 100,000 to250,000 gallons per day of hog manure from up to 100,000 sows.

Producers Alliance

continued next page


Miss-Lou Blueberry Growers Mississippi $28,400 Grant funds will be used to develop a business plan for marketingfrozen, free-flowing blueberries.

Missouri Northern Pecan Growers Missouri $140,000 Grant funds will be used for working capital expenses for marketingorganic pecans.

Niman Ranch Pork Cooperative Iowa $250,000 Grant funds will be used for working capital expenses for marketingNitrite-Free and Ready-To-Eat pork products to expanded markets.

Olive Growers Council of California California $249,170 Grant funds will be used for working capital expenses to market slicedolive salad and nacho toppings.

Pacific Coast Producers California $300,000 Grant funds will be used for working capital expenses for marketingprivate label canned tomato products, including organic tomatoes,petite diced tomatoes, and flavored tomatoes.

Prairie Land Cooperative Iowa $107,000 Grant funds will be used to develop a marketing plan for marketingsoybeans processed into oil using continuous super-critical carbondioxide oil-extraction technology.

Puna-Hawaii King Papaya Co-op Hawaii $50,000 Grant funds will be used for a feasibility study to determine the viabili-ty of marketing tree-ripened papayas and to develop a marketing plan.

Siouxland Energy & Livestock Co-op Iowa $150,000. Grant funds will be used for working capital expenses for marketing E-85 fuel.

Small Farms Cooperative Nebraska $250,000 Grant funds will be used for working capital expenses for marketingpre-cooked, ready-to-eat natural meat entrees.

Southeast Milk, Inc. Florida $185,000 Grant funds will be used for a feasibility study to identify value-addedproducts, and determine the market potential, viability, and profitabilityof the products from dairy park effluent.

Sunkist Growers, Inc. California $450,000 Grant funds will be used for working capital expenses for marketingSunkist Smiles, a packaged fresh-cut orange product.

Sun-Maid Growers of California California $150,000 Grant funds will be used to conduct a feasibility study for implement-ing radio frequency identification into the handling and distribution ofraisins.

Sunsweet Growers, Inc. California $500,000 Grant funds will be used for working capital expenses associated withintroducing individually-wrapped dried plums to the U.S. market.

Valley Fig Growers California $61,348 Grant funds will be used for working capital expenses for marketingproducts made from California fig paste, including Soft 40 Fig Pasteand E-Diced Figs.

Wisconsin Dairy Graziers Co-op Wisconsin $38,540 Grant funds will be used for working capital expenses for marketingcold-pack cheese products.

Association Cooperative

Recipient State Amount Description


By Dan Campbell, editor

[email protected]

Editor’s Note: in late October,FCSAmerica announced that it wasbreaking off negotiations to sell toRabobank (see page 35). However, theissues raised during the Congressionalhearing about the future of FCS in ruralAmerica remain of great importance.

Congressional hearingSept. 29 in Washington,D.C., examined the stateof the nation’s FarmCredit System (FCS) and

the likely ramifications of a proposedsale of a key FCS lender to a foreignbank. The hearing presented sharplycontrasting views about the nature offarm lending in America and the roleof the 92, farmer-owned associationsthat comprise FCS in meeting farmand rural credit needs.

If there was ever any doubt, the hear-ing confirmed that the proposal to exitthe FCS by Omaha-based Farm CreditServices of America (FCSAmerica) hadindeed stirred up a hornet’s nest. It alsorevealed just how passionate many pro-ducers remain about the need for afarmer-owned cooperative lending sys-tem for the nation.

Opponents said the proposed sale ofFCSAmerica to Netherlands-basedRabobank for $600 million should beblocked because it is a poor businessdeal for FCSAmerica stockholder-members and could threaten the con-tinued viability of the overall FCS.

They said Congress should also expandthe FCS charter to enable it to providea greater range of financial services tomore customers.

During the hearing — held by theHouse Subcommittee on Conservation,Credit, Rural Development andResearch — several witnesses stressedthat their opposition was not based onany ill feeling toward Rabobank.Rather, they said they oppose allowingany private bank — let alone a foreignbank — to gain control of a vital pieceof FCS, which Congress created in

1916 to ensure a steady, reliable supplyof affordable credit is available to fuelthe nation’s farm economy throughgood times and bad.

Banking industry proponents of thesale to the Netherlands-basedRabobank used the hearing to not onlyvoice support for the sale, but to blastFCS as a “predatory lender,” whichthey said has outlived its mission and isabusing its present charter fromCongress.

As a government-backed entity withaccess to low-cost funds, FCS can offer

Rabobank proposa l sparksdebate on ro le o f FCS in fa rm & ru ra l lend ing

A

USDA graphic by Stephen Thompson


interest rates that cannot be matchedby community banks, they said. Thebanking groups accused FCS of usingits advantages to cherry pick well-to-do, low-risk farm borrowers, ratherthan catering to higher-risk borrowers,as they say Congress intended. FCSmaintains that its mission is to serve allsectors of U.S. agriculture.

Deal criticized as‘breathtakingly bad’

Myron Edleman, a South Dakotacattleman and grain/hay grower, spokeon behalf of a group of FCSAmericaborrowers who have formed Farmersfor Farm Credit, of which he is chair-man. The group was formed, he said,to “ensure that other FCSAmericastockholders could learn the awfultruth about the sale of their co-op.”The proposal to sell the co-op lenderto Rabobank is “so bad that it isbreathtaking,” said Edleman, formerFarm Credit Council chairman.

Opposition to the deal amongFCSAmerica stockholders is so over-whelming, he testified, that many sus-pect the board is “now struggling tofind a way to unwind this decisionwithout costing stockholders millionsof dollars.” He asked that Rabobankand FCSAmerica be required to dis-close the terms of any contractsbetween them, including compensationand management bonuses.

If Rabobank succeeds, “over $1 bil-lion of borrower-contributed capitalwill be wiped off the books ofFCSAmerica,” Edleman testified.“Hundreds of millions more dollarswill be flushed down the drain asFCSAmerica exits the system and paysover $800 million as an exit fee into afund designed to protect Wall Streetinvestors — not farmers. None of thismoney belongs to the management ofFCSAmerica; it belongs to the stock-holders...”

Edleman said FCSAmerica’s capitalwas built up over many years fromearnings generated on thousands ofloans. “This capital helps to ensurethat our families and future genera-tions of Midwest farmers will have

access to a financially strong, borrow-er-owned source of credit.”

If Rabobank becomes lender forFCSAmerica’s 51,000 customers, allbusiness decisions that are today sub-ject to the scrutiny by farmers,Congress and the FCA will insteadbecome the sole prerogative ofRabobank management, he noted. “Itis not possible to put a dollar value onwhat we as farmers will lose.”

The principal of maintaining FCSas a system of “farmer-owned, farmer-controlled lending cooperatives” isabsolutely essential to the future ofAmerican agriculture, Edleman said.

NCFC, FCC urge repealof ‘termination’ option

Glen Keppy, speaking on behalf ofthe National Council of FarmerCooperatives (NCFC), urged thatCongress revise the system’s charter toeliminate the possibility of other suchterminations from the FCS in thefuture. NCFC also supports additionalchanges to modernize the Farm CreditAct, he said, citing as an example aproposal that CoBank be allowed tolend to new and emerging types offarmer cooperatives.

“Many things have changed when itcomes to agriculture in today’s globaleconomy,” said Keppy, a hog/grainfarmer and CHS member fromDavenport, Iowa. What has notchanged, however, is the need for farm-ers, ranchers and their cooperatives tohave dependable, competitive sourcesof credit and capital to operate to mod-

ernize and expand, and to take advan-tages of new market opportunities.”

AgBank CEO Jerold Harris, repre-senting the Farm Credit Council(FCC), the industry trade associationfor the FCS, also urged Congress torepeal the Act’s termination authority“as soon as possible.” That authoritywas only inserted into the Act 17 yearsago to serve the interests of one small,statewide credit association for live-stock producers, he said. He, too,stressed the need for more lendingflexibility and authority for FCS.

Harris said the Rabobank purchase isnot a good deal for its member stock-holders. In exchange for $600 million,Rabobank would be getting a lendinginstitution with total assets of $7.8 bil-lion, including $1.35 billion in capitaland unallocated surplus, more than$200 million in loan-loss reserves and40 offices staffed by 900 employees.

The decision to sell out toRabobank was far from unanimous,according to Harris. Quoting “reliablesources,” he said “a significant numberof FCSAmerica board members votedagainst” the deal.

As a system employee for 40 years,Harris said, “I have seen very goodtimes in agriculture and very badtimes. I know first hand that the pres-ence of a healthy, competitive, farmer-owned Farm Credit System institutionhelps all farmers — even those whoborrow from other sources — receive amuch more competitive interest rate.”

Bankers support sale;oppose broader charter

Representing the American BankersAssociation (ABA), Roger Monson,president of Citizens State Bank inFinley, N.D., spoke in favor of the sale.His testimony also stressed ABA’s graveconcern over the parallel discussionabout expanding the FCS charter.

Monson called FCS “a companywhich feels it has outgrown farmingand the rural America it was charteredto serve,” and is now “pursuing anexpansionist agenda” without willing-ness to give up the advantages of beinga government-sponsored entity (GSE).

“It is not possible toput a dollar valueon what we as farmers will lose.”— Myron Edleman


The FCS must recognize that “withthe advantages Congress has bestowedupon it, there are limits and responsi-bilities. There is no economic or pub-lic policy argument that can be madeto justify expanding the charter of thesystem.”

Monson said FCS is providing gov-ernment-subsidized credit to “thosethat need it least…the rural rich,” evenhelping them finance “country estates,weekend getaways, hunting preservesand golf courses.”

For those FCS associations thatwish to expand their financial services,the answer is to cut their ties to thefederal government, as FCSAmericahas proposed to do, he said. “This isnatural evolution, and we support it.”Monson called FCS “a large, sophisti-cated and highly profitable financialservices institution” with $119 billionin assets, $94.3 billion in loans and anet profit of $1.8 billion in 2003.

FCS is the only GSE that competesdirectly with the private, tax-payingbank sector by doing direct, retaillending, he said. “From a public policyperspective, the justification for whythe system continues to enjoy suchextraordinary governmental support istenuous.”

Monson noted that American tax-payers had to “bail out” FCS duringthe farm credit crisis of the 1980s,after what he termed “a decade ofspectacularly poor lending practices.”Farmers in the early ‘80s made exten-sive use of low-interest loans fromFCS, but began to fail in large num-bers when interest rates began to shootup. Ultimately, Congress had to offer$4 billion in bonds to shore up the sys-tem in 1988, he said.

Private sector lenders now see FCSas a competitor that “exploits its GSEstatus to the fullest,” such as offeringbelow-market pricing to gain marketshare, Monson said. Complaints aboutthese practices to the FCA have beenlargely ignored, he continued.

Further, the system has made “deftuse of statutory and regulatory loop-holes” to take in more non-insureddeposits, and has ignored its mandate

to serve young, beginning, small andwomen-owned enterprises, instead offocusing on low-risk loans to larger,wealthier borrowers,” he said.

Opponents of the sale have ques-tioned the motives of FCSAmericamanagement and directors, butMonson said the same accusationcould be aimed at FCS management.“When it is convenient for systemmanagers to extol the virtues of theirlocal boards, they do so; but when alocal, farmer-owner board makes adecision that displeases them, theyheap abuse on their motives and theircharacter. Who really runs the FarmCredit System?”

Wheat growers supportAgStar’s counter offer

Mark Gage, a North Dakota graingrower and president of the NationalAssociation of Wheat Growers(NAWG), said his group supportspreserving the FCS as a farmer-ownedlending system. NAWG does notoppose Rabobank’s entry into U.S. aglending, he said, calling the bank “arespected and strong lender with agood track record in agriculturalfinance.”

However, Gage said acquisition ofFCSAmerica by Rabobank “willadversely affect the entire Farm CreditSystem.” The sale could start a chainreaction, in which the strongest FCSinstitutions would be cherry pickedaway, leaving the weaker ones to holdup the roof. Each time one institutionis sold, it requires the remaining FCSinstitutions to recapitalize a new asso-ciation to take its place, drawing awayvital system resources, he said.

He, too, questioned the economicsof the sale, saying FCSAmerica wouldbe sold for 41 cents on the dollar ofassets, including a reserve that repre-sents dividends due to the association’s

farmer members. FCSAmerica has “anexcessive amount of unallocated capitalthat has not been paid as patronage,”he said.

FCSAmerica should insteadembrace the merger proposal fromMinnesota-based AgStar FinancialServices, another FCS member, Gagesaid. AgStar has offered $650 millionin cash to FCSAmerica stockholders,and said future patronage could pushthe value of the offer to more than $1billion. Most important, farmers

Myron Edleman (left), South Dakota cattleman and chairman of Farmers for Farm Credit,and Glen Keppy, an Iowa farmer representing the National Council of Farmer Cooperatives,both testified against the proposed sale of FCSAmerica to Rabobank. The deal has sincebeen called off, but the Congressional hearing raised issues crucial to the future of farmand rural lending in America. Photo courtesy Farm Credit Council


would remain in control, since itwould stay within the FCS.

Gage also called attention to themassive changes that have occurred inagriculture since the FCS charter waslast revised 30 years ago, urging thatthe debate be used as a stimulus toupdate that charter and enable FCS toprovide more services to producers andrural America.

“The message of the NationalAssociation of Wheat Growers is toensure that this cooperative remainshealthy and viable,” he said.

Community bankers blast ‘unfair’ lending advantage

John Evans Jr., appearing on behalfof the Independent CommunityBankers of America (ICBA), said “reg-ulator-assisted mission creep” has

occurred, allowing FCS to overreachits charter. “If FCS banks are allowedto offer the same products as us, smalltown banks will be a thing of the past.”

Evans, president and CEO of D.L.Evans Bank in Burley, Idaho, accusedsale opponents of “wanting to have itboth ways.” Last June, FCS represen-tatives “had the audacity” to lobby theFCA to expand the scope and eligibili-ty of the system’s authority so thatFCS entities could make loans to indi-viduals who “have little relation toagriculture,” he said.

CoBank’s desire to have its charterexpanded so that it can lend to pro-ducer-owned LLCs (considered bysome to be a new form of hybrid co-op), with both producer and investorclass stockholders, is another contra-diction of principle, Evans said. The

LLCs can wind up with producersholding only 50 percent of the stock,“allowing outside investors to easilytake control over this new style ofLLC-cooperative.

“Why is the system supporting leg-islation to potentially allow every othercooperative in the United States to beput on the chopping block except forits own?”

Evans said ICBA surveyed its mem-bers on the sale, and found that themajority favored the sale to Rabobank.However, some ICBA members haveexpressed concern over the Rabobankproposal, Evans noted. They sayRabobank would become yet anothermajor new competitor for communitybanks, and that it would be buying “alarge book of business that was built

Nancy Pellett, chairman and CEO of the Farm CreditAdministration (FCA), which regulates the FCS, testifiedat a Congressional hearing Sept. 29 as to the critical roleFCS plays in the nation’s food and fiber system. However,Pellett said she would not take a position on theRabobank proposal, since the FCA board may ultimatelyhave had to decide its fate.

She provided important background for the debate,stressing that farmers and the rest of rural America havea huge stake in the outcome. FCS has more than $100 bil-lion in loans, representing about 30 percent of thenation’s total ag credit market. The system is “sound inall material respects,” Pellett stressed.

“Without the FCS, we believe the soundness of agri-culture and the quality of life in rural America would begreatly diminished,” Pellett warned. FCS is a vital key tothe nation’s agricultural strength, the ultimate beneficia-ries of which are American consumers, she said. Onaverage, Americans now spend only 14 percent of theirincome on food, down from 21 percent in the 1970s.

In the early 1990s, Congress directed the GeneralAccounting Office to study the cost and availability ofcredit in rural America, Pellett said. The results,released in 1994, concluded that no new statutoryauthorities were needed for FCS in the near term. How-ever, the study said that the restructuring of Americanagriculture could make changes necessary in the longterm.

A decade later, “those changes have arrived,” Pellettsaid. She noted that average farm real estate prices haveskyrocketed from $196 per acre in 1970 to $1,360 in 2004,a 594-percent increase.

At the same time, the rural population has declinedfrom 26 to 21 percent of the nation’s total. Many ruraltowns are losing population and critical infrastructure,Pellett continued. The number of farmers and ranchershas declined from 3 million to 2 million since 1970, andfarmers have become increasingly reliant on off-farmincome and government payments. Much of the capital inrural areas is in fixed assets and not easily converted forinvestment purposes, she said.

In response, FCA developed a five-year plan whichcalls for giving system lending institutions greater flexi-bility and to reduce or eliminate regulations that “unnec-essarily impair” their effectiveness. It recommends thatthe FCS be allowed to expand operations, not only withinagriculture, but also to serve a broader portion of ruralAmerica. Specifically, Pellett said Congress should con-sider changing the Act so that FCS institutions can makehome loans in rural towns of more than 2,500 people (thecurrent cap), and to enable them to engage in syndica-tion lending (bringing in other banks to help them financeprojects that exceed their lending limits).

The Farm Credit Act “must be brought into the 21stCentury,” Pellett said. ■

— By Dan Campbell

FCA chair: stakes huge in credit debate; changes sorely needed



our outstanding coopera-tive leaders — Pete Crearof the Credit UnionNational Association,Robert Kabat, formerly

with the National Rural ElectricCooperative Association, and the latehousing co-op advocates Charles andEva Rappaport — will receive thecooperative community’s highest honornext April 20, when they are inductedinto the Cooperative Hall of Fame.The Hall of Fame recognizes thosewhose contributions to cooperativeenterprise are “genuinely heroic.” Twocommittees of national co-op leadersselect the inductees.

• Pete Crear has been a passionatepromoter of cooperative enterprisefor more than 40 years. The breadthof his contribution is reflected in thewords used to describe him: organiz-er, statesman, educator, ambassador,advocate, mentor and leader. His skillas an organizer resulted in the estab-lishment of numerous credit unionsin many states, including close to 20in metropolitan Detroit alone, whichbrought the first stable, non-predato-ry financial services to the inner cityand its mostly minority population.

His statesmanship has been evi-dent throughout his career as herepeatedly demonstrated an ability toread the politics of situations, applyhis senses of humor and fairness, andbroker compromises that producedsolutions. His commitment to edu-cation is evident in the major role heplayed in establishing CUNA’s part-nership with the National Endow-ment of Financial Education, whichnow brings financial education to

nearly 1,000 high schools across thecountry.

• Robert “Bob” Kabat is creditedwith creating a culture of continuingcooperative education within theelectric cooperative industry. Asdirector of NRECA’s ManagementServices Department for 40 years,Kabat put in place the managementprograms and consulting servicesthat have enabled electric and tele-phone cooperatives to thrive in achanging utility environment. Nosingle person has been more instru-mental in the development of effec-tive governance and managementexpertise within this cooperative sec-tor. Literally thousands of locallyelected directors have benefited fromthe “institutes” that he established toprovide training on the duties andresponsibilities of board members.

Still in use today is the uniquemodel he developed, with assistancefrom the Rural Electric ManagementDevelopment Council, for evaluatingmanagement effectiveness for gen-

eral managers and CEOs. He devel-oped the Management InternshipProgram, a six-week university-basedtraining program on all aspect ofelectric cooperative managementthat graduates more than 60 studentsa year and is conducted at the busi-ness school of the University ofWisconsin-Madison.

• Charles & Eva Rappaport(deceased) for more than 30 yearswere tireless volunteers and influen-tial leaders of the New York City andnational housing cooperative commu-nity. Charles served as president of

the Federation of 213s —later theFederation of New York HousingCooperatives — founded in the 1950sby 100 moderate-income co-ops. Evaserved as the organization’s executivedirector, working as editor, writer,conference coordinator and member-ship director in their home office.

In a city where a third of all own-ership housing is in cooperatives,Charles was a strong advocate andmade sure housing cooperatives wereheard on issues like asbestos, lead,energy and citywide labor contracts,as well as real estate tax abatementsfor veterans and senior citizens.

While much of their focus was onNew York City, the Rappaportsadvocacy has been felt throughoutthe country. Charles directed hisattention to the national level, wherehe led the Federation’s successfulcampaign to separate 213 premiumsfrom all other Federal HousingAuthority insurance funds and createthe Cooperative ManagementHousing Insurance Fund as a truemutual. More than 40 years later, theFund is still returning patronage div-idends to Section 213 cooperativehousing corporations.

The Cooperative Hall of Fame wasestablished in 1974 by the NationalCooperative Business Association andis now administered by the Cooper-ative Development Foundation, anational foundation that uses coopera-tives to help people improve theirlives. The Hall of Fame is housed inthe offices of the National CooperativeBusiness Association in Washington,D.C., and can also be visited on theWeb at: www.heroes.coop. ■

Four leaders se lec ted to Co-op Hal l o f Fame

F


avid Landis, a state sena-tor from Nebraska since1978, has been gettingrave reviews at co-opannual meetings for an

inspirational, one-man performance inwhich he portrays co-op pioneer andchampion George W. Norris. Born atthe outset of the Civil War in 1861,Norris was elected from Nebraska tothe House of Representatives in 1902,spending 10 years in the House beforemoving on to the Senate, where heserved another 30 years. During the1930s, he authored legislation that cre-ated the Rural ElectrificationAdministration (REA) and theTennessee Valley Authority (TVA).

These organizations gave millionsof Americans access to many of thesimple conveniences city people hadenjoyed for decades. Rural electricityrevolutionized farm life in America.Throughout his career, Norris’ con-science was his only guide, and hefought for the farmers and the com-mon men and women of this country.

Q. How did you first become familiar withSen. George Norris, and what about hislife and work inspired to you to create yourone-man show based on his life?

A. When I was first elected to theNebraska unicameral, non-partisanlegislature, I discovered that both ofthose innovations, unicameralism [a legislature composed of a singlebody] and nonpartisanship, were theideas of George Norris. The idea for a one-man show, or for doing Norris,

was prompted by a request from theNebraska Humanities Council toimpersonate Norris at our 125th state-hood anniversary celebration. TheHumanities Council felt Norris’ legacywas slipping in the mind’s eye ofNebraskans, and that he was no longera vital part of our communal memory.

Q. What major messages or lessons do youthink Sen. Norris would want the leadersand members of today’s cooperatives toremember, based on his experiences?

A. Norris would remind us that thecooperative is a mechanism for self-help. It is people determining theirown fate, getting together and chartingtheir own course. He was a greatbeliever in that kind of responsibility,and that’s one of the reasons he lovedthe cooperative movement. Second, I think he would remind them thatcooperatives sprang up because themarketplace had failed them. Thedesire for profits that motivates theinvestor-owned utility was not suffi-cient justification to run electricity tolow-profit or no-profit customers. Co-ops are a product of the failure of theinvestor-owned utilities to care enoughto extend service to people that neededthat service.

Q. Are the challenges confronting today’scooperatives much different than the onesfaced in Norris’ day?

A. I’m sure there are new complexitiesand difficulties facing co-ops todaythat were not present in Norris’ time;

I N T H E S P O T L I G H T

Sen. Dave Landis , as co-opchampion Sen. George Nor r is

D

Dave Landis in costume as SenatorGeorge Norris, who spearheaded effortsto bring electricity to rural Americathrough the use of utility cooperatives.Photo courtesy Dave Landis

“…we need to think in terms of what isgood today and whatis good in the future,that our legacy runsacross generations andthe shadow of our lifefalls upon generationsyet unborn.”


however, those days were also difficultand complex. Co-ops sprang up, forthe most part, in the days of theDepression and WW II. They grewup with the envy of the investor-ownedoperators who wanted to stymie co-opsat every turn, including the use of law-suits to stop the creation of co-ops. I guess you could say that the co-opshave never had an easy row to hoe.They’ve always had critics and chal-lenges and they’ve always risen aboveand succeeded in the face of thosechallenges.

Q. Is there one particular anecdote aboutNorris that you think reveals the type ofman he was?

A. There is a particular anecdotethat’s helpful to understand Norris,although it’s one that he would sayreveals not himself, but his mother.When he was ten and had spent ahard day working on the familyfarm, his mother called him over toplant a tree. Both of them wereglistening with sweat, it was hotand a hard day of work that they’djust finished. Norris said, “Mother,why do you work so hard? Youwon’t even see this tree in fruition.”And she looked him in the eye andsaid, “Willie, I may not see this treebear fruit, but someday someonewill.”

Norris used that anecdote overand over in his life to say that weneed to think in terms of what isgood today and what is good in thefuture, that our legacy runs acrossgenerations and the shadow of ourlife falls upon generations yetunborn. He thought in terms of alegacy that would last decades as itaffected people’s lives and he foundthat obligation or responsibility inthat anecdote of his mother and hischildhood.

Q. The sheer tenacity of Norris — con-tinuing to push for laws supporting co-ops even though he was defeated timeand again — is a striking feature ofyour presentation. Even the fact that he

was left as a widower with three childrenprior to making his first run for Congressmight have defeated a lesser man. Whatdo you think kept him fighting againstsuch formidable odds?

A. Norris grew up on a farm, father-less, with a mother and six older sisterstrying to eke out a living on relativelypoor soil in Ohio. He didn’t go tokindergarten so he could help on thefarm. At the age of 11, he paid thetaxes on that farm by working on thecounty road gang. Norris knew noth-ing but tenacious effort. It would nothave made a difference what line of

work he ultimately went into. Thekind of energy and fight that he hadwas obvious by the age of 16. Norrisnever calculated the odds, so that theycould intimidate him or dissuade him.He calculated the public good and wasmotivated by that alone.

Q. Who are the primary audiences foryour performances? How many shows doyou perform per year? How can interestedparties contact you?

A. Co-op annual meetings are a majoraudience, although I also speak atmeetings of credit unions, which arealso organized as cooperatives. Norriswas a supporter of them as well. Hebelieved in the idea of the cooperativeone-person, one-vote form of self-determination. The Nebraska legisla-ture is on-line; you can find me therefor e-mail or home telephone number.

Q. Are you able to “tailor the content ofthe presentation if the audience is one orthe other type of co-op?”

A. I try to tailor the content of thepresentation to the audience. Norris’general approach did not distinguishbetween utilities and [farm or othertypes of] co-ops. His basic distinctionwas between private and public power.He found the virtues of public powerto straddle both the utility and thecooperative.

Q. What would the nation lose if ourutility and farmer co-ops pass out of exis-tence?

A. I regard that future as unthinkable.In a more light-hearted response, I would just quote Mark Twain whosaid, “There is nothing so irritating asa good example.” If there is tensionbetween the investor-owned utilitycommunity and public power, it’sbecause public power and coopera-tives have been such a shining exam-ple of service, fair prices, community,outreach and fair dealing. Those arethings we can’t afford to lose in ourcommunities. ■

Nebraska Senator George Norris tours the NorrisDam in Tennessee, which is part of the TennesseeValley Authority (TVA), of which he was a champion.Photo courtesy TVA


By Marlis Carson

Vice President, Legal, Tax and AccountingNational Council of Farmer Cooperatives

Section 7 of the Clayton AntitrustAct makes it illegal for one business toacquire, directly or indirectly, thestock of another business, where theeffect of the acquisition may be tosubstantially lessen competition ortend to create a monopoly. A U.S.District Court in Kentucky has ruledthat Dairy Farmers of America (DFA)did not violate this provision when itpurchased 50 percent of the votinginterest in the company that con-trolled one fluid milk processing plantand a 50-percent non-voting, non-managerial interest in another compa-ny that operated a competing fluidmilk processing plant.

Case factsDFA, a milk marketing cooperative,

markets raw, unprocessed milk to dairyprocessors. It invests in downstreamdairy companies that process milk forconsumption. Such investments helpDFA secure outlets for its members’raw milk and allow its members toshare in the earnings from the sale offinished dairy products.

In 2001, DFA joined with severalindividuals to form National DairyHolding, L.P. (NDH), which owns theFlav-O-Rich dairy bottling plant inLondon, KY. The individuals collec-tively owned 50 percent of the votinginterests in NDH; the remaining 50percent was held by DFA.

In 2002, DFA and a family-ownedlimited partnership formed Southern

Belle Dairy Company, LLC (SouthernBelle). Southern Belle owns a fluidmilk processing plant in Somerset, KY.DFA owned 50 percent of the votinginterests in Southern Belle and thefamily limited partnership owned the

other 50 percent.In 2003, the U.S. Department of

Justice and the State of Kentucky fileda civil antitrust lawsuit against DFAand Southern Belle to compel DFA todivest its interest in Southern Belle.The complaint alleged that DFA’s pur-chase of its interest in Southern Belle,after it had secured the 50-percentinterest in NDH, would substantiallylessen future competition for the saleof milk to schools in Kentucky andTennessee.

In 2004, the ownership and controlof both joint ventures was restructured.In February 2004, one of the individualowners of NDH, Allen Meyer,acquired the interests of the other indi-vidual owners. Now Meyer and DFAeach owned 50 percent of NDH. Theyeach also owned 50 percent of anotherjoint venture, Dairy ManagementLLC, that served as the managing part-ner for NDH, with Meyer and DFA aslimited partners. Meyer was clearlyidentified as the manager of DairyManagement LLC, and thus of NDH.Furthermore, the operating agreementof NDH was modified to ensure theNDH was operated and controlledsolely by its manager, Meyer.

In July 2004, DFA exchanged itsvoting interests in Southern Belle fornonvoting preferred capital interests.DFA no longer had the right to voteon any matter and did not have a seaton the governing board of SouthernBelle. The family limited partnershiphad the right to sell Southern Belle atany time, including DFA’s interests.Southern Belle, and hence theSomerset plant, were managed by amember of the family partnership.The family partnership did not ownany interest in DFA and DFA did notown any interest in the partnership.

The court issued its opinion in lateAugust 2004, holding that as the ven-tures are now structured, DFA is not ina position to control the sale of milk toschools in the area.

Holdings of the courtThe district court identified the

issue at hand as to whether DFA’s 50

L E G A L C O R N E R

Da i ry co-op acqu is i t ion doesnot v io la te ant i t rus t law

DFA’s 50 percentshare of each ven-ture, in and of itself,did not translateinto the degree ofcontrol necessary toestablish anantitrust violation.


percent non-voting interest inSouthern Belle, when combined with a50-percent voting interest in NDH(and thus Flav-O-Rich, SouthernBell’s competitor), would substantiallylessen competition. Citing the U.S.Supreme Court decision in U.S. v.Philadelphia National Bank, 374 U.S.321 (1963), the district court notedthat Section 7 of the Clayton Act isviolated if the market is suffi-ciently concentrated and anacquisition would enhancethat concentration.

The court noted that thePhiladelphia National Bankstandard requires that theacquisition results in at leastsome control of a large per-centage of a market by onefirm. Here, the court concludedDFA’s acquisition “has not resulted inDFA controlling a large portion of therelevant market for the sale ofprocessed milk to schools.” The pur-chase of shares does not enhanceDFA’s ability to influence the marketbecause “DFA’s non-voting interest inSouthern Belle does not give it anycontrol over the business decisionsmade by Southern Belle,” the courtstated. The balance of control in themarket has not shifted to DFA, so theacquisition of an interest in SouthernBelle by DFA has not enhanced con-

centration and thus is not illegal.The United States argued that

DFA’s interest in Southern Belle andNDH gave the dairies incentive andopportunities to collude and diminishcompetition. The court was not con-vinced, however, noting that withrespect to school milk bidding, DFAhas no voting rights and thus cannotdirectly affect Southern Belle’s school

milk business decisions. Similarly, thecourt concluded that DFA’s 50 percentinterest in NDH does not result in anyparticipation in business decisions.The court noted that the operatingagreements for both Southern Belleand NDH leave the operationalaspects of the company with the opera-tional owners/partner, not DFA. Thecourt noted that there must be “somemechanism by which the allegedadverse effects in the sale of milk arelikely to be brought about by DFA’sacquisition of a non-operational inter-est in Southern Belle.” While DFA

had an obvious interest in the successof both dairies to maximize its 50- per-cent share of the earnings of each ven-ture, that in and of itself did not trans-late into the degree of control neces-sary to establish an antitrust violation.

Referencing the limited nature ofDFA’s ownership interest, including thelack of involvement in the day-to-dayoperations of either NDH or Southern

Belle, the court foundthat the “incentivesand opportunities forcollusion are not sub-stantially greater byvirtue of DFA’s dualownership intereststhan they were prior tothis challenged acquisi-tion.” Accordingly, the

court granted a motion by DFA forsummary judgment, in effect holdingthat even if all the evidence, facts, andinferences before the court are viewedin the light most favorable to the gov-ernment, DFA would still prevail as amatter of law.

The U.S. Department of Justicehas notified the court that it intendsto appeal the decision to the U.S.Court of Appeals for the 6th Circuit.Justice contends the ruling permitscompanies to invest more heavily incompetitors than antitrust enforcersbelieve is appropriate. ■

In the Oct.–Sept. 2004 issue of Rural Cooperatives,“Legal Corner” reported on a decision in antitrust liti-gation by Northland Cranberries against Ocean SprayCranberries. As part of a larger business deal, North-land agreed to dismiss, with prejudice, its lawsuitalleging antitrust law violations on the part of OceanSpray. This leaves in place the U.S. District Court opin-ion in the case holding the presence of foreign (Cana-dian) producers in Ocean Spray’s membership does notstrip the cooperative of its antitrust protection underthe Capper-Volstead Act.

In addition to ending the litigation, the deal providesthat Ocean Spray will purchase all cranberry process-ing assets and the current inventory of unprocessedcranberries of Northland. Ocean Spray and Northlandalso signed a 10-year agreement through which OceanSpray will, for a fee, receive and convert into concen-trate all of the cranberries produced by Northland andits contract growers. Northland will then be free tobottle and market its own cranberry juice, in competi-tion with Ocean Spray and other juice companies atthe wholesale and retail levels. ■

Northland vs. Ocean Spray antitrustsettlement preserves co-op win

By Annie Baxter

Editor’s note: the article originally wasbroadcast on Minnesota Public Radio.

he little farming commu-nities of Vesta and Echoin southwesternMinnesota know theplight of small towns

first hand. As local farms shut downover the years, so did many businesses.The townspeople tolerated the loss ofthe pool hall or the gas station. Butwhen the café closed its doors down inVesta, that’s where people had to drawthe line.

In Echo, the loss of the little gro-cery store was the last straw. So thetownspeople took matters into theirown hands and have established newbusinesses through cooperatives theyformed.

The Vesta café is a perfect postcardpicture: country knickknacks, liketeacups and tiny plastic apples, deco-rate the walls, and the smell of strongcoffee fills the air. At three in the after-noon, business is brisk. A group ofretired farmers plays a cut throat gameof cards in the corner.

“Sometimes they almost kill eachother just for a quarter,” one farmerjokes.

A few feet away sit three Vestaladies, exchanging gossip over slices oflemon meringue pie. They say they’rehere at least once a day.

“I think it was three times today forme,” one woman admits.

For decades, a café next door wasthe local hangout. It closed nearlythree years ago. The cafe seemed to

have plenty of customers, so localsguess it wasn’t well-managed.

Carole Jordan works at the new caféand she waitressed at the old one, too.She says when it closed, she lost morethan just a job.

“The town died without a café,”Jordan says matter-of-factly. “Therewere no cars on the street. I said prettysoon the tumbleweeds will be blowingdown the street.”

Once the café closed, that broughtthe number of empty storefronts tofour — half the businesses on thestreet. The farmers who play cards hadnowhere to go. Sometimes, they’dresort to setting up a card table in theliquor store.

Finally, people in town took action.They pooled their resources togetherto build this cafe. Dan Holmberg haslived in the area all his life. He was oneof the organizers.

“A lot of people got their headstogether and decided maybe we can

build this thing if we get donations. Sowe asked for donations from the com-munity, and I think we put about$90,000 together. It was all volunteerlabor, except for the electrical. I thinkit took about eight months to build theplace, but I think we did a good job,”Holmberg says.

The community founded a non-profit organization to pay for the café.Then they interviewed potential man-agers and decided to lease the businessto Yvonne Ellis. She and her husbandrun the operation now.

If it weren’t for this cafe, Vesta resi-dents would have to drive about 20miles to Redwood Falls or Marshallfor a restaurant. But it’s not the com-mute that really bothers people. Thetown needs a café for reasons that gobeyond convenience, according to thelocal bank’s loan officer, DavidWidman.

“If we don’t have this, we’re notgonna have a community,” Widman


Co-ops he lp keeprura l towns a l ive

T

Vesta community members, such as these retired farmers, teamed up to open the VestaCafé a year ago. The co-op café was built with volunteer labor and paid for by donationsfrom community members. Photos courtesy Minnesota Public Radio


asserts. “This is what’s facing smalltowns throughout the Midwest.”

Vesta has a lot in common with itsneighbor Echo, just five miles up theroad. The town’s about a mile wideand a mile long, with a crush of aban-doned buildings at the center.

Echo residents Nancy Harvey,Corlys Chase and Guila Kurtz point tothe town’s landmarks, or what remainsof them.

“The grocery store just closed inDecember,” Kurtz notes.

“And didn’t that used to be ahotel?” Harvey asks. “There’s nothingin there now, I believe.”

“The pool hall had been there foryears and years and years. But it’s beenvacant for a long time. Someone livedon the second floor,” Chase says, shak-ing her head.

“So you see, there are vacant build-ings everywhere. And that’s what we

don’t want,” Harvey concludes.These three women are shaking

things up in town. When the grocerystore closed last year, they werespurred to do something about it.They’re part of a group of mostlyretirement-age women who raisedenough money to build the town a newstore.

It turns out they’re familiar with thedo-it-yourself approach. A few yearsago, the public school closed down,and people in town got together toopen a charter school. Since then,attendance has more than tripled.

Guila Kurtz says people in Echolearned a lesson from the school, andthey’re applying it to the grocery store.

“No one is going to do it for us. Wedecided to take over!” Kurtz says witha smile.

More and more rural towns arecoming to the same conclusion. In fact,

Minnesota has more than 1,000 co-ops. It’s one of the leading statesembracing the cooperative businessmodel.

The store in Echo will be nonprofitand small-scale. They’ll keep a limitedinventory of items like milk, cereal,and coffee. And it will bear the aptname of Hope Market.

“One thing that’s happened since westarted this grocery store, is that therehave been people who are interested instarting other businesses in town,”Nancy Harvey says. “That’s gonnabring in other income, it’s gonna begood for the city — to help the townstart thriving again.” So far, no othernew businesses have opened up. And atthis point, Hope Market is still anempty lot marked off by some plasticorange fencing. But construction issupposed to move fast, and the marketshould open this fall. ■

Waitress Carole Jordan and café manager Yvonne Ellis prepare for lunch business.


ural cooperative develop-ment in 24 states got a$6.3 million boost fromUSDA RuralDevelopment in

September, when AgricultureSecretary Ann M. Venemanannounced the recipients of 2004Cooperative Development Grants.

“Viable cooperative ventures areimportant to increasing economicdevelopment in rural areas,”Veneman said. “These funds areimportant to ensuring farmers andranchers have added opportunityto fully use their natural resourcesto create value-added ventures.”

The grants were awarded on acompetitive basis and are intendedto foster rural cooperative develop-ment through projects that providerural residents with education andtechnical assistance in areas ofcooperative startup, marketing andmanaging, and other self-help tools.

In Pennsylvania, for example,Veneman said the Bush administra-tion is providing grant funds to theKeystone Development Center ofState College, which is working tosupport the formation of 11 farmeralliances and cooperatives. Theeffort includes developing coopera-tives for forest-owners, biodieselproduction and other naturalresource-based ventures.

Another example is the Centerfor Rural Cooperative BusinessDevelopment (CRCBD) at SouthCarolina State University, whichreceived a $146,656 grant to helprural residents start new co-ops

and to develop marketing plans andimprove co-op management practices.In 1999, South Carolina State becamethe first historically black college oruniversity to house a CRBCD. In

2001, the Center launched a farm-to-school produce project which encour-ages school districts to buy fresh fruitand vegetables from local co-ops ofsmall farming operations. ■

USDA prov id ing $6.3 mi l l ion in g rants fo r ru ra l co-opdevelopment in 24 s ta tes

USDA RURAL DEVELOPMENT Rural Cooperative Development Grants

STATE PROJECT GRANT AMOUNTAL Federation of Southern Cooperatives $300,000 AR Winrock International Institute for Ag Development 299,935 CO Rocky Mountain Farmers Union

Educational & Charitable Foundation 300,000 GA Golden Triangle RC&D 266,816 IA Iowa State University 299,943 IL Western Illinois University 189,044 IN Indiana Rural Development Council, Inc. 85,000 KY Kentucky Center for Ag and Rural Development 184,150 MA Cooperative Development Institute, Inc. 294,930 MD University of Maryland Eastern Shore 296,500 MN Northcountry Cooperative Foundation 300,000 MO Missouri Farmers Union Family Farm Opportunity Center 298,065 MS Mississippi Cooperative Development Center 300,000 MT Montana Cooperative Development Center 300,000 ND North Dakota Association of Rural Electric Cooperatives 300,000 NE Nebraska Cooperative Development Center 299,958 NH New Hampshire Community Loan Fund 300,000 OH Ohio State University Research Foundation 299,867 PA Keystone Development Center, Inc. 299,832 SC S.C. University, Center for Rural Co-op Business Dev. 146,656 SD Value-Added Agriculture Development Center 200,000 VA Southern States Cooperative Foundation 299,989 WA Northwest Cooperative Development Center 181,950 WI Cooperative Development Services Fund, Inc. 300,000

TOTAL: $6,342,635

R


Carolyn Liebrand, Agricultural

Economist

USDA Rural Developmente-mail: [email protected]

Editor’s note: This article is based onUSDA's annual survey of all U.S. cooper-atives, which gathered 2002 financial andmarketing data for dairy cooperatives.More detailed results are presented inResearch Report 203, “Financial Profile ofDairy Cooperatives, 2002” available at:www.rurdev.usda.gov/rbs/pub/newpub.htm. For a hard copy, call (202) 720-8381,or e-mail: [email protected].

n 2002, all types of U.S.dairy cooperatives werenegatively impacted bylower milk and dairyproduct prices.

Nevertheless, dairy cooperatives ingeneral appeared to be in good shapefinancially, irrespective of operatingtype. Cooperatives successfullyemployed a variety of methods to mar-ket members’ milk. While some usedfew assets and operated on narrowmargins, others employed considerablecapital and generated wider margins.

This report uses some basic finan-cial yardsticks for measuring the fiscalstatus of co-ops, based on the type ofoperations.

More assets per cwt Dairy co-ops used about $1 per

hundredweight (cwt) more of assets in2002 than they did five years before.Data analyzed by USDA RuralDevelopment shows that dairy cooper-atives employed $6.22 of assets per cwtto market their members' milk in 2002

(table 1). The growth in assets stemmed from

an increase in fixed assets (property,plant, equipment and other fixedassets). Much of this increase was sup-ported by a rise in long-term liabilitiesper cwt of member milk relative to1997 — the last time a detailed lookinto dairy cooperatives’ financial per-formance was taken by USDA RuralDevelopment.

Total liabilities came to $4.13 percwt of member milk, which amounted

to two-thirds of total assets. The $2.39in current liabilities represented mostlypending payments to members andmade up 58 percent of all liabilities.

On the other side of the ledger,dairy cooperatives had $2.81 per cwtin current assets and $2.90 per cwt ofproperty, plant and equipment in 2002-- each representing around 46 per-cent of total assets. With current

assets exceeding current liabilities by18 percent, the short-run solvencypicture looked strong for dairy co-opsin 2002.

Member equity of $2.10 per cwt ofmilk represented one-third of totalassets. Member investment in coopera-tives per cwt was about the same as in1997, but made up a slightly smallershare of total assets. Furthermore, theratio of long-term liabilities to equityalmost doubled from that in 1997 (.83vs. .44).

Relatively low milk and dairy prod-uct prices in 2002 were reflected in theoperating statement. Milk and dairyproduct sales were about $3 per cwt ofmilk handled below those reported in1997 (table 2). Milk and dairy productsales of $15.73 per cwt, the largest sin-gle income item, represented 86.1 per-cent of total dairy cooperative incomein 2002.

Survey shows da i ry co-ops ingenera l ly s t rong f inanc ia l s ta te

I

Natalie and Katelyn Horning — daughters of Jeff and Lynda Horning — perform calf-feed-ing chores on the family dairy farm near Ann Arbor, Mich. The Hornings, fifth generationdairy farmers, were honored as 2004 Outstanding Young Dairy Cooperators by MichiganMilk Producers Association (MMPA). Photo by Mindy Pratt, courtesy MMPA


Supply and other sales was the nextlargest source of income, at $2.19 percwt, accounting for a slightly largershare of total income than in 1997.Total income was $18.27 per cwt whilenet margins before tax came to 21cents per cwt of milk handled. Returnon sales was a modest 1.2 percent in2002.

These figures come from a surveyof U.S. dairy cooperatives conductedby the Rural Cooperative-BusinessService of USDA Rural Development.Forty-one percent of the dairy cooper-atives in the United States providedfinancial information in sufficientdetail to be included in the financialprofile of dairy cooperatives for 2002.However, these 80 cooperatives repre-sented almost all (98 percent) of thecombined total assets and most (97percent) of the net milk volume han-dled by all U.S. dairy cooperatives.

Performance variesby type of operation

U.S. dairy cooperatives use a varietyof means to market members’ milk.The various types of operationsrequire differing levels of capital andgenerate differing amounts of incomeand returns.

Cooperatives providing data for thisstudy were grouped into four generaloperating methods: bargaining only;commodity manufacturing; niche mar-keting; and diversified and fluid pro-cessing. The diversified and fluid pro-cessing cooperatives handled abouttwo-thirds of the net milk volumereported while bargaining-type co-opshandled 23 percent (fig 1).Commodity manufacturing coopera-tives made up 9 percent of the netcooperative milk volume in 2002 whileniche marketing cooperatives repre-sented less than 1 percent.

Diversified and fluid processingcooperatives were also the dominantoperating type in terms of assets, hold-ing 91 percent of all assets of reportingdairy co-ops while bargaining only co-ops held just 4 percent. Similarly,diversified and fluid milk processingcooperatives had almost three-fourths

of cooperative milk volume and dairyproduct sales. Bargaining-only co-opshad the next largest share, 18 percent.Niche-marketing cooperatives’ sharesof assets and dairy sales were less than1 percent.

The assets supporting the variousmethods dairy cooperatives used tomarket their members’ milk rangedfrom $1 to $10 per cwt, depending onthe type of operations employed (table3 and figure 2). Likewise, total incomeper cwt varied by almost $8 while netmargins came to between 4 and 32cents per cwt of milk handled (table 4).

Bargaining-only dairy co-opsBargaining-only cooperatives seek

the most profitable outlets for theirmembers’ milk at the first-handlerlevel and do not own or operate plants.Thus, they require the fewest assets tomarket a cwt of milk, $1.02 in 2002.This was the only operating type of

co-op to show lower total assets in2002 compared to 1997. Currentassets represented 75 percent of totalassets used.

Likewise, bargaining-only coopera-tives had the fewest liabilities andmember investment on a per-cwt ofmember milk basis. As such, long-term liabilities came to just 6 percentof total assets, the lowest level of thefour operating types.

At the same time, bargaining-onlycooperatives generated the lowest milkand dairy product sales per cwt,$12.84. Net margins of 4 cents per cwtwere well below those of any of theother types. However, due to the lowuse of equity and fixed assets, returnon equity (17.2 percent) and return onfixed assets (18.5 percent) were highestamong the operating types. Further,return on total assets was a modest 4.7percent, below the average for allcooperatives (5.3 percent).

Table 1—Balance sheet items per cwt1

U.S. dairy cooperatives 2002 1997Current assets 2.81 2.89PP&E and other assets 2.90 1.79Investments in other cooperatives .51 .57

Total assets 6.22 5.25Current liabilities 2.39 2.26Long-term liabilities 1.74 .92

Total liabilities 4.13 3.18Equity 2.10 2.07Total liabilities and equity 6.22 5.25

1 Per cwt of member milkNote: Totals may not add due to rounding.

Table 2—Operating statement items per cwt1

U.S. dairy cooperatives 2002 1997Milk and dairy product sales 15.73 18.75Supply and other sales 2.19 2.24Service receipts and other income .31 .19Patronage refunds .03 .06

Total income 18.27 21.25Estimated expenses 18.06 20.96Net margins before tax .21 .28

1Per cwt of milk handledNote: Totals may not add due to rounding.


Commodity marketing dairy co-opsCommodity marketing cooperatives

operate plants to produce bulk dairyproducts in high-volume plants. Manyof these plants capture economies ofscale in producing undifferentiated,storable commodity dairy products.They required the second lowest levelof assets, $3.41 per cwt, in 2002. Likebargaining-only cooperatives, currentassets made up a majority (53 percent)of their total assets. Commodity man-ufacturing cooperative members hadthe next to lowest investment in theircooperatives, $1.60 per cwt.

Like bargaining-only cooperatives,more than 90 percent of the commodi-ty manufacturing cooperatives’ totalincome came from the sale of milk anddairy products. Net margins for com-modity manufacturing cooperativeswere almost four times those of bar-gaining-only cooperatives, yet theywere well below the other two operat-ing types. However, perhaps reflectingefficiency of operation or economies ofscale, return on total assets was 6.7percent, the highest of all operatingtypes in 2002.

Diversified and fluid processing dairy co-ops

Diversified and fluid processingcooperatives were lumped together inone category. Fluid processing cooper-atives aim to capture value for theirmembers by processing and packagingfluid milk, as well as products such asice cream, sour cream, cottage cheeseand/or yogurt. Diversified cooperativeshave a broad spectrum of operations,selling a large portion of their milksupply to other handlers while main-taining a steady volume at their ownprocessing or manufacturing plants to

Table 3—Consolidated balance sheet per cwt of member milk, by type of dairy cooperative, 2002Type of cooperative

Item Bargaining Commodity Niche Diversified andonly manufacturing marketing fluid processing

Dollars per cwt of member milkCurrent assets .76 1.80 2.50 3.68Net PP&E1 and other assets .20 1.54 6.70 4.03Investments in other co-ops .06 .07 .83 .73

Total assets 1.02 3.41 10.03 8.44Current liabilities .69 1.39 1.82 3.13Long-term liabilities .06 .42 2.41 2.51

Total liabilities .75 1.81 4.23 5.64Total equity .27 1.60 5.80 2.80Total liabilities and equity 1.02 3.41 10.03 8.44

Member milk (million pounds) 31,772 12,535 344 89,800

Table 4—Consolidated operating statement per cwt of total milk handled, by type of dairy cooperative, 2002Type of cooperative

Item Bargaining Commodity Niche Diversified andonly manufacturing marketing fluid processing

Dollars per cwtMilk and dairy product sales 12.84 15.36 18.30 16.69Supply and other sales .68 .62 3.44 2.88Service receipts and other income .23 .24 .13 .34Patronage income .01 .02 .07 .05

Total income 13.75 16.25 21.94 19.96Total expenses 13.71 16.09 21.62 19.68Net margins before tax .04 .15 .32 .27

Milk volume handled (million pounds) 33,856 13,857 344 106,748

Note: Totals may not add due to rounding.1 Property, plant and equipment.

Note: Totals may not add due to rounding.


make both commodity and differenti-ated products.

The system of plants operated bydiversified and fluid processing coop-eratives and their marketing operations

required the next highest level of assetsin 2002, $8.44 per cwt. They alsoshowed the largest increase in asset usecompared to 1997’s $6.96 per cwt.

Long-term liabilities represented 30percent of total assets, the highest levelamong the different operational types.Furthermore, long-term liabilitiescame to 90 percent of the equity mem-bers had in the cooperatives. Theother operating types had ratios thatwere less than one-half of that.

Supply and other sales made upmore than 14 percent of total incomefor diversified and fluid processingcooperatives, well above the level ofsupply and other sales of either bar-gaining-only or commodity-manufac-turing cooperatives. Total income andnet margins before tax for diversifiedand fluid processing cooperatives werealso far above those two types andwere only slightly below that of niche-marketing cooperatives.

Return on total assets was 5.3 per-cent, a bit below returns for commoditymanufacturing cooperatives, but abovethe other two operating types. Diver-sified and fluid processing cooperativesachieved the second highest return tomembers’ equity, 11.7 percent.

Niche-marketing dairy co-opsNiche-marketing cooperatives typi-

cally process most of their members’milk into specialty or branded dairyproducts for particular market niches.

Most handle relatively small volumesof member milk and, relative to theother types, require the most assets percwt of member milk for cooperativeoperations.

Assets employed in 2002, $10.03per cwt, were similar to asset use in1997, $10.07. The small volume ofmilk handled by most niche-marketingcooperatives diminishes their ability tocapture the level of economies of size

that commodity-manufacturing anddiversified cooperatives do.

Niche-marketing cooperatives madethe most use of member equity -- theonly operating type where equity rep-resented a majority of total assets (58percent). Their members’ investmentof $5.80 per cwt was twice as high asdiversified and fluid processing coop-erative members’ investment in theircooperatives. Additionally, niche-mar-keting cooperatives, along with diversi-fied and fluid processing cooperatives,had significantly larger total liabilitiesper cwt of milk than the other twotypes.

Niche-marketing cooperatives gen-erated the largest milk and dairy prod-uct sales per cwt. Niche-marketingcooperatives also had the most supplyand other sales per cwt of all operatingtypes. Thus, niche-marketing coopera-tives had the highest total income percwt, $21.94.

Niche-marketing co-ops also hadthe largest net margins before tax percwt, 32 cents. Return to sales was 1.4percent, the same as diversified andfluid processing cooperatives, and well-above the other two operating types.Nevertheless, return to assets forniche-marketing cooperatives of 3.7percent was lowest of all operatingtypes in 2002. ■

0

2

4

6

8

10

12�

Bargaining-only Commodity�manufacturing

Niche�marketing

Diversified &�fluid processing

All financial�profile�

cooperatives

$/cwt�

Fig. 2 Dairy cooperative assets per cwt of member milk, by operating type, 2002.�

Member equity�

Total liabilities�

Total assests

Operating type

Fig. 1 Dairy cooperatives net milk volume and total assets, by operating type, 2002

Total assetsNet milk volume

Bargaining only Commoditymanufacturing

�

Niche marketing Diversified & fluid processing


M A N A G E M E N T T I P

How does your local co-op rate?

Compare your farm supply cooperative1 with averages for cooperatives with similar functions.

Size (2002) 2, 3 Size (2003) 2, 3 Your Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative

Sell farm supplies only Number 68 36 31 9 68 36 31 9 ________Total assets Mil. dol. 1.8 4.2 8.0 14.3 2.0 4.1 8.1 15.6 ________Long-term debt Thou. dol. 106.2 382.0 649.5 2,087.5 126.2 330.0 602.2 1,675.3 ________Total liabilities Thou. dol. 540.4 1,504.8 3,014.9 6,019.8 586.3 1,423.5 3,347.3 6,199.4 ________Total sales Mil. dol. 2.7 6.9 13.1 25.9 2.8 7.0 13.9 28.2 ________Total service revenue Thou. dol. 64.1 239.8 207.4 478.1 77.1 170.5 382.9 774.8 ________Total revenue Mil. dol. 2.8 7.4 13.6 26.8 2.9 7.2 14.5 30.0 ________Net income (losses) Thou. dol. 64.8 196.8 353.0 261.9 22.8 106.3 311.1 803.6 ________Labor of total expenses Percent 55 51 54 53 55 53 53 53 ________Patronage refunds received Thou. dol. 37.9 105.1 207.4 417.1 1.4 32.5 89.4 344.3 ________Liquidity ratiosCurrent Ratio 2.00 1.60 1.42 1.40 2.07 1.56 1.37 1.37 ________Quick Ratio 0.98 0.88 0.81 0.58 0.99 0.81 0.71 0.61 ________

Leverage ratiosDebt Ratio 0.29 0.36 0.38 0.42 0.30 0.35 0.41 0.40 ________Debt-to-equity Ratio 0.41 0.56 0.60 0.72 0.42 0.53 0.70 0.66 ________Times interest earned Ratio 5.45 5.96 6.25 2.34 2.51 3.81 5.49 5.10 ________

Activity ratiosFixed asset turnover Ratio 7.19 6.51 5.90 6.16 6.81 6.60 6.34 6.81 ________Total asset turnover Ratio 1.47 1.66 1.64 1.80 1.43 1.70 1.71 1.81 ________

Profitability ratioGross profit margins Percent 18.32 16.46 19.12 16.94 17.66 16.31 17.39 17.00 ________Return on total assets beforeinterest and taxes Percent 4.55 6.02 5.71 3.60 1.90 3.70 4.98 7.40 ________

Return on total equity Percent 6.77 9.76 9.57 4.16 2.27 5.23 9.05 11.58 ________

1 100 percent of sales were generated from farm supply sales. 2 Small = Sales are $5 million or less; medium = over $5 million to $10 million; large= over $10 million to $20 million; and super = over $20 million. 3 There were 287 cooperatives surveyed in both years.

Beverly L. Rotan, Economist

USDA Rural Development, CooperativeServices

Another year has come and gonewith some of the larger regional sup-ply cooperatives no longer in busi-ness. How did this affect your localcooperative?

Many local cooperatives that would

have had positive net incomes had neg-ative net incomes due to loss on dis-posal of investments. Has your cooper-ative fared better, about the same orlower compared to cooperatives withsimilar functions and factors, includingsales, product mix, etc.?

Comparisons with other coopera-tives may help to determine whetheryour cooperative is doing well or poor-

ly. The following tables can help youmake industry trend and norm com-parisons.

The tables shown here containaverage financial data compiled from a survey of 287 cooperatives for 2002and 2003. Fill in the blanks and com-pare these benchmarks with yourcooperative’s financial data.

So how’s your cooperative doing? ■


Compare your mixed farm supply cooperative1 with averages for cooperatives with similar functions.Size (2002) 2, 3 Size (2003) 2, 3 Your

Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative Market farm products andsell farm supplies Number 10 11 21 28 10 11 21 28 ________ Total assets Mil. dol. 1.5 4.1 8.6 22.9 1.5 3.3 8.1 22.4 ________Long-term debt Thou. dol. 74.2 308.3 901.2 3,218.1 181.3 243.0 725.5 2,715.0 ________Total liabilities Thou. dol. 504.9 1,500.5 3,491.9 11,156.2 600.7 1,310.8 3,147.4 11,035.7 ________Total sales Mil. dol. 3.1 6.5 13.3 38.1 2.9 6.7 13.6 45.1 ________Total service revenue Thou. dol. 172.3 329.1 619.6 1,660.5 116.8 249.3 646.6 1,626.7 ________Total revenue Mil. dol. 3.2 7.0 14.3 40.6 3.1 7.1 14.5 47.2 ________Net income (losses) Thou. dol. (94.1) 83.5 320.3 518.9 28.3 75.0 206.5 588.4 ________Labor of total expenses Percent 52 47 52 51 54 48 52 52 ________Patronage refunds received Thou. dol. (3.9) 86.1 181.4 1,660.5 24.9 92.4 33.5 197.0 ________Liquidity ratiosCurrent Ratio 2.00 1.44 1.39 1.34 1.87 1.49 1.44 1.31 ________Quick Ratio 1.11 0.66 0.72 0.66 1.04 0.73 0.71 0.67 ________

Leverage ratiosDebt Ratio 0.34 0.37 0.41 0.49 0.39 0.40 0.39 0.49 ________Debt to equity Ratio 0.50 0.58 0.69 0.95 0.64 0.66 0.64 0.97 ________Times interest earned Ratio -5.52 3.47 4.49 2.55 3.48 2.77 3.56 2.89 ________

Activity ratiosFixed asset turnover Ratio 8.21 5.30 5.75 5.78 7.37 8.33 6.29 7.35 ________Total asset turnover Ratio 2.04 1.58 1.55 1.66 1.89 2.03 1.69 2.01 ________

Profitability ratioGross profit margins Percent 13.47 14.77 15.92 15.90 12.69 12.88 14.49 13.40 ________Return on total assets beforeinterest and taxes Percent -5.28 3.65 5.00 4.02 2.74 3.32 3.92 4.26 ________

Return on total equity Percent -14.35 4.16 8.62 5.96 4.11 5.29 5.94 6.96 ________

1 50 to 99 percent of sales were generated from farm supply sales. 2 Small = Sales are $5 million or less; medium = over $5 million to $10 million; large = over $10 million to $20 million; and super = over $20 million. 3 There were 287 cooperatives surveyed in both years.

USDA Rural Development has awarded $22.8 mil-lion in competitive grants to 167 recipients in 26states to support President Bush’s renewable energyefforts. The funds will be used by rural small busi-nesses, farmers and ranchers to develop renewableenergy systems and promote energy efficiencyimprovements.

“The Bush administration is committed to advancingrenewable energy ventures in rural America,”Agriculture Secretary Ann M. Veneman said inannouncing the grants. “We have the natural resourcesand the ingenuity to create new forms of energy and touse it more efficiently.”

Veneman said the Renewable Energy Systems andEnergy Efficiency Improvements program was createdas part of the 2002 Farm Bill to assist farmers, ranchers,

and rural small businesses develop renewable energysystems and make energy efficiency improvements totheir operations. Under this program in 2003, the Bushadministration invested $21.7 million to develop orimprove wind power, anaerobic digester, solar, ethanoland other bioenergy related systems or energy efficien-cy improvements in 24 states.

A large percent of the 94 renewable energy applica-tions selected this year will support anaerobic digestersand small and large wind power type ventures. A pre-dominate number of the 73 energy efficiency grants willgo to agricultural producers who will use the funds forbuildings.

A complete list of the selected grant recipients andprojects can be found at: http://www.rurdev.usda.gov/rd/newsroom/news.htm. ■

USDA awards $22.8 mill ion to support renewable energy


ifteen 1890s Land GrantUniversities are receivingnearly $1.8 million inbusiness and technologydevelopment assistance

from USDA Rural Development.These funds will provide outreach andtechnical assistance in developing newbusinesses, including cooperatives, andto create employment opportunities inunder-served rural communities, andto promote use of Rural Developmentprograms.

“USDA’s partnership with 1890Institutions is critical to the develop-ment of new business opportunities inunder-served areas and supportsPresident Bush’s economic plan to cre-ate jobs in rural America,” saidAgriculture Secretary Ann M.Veneman. “I commend the 1890Institutions for placing a priority onintegrating new technologies into localbusiness initiatives. It is critical to theability of entrepreneurs to competedomestically and globally.”

The 1890 Institutions have some ofthe best agricultural science and busi-ness education programs in the nation.Through the cooperative agreement,USDA will be building upon thestrength of these programs to ensurethat quality education related to smallbusiness development is also availablein these communities.

“Underserved communities andbusinesses are benefiting from theeffort to match up the technical andfinancial resources of USDA RuralDevelopment with the technical busi-

ness expertise at the 1890 Institutions,”said Agriculture Acting Under Secre-tary for Rural Development GilbertGonzalez.

Gonzalez said that USDA has astrong track record of support for such1890 initiatives and cited two examplesof how the funds have created neweconomic opportunity and improvedthe quality of life for residents in eco-nomically challenged communities.For example, the Center for Rural Lifeand Economic Development at AlcornState University EntrepreneurialOutreach program has provided train-

ing and technical assistance to individ-uals in business and planning to startnew businesses in its five-county areaof Southwest Mississippi. In additionto the awards listed below, $75,000grants were issued to: North CarolinaA&T State University; Tennessee StateUniversity; Virginia State University,and West Virginia State University.

Other funds have been allocated forthe following projects:

Tuskegee University in Tuskegee,Ala.—$150,000 for strengtheningentrepreneurial and business develop-ment activities in the Alabama BlackBelt counties and other targeted com-munities by providing business eco-nomic development training, technicalassistance and develop informationtechnology for business and ruraldevelopment.

University of Maryland-EasternShore in Princess Anne, Md.—$125,000 to conduct outreach and pro-vide technical assistance to developentrepreneurs and businesses, includingcooperatives. Funds will be used todevelop a micro-lending program anddevelop and train micro-enterprisebusinesses in business operations and e-commerce in cooperation with Mary-land Capital Enterprises, a non-profitorganization. Additionally, funds willbe used to develop a network of hydro-ponic greenhouse growers.

Southern University in BatonRouge, La.—$150,000 to provide theresidents in four rural communitiesand parishes (counties) with essential

1890s Land Grant Ins t i tu t ions to use USDA funds to p romotebus iness g rowth, new jobs

F

Tuskegee University in Alabama (above)and the other 1890 Land Grant Universitiesand colleges, offer some of the best ag sci-ence and business education programs inthe nation. Photo courtesy Tuskegee University



technical and financial services assis-tance through conducting seminars,entrepreneurial conferences, and pro-vide information technology trainingand support services.

University of Arkansas-Pine Bluffin Pine Bluff, Ark.—$135,000 to beused to provide outreach and technicalassistance to develop entrepreneursand businesses, including cooperatives.Funds will be used to focus on the cre-ation of business enterprises thatdevelop and/or utilize technology-based products and services, along withimplementation of a business supportincubator to house 12 to 15 new orstart-up businesses.

Fort Valley State University inFort Valley, Ga.—$150,000 to provideservices for expansion and enhance-ment of economic development, cre-ation of new business and cooperativedevelopment opportunities, communi-ty development and revitalization,tourism and increased usage of com-puter technology.

Delaware State University inDover, Del.—$150,000 to provide sus-

tainable business and economic devel-opment efforts that meet communityneeds and assist in enhancing the qual-ity of life, wealth creation and employ-ment opportunities that will serve as acatalyst for community revitalization.

Prairie View A&M University inPrairie View, Texas—$115,792 to focuson business start-up and expansion in13 targeted rural counties. Funds willalso be used to provide technologyoutreach services in the form of on-sight, on-hand internet/economicdevelopment seminars and to continueto provide entrepreneurship educationto primarily Hispanic and African-American youth.

Alcorn State University in Alcorn,Miss.—$149,608 for support andenhancement of the program“Strengthening Entrepreneurship andSmall Business in Five Counties(Adams, Claiborne, Franklin, Jeffersonand Wilkinson) of SouthwestMississippi.”

Langston University in Langston,Okla.—$149,600 for strengthening andgrowing rural enterprises in under-

served communities; bringing to ruralentrepreneurs information about pro-grams and services available throughUSDA by conducting seminars, sym-posiums, workshops and communitymeetings. Funds will also assist andsupport business development andgrowth through counseling, businessplanning, grant writing and loan pack-aging preparation.

Florida A&M University inTallahassee, Fla.—$100,000 to imple-ment business and economic develop-ment outreach service to eight selectedrural counties in North Florida whohave the most economic need and toestablish long-term and sustainableeconomic and business growth.

South Carolina State University inOrangeburg, S.C.—$125,000 to providebusiness consulting in the area of mar-keting, customer service, humanresource development, business man-agement, accounting, bookkeeping,finance, and international trade. Inaddition, funds will be used to workwith community youths to promote andencourage future entrepreneurship. ■

Southern States turn-aroundcontinues with $68-million profit

Southern States Cooperative,Richmond, Va., continues to showfinancial improvement with a pre-taxprofit of $68.5 million for the fiscalyear that ended June 30. The coopera-tive’s overall results and its balancesheet benefited not only fromimproved operations, but also fromdebt restructuring that resulted in again of nearly $65 million, the co-opannounced. The showing represents a

major turn-around from losses in theprevious three fiscal years, when thecooperative was involved in majorrestructuring efforts.

“In many ways, the recently com-pleted fiscal year was the most success-ful in SouthernStates’ history,”said Thomas R.Scribner, presi-dent and CEO. “The year showed thatefforts to focus on our core business ofproduction agriculture, to reduce debt

and operating expenses and to re-estab-lish sound business principles haveresulted in a successful turn-around.”

The co-op closed on a new, $265million financing package in October,which will refinance all but a small

piece of the co-op’s long-termdebt. In additionto paying off exist-

ing debt, the refinancing will provideone of the nation’s largest farmer-owned co-ops with the capital it needs

N E W S L I N ECompiled by Dan Campbell

Send items to: [email protected]

1890s Land Grant Institutions to use USDA funds to promote business growth continued from page 31


to focus on the future, Scribner said. According to Scribner, progress was

made in a number of key areas duringthe past year, including:• continued reductions in operating

expenses;• further reductions in debt — now 70

percent below where it stood threeyears ago;

• customer service improvements;• improved inventory control and effi-

ciency at the co-op’s distributioncenters;

• steps to boost marketing effective-ness and efficiency;

• development of a strategic plan.

Southern States also made its firstacquisition in four years by exercising anoption late in fiscal 2004 to buy outAgway’s 50 percent ownership of a live-stock feed mill at Gettysburg, Pa.Southern States and Agway had operat-

ed the mill as a joint venture since 1999.Southern States serves more than

300,000 producer-members with arange of farm inputs, including fertiliz-er, seed, feed and pet food, animalhealth supplies and petroleum prod-ucts, as well as other items forthe farm and home. Thecooperative’s distribu-tion network includesmore than 1,200retail outlets in anarea that extendsfrom Maine to theGulf Coast and asfar west asKentucky.

NCB’s Top 100 Co-opshad revenue of $117 billion

National Cooperative Bank (NCB)reported that the nation’s 100 highestrevenue-earning cooperative businesses

had more than $117.4 billion in salesin 2003. The list illustrates the vitalrole cooperatives play in the nation’seconomy, says Charles E. Snyder,NCB president and CEO.

“As the nation continues to struggleand face challenges during this diffi-

cult economic period, coopera-tives continue to enrich and

empower Americanseveryday, providingstrong returns to itsmembers,” Snyder said.“Americans aredemanding dependable

businesses in which theymaintain a personal stake

and an active role in thedecision-making process.”

The continued strong performanceof cooperatives is especially notable,with these companies impressivelyrebounding from the recession and the

up over many years using GSE tax andfunding advantages.” Further, FCSwould likely set up a new bank to servethe region “with the same advantages.”

Some ICBA members are also ques-tioning why an FCS member that exitsthe system should be required to pay alarge fee (about $800 million in thecase of FCSAmerica) into the FCSinsurance fund. Evans said Americantaxpayers had to “bail out” FCS duringthe farm crisis of the 1980s, while ruralag banks were “allowed to fail in stag-gering numbers, ruining many com-munities.”

NFU fears “lethal precedent” John K. Hansen, president of the

Nebraska Farmers Union, spoke onbehalf of the National Farmers Unionand its 260,000 family farm and ranchmembers. He said NFU has taken a“position of firm opposition” to thesale, and is “extraordinarily concerned”about its short- and long-term impacts.NFU fears that a “potentially lethalprecedent” would be set, damaging theentire FCS network.

FCSAmerica is the second largestFCS association, and one of the sys-tem’s “most stable, profitable and secureunits,” Hansen said. A sale to Rabobankwould forever end the potential of divi-dend payouts to members who have“decades of equity in their own institu-tion.” The sale could shove aside FCS’Congressional mandate to assist begin-ning and minority farmers and to helplocal communities, he added.

FCSAmerica “would go from afarmer controlled and directed lenderto instead being owned by the world’slargest ag lender, one that lends tohuge, vertically integrated industrial-ized operations that often competeunfairly with our family-owned farm-ers and ranchers.”

Unlike some of the other sale oppo-nents, Hansen indicated that caution isneeded regarding proposals to broadenthe FCS charter. NFU opposed the“Choice” proposal several years ago,which ultimately failed to gain tractionin the farm community or on CapitolHill. It would have allowed FCS asso-ciations to lend outside their designat-

ed territories and to take on expandedlending roles, he said.

“We were concerned that theChoice proposals could have jeopar-dized the Farm Credit System’s tax-exempt status, promoted “cherry pick-ing” of borrowers and reduced localservices. We also opposed differentialinterest rates for FCS member-bor-rowers because they are contrary tocooperative principles.”

Hansen urged that further, regionalhearings be held in each of the affectedstates before any action is taken on theRabobank offer.

At the conclusion of the hearing,Subcommittee Chairman Frank Lucasof Oklahoma pledged continued over-sight of the FCS and FCA, adding that“I will work to ensure any futureactions taken by the subcommittee arein the best interest of America’s farm-ers and ranchers.”

In mid October, Rabobank ChairmanBert Heemskerk told the Omaha WorldHerald that if the FCA should turn thedeal down, the bank will look for otheravenues to enter the U.S. market. ■

Rabobank proposal sparks debate on role of FCS in farm & rural lending continued from page 16


difficult economic situations created bytimes of global conflict. Unlikeinvestor-owned firms, cooperatives arecontrolled by their members, the indi-viduals who use and benefit from thegoods and services provided.

Cooperatives are organized to maxi-mize economic returns for members,not top-ranking executives or distantinvestors.

According to the NationalCooperative Business Association,there are 48,000 cooperatives in theUnited States. These entities exist in anumber of industries including agricul-ture, grocery, hardware and lumber,finance, energy and housing. Manycooperatives on the NCB Co-op 100list are such well-known householdnames as Ocean Spray, ShopRite andThe Associated Press.

The entire NCB Co-op 100 report, as well as additional informa-tion on cooperatives, is available at www.co-op100.coop.

WestFarm Foods namesJohn Underwood as CEO

John Underwood has been namedpresident and CEO of WestFarmFoods, the $1.3 billion dairy productsmanufacturing and marketing arm ofNorthwest Dairy Association (NDA),the fourth largest dairy co-op in thenation, with 700 dairy farm membersin Washington, Oregon, Idaho andCalifornia. NDA Board Chairman RodDeJong says Underwood’s knowledgeof the company and industry, his lead-ership skills and his performance dur-

ing his tenure as interim CEO werekey factors in the 14-person board’sunanimous decision. “John exemplifiesthe leadership skills our members wantrunning this company,” he said. “Hehas gained the confidence of the mem-bers, as well as our customers, suppli-ers and employees.”

Underwood has 22 years of experi-ence with WestFarm Foods and servedas Interim CEO since April 1, 2004. Inhis most recent prior position, assenior vice president of the IngredientsDivision, he led worldwide sales andmarketing initiatives for the company’sbulk cheese, bulk butter and milk pow-der products that generate nearly 60percent of the company’s revenue.

Previously Mr. Underwood led oper-ations at 12 milk processing facilities infour Western states; overseen multi-million dollar capital improvement pro-jects, from initial design through start-up; raised manufacturing efficienciesand productivity; and introduced state-of-the-art manufacturing processes.

Improved milk prices give boost to Dairylea

Dairylea Cooperative Inc. reportedsales of $962 million for the fiscal yearending March 31, up 12.95 percentfrom the previous year. The Syracuse,N.Y.-based co-op paid its 2,500 mem-bers $846 million, up from $759 mil-lion the year before. Dairy lea reported$892,000 in after-tax profits in 2004,up from $696,000.

Co-op President and ChairmanClyde Rutherford said high milk prices

for the first time in many years helpedthe co-op’s performance.

Dairy lea sells it members’ milk to anumber of processors and provides avariety of services to them, fromfinancing to insurance.

Michigan Sugar completespurchase of Monitor Sugar

Michigan Sugar has completed thepurchase of former rival MonitorSugar for about $40 million. Thecompany now becomes the nation’sthird largest sugar beet cooperative,with sales of about $300 millionannually.

Michigan Sugar became a co-op in2002, when producers organized tobuy the operation from Texas-basedImperial sugar. Co-op leaders say thecombined company will offer manyimproved operating efficiencies. Theco-op will now have about 1,250grower-members, 500 permanentemployees and 1,800 seasonal workers.

AMPI members receiving$11 million in patronage

Midwest dairy producers who mar-ket milk through Associated MilkProducers Inc. (AMPI), New Elm,Minn., will share $2.9 million in earn-ings. Fifty percent, or $1.45 million, isbeing paid in cash, while the balancewill be allocated to member equityaccounts.

AMPI’s annual revolvement of capitalretains and previously allocated earningsare budgeted for November andDecember. The total earnings and equi-

engines: better detergency and lubrici-ty — eliminating the need for pollut-ing sulfur as a lubricity additive — andgenerally make engines run quieterand cooler, with increased durabilitydue to reduced formation of harmfulengine deposits.

“Our fuel provides better horsepow-er, 5 to 10 percent better mileage, andruns cleaner, with no drawbacks ortradeoffs,” says Probst. “We have truck

operators telling us that they can cut therun over the mountains from Denver toAspen by an hour using Blue Sun.”

Scott Bentz agrees; he’s using BlueSun’s product for something a bit morefun — fueling a diesel-powered drag-ster with 100 percent biodiesel. Histeam first tried it out by draining thetank of conventional diesel fuel andrefilling it with Blue Sun. “When wefired it up, it was like the difference

between day and night. All our besttimes have been on biodiesel,” he says.“I don’t mind saying I’m sold on theproduct.”

Probst thinks that kind of responsewill fuel a growing market for BlueSun. “This is only the beginning,” hesays. “When this business modelproves out, we plan to set up opera-tions in other markets across thecountry, too.” ■

Biodiesel with altitude continued from page 6


ty that will be returned to owners thisyear is expected to be about $11 million.

“AMPI is assuring member-ownersa fair return on equity,” said AMPIGeneral Manager Mark Forth.“Sharing the profits is one of the bene-fits cooperative members expect fromowning the business,” said AMPIPresident Paul Tuft, a dairy producerfrom Rice Lake, Wis.

LO’L changes nameof animal feed unit

Land O’Lakes Inc. has changed thename of its animal feed subsidiaryfrom Land O’Lakes Farmland Feed, toLand O’Lakes Purina Feed. “Our newname leverages our existing brandequity and honors the heritage of ourtwo leading brands,” says Robert M.DeGregorio, president, Land O’Lakes

Purina Feed. “It also communicatesthe importance of both brands to ourmembership, the cooperative systemand our customers.”

Land O’Lakes Purina Feed servesproducers through 2,800 local coopera-tives and independent dealershipsacross the United States. The company,in combination with its wholly ownedsubsidiary, Purina Mills LLC, is NorthAmerica’s leading feed manufacturer.

Countrymark to reduceemissions at Indiana refinery

Countrymark Co-op, Indianapolis,Ind., is investing $40 million to buildan ultra-low sulfur diesel-fuel process-ing facility at the co-op’s refinery com-plex in Mt. Vernon, Ind. The projectwill save about 125 jobs and will meetU.S. Environmental Protection

Agency’s 2006 requirements for clean-er diesel fuel, the co-op says.

“Countrymark is a Hoosier compa-ny that is keeping Hoosiers at work,”Gov. Joe Kernan said at the ground-breaking ceremony. “Not only is theinvestment for this complex good forthe community and our environment,but it also reduces our dependency onforeign oil by using Indiana materialsproduced by Hoosier workers.”

Countrymark expects to hire 15production workers and up to fivemore technical employees at the Mt.Vernon refinery as a result of the newcomplex. The Co-op currently has 230workers in Posey County and supportsan additional 70 jobs through itsstatewide member network in themanagement, sales and delivery ofdiesel fuel and gasoline. ■

Bowing to a rising tide of opposition, the board ofOmaha-based Farm Credit Services of America(FCSAmerica) in October announced that it was ending itsproposal to sell the co-op bank to Netherlands-basedRabobank. That announcement was followed about twoweeks later by the news that Jack Webster had resigned asCEO of FCSAmerica.

FCSAmerica has decided to go it alone at least for thetime being, having also rejected a counter merger proposalfrom AgStar Bank of Minnesota. Some said that offer waspreferable because it would have kept FCSAmerica as partof the Farm Credit System.

Webster, who had pushed for the sale to Rabobank,issued a statement saying that “For this company to moveforward, the board and I felt it was in the best interest ofthis organization to continue to grow under new leader-ship.”

FCSAmerica Chairman Paul Folkerts said he believesthe sale would have provided greater opportunities forfarmers and ranchers, but that ultimately the board decided“that it was not in the best interests of FCSAmerica tomove forward with the transaction.”

The proposed sale had sparked intense grassroots opposi-tion from farmers and ranchers, which was spearheaded by acoalition of FCSAmerica stockholders who formed Farmersfor Farm Credit (FFFC) to block the sale. A Congressionalhearing was held Sept. 29 in Washington D.C. to examine

the proposed sale and related issues (see page 13).“This decision is a clear and important victory for stock-

holders,” said FFFC Chairman Myron Edleman, a SouthDakota cattleman.

“They tried to sell our association for less than half itsvalue, and farmers would have lost ownership and control,”added FFFC Co-Chairman Alan Dillman. “And at least 80percent of our shareholders didn’t want their loans trans-ferred to a foreign bank,” he added, referring to a poll ofabout 700 FCSAmerica stockholders.

Opposition was based both on the price being offered,which Rabobank had boosted from $600 million to $750million, and on the potential impact it could have had onthe rest of the nation’s Farm Credit System banks.

“We are disappointed by the decision ofFCSAmerica’s board, given that we had significantlyincreased our offer in order to clearly demonstrate ourcommitment to completing the transaction,” said CorBroekjuyse, head of Americas for RabobankInternational. “We strongly believe our partnershipwould have offered tremendous benefits to FCSAmericacustomers in terms of new products, improved servicesand, of course, a considerable financial payment tostockholders.” He said the board’s decision has deniedstockholders the right to vote on the proposal (stock-holders and the Farm Credit Administration board bothwould have had to approve the sale). ■

Plug pulled on FCSA sale; Webster resigns as CEO

Information appearing in Rural Cooperatives magazine during calendar year 2004 has been indexed to help you find pastarticles. Articles are indexed by month and page. Back issues can be found on-line at www.rurdev.usda.gov.

Title Features Issue—Page ACDI/VOCA spreads co-op model worldwide ................................................................................................................. May/June 37African ag co-ops leading fight against HIV/AIDS ............................................................................................................ Jan./Feb. 15Agribusiness, co-ops awarded $28 million in USDA grants .............................................................................................. Jan./Feb. 11Agriliance to operate major terminal at Port of Galveston .............................................................................................. Sept./Oct. 17Association of Cooperative Educators

Cross-border membership and collaboration brings growth ........................................................................................ May/June 36Attracting the Upper Midwest’s next generation of dairy farmers ................................................................................. March/April 7Backyard powerhouses

“Green Tags” spur development of renewable power co-ops ...................................................................................... Sept./Oct. 18Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ................................................................................................. July/Aug. 18Biodiesel: the 10 percent solution ....................................................................................................................................... July/Aug. 17Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production .......................................................................... Nov./Dec. 4Boosting the giant

USDA assistance effort helping Nigerian producers ...................................................................................................... Jan./Feb. 12Buying biodiesel ‘off the rack’

CHS investing in new injection technology to streamline biodiesel blending process ................................................ July/Aug. 28California ag tour gives U.S. trade rep crucial insight into state’s export crops ............................................................... Sept./Oct. 4CCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ............................................................................................ May/June 35CFC: rural electric co-ops’ own financing powerhouse .................................................................................................... May/June 29Clean Air Act kickstarted ethanol ....................................................................................................................................... July/Aug. 16Co-Bank keeps pace with co-ops’ changing needs ............................................................................................................ May/June 23Community investments help launch plant ........................................................................................................................ July/Aug. 21Compensating co-op directors

USDA study reveals wide range of pay plans ................................................................................................................. July/Aug. 38Co-op boosting yields of protein, oil through approved variety program ...................................................................... Sept./Oct. 16Co-op born of growers’ frustration with processor’s lack of long-term outlook ............................................................... May/June 9Co-op completes purchase of Virginia turkey plant ........................................................................................................... Nov./Dec. 7Co-op horizon problems: do you have one? ...................................................................................................................... July/Aug. 24Co-op identity among topics during annual ACE institute ............................................................................................. Sept./Oct. 28Co-op leaders focus on strategies for success ..................................................................................................................... Jan./Feb. 21Co-op strives to help members reduce power use, lower bills ........................................................................................... Jan./Feb. 19Co-ops can play role for members seeking trade adjustment assistance ............................................................................. July/Aug. 4Co-ops help keep rural towns alive ................................................................................................................................... Nov./Dec. 22CUNA: Meeting the needs of 83 million members .......................................................................................................... May/June 39Dairy co-ops continue dominant role in marketing nation’s milk ................................................................................ March/April 14Defending their turf

Growers see co-op’s legislative action as essential to future of nation’s sugar industry ................................................. May/June 4Direct Access!

AGP’s new Pacific port an investment in Midwest soybean farms & facilities ........................................................... Sept./Oct. 141890s Land Grant Institutions use USDA funds to promote business growth ............................................................... Nov./Dec. 31Election and voting policies of agricultural cooperatives .................................................................................................. May/June 14Eligible bio-products defined ......................................................................................................................................... March/April 17Exploring a greater role for ag co-ops in sustaining rural living .................................................................................. March/April 21Ethanol co-ops unite to form marketing venture .............................................................................................................. July/Aug. 12Farm Credit Council promotes lending system dedicated to improved quality of farm life ........................................... May/June 28Farmers burn more of what they grow with E85 ............................................................................................................... July/Aug. 29Farmer co-op sales, income fall in 2002 ............................................................................................................................. Jan./Feb. 28FCA chair: stakes huge in credit debate; changes sorely needed ..................................................................................... Nov./Dec. 16Federation of Southern Co-ops:

Three decades of sustaining rural Southern communities, saving black-owned farmland .......................................... May/June 31Finding labor can be a struggle ........................................................................................................................................ March/April 8Four leaders selected to Co-op Hall of Fame .................................................................................................................. Nov./Dec. 17Fueling a rural revival

Ethanol co-op supports farmer income while providing lift to community ................................................................. July/Aug. 10Furth, Wilson, Moorhouse win top honors for communications excellence .................................................................. Sept./Oct. 30General conclusions about co-op’s downfall ..................................................................................................................... Sept./Oct. 23Great Escapes

Agri-tourism co-op helping Georgia farmers diversify .................................................................................................. Sept./Oct. 8Great Expectations

Ethanol is hot, but what is the long-term outlook for biofuel? ..................................................................................... July/Aug. 14


2004 Ar t ic le Index


Greener pastures for bio-tech co-ops?New, bio-based products may only be scratching thesurface of potential .......................................................... March/April 16

Growers’ hay project may go statewide ............................. March/April 12Hard lessons

Tri-State Ethanol struggling to overcome difficult start ..... July/Aug. 32How business culture drives economic behavior in co-ops...... Jan./Feb. 23How Green Tags work ........................................................... Sept./Oct. 19KSU, NDSU Centers researching co-op issues ..................... May/June 34Land O’Lakes reports nearly $84 million in earnings ....... March/April 23Lost Horizon

Membership “horizon” problem preceded demise of MCP ... July/Aug. 22Making hay, the right way

Oregon producers organize to market certified weed-free, premium hay ................................................. March/April 10

Making good thingsCass-Clay Creamery expanding product line and marketing horizons ............................................. March/April 4

Meeting the test8,200 service calls in 24 hours tests mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

MFA Oil committed to development and marketing of renewable fuels ........................................ July/Aug. 26

Minnesota ethanol co-op producing premium Vodka ....... March/April 20Missouri-based co-op brewery unveils

Pony Express line of beer ............................................... March/April 20NAHC advocates for co-p housing nationally ....................... May/June 27National Cooperative Bank

Grocery, housing & purchasing co-ops on spectrum of organizations financed ............................... May/June 41

National Telecommunications Cooperative AssociationResponses to evolving technology, deregulation key to members’ future .................................. May/June 40

NCBA helps co-ops compete in time of change .................... May/June 25NCFC champions issues crucial to ag coo-ops ...................... May/June 24NCFC names California’s Peltier president, CEO ............ March/April 15Net income, sales decline for local farm co-ops ................ March/April 24NMPF tackles tough issues for dairy co-ops .......................... May/June 26Northland vs. Ocean Spray antitrust

case settled; assets transferred ............................................ Nov./Dec. 21NRECA programs benefit 865 co-ops,

37 million consumers nationwide ....................................... May/June 30NSAC: Making sure co-op numbers add up right ................. May/June 26Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9On the front line

Field representatives are the eyes and ears of a co-op .......... Jan./Feb. 4Proposed sale of Farm Credit System

lender to Dutch bank ignites controversy ........................... Sept./Oct. 7Proximity to grain supply, livestock feeders

key factors in ethanol plant site selection ............................ July/Aug. 19Quick Picks—

Some select cooperative education resources .................... Sept./Oct. 27Rabobank proposal sparks debate on

role of FCS in farm & rural lending .................................. Nov./Dec. 13Sharing the umbrella

State co-op councils broaden base to serve consolidating co-op sectors ........................................ May/June 18

Signs of LifeHave you checked your co-op’s education pulse lately? .... Sept./Oct. 26

Survey shows dairy co-ops in generally strong financial state .. Nov./Dec. 25The canning of Tri Valley

What went wrong at Tri-Valley Growers, and what can other co-ops learn from it? .......................... Sept./Oct. 20

The right thingGROWMARK’s Kelley says time is right

for renewable fuels to gain larger share of market ............. July/Aug. 3027 co-ops among recipients of $13

million in USDA VAPG funding ....................................... Nov./Dec. 10USDA co-op development efforts

support commercial farming in Ghana ............................... May/June 11USDA grant helping Colorado

cooperative produce biodiesel ......................................... March/April 18USDA grants support home-grown fuels ............................... July/Aug. 34USDA providing $6.3 million in grants

for rural co-op development in 24 states ........................... Nov./Dec. 24USDA purchasing biobased products .................................... Sept./Oct. 12

USDA Rural Development: committed to the future of America’s rural communities ..................... May/June 42

USDA study boosts fuel conversion efficiency rating for ethanol ............................................... Sept./Oct. 13

UW Center for Co-ops: Working together, then and now ... May/June 34Warming up to cold tofu

Ohio soybean growers study entry into emerging frozen tofu market ........................................ Nov./Dec. 8

Weighing inStudy gauges impact of local ag co-ops on rural economies of Great Plains, eastern Cornbelt ................ March/April 26

Why help Ghana’s cooperatives? ............................................ May/June 13Wisconsin co-op offers fresh approach to produce auctions .... Jan./Feb. 8

Magazine DepartmentsCOMMENTARY/EDITORIALCommitted to our communities ............................................... Sept./Oct. 2International co-op development promotes trade, democracy .... Jan./Feb. 2Hard acts to follow ................................................................ March/April 2Put a soybean in your tank ........................................................ July/Aug. 2The extended family .................................................................. May/June 2Through good times and bad ................................................... Nov./Dec. 2

Focus On...Innovation drives Accelerated Genetics ................................. Sept./Oct. 25Southern Marketing Agency Inc. ............................................. Jan./Feb. 20

In the Spotlight…Sen. Dave Landis, as co-op champion Sen. George Norris .. Nov./Dec. 18

Legal CornerCapper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Management TipHow does your local farm supply co-op rate? ....................... Nov./Dec. 29How is your co-op doing? ........................................................ Jan./Feb. 30

Newsline

Trio being inducted into Cooperative Hall of Fame ............. Jan./Feb. 32Record growth for Organic ValleyCHS income down despite sales climbWestern Sugar plans new $3.5 million diffuserSwiss Valley picks pair to replace CEO QuestDFA allocated $28 million; plans N.M. cheese plantTom Camerlo Dairyman of the Year; Beckendorf to lead NMPFRiceland buys ADM share of grain venturePremium Pork plans plant in MissouriSun-Maid buys raisin facility in SelmaAGRI Industries to end grain pact with CargillChippewa Valley’s Lee heads Renewable Fuels AssociationAgway seeks court OK to sell produce businessLOL member promotes farmer-to-farmer aidNCRA invests $340 million to settle clean air suitUSDA, NRECA seek to boost renewable energy usePCCA net margins double as co-op marks 50th yearUSDA to provide $1 million in grants for rural home health care co-ops

Iowa Turkey Growers Co-op expands new processing plant March/April 29Georgia oilseed co-op plan launched with USDA grantIowa Premium Pork selling stock for plant purchaseNMPF says CWT program having major price impactCalifornia Co-op Center closes; services continue via ExtensionWisconsin home-healthcare co-op named national finalistRalph Bunje, farm co-op bargaining leader, dies at 92Ron Long, A.I. innovator, retires from Select SiresCommunity credit union to serve low-income co-psCo-ops gain North American option for .co-op registrationPenlight restores power in record time

USDA to award $23 million for renewable energy projects .. May/June 45UW’s Ann Hoyt elected NCBA board chairWisconsin’s Co-op Care Program finalist for prestigious awardCo-ops eligible for Value-Added GrantsFarm Credit Bank of Texas doubles earnings in 2003


ACDI/VOCA’s Deegan resignsNew logo adopted for California Tree FruitForum for Dairy Women slated in Madison, Sept. 26-27USDA awards $385 million for rural electric expansionUSDA announces $190 million in high-speed Internet loans

Darneille new PCCA CEO ..................................................... July/Aug. 41Repayment demanded from Farmland bondholdersTuscarora Organic Co-op expandsTurkey growers form co-op to pursue plant purchaseGold Kist eyes possible conversionOrganic Valley sponsors “swim for clean water”Iowa Premium Pork to operate in Le MarsACDI/VOCA names Baker interim presidentNew Sacramento nonprofit to promote cooperativesFarmland’s share of feed, agronomy ventures soldAMPI to close Glencoe plantDecatur to lead FCLSelect Sires adds dairy breeds to product lineUSDA launches renewable energy pilot projectHome health care co-ops get $1 million USDA boostInnovative practices focus of Missouri co-op conferenceRural credit program achieves mission in RussiaCo-op Month activity to focus on contributions to communities

Iowa hearing examines key issues affecting co-ops ............... Sept./Oct. 32U.S. Premium Beef converts to LLC; begins test marketing natural beefRiceland’s Richard Bell retires in year of record sales, incomeUSDA’s Tom Gray honored for public service to co-opsCo-op buys cigarette plantChesapeake farmers to market low-carb breadGROWMARK profits climb; election reduces board sizeForemost Farms USA revolves $4.2 million in member equityDallas, Nielsen join Co-op Foundation boardMichigan Sugar to buy Monitor SugarIdaho wheat growers joining CHSIowa meatpacking plant closesFormer Lt. Gov. Bradley takes job with DFA

Southern States turn-around continues with $68-million profit ....................................................... Nov./Dec. 32

NCB’s Top 100 Co-ops had revenue of $117 billionWestFarm Foods names John Underwood as CEOImproved milk prices give boost to DairyleaMichigan Sugar completes purchase of Monitor SugarAMPI members receiving $2.9 million in patronageLO’L changes name of animal feed unitCountrymark to reduce Emissions Indiana refineryPlug pulled on FCSA sale

Page From the PastBack to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39

Value-Added CornerAmazing Grains!

Montana grain growers use VAPG funds from USDA to develop gluten-free flour ....................................... July/Aug. 6

Biodiesel project looks promising for Iowa co-op ............... March/April 9USDA helps Michigan sugarbeet growers

purchase processing plant ..................................................... Jan./Feb. 10Warming up to cold tofu


SUBJECTSAgri-TourismGreat Escapes

Agri-tourism co-op helping Georgia farmers diversify ....... Sept./Oct. 8

Biofuels & ProductsBalancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18Biodiesel project looks promising for Iowa co-op ............... March/April 9Biodiesel: the 10 percent solution ........................................... July/Aug. 17Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production ........................................................Nov./Dec. 4

Buying biodiesel ‘off the rack’CHS investing in new injection technology to streamline biodiesel blending process ............................. July/Aug. 28

Clean Air Act kickstarted ethanol ............................................ July/Aug. 16Community investments help launch plant ............................ July/Aug. 21Eligible bio-products defined ............................................. March/April 17Ethanol co-ops unite to form marketing venture ................... July/Aug. 12Farmers burn more of what they grow with E85 ................... July/Aug. 29Fueling a rural revival

Ethanol co-op supports farmer income while providing lift to rural community .............................. July/Aug. 10

Great ExpectationsEthanol is hot, but what is the long-term outlook for biofuel? ............................................ July/Aug. 14

Greener pastures for bio-tech co-ops?New, bio-based products may only be scratching the surface of potential .................................. March/April 16

Hard lessonsTri-State Ethanol struggling to overcome difficult start ...... July/Aug. 32

Lost HorizonMembership “horizon” problem preceded demise of MCP ..................................................... July/Aug. 22

MFA Oil committed to development and marketing of renewable fuels ........................................ July/Aug. 26

Minnesota ethanol co-op producing premium Vodka ....... March/April 20Proximity to grain supply, livestock feeders

key factors in ethanol plant site selection ............................ July/Aug. 19The right thing

GROWMARK’s Kelley says time is right for renewable fuels to gain larger share of market ................... July/Aug. 30

USDA grant helping Colorado cooperative produce biodiesel ......................................... March/April 18

USDA grants support home-grown fuels ............................... July/Aug. 34USDA purchasing biobased products .................................... Sept./Oct. 12USDA study boosts fuel conversion

efficiency rating for ethanol ............................................... Sept./Oct. 13

CommunicationCCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ... May/June 35Furth, Wilson, Moorhouse win top

honors for communications excellence .............................. Sept./Oct. 30

Consumer Co-opsCo-ops help keep rural towns alive ........................................ Nov./Dec. 22CUNA: Meeting the needs of 83 million members ............... May/June 39NAHC advocates for co-p housing nationally ....................... May/June 27NCBA helps co-ops compete in time of change .................... May/June 25

Co-op DevelopmentACDI/VOCA spreads co-op model worldwide ..................... May/June 37African ag co-ops leading fight against HIV/AIDS ................ Jan./Feb. 15Boosting the giant

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12Co-op born of growers’ frustration with

processor’s lack of long-term outlook ................................... May/June 9Co-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7Federation of Southern Co-ops:

Three decades of sustaining rural Southern communities, saving black-owned farmland ....................... May/June 31

Rural Cooperative Development Centers (listed) .................. May/June 32USDA co-op development efforts support

commercial farming in Ghana ............................................ May/June 11USDA providing $6.3 million in grants for

rural co-op development in 24 states ................................. Nov./Dec. 24Why help Ghana’s cooperatives? ............................................ May/June 13

Co-ops & CommunitiesCommunity investments help launch plant ............................ July/Aug. 21Co-ops help keep rural towns alive ........................................ Nov./Dec. 22Exploring a greater role for ag

co-ops in sustaining rural living ...................................... March/April 21


Fueling a rural revivalEthanol co-op supports farmer income while providing lift to rural community .............................. July/Aug. 10

Weighing inStudy gauges impact of local ag co-ops on rural economies of Great Plains, eastern Cornbelt ................ March/April 26

DairyAttracting the Upper Midwest’s next

generation of dairy farmers ............................................... March/April 7Back to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20Dairy co-ops continue dominant

role in marketing nation’s milk ....................................... March/April 14Finding labor can be a struggle ............................................ March/April 8Innovation drives accelerated Genetics .................................. Sept./Oct. 25Making good things

Cass-Clay Creamery expanding product line and marketing horizons ............................................. March/April 4

NMPF tackles tough issues for dairy co-ops .......................... May/June 26Southern Marketing Agency Inc. ............................................. Jan./Feb. 20Survey shows dairy co-ops in

generally strong financial state ........................................... Nov./Dec. 25

Director Education and DevelopmentCompensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38Election and voting policies of agricultural cooperatives ...... May/June 14Signs of Life

Have you checked your co-op’s education pulse lately? .... Sept./Oct. 26

EducationAssociation of Cooperative Educators

Cross-border membership and collaboration brings growth ................................................ May/June 36

Co-op identity among topics during annual ACE institute .... Sept./Oct. 281890s Land Grant Institutions use USDA

funds to promote business growth ..................................... Nov./Dec. 31Quick Picks—

Some select cooperative education resources ..................... Sept./Oct 27Sen. Dave Landis, as co-op champion Sen. George Norris .... Nov./Dec. 18Signs of Life


EnvironmentBackyard powerhouses

“Green Tags” spur development of renewable power co-ops ................................................. Sept./Oct. 18

Biodiesel: the 10 percent solution ........................................... July/Aug. 17Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production .........................................Nov./Dec. 4

Clean Air Act kickstarted ethanol ............................................ July/Aug. 16Greener pastures for bio-tech co-ops?

New, bio-based products may only be scratching the surface of potential ..............................March/April 16

How Green Tags work ........................................................... Sept./Oct. 19USDA purchasing biobased products .................................... Sept./Oct. 12

Farm Supply, Agronomy & ServiceBuying biodiesel ‘off the rack’

CHS investing in new injection technology to streamline biodiesel blending process ............................. July/Aug. 28

Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28How does your local farm supply co-op rate? ....................... Nov./Dec. 29How is your co-op doing? ........................................................ Jan./Feb. 30Innovation drives Accelerated Genetics ................................. Sept./Oct. 25MFA Oil committed to development

and marketing of renewable fuels ........................................ July/Aug. 26Net income, sales decline for local farm co-ops ................ March/April 24The right thing

GROWMARK’s Kelley says time is right for renewable fuels to gain larger share of market ................... July/Aug. 30

FinanceCFC: rural electric co-ops’ own financing powerhouse ........ May/June 29

Co-Bank keeps pace with co-ops’ changing needs ................. May/June 23CUNA: Meeting the needs of 83 million members ............... May/June 39Farm Credit Council promotes lending

system dedicated to improved quality of farm life ............. May/June 28National Cooperative Bank

Grocery, housing & purchasing co-ops on spectrum of organizations financed ................... May/June 41

NSAC: Making sure co-op numbers add up right ................. May/June 26Proposed sale of Farm Credit System

lender to Dutch bank ignites controversy ........................... Sept./Oct. 7Rabobank proposal sparks debate on

role of FCS in farm & rural lending .................................. Nov./Dec. 13The canning of Tri Valley

What went wrong at Tri-Valley Growers and what can other co-ops learn from it? .......................... Sept./Oct. 20

Forage CropsGrowers’ hay project may go statewide ............................. March/April 12Making hay, the right way

Oregon producers organize to market certified weed-free, premium hay ................................... March/April 10

Fruits, Nuts, VegetablesCalifornia ag tour gives U.S. trade rep

crucial insight into state’s export crops ................................ Sept./Oct. 4Co-ops can play role for members

seeking trade adjustment assistance ....................................... July/Aug. 4Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9The canning of Tri Valley


What went wrong? Some opinions ........................................ Sept./Oct. 24

Governance & StructureCompensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38Co-op leaders focus on strategies for success .......................... Jan./Feb. 21Election and voting policies of agricultural cooperatives ...... May/June 14How business culture drives economic behavior in co-ops .... Jan./Feb. 23Lost Horizon

Membership “horizon” problem preceded demise of MCP July/Aug. 22NCFC names California’s Peltier president, CEO ............ March/April 15

Grains & OilSeedsAmazing Grains!

Montana grain growers use VAPG funds from USDA to develop gluten-free flour .................... July/Aug. 6

Co-op boosting yields of protein, oil through approved variety program ....................................Sept./Oct. 16Direct Access!

AGP’s new Pacific port an investment in Midwest soybean farms and facilities.............................. Sept./Oct. 14



Lost HorizonMembership “horizon” problem preceded demise of MCP July/Aug. 22

Missouri-based co-op brewery unveils Pony Express line of beer ............................................... March/April 20

Warming up to cold tofuOhio soybean growers study entry into emerging frozen tofu market ........................................ Nov./Dec. 8

Legislative and LegalCapper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10Co-ops can play role for members

seeking trade adjustment assistance ........................................July/Aug. 4Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20Defending their turf

Growers see co-op’s legislative action as essential to future of nation’s sugar industry ........................ May/June 4

NCBA helps co-ops compete in time of change .................... May/June 25NCFC champions issues crucial to ag co-ops ........................ May/June 24


Rabobank proposal sparks debate on role of FCS in farm & rural lending .................................. Nov./Dec. 13

Livestock/PoultryCo-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7Innovation drives Accelerated Genetics ................................. Sept./Oct. 25Proximity to grain supply, livestock feeders

key factors in ethanol plant site selection ............................ July/Aug. 19

ManagementCo-op leaders focus on strategies for success .......................... Jan./Feb. 21The canning of Tri Valley


What went wrong? Some opinions ........................................ Sept./Oct. 24

MarketingAgriliance to operate major terminal at Port of Galveston ..... Sept./Oct. 17Back to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18Buying biodiesel ‘off the rack’


Co-op leaders focus on strategies for success .......................... Jan./Feb. 21Direct Access!

AGP’s new Pacific port an investment in Midwest soybean farms & facilities .................................... Sept./Oct. 14

Dairy co-ops continue dominant role in marketing nation’s milk .............................................. March/April 14

Ethanol co-ops unite to form marketing venture ................... July/Aug. 12Farmers burn more of what they grow with E85 ................... July/Aug. 29Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28How is your co-op doing? ........................................................ Jan./Feb. 30Land O’Lakes reports nearly $84 million in earnings ....... March/April 23Making good things

Cass-Clay Creamery expanding product line and marketing horizons ............................... March/April 4

Making hay, the right wayOregon producers organize to market certified weed-free, premium hay .................................. March/April 10

Missouri-based co-op brewery unveils Pony Express line of beer ............................................... March/April 20

Net income, sales decline for local farm co-ops ................ March/April 24Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9Southern Marketing Agency Inc. ............................................. Jan./Feb. 20Survey shows dairy co-ops in generally strong financial state .. Nov./Dec. 25USDA helps Michigan sugarbeet

growers purchase processing plant ....................................... Jan./Feb. 10Warming up to cold tofu


Member Relations Attracting the Upper Midwest’s next

generation of dairy farmers ............................................... March/April 7Co-op horizon problems: do you have one? ........................... July/Aug. 24Exploring a greater role for ag

co-ops in sustaining rural living .................................... March/April 21How business culture drives economic behavior in co-ops .... Jan./Feb. 23Making good things

Cass-Clay Creamery expanding product line and marketing horizons ................................March/April 4

Organizations Serving Co-opsACDI/VOCA spreads co-op model worldwide ..................... May/June 37Association of Cooperative Educators

Cross-border membership and collaboration brings growth May/June 36CCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ... May/June 35CFC: rural electric co-ops’ own financing powerhouse ........ May/June 29Co-Bank keeps pace with co-ops’ changing needs ................. May/June 23CUNA: Meeting the needs of 83 million members ............... May/June 39Farm Credit Council promotes lending system

dedicated to improved quality of farm life ......................... May/June 28

Federation of Southern Co-ops:Three decades of sustaining rural Southern communities, saving black-owned farmland ....................... May/June 31

KSU, NDSU Centers researching co-op issues ..................... May/June 34NAHC advocates for co-p housing nationally ....................... May/June 27National Cooperative Bank

Grocery, housing & purchasing co-ops on spectrum of organizations financed ............................... May/June 41

National Telecommunications Cooperative AssociationResponses to evolving technology, deregulation key to members’ future ...................................May/June 40

NCBA helps co-ops compete in time of change .................... May/June 25NCFC champions issues crucial to ag coo-ops ...................... May/June 24NMPF tackles tough issues for dairy co-ops .......................... May/June 26NRECA programs benefit 865 co-ops,

37 million consumers nationwide ....................................... May/June 30NSAC: Making sure co-op numbers add up right ................. May/June 26Rural Cooperative Development Centers .............................. May/June 32Sharing the umbrella

State co-op councils broaden base to serve consolidating co-op sectors ................................... May/June 18

State or regional cooperative associations .............................. May/June 21USDA Rural Development: committed to

the future of America’s rural communities ......................... May/June 42UW Center for Co-ops:

Working together, then and now ........................................ May/June 34

StatisticsFarmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28How does your local farm supply co-op rate? ....................... Nov./Dec. 29How is your co-op doing? ........................................................ Jan./Feb. 30Net income, sales decline for local farm co-ops ................ March/April 24Survey shows dairy co-ops in

generally strong financial state ........................................... Nov./Dec. 25

SugarCo-op born of growers’ frustration with

processor’s lack of long-term outlook ................................... May/June 9Defending their turf

Growers see co-op’s legislative action as essential to future of nation’s sugar industry .................... May/June 4

USDA helps Michigan sugarbeet growers purchase processing plant ..................................................... Jan./Feb. 10

Trade Agriliance to operate major terminal at Port of Galveston ...... Sept./Oct. 17California ag tour gives U.S. trade rep crucial

insight into state’s export crops ............................................ Sept./Oct. 4Co-ops can play role for members seeking

trade adjustment assistance .................................................... July/Aug. 4Defending their turf


Direct Access!AGP’s new Pacific port an investment in Midwest soybean farms & facilities .................................... Sept./Oct. 14

USDAAgribusiness, co-ops awarded $28 million in USDA grants ... Jan./Feb. 111890s Land Grant Institutions use USDA

funds to promote business growth ..................................... Nov./Dec. 3127 co-ops among recipients of $13 million

in USDA VAPG funding .................................................... Nov./Dec. 10USDA co-op development efforts support

commercial farming in Ghana ............................................ May/June 11USDA grant helping Colorado

cooperative produce biodiesel ......................................... March/April 18USDA grants support home-grown fuels ............................... July/Aug. 34USDA helps Michigan sugarbeet growers

purchase processing plant ..................................................... Jan./Feb. 10USDA providing $6.3 million in grants

for rural co-op development in 24 states ........................... Nov./Dec. 24USDA Rural Development: committed to

the future of America’s rural communities ......................... May/June 42USDA study boosts fuel conversion

efficiency rating for ethanol ............................................... Sept./Oct. 13


Utility Co-ops Backyard powerhouses

“Green Tags” spur development of renewable power co-ops ................................................. Sept./Oct. 18

CFC: rural electric co-ops’ own financing powerhouse ........ May/June 29Co-op strives to help members reduce power use, lower bills .. Jan./Feb. 19How Green Tags work ........................................................... Sept./Oct. 19Meeting the test

8,200 service calls in 24 hours tests mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

NRECA programs benefit 865 co-ops, 37 million consumers nationwide ....................................... May/June 30

Sen. Dave Landis, as co-op champion Sen. George Norris .. Nov./Dec. 18

Value Added Agribusiness, co-ops awarded $28 million in USDA grants ... Jan./Feb. 11Biodiesel project looks promising for Iowa co-op ............... March/April 9Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production ........................................ Nov./Dec. 4

Co-op born of growers’ frustration with processor’s lack of long-term outlook ................................... May/June 9

Co-op boosting yields of protein, oil through approved variety program ............................... Sept./Oct. 16



Greener pastures for bio-tech co-ops?New, bio-based products may only be scratching the surface of potential ............................. March/April 16

Making hay, the right wayOregon producers organize to market certified weed-free, premium hay ................................... March/April 10

Minnesota ethanol co-op producing premium Vodka ....... March/April 20Missouri-based co-op brewery unveils

Pony Express line of beer ............................................... March/April 2027 co-ops among recipients of $13

million in USDA VAPG funding ....................................... Nov./Dec. 10USDA grants support home-grown fuels ............................... July/Aug. 34USDA purchasing biobased products .................................... Sept./Oct. 12Warming up to cold tofu

Ohio soybean growers study entry into emerging frozen tofu market ................................................ Nov./Dec. 8

AUTHORS Barr, William W.Amazing Grains!

Montana grain growers use VAPG funds from USDA to develop gluten-free flour .............................. July/Aug. 6

Baxter, AnnieCo-ops help keep rural towns alive ........................................ Nov./Dec. 22

Berry MarkWarming up to cold tofu

Ohio soybean growers study entry into emerging frozen tofu market ................................................ Nov./Dec. 8

Borst, AlanCo-ops can play role for members

seeking trade adjustment assistance ....................................... July/Aug. 4

Campbell, DanielAttracting the Upper Midwest’s next

generation of dairy farmers ............................................... March/April 7Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18Committed to our communities ............................................... Sept./Oct. 2Defending their turf



Hard acts to follow ................................................................ March/April 2Making good things

Cass-Clay Creamery expanding product line and marketing horizons ............................................. March/April 4

Proximity to grain supply, livestock feeders key factors in ethanol plant site selection ............................ July/Aug. 19

Put a soybean in your tank ........................................................ July/Aug. 2Rabobank proposal sparks debate on role

of FCS in farm & rural lending ..........................................Nov./Dec. 13The extended family .................................................................. May/June 2Through good times and bad ................................................... Nov./Dec. 2

Carson, MarlisDairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Crooks, AnthonyLost Horizon

Membership “horizon” problem preceded demise of MCP .. July/Aug. 22

Dunn, JohnUSDA co-op development efforts support

commercial farming in Ghana ............................................ May/June 11

Eversull, EldonFarmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28

Ely, G.Boosting the giant

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

Frederick, Donald A.Capper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10

Gray, Thomas W.Exploring a greater role for ag

co-ops in sustaining rural living ...................................... March/April 21

Haskell, JamesBoosting the giant:

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12International co-op development promotes trade, democracy ... Jan./Feb. 2

Hastings, AnnThe right thing

GROWMARK’s Kelley says time is right for renewable fuels to gain larger share of market ............. July/Aug. 30

Hogeland, Julie A.How business culture drives economic behavior in co-ops .... Jan./Feb. 23

Jobe, Jeff Biodiesel project looks promising for Iowa co-op ............... March/April 9Boosting the giant:

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

Johnson, Mark S.Farmers burn more of what they grow with E85 ................... July/Aug. 29

Karg, Pamela J.Sharing the umbrella

State co-op councils broaden base to serve consolidating co-op sectors ................................................. May/June 18

Wisconsin co-op offers fresh approach to produce auctions .... Jan./Feb. 8

Leach, Richard E.USDA helps Michigan sugarbeet growers

purchase processing plant ..................................................... Jan./Feb. 10

Leach, MichaelCo-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7

Liebrand, CarolynSurvey shows dairy co-ops in generally strong financial state Nov./Dec. 25


Ling, CharlesDairy co-ops continue dominant role

in marketing nation’s milk .............................................. March/April 14

McNamara, Kevin; Fulton, Joan; Hine, SusanWeighing in

Study gauges impact of local ag co-ops on rural economies of Great Plains, eastern Cornbelt ................ March/April 26

Merlo, CatherineOn the front line

Field representatives are the eyes and ears of a co-op .......... Jan./Feb. 4

Reynolds, Bruce J.Compensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38Election and voting policies of agricultural cooperatives ...... May/June 14

Richter, SteveBuying biodiesel ‘off the rack’


Rodenburg, JimDirect Access!

AGP’s new Pacific port an investment in Midwest soybean farms & facilities .................................... Sept./Oct. 14

Rotan, Beverly L.How does your local farm supply co-op rate? ....................... Nov./Dec. 29How is your co-op doing? ........................................................ Jan./Feb. 30Net income, sales decline for local farm co-ops ................ March/April 24

Schofer, Dan; Deibel, Penelope; Sherwin, DanMaking hay, the right way

Oregon producers organize to market certified weed-free, premium hay ................................... March/April 10

Schram, Susan G.African ag co-ops leading fight against HIV/AIDS ................ Jan./Feb. 15

Scroggs, CraigGreat Escapes

Agri-tourism co-op helping Georgia farmers diversify ....... Sept./Oct. 8

Searcy, DianeMFA Oil committed to development

and marketing of renewable fuels ........................................ July/Aug. 26

Sexton, Richard; Hariyoga, HimawanThe canning of Tri Valley


Thompson, StephenBackyard powerhouses

“Green Tags” spur development of renewable power co-ops Sept./Oct. 18Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production ........................................ Nov./Dec. 4

Community investments help launch plant ............................ July/Aug. 21Great Expectations

Ethanol is hot, but what is the long-term outlook for biofuel? ............................................ July/Aug. 14

Greener pastures for bio-tech co-ops?New, bio-based products may only be scratching the surface of potential .................................. March/April 16

Hard lessonsTri-State Ethanol struggling to overcome difficult start .... July/Aug. 32

Meeting the test8,200 service calls in 24 hours tests mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

USDA study boosts fuel conversion efficiency rating for ethanol ................................................................ Sept./Oct. 13

Wadsworth, JamesSigns of Life


Zeuli, KimberlyCo-op leaders focus on strategies for success .......................... Jan./Feb. 21


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Rur Coop Nov/Dec04 V4Regardless of the pros and cons of the proposed sale, it appears that there was...

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