United StatesDepartment ofAgriculture

Rural Business-CooperativeService

RBS ResearchReport 174

Abstract Cooperative Unification: Highlights From 1989 To Early 1999

James J. WadsworthRBS Agricultural Economist

This report describes cooperative unification activities, It discusses unification as ameans of strategic positioning for cooperatives, given changing industry trends andconditions, and identifies the implications of unification and potential subsequentstrategies. Highlights of unification activities, most of them among well-known cooper-atives, are described for the 1 O-year period, January 1989 - April 1999. Selectedactivities are cataloged in the appendix, listed by date, naming the cooperativesinvolved with a brief description of what the unification entailed.

Keywords: unification, merger, consolidation, acquisition, strategic direction

September 1999

Preface Unification activities of agricultural cooperatives recently have been making headlines,largely due to the size of some of the partners involved. Cooperatives of all sizes havebeen unifying, but the spotlight has been enhanced by the activity among large region-al cooperatives. In some cases, merger partners have been other large cooperativesand in others, smaller local cooperatives were brought into a large regional fold.Across the nation, smaller cooperatives continue to consolidate in various agriculturalsectors.

Unification often improves.industry strategic positioning and answers the need forgrowth, the lifeblood of all businesses. Unification opens opportunities for new strategicdirections: horizontal integration, vertical integration, capacity expansion, scaleeconomies, synergies and efficiencies, etc.

Cooperative leaders must understand the implications of unification and the impactthat such activity has on their industry and their cooperative position in it. Highlights ofselected major unification activity are provided in this report, covering the last 10years. The listing is not an exhaustive compilation, but rather views some of thenotable unification activities across the Nation. The listing is summarized as to thetypes of unification activity that took place by the cooperatives involved. The mainsource was USDA’s Rural Cooperatives magazine (formerly Farmer Cooperatives). Formore recent (much of 1998 and 1999) unification activities, various news sources wereused.

i

Contents Highlights.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l

Unification-Strategic Positioning ..................................... .l

Strategic Implications ............................................... .3

FIBS Statistics. .................................................... .5

Selected Unifications ............................................... .5

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Locations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Type of Activity ............................................ .l 0

Dairy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..lO

Farm Supply and Grain ................................... .lO

Livestock.. . . . . . ..~.....................................lO

Fruit and Vegetable ...................................... .l 1

F i n a n c e . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . _ . . . . . . . . . . . l l

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..ll

Selected Unification Listings ....................................... . 0

Listing Index.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..17

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..19

ii

Highlights Unifications (mergers, consolidations, and acquisitions) have changed the agriculturalcooperative landscape. Cooperatives of all sizes and types have been uniting over theyears, but, more recently, large-scale unifications are forging a higher form of structuralchange.

The reason for the increased unification activity is not surprising. Cooperatives arebeing forced to examine alternative strategic directions for remaining prominent.External trends and conditions and industry change are dictating that cooperativesevaluate their organizations regarding their traditional position and functions.Cooperatives are planning, adjusting, and positioning to meet future organizationalgoals. Depending on circumstances and position, cooperatives have three strategicdirections to contemplate: internal change, unification, and ventures and agreements(strategic alliances). Unification is a difficult path to choose, but many cooperativesregard it as their best choice.

Cooperatives striving to grow and achieve stronger industry position through unificationare often presented with opportunities to employ other strategies for growth and opera-tional improvement. Some of the major reasons for, or byproducts of, unification arevertical integration, horizontal integration, scale economies, capacity expansion, andsynergies and efficiencies.

Unification is also necessary for consolidating fragmented industries. Many coopera-tives have taken that route to gain new opportunities in such industries to better servemembers. Most commodity and service sectors of agriculture-dairy, farm supply,grain, livestock, fruit and vegetable, and finance-have seen unification activity. Somecooperatives are getting larger and larger and covering vast areas. Dairy Farmers ofAmerica is often cited. If the Farmland/Cenex Harvest States consolidation occurs, amassive regional cooperative will result. Such consolidation and changing industrystructure raise questions:

l how large can cooperatives become on a nationwide basis and still be effectiveorganizations that are well represented and well governed by member produc-ers?

l will producer-members be better served, or will the dilution of joined coopera-tive cultures and the resulting broad governing bodies produce a watered downlevel of member-owner control?

l how effective is unification for industries and their participants? Will unificationimprove the remaining cooperatives and their member services?

l how will large-scale unifications affect other cooperatives (local and regional)and various cooperative partnerships (e.g., Land O’Lakes joint feed venturewith Cenex Harvest States and GROWMARK) in this industry or related indus-tries?

Cooperative leaders must keep abreast of these activities occurring with the wide-spread unifications and what they mean to their cooperative, industry, industry position,and service to members.

. . .111

Highlights Statistical tracking by Rural Business-Cooperative Service (FIBS) indicates 777 coop-erative unifications from 1989 through 1997. Of those, 66 percent were mergers orconsolidations and 34 percent were acquisitions.

Fifty-one selected unifications for the 1 O-year period, January 1989 through April 1999,are tabulated and cataloged. Most involved dairy cooperatives. Here are some high-lights:

l

Merger forming Dairy Farmers of America (DFA) combining Mid-AmericaDairymen, Milk Marketing, Inc. (MMI), Western Cooperative Dairymen, Inc.(WCDI), and Associated Milk Producers Inc. (AMPI, southern division).

Formation of Cenex Harvest States from the unification of CENEX and HarvestStates.

0

l

l

l

Potential merger of Farmland Industries and Cenex Harvest States.

Consolidation of Land O’Lakes and Countrymark.

Unification of Land O’Lakes and Dairymen’s Cooperative Creamery.

Purchase of Gold Kist farm supply operations by Southern States Cooperative.

Purchase of SF Services by Farmland Industries.

Purchase of Agripac by Pro-Fat.

l Merger of 21 st Century Genetics, Noba, and Genex under the CooperativeResources International (CRI) umbrella.

l Purchase of a grape subsidiary of Tree Top, Inc., by Welch%.

l Purchase by GROWMARK of the Canadian cooperative, United Co-Operativesof Ontario.

l Merger of Atlantic Dairy Cooperative with Land O’Lakes (LOL).

l Financial institution mergers involving CoBank, St. Paul Bank, Springfield FarmCredit Bank, and Springfield Bank for Cooperatives.

l Acquisition of 22 local cooperatives by Riceland Foods.

l Merger of Indiana Farm Bureau Cooperative Association and CountrymarkCooperative.

iv

Cooperative Unification: HighlightsFrom 1989 To Early 1999

James J. WadsworthRBS Agricultural Economist

Editor’s no te-Dr. ]oseph Knapp, then adminis tra tar ofUSDA’s Farmer Cooperative Service, wrote in 1965: “Tomerge--or not to merge. This is the problem confronting anumber of farmer cooperatives today. Times have changedsince many existing farmer cooperatives were formed. Wenow have fewer and larger farms, better roads, better meansof communication, and better transportation methods andequipment . It is possible for a cooperative to serve farmerseffectively over a much wider territory than even a decadeago. Moreover, larger cooperatives serving larger areas canprovide more extensive services and afford better manage-men t.”

Introduction

The cooperative community and agriculturalindustry it represents have changed considerably inthe 38 years since the late Dr. Knapp viewed them.Today, unifications remain in the forefront of coopera-tive restructuring. Large regional cooperatives are cov-ering wider geographical areas. Traditional marketingand membership boundaries have fallen by the way-side under the weight of unifications.

Who would have imagined 38 years after Dr.Knapp’s observations that Dairy Farmers of America,Land O’Lakes, Cenex Harvest States, among others,would be as large and expansive as they are? Indeed,some of the recent unification activities of large coop-eratives have redefined the service, governance, andoperational boundaries in ways that once would nothave been feasible for a farmer cooperative. Recentmajor unifications have clearly redefined and alteredthe scope of agricultural markets in the United Statesand the world.

This report, which focuses on unification activi-ties of cooperatives during the past 10 years, is a fol-

lowup to RBS Service Report 57 (November 1998),Cooperafive Restructuring, 1989-2999, that catalogednumerous restructuring activities-unifications, jointventures, agreements, expansions, contractions,revampings--of agricultural cooperatives.

Unifications-mergers, consolidations, andacquisitions-have gained greater prominence in agri-cultural news due to the significant involvement oflarge, well-known regional cooperatives. They are uni-fying in what appears to be geographic and/or opera-tional-type hopscotch patterns. Land O’Lakes, GROW-MARK, Dairy Farmers of America, Cenex HarvestStates, Farmland Industries, Cooperative ResourceInternational, Southern States, and others have beenactively involved in considerable unifications.Similarly, smaller cooperatives are consolidating acrossthe country, but at a more moderate pace, linking withpartners in nearby or adjacent operational areas.

This report begins by discussing unification as ameans of strategic positioning for cooperatives toattain goals, given changing industry conditions andtrends. The implications follow-the strategies thatcooperatiyes use with unification and subsequentquestions and issues that must be continually assessed.RBS data for cooperatives removed from its mailinglist because of unifications are then provided. Thereport summarizes selected unifications of agriculturalcooperatives from January 2989 through April 1999(cataloged in the appendix).

Unification-Strategic Positioning

Industry conditions often dictate strategic posi-tioning or restructuring as illustrated in figure 1. Firmsmust evaluate their strategic position because of thesefactors. The figure shows the emergence of trends and

1

Figure I- Industry Dictated Strategic Positioning

Trends and Conditions

1 1 1 1 1

Organization, Adjustment, Planning, and Positioning

Organizational and System- Alternative Strategic Directionsfor Goal Accomplishment

External Conditions

Decision nodes

0Unification

conditions that cause an industry to change or consid-er change. This activity creates situations that requireorganizations to adjust, plan, and position themselvesin the changing environment. Depending on the indus-try and cooperative in question, certain strategic direc-tions will be more effective than others. They will alsovary by cooperatives as they seek to achieve goals.

Figure 1 shows cooperatives having three direc-tional choices. They can (1) make internal changes toimprove structure, efficiencies, and operations, (2)unify with other cooperatives or companies, or (3)develop marketing agreements, joint ventures, strate-gic alliances, or other working business relationshipswith other cooperatives or companies. This reportfocuses on unification activity, often the hardest strate-gic choice a cooperative can make. Unification alters

2

cooperative culture, internal and external structure,governance, asset base, and membership boundaries,and often involves a drastic change in operations andoverall organizational and governance structure.

While unification creates major changes, it is nota new concept. Looking over at least the past 10 years,it is clear that cooperatives have been making unifica-tion choices for some time. However, more recentactivities have involved larger cooperatives andexpanded the presence of nationwide cooperativeswith broad expanses of membership. These unifica-tions are intriguing. What do they mean? Why aresome cooperatives making the choice?

Unification implications are many, although var-ied, depending on the industry and cooperativesinvolved. The following section identifies some of the

implications that can be expected from unification.Some strategic and thought-provoking questions andissues are also identified.

Strategic Implications

Unification, often conducted to achieve stronger indus-try position, can provide cooperatives with opportuni-ties to use new strategies. Figure 2 illustrates coopera-tive strategic positioning and potential growthchannels that often result from unification. Flowingfrom unification are a variety of probable strategiesthat come into play. Unification develops a strategicposition that will often propel the surviving coopera-tive into one or more potential strategy channels: verti-cal integration; horizontal integration; scaleeconomies; capacity expansion; and synergies and effi-ciencies.

Figure 2 signifies that unification can create a sur-viving cooperative that:

l participates in two or more vertically adjacentindustries (vertical integration);

l expands an existing line of business andamassing resources or bargaining power toshare market risks by accumulating volumerequired to realize scale economies in productprocurement, sales, transportation, and distrib-ution (horizontal integration and scaleeconomies);

l substantially increases assets and operationalbase resulting in greater capacity andimproved use of resources (capacity expan-sion); and/or

0 collapses specific facets of operations into moreefficiently managed and operated central func-tions (synergies, efficiencies).

Examples of such strategies during unificationsare prevalent. For instance, the numerous mergersinvolving Mid-America Dairymen, subsequently lead-ing to the formation of Dairy Farmers of America,brought about horizontal integration, economies ofsize/scale, vertical integration involving value-addedproducts, and more efficient use of capacity produc-tion. Those, in turn, created significant growth for thecooperatives involved and formed a cooperative of sig-nificant size and scope.

In today’s environment, growth is one of the criti-cal unification goals. Economies of size, more marketprominence, and membership enhancement are allgrowth factors that cooperatives strive to achieve.Vilstrup, Cobia, and Ingalsbe (Cooperatives inAgriculture, Chapter 20) contend that growth is con-sidered a sign of a healthy, successful business, point-ing out that advantages stem from economies of sizeand the ability to achieve marketing and bargainingpower, political power, legislative influence, and finan-cial strength.

The development of large regional cooperativeorganizations, however, raises questions regardingmember governance and service:

How large can cooperatives become on anationwide basis and still be effective organiza-tions that are well represented and well gov-erned by member owners?

Will producer members be better served, orwill the dilution of joined cooperative culturesand the resulting broad governing bodieswater down the level of member-owner con-trol?

In other words, will cooperative cultures be dilut-ed as cooperatives grow into larger and more wide-spread organizations, crossing broad geographicboundaries? Will the transformed cooperatives haveless member representation and governance? And,will those mega-cooperatives be stronger and betterable to serve members?

The ongoing and fast structural change in agri-cultural industries clouds the answer to these ques-tions. Clearly, some agricultural markets need to beconsolidated for higher member benefits. Some arefragmented by too many competing organizations,given the number of producers involved.

It is often contended that overcoming fragmenta-tion can be a significant strategic opportunity, and thatonce consolidation barriers are overcome, the structureof an industry can be improved for those that consoli-date. The structures of agricultural industries in dairy,farm supply, and cattle, for instance, are changing dueto consolidation. The artificial insemination industryhas seen considerable consolidation. Once an industrywith a large number of stud organizations, it has nowconsolidated into four cooperatives and a select num-ber of private firms. The dairy industry, overall, con-tinues to see consolidation. Though fragmentation inthat industry still applies in certain areas, Dairy

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Figure 2- Strategy Potential of Unification

Potential subsequent-strategies

Farmers of America and Land O’Lakes, for instance,continue to gain large-scale prominence. The numberof players in the industry has shrunk.

Consolidations in the farm supply industry alsoare prevalent: Land O’Lakes and Countrymark,CENEX and Harvest States, and now the prospect of aunified Farmland and Cenex Harvest States.

Indeed, unification activity among quite a fewcooperatives has been impressive. The changing struc-ture of certain agricultural industries cannot beignored. However, overcoming fragmentation and see-ing industries consolidate, perhaps toward the “rule ofthree” (it asserts that there is only room for two orthree major competitors in an industry sector-thecompanies that can supply the volume and serviceneeded to support demand), invites more questions:

l How effective is unification for industries andtheir participants? Will they improve alongwith the member services of the remainingcooperatives?

l How will large-scale unifications affect othercooperatives (local and regional and various

cooperative partnerships (e.g., Land O’Lakes’joint feed venture with Cenex Harvest Statesand GROWMARK) in this industry or relatedindustries?

The structural changes taking place will pressureexisting cooperatives with comparatively slight indus-try involvement or market share. It may force them toconsider unification or other courses of action. Theimpact of such pressure must be carefully weighed.Continuing to serve producer members in the mostefficient and beneficial way, given changing structures,should be the ultimate goal of all remaining coopera-

Figure 3 summarizes the potential impacts andimplications of unification. Given significant changevia unification, there are a number of unknowns tocontemplate. What will be the impact on:

l member service and governance,

l other cooperatives and firms,

Figure 3- Strategic Implications (Questions) of Unification

Subsequent strategies,organizational

l industry and industry performance, and

l subsequent strategy employment and organi-zational/operational change?

Cooperative leaders must keep attuned to unifi-cations affecting their cooperative and their industryand what impact these structural changes have on theorganizations and services to members. The followingsections highlight some of the cooperative unificationsduring the past 10 years.

Unifications are expected to continue, and to fur-ther alter the structure and scope of agricultural indus-tries. Questions as to the effectiveness of further con-solidation arise. The answers won’t be easy to assess,but time and a keen eye on the impacts of such unifica-tion activity will eventually produce a clearer picture.Research and/or analyses beyond merely describingunification activities are needed to gain a greaterunderstanding of how unification is impacting indus-tries and of its effect on cooperative cultures and oper-a tions.

RBS Statistics

Figure 4 graphs unification activities derivedfrom removals from the RBS mailing list of coopera-

tives from 1989 to 1997 (see appendix table 1 for thedata contained in the chart). Each year, farmer cooper-atives are dropped from the mailing list because ofmergers, consolidations, acquisitions, dissolutions, etc.The unifications included in figure 4 are those cooper-atives that indicated that they merged or consolidatedwith, or were acquired by, another cooperative(s). Thetrend shows unification activity peaked at 135 in 1991.Other high years were 1992 (107) and 1995 (90).

During the study period, RBS documented 777unifications. Of those, 65.8 percent were identified asbeing mergers and consolidations, and 34.2 percentwere acquisitions (appendix table 1)

Selected Unifications

Selected unifications show the scope of activity.Tables 1 and 2 summarize those described in theappendix by month and year.

SummaryThis section summarizes the unifications

described in the appendix. In some of the text, identi-fying numbers given in parentheses correspond to the

5

Figure +- Unifications per FIBS Mailing List Removals

80

60

1989 1990 1991 1992 1993 1994 1995 1996 1997

Table I- Selected unification activities, by year and type, 1989 through early 1999*

Totals D S G FV L F

1999 8

1998 9

1997 4

1996 4

1995 9

1994 5

1993 2

1992 5

1991 1

1990 3

1989 1

Totals 51 20** 9 4 l ** 7 8 3

2

3

3 l *

1

4

3

3

1

1 1

5 1

1

1

1 ***

1

1

1 2 1

1

1 2

1 2 1

1

1 1

1

1

1

l Numbers correspond to activities listed in Table 2 and appendix listing.l * One of the unifications was a DHIA activity.l ** Counted as 1 were the 22 local cooperatives acquired by Riceland Foods in 1992D = dairy, S = farm supply, G = grain, FV= fruit and vegetable, L = livestock, F = finance.

6

Table Z- Selected unifications of agricultural cooperatives, 1989 through early 1999

# Type Cooperative(s) State Action State Year

1 s

2 L

3

4

L

G

5 F

6 FV

7 D

8

9

IO

11

12

13

14

15

16

17

18

19

20

21

22

D

D

D

S

G

S

S

D

S

S

L

D

D

D

L

Farmland, Cenex HarvestStates

21 st Century Genetics,Noba, Genex

Central Livestock

Northwest Grains Co-operative Terminal,Prairie States Cooperative

St. Paul Bank forCooperatives

AgriPac, Inc.

Maryland Virginia MilkProducers Association

San Joaquin Dairymen,Danish Creamery,California Milk Producers

California Gold Dairy Products

Darigold Farms

Southern States Cooperatives

Cando Farmers Elevator

Countrymark

Farmers Petroleum Cooperative

Dairyman’s Cooperative Creamery

Farmland Industries

CENEX

Michigan Livestock Exchange

MMI, AMPI, Western Dairymen

NE DHIA

Atlantic Dairy Cooperative

Equity Livestock

MOMN

WIOH, NY

MN

ND

Discussing full merger 1999

Merged to form Genex, asubsidiary of CRI

Merged into CRI

Merging to form PrairieStates Terminal

MOMN

WI 1999

WI 1999

ND 1999

MN Merging into CoBank, ACB c o 1999

OR

VA

CA

Bought by Pro-Fat

To merge with CarolinaVirginia Milk Producers

Exploring merger

NY 1999

NC 1999

CA 1999

CA

W A

VA

ND

IN

Ml

CA

MO

MN

Ml

OH,WI.CO

NY

PA

WI

Merging into DFA

Plans to acquire Echo Spring Dairy

Purchased farm supply from Gold Kist

Merging with Cando Farmers Union Oil

Merging with LOL

Merging with Farmland Industries

Merging with LOL

Purchased SF Services

Merged with Harvest States Cooperatives

Merged with Southern States Cooperatives

Merged with Mid-Am to form DairyFarmers of America

Merged with Dairylea Cooperative

Merged with LOL

Acquired Midwest Livestock

MO 1998

OR 1998

GA 1998

ND 1998

MN 1998

MO 1998

MN 1998

AR 1998

MN 1998

VA 1997

MO 1997

NY 1997

MN 1997

WI 1996

Continued

7

Table 2- Selected unifications of agricultural cooperatives, 1989 through early 1999 (continued)

# Type Cooperative(s) State Action State Year

23 D

24 L

25 FV

26 D

27 FV

26 D

29 L

30 D

31 D

32 S

33 F

34 L

35 FV

36 D

37 D

36 G

39 D

40 FV

41 L

42

43

44

45

Fort Collins MilkProducers

Eastern Al, AtlanticBreeders, LABC

Naturipe Berry Growers

Foremost Farms

Blue Chelan, Trout, Inc.

Eastern Milk Producers

Dairylea Cooperative

Southern Milk Sales

Coble Dairy

GROWMARK

CoBank, Farm CredftBank, Springfield Bankfor Cooperatives

Noba, Inc.

Pro-Fat

Dairymen, Inc

Gulf Dairy

Consumers Co-op,Farmers Union Coop Elevator

Allen Dairy

Wenoka Sales

21st Century Genetics,WI DHIC

Dairymen’s Creamery

A-G Cooperative

22 Riceland affiliatedcooperatives

Chaseburg CooperativeCreamery

co Joined Western Dairymen co 1996

NY. PA Merged to form Genex Cooperative NY 1996LA

CA

WI

WA

c o

NY

AL

NC

IL

c oMAMA

OH

NY

KY

LA

c o

Acquired Ag Mark Produce FL 1996

Acquired Morning Glory WI 1995

Merged to form Trout-Blue Chelan WA 1995

Merged with MMI OH 1995

Purchased Empire Livestock NY 1995

Merged with MidAm MO 1995

Merged with M&Am MO 1995

Purchased United Co-operatives of Ontario Ontario 1995

Merged to form CoBank, ACB c o 1995

Merged into CRI

Purchased Curtis Burns Foods

Merged with Mid-Am

Merged with f&f-Am

Merged to form Great PlainsCooperative

WI

NY

MO

MO

c o

ID Merged with Prairie Farms Dairy IL

WA Merged with Majestic Valley Produce WA

WI Merged and formed CRI WI

ID Merged wtth Darigold Farms WA

WI Merged with Mid-Am MO

AR Acquired by Riceland Foods AR

WI Merged with T&State MilkCooperative

WI

1995

1994

1994

1994

1994

1994

1993

1993

1992

1992

1992

1992

Continued

Table 2- Selected unifications of agricultural cooperatives, 1989 through early 1999 (continued)

# Type Cooperative(s) State Action State Year

46 FV

47 S

48 D

4g s

50 FV

51 F

Fruita Consumers Cooperative CO

Indiana Farm Bureau, INCooperative Countrymark

Greenwood Milk Producers WI

Monroe Service, Randolph Service IL

Welch’s (National Grape NYCooperative)

Jackson Bank, Spokane Bank MSWA

Bought United Fruit Growers c o 1992

Merged to create Countrymark Cooperative IN 1991

Merged with LOL MN 1990

Merged to form Gateway FS IL 1990

Bought Tree Top subsidiary U.S. Grape WA 1990

Merged with National Bank for Cooperatives CO 1989

# corresponds to number in unification listing of appendix.

numbering of each activity listed in table 2 and theappendix. Readers may want to read certain descrip-tions for additional information.

LocationsTo provide a general overview of where unifica-

tions have been occurring across the Nation during thepast 10 years, figure 5 maps the locations of the select-ed unification activities included in table 2 and cata-loged in the appendix. All 10 years are commingled.Some dots represent more than one activity. No corre-lation can be made between the markings, i.e., whatcooperative locations are linked through unificationwith other cooperative locations.

Given this depiction, cooperative unificationsoccurred in a broad and scattered pattern across theUnited States, most of it in Washington State,California, the Midwest, the Mid-South, and parts ofthe East.

7ype of ActivityUnification listings are labeled by a code letter in

parentheses identifying the type of unification activitydescribed. Code letters consist of the following:

(D) - D a i r y(S) - Farm supply(L) - Livestock(G) - Grain(Fv) - Fruit and/or vegetable(F) - F i n a n c e

The code letter does not necessarily indicate thecooperatives involved by their type, but rather by thetype of operational activity described by the unifica-tion. In some cases, the activity might actually havecrossover implications. For example, a grain activitymay also be a farm supply activity, and vice versa.

Table 1 provides the number and type of theselected unification activities cataloged. Fifty-oneactivities are listed, headed by 20 dairy unifications, 9in farm supply, 7 in fruit and vegetable, and 8 in live-stock. Four cooperative activities occurred in grain andthree involved finance (CoBank and its counterparts).

DaiwMid-America Dairyman of Missouriunified with Dairymen Inc. (36) of Kentucky and anumber of relatively small dairy cooperatives (43,37,36,31,30)’ prior to forming Dairy Farmers of Americain 1997 (19). Milk Marketing, Inc. of Ohio and EasternMilk Producers of New York merged in 1995 (28) andthe resulting cooperative subsequently teamed withMid-America Dairymen, AMP1 Southern Region, andWCDI of Colorado to form Dairy Farmers of America(DFA) in 1997. Recently, California Gold DairyProducts voted to merge with DFA (9).

Land O’Lakes (LOL) was involved in significantactivity, pulling Atlantic Dairy of Pennsylvania (21)and Dairyman’s Cooperative Creamery of California(15) into its fold. LOL also unified on the farm supplyside, acquiring Countrymark of Indiana in 1998 (13).A significant potential unification event not listed was

9

Figure +Locations of Cooperatives Involved in Selected Unifications

Unifications

0 Location- States, USA

LOL’s talks with AG Processing that were later termi-nated. Greenwood Milk Producers of Wisconsin joinedLOL in 1990 (48).

Dar&old expanded its presence in the Northwestby adding Dairymen’s Creamery Association of Idahoin 1992 (42) and acquiring Echo Spring Dairy ofOregon in 1998 (11).

On the East coast, Maryland and Virginia MilkProducers is merged with Carolina Virginia MilkProducers (7) in early 1999 while Florida DairyFarmers and Tampa Independent Dairy Farmersmerged to form Southeast Milk, Inc., in Florida (10).

The nation’s third largest dairy cooperative maybe formed in California if merger talks succeed amongSan Joaquin Dairymen, Danish Creamery Association,and California Milk Producers (8).

Farm Supply and &&-A majorunification in farm supply occurred by combiningCENEX and Harvest States to form Cenex HarvestStates Cooperatives (17). Farmland Industries had two

significant activities in 1998-a merger with FarmersPetroleum Cooperative of Michigan (14) and theacquisition of SF Services of Arkansas (16). Andtopping those activities are the unification talksbetween Farmland Industries and Cenex HarvestStates (1).

Southern States purchased Gold Kist’s retail farmsupply business in 1998 (6) and greatly expanded itsmarketing territory into the Southeastern States. Inanother major acquisition, LOL purchasedCountrymark’s primary farm supply businesses in1998 (13). An interesting linkage was GROWMARK’spurchase of a Canadian cooperative, United Co-opera-tives of Ontario (32).

In 1992, Riceland Foods acquired 22 of its localmember grain drying cooperatives (44). Great PlainsCooperative in Colorado was formed from the mergerof two Colorado grain cooperatives, making it one ofthe largest cooperatives in Colorado (38).

10

Livestock-The livestock industry has seenconsiderable unification during the lo-year period.Both a farm supply and a dairy cooperative wereinvolved-Southern States of Virginia merged withMichigan Livestock Exchange (18), and DairyleaCooperative acquired Empire Livestock, bothoperating in the State of New York (29).

Furthermore, a significant merger took placeamong three artificial insemination cooperatives toform Genex (24). It also joined Cooperative ResourcesInternational (CRI), a holding cooperative developedin 1993 from the partial merger of 21st CenturyGenetics (artificial insemination cooperative) andWisconsin DHIC, a dairy herd improvement coopera-tive (41). Noba Inc., of Ohio joined CR1 in 1995 (34).CR1 unification continued when Central Livestock ofMinnesota joined the fold (3), and the three AI sub-sidiaries (21st Century Genetics, Noba, and Genex)merged, resulting in just one AI subsidiary, Genex (2),under the CR1 umbrella.

Among livestock marketing cooperatives inWisconsin, Equity Livestock acquired MidwestLivestock, substantially increasing the size of the sur-viving organization (22).

Fruit and Vf?gefBble-Cross-Nationunifications occurred in the fruit an vegetable category.Welch’s (owned by National Grape Co-operative) ofMassachusetts purchased Washington-based U.S.Grape, a subsidiary of Tree Top, Inc., in 1990 (50).Naturipe of California purchased Florida Berries in1996 (25). Among regional activity, Blue Chelan andTrout cooperatives, both in Washington State, mergedto form Trout-Blue Chelan in 1995 (27), Pro-Fatacquired Curtice Burns, both in New York, in 1994 (35),and Fruita bought United Fruit, both in Colorado (46).

Finance--Three consolidations took place inthe cooperative finance arena. In 1989, the JacksonBank for Cooperatives in Mississippi and the SpokaneBank for Cooperatives in Washington merged into theNational Bank for Cooperatives (51). In 1995, CoBank,the Springfield Farm Credit Bank, and the SpringfieldBank for Cooperatives merged to form CoBank,Agricultural Credit Bank (33). Then, early this year(1999), the St. Paul Bank for Cooperatives, the last ofthe former district banks, merged with CoBank, ACB(5). CoBank became the parent lending institution forthe entire Farm Credit System.

Appendix

Selected Unification ListingsUnification listings are organized by date (month

and year reported) and are numbered for reference.The code letter in parentheses identifies the unificationactivity described (see text). Descriptions were gleanedfrom various news sources and from USDA’s RuralCooperatives magazine (formerly FarmerCooperatives). Those from outside the magazine havean asterisk (*) next to the heading.

April 1999(S) Farmland, Cenex Harvest States Work TowardConsolidation*

Farmland Industries, Inc., Kansas City, MO, andCenex Harvest States Cooperatives, St. Paul, MN,announced plans to explore a complete combinationof the two agricultural cooperatives. The resultingcooperative would create an agricultural giant with$20 billion in annual revenue. Both boards of direc-tors have approved the talks leading to the pro-posed unification.

(L) CRI AI Subsidiaries Consolidated*

Delegates representing members of CooperativeResources International (CRI), Shawano, WI,approved the merger of the separate AI sub-sidiaries-21st Century Genetics, Shawano, WI;Noba, Tiffin, OH; and Genex, Ithaca, NY; into onesubsidiary, Genex.

(L) Central Livestock Joins CRI*

Delegates representing members of CR1 approvedthe consolidation of Central Livestock Association,St. Paul, MN, into CRI, Shawano, WI. CentralLivestock joins AgSource and Genex as subsidiariesof CRI.

March 19994. (G) Northwest Grain and Prairie States to Merge*

Northwest Grain Co-operative Terminal, Williston,ND, will merge with Prairie States Cooperative,Zahl, ND, to form Prairie States Terminal. The con-solidation involves a combined membership of1,800 producers, who overwhelmingly approvedthe combination. Northwest Grain operates grain-

11

marketing terminals in five communities. PrairieStates is a full-service cooperative with programs ingrain, fertilizer, fuel, and chemicals.

5. (F) CoBank, ACB, St. Paul Bank Agree To Merge*

Pending shareholders approval, CoBank, ACB,Denver, CO, and St. Paul Bank (MN) will form abank with $22 billion in assets. Both banks are partof the $84 billion U.S. Farm Credit System. The St.Paul Bank has $2.3 billion in assets and serves 600agricultural cooperatives and rural utility customersin the upper Midwest. CoBank, ACB, has $20 billionin assets, finances agricultural exports, and serves2,000 agricultural cooperatives, rural utility systems,and farm credit associations. The merger will createthe nation’s largest Farm Credit System bank.

February 19996. (FV) Pro-Fat Cooperative Completes Acquisition of

Agripac*

Pro-Fat Cooperative, Inc., Rochester, NY, and itswholly owned subsidiary, Agrilink Foods, Inc., hasacquired the frozen food business of Agripac, Inc.,Salem, OR. Agripac had approximately $130 millionin annual sales. Pro-Fat will operate the businessthrough its subsidiary, Pro-Fat Acquisition II, Inc.Agrilink will provide the subsidiary with manage-ment and administrative services.

January 19997. (D) Maryland and Virginia Milk Producers To

Merge With Carolina Virginia Milk Producers*

Maryland and Virginia Milk Producers Association,Inc., Reston, VA, the largest dairy cooperative inVirginia, plans to merge with Carolina Virginia MilkProducers Association, Charlotte, NC. Directors ofboth cooperatives approved the consolidation plan.The new cooperative would serve more than 1,550dairy farmers in 11 States and market about 3 bil-lion pounds of milk a year.

8. (D) Three California Cooperatives Explore Merger*

Three California dairy cooperatives are contemplat-ing a merger that would create one of the largestmilk-producing associations in the Nation. Thetrio-San Joaquin Valley Dairymen, Los Banos,Danish Creamery Association, Fresno, andCalifornia Milk Producers, Artesia-represent 700

dairymen and 44 percent of the State’s milk produc-tion. The merger would make the cooperative theState’s largest and the nation’s third biggest with anestimated revenue of nearly $2 billion.

December 19989. (D) California Gold To Merge with DFA

Members of California Gold Dairy Products,Petaluma, CA, the Nation’s 12th-largest milk mar-keting cooperative, have voted overwhelmingly tojoin Dairy Farmers of America (DFA), Kansas City,MO. California Gold’s 330 members in Californiaand Nevada produce 2.5 billion pounds of milkannually, about half of which is marketed as fluid.

10. (D) Florida Dairy Cooperatives Merge

Florida Dairy Farmers Association and TampaIndependent Dairy Farmers Association havemerged to form Southeast Milk Inc.Headquartered in Belleview, FL, Southeast Milk isthe only Florida-based dairy cooperative. Its 253members have a combined annual milk volume ofsome 2.8 billion pounds, or about 90 percent of themilk produced in the State.

October 199811. (D) Darigold To Purchase Echo Spring Dairy

Darigold Farms, a major dairy cooperative in thePacific Northwest (Seattle, WA), agreed to pur-chase Echo Spring Dairy, an Oregon-based compa-ny that offers a full line of fluid milk products, cot-tage cheese, and sour cream. Darigold Farms hasbeen a major supplier to Echo Spring, providingabout 85 percent of its milk needs. The purchasewill combine Echo Spring’s 105 workers withDarigold’s 1,300 employees.

12. (S) Southern States/Gold Kist Deal Complete*

Southern States Cooperative, Inc., of Richmond,VA, has purchased of the wholesale and retail farmsupply business from Gold Kist Inc. of Atlanta,GA. By early November, Southern States expects tohave its signs on 100 former Gold Kist retail farmsupply stores as well as peanut and grain buyingstations, cotton gins, fertilizer plants, feed millsand crop protection distribution centers in SouthCarolina, Georgia, Florida, Alabama, Mississippi,Arkansas, Louisiana, and Texas.

12

September 199813. (S) Countrymark, LOL Members Approve

Purchase*

Members of Land O’Lakes, Inc. (LOL),Minneapolis, MN, and Countrymark Cooperative,Inc., Indianapolis, IN, approved LOL’s acquisitionof Countrymark’s primary farm supply businesses.Ninety percent of the members of the two organi-zations supported the acquisition which will foldCountrymark’s seed, agronomy, and feed business-es into LOL, expanding LOL’s market territory andmembership deep into the eastern Midwest, andmake it the third-largest commercial feed manufac-turer in the U.S. The acquisition also includesCountrymark’s petroleum distribution businessand involves establishing joint ventures withCountrymark and GROWMARK, Inc., in feed,seed, and petroleum.

July 199814. (S) Farmland and Farmers Petroleum Propose

Merger*

Farmland Industries, Inc., of Kansas City, MO,plans to merge with Farmers PetroleumCooperative, Inc., of Lansing, MI. FarmersPetroleum, which has 4,100 members, is owned byMichigan farm cooperatives, individual farmers,and the Michigan Farm Bureau. Petroleum contin-ues to be a major business unit for Farmland.Under the merger, Farmland will operate FarmersPetroleum’s five retail facilities.

May 199815. -(D) Land 0’ Lakes, Dairyman’s Creamery Merger

Plan Approved*

Members of Land O’Lakes of Minneapolis, MN,and Dairyman’s Cooperative CreameryAssociation of Tulare, CA, approved a merger thatwill make LOL a $5 billion national cooperative.LOL will beef up its presence in the West The twocooperatives have a long history together.Dairyman’s has been making butter for LOL for 15years.

16. (S) Farmland To Buy SF Services*

SF Services of North Little Rock, AR, whose small-town farm supply stores produced sales of $623million in 1997, has been purchased by Farmland

Industries, Inc., of Kansas City, MO. Arkansas hasat least 83 SF-affiliated stores. Another 420 loca-tions are scattered through east Texas, Mississippi,Louisiana, and Oklahoma, with some locations inAlabama and Kansas. The sale required approvalby 126 store-owning members of SF.

March 199817. (S) CENEX, Harvest States Members Approve

Unification

The members of CENEX, Inc., and Harvest StatesCooperatives, both of St. Paul, MN, overwhelm-ingly approved unification to form CENEXHarvest States Cooperatives, one of the nation’slargest farmer-owned cooperatives. The unificationwill take effect June 1,1998. About 88 percent ofCENEX members and 91 percent of Harvest Statesmembers favored the merger. Their businessesspan the full range of food production from farmsupplies to processing and marketing to consumerproducts.

November/December 199718. (L) Southern States, Michigan Livestock Eye

Merger

Michigan Livestock Exchange at East Lansing andits subsidiaries, which have 60,000 members andsales that topped $700 million in 1996, will becomethe livestock marketing division of Southern StatesCooperative based at Richmond, VA, under a pro-posed merger.

September/October 199719. (D) Dairy Farmers of America Formed

Members of four leading U.S. dairy marketingcooperatives (Mid-America Dairymen, MilkMarketing Inc., AMP1 Southern Region, andWDCI have voted to form Dairy Farmers ofAmerica at Kansas City, MO. The new cooperativewill handle about 21 percent of the nation’s milksupply; serve 22,000 members in 42 States; willhave combined sales of nearly $7 billion; and willmarket more than 32.5 billion pounds of milk(1996).

13

March/April 199720. (D) Dairylea, DHIA Combining Operations

Cooperative Dairy One Inc., has been formed fromthe merger of Northeast Dairy Herd ImprovementAssociation, Ithaca, NY, and Dairylea Cooperative,Inc., of Syracuse, NY. It’s mission is to bring aboutneeded changes in the dairy industry.

21. (D) Atlantic Dairy, Land O’Lakes Merge

Members of two of the Nation’s leading dairy mar-keting cooperatives have approved the merger ofAtlantic Dairy Cooperative (ADC), ofPhiladelphia, PA, with LOL of Minneapolis, MN.The merger solidifies a 17-year relationshipbetween the two cooperatives. ADC’s administra-tive operations at Southhampton, PA, will bemaintained, as will its field staff and the staff of itsHolly Milk manufacturing operation. ADC willadopt L,OL,‘s governance system and its memberswill join LOL.

July/August 199622. (L) Equity Livestock Acquires Midwest in

Wisconsin

The largest livestock marketing cooperative inWisconsin, Equity Cooperative Livestock SalesAssociation at Baraboo, has become the dominantcooperative of its type in the State with its pur-chase of Midwest Livestock Producers of FrancisCreek.

May/June 199623. (D) WDCI, Fort Collins Milk Producers Unify

Fort Collins (CO) Milk Producers Association, adairy marketing cooperative with seven memberswho produce 2 million pounds of milk annually,has joined Western Cooperative Dairymen, Inc., ofThornton, CO.

March/April 199624. (L) Livestock Breeding Cooperatives (Atlantic

Breeders, Eastern AI, LABC) Merge

Members of Atlantic Breeders Cooperative ofLancaster, PA, Eastern A.I. Cooperative, Ithaca,NY, and Louisiana Animal Breeders Cooperative,Baton Rouge, LA, overwhelmingly approvedmerger plans to form Genex Cooperative. The pro-

25. (FV) Naturipe Acquires Florida Berries

posal also made Genex a subsidiary of CooperativeResources International, an AI holding cooperativebased at Shawano, WI. The three cooperatives hadbeen working together since 1986 in a partnershipcalled Federated Genetics.

Greater timely access to markets in the East andSouthwest will be achieved through an agreementbetween Naturipe Berry Growers of Watsonville,CA, and Ag Mark Produce, Inc., of Plant City, FL.Berries grown in Florida will be marketed underthe Naturipe label. The Florida source will allowNaturipe, a berry-marketing cooperative, to servethe eastern markets at a lower cost during a timewhen California supplies are limited.

October 199526. (D) Foremost Farms To Buy Morning Glory

Foremost Farms USA, Baraboo, WI, has announcedplans to acquire the Morning Glory Farms Regionof Associated Milk Producers, Inc. (AMPI),Shawano, WI-one of San Antonio-based AMPI’sthree regions. Both cooperatives have facilities andmembers concentrated in Wisconsin and northernIllinois. Foremost Farms was created last year bythe 1994 consolidation of Wisconsin DairiesCooperative and Golden Guernsey DairyCooperative.

September 199527. (FV) Washington Apple Co-ops (Blue Chelan,

Trout) Merge

Washington’s largest grower-owned apple cooper-ative was formed Sept. 1 when two apple coopera-tives-Blue Chelan Inc., and Trout, Inc.-merged.The new association, Trout-Blue Chelan, Inc., rep-resents about 300 growers and will pack 5 millionboxes of fruit worth $70 million annually.

May 199528. (D) MM1 and Eastern Milk Approve Merger

The nation’s third largest dairy cooperative hasbeen created by delegates voting to merge EasternMilk Producers Cooperative, Syracuse, NY, andMilk Marketing, Inc. (MMI), Strongsville, OH. Thenew cooperative will retain the MM1 name and

14

incorporate Eastern’s cow logo into the new logo.The new cooperative has 9,000 farm family mem-bers in an area stretching from Indiana to Vermont.It will process 7 billion pounds of milk worth $1billion, annually. More than 95 percent of the vot-ing members of each cooperative approved themerger.

29. (L) Dairylea Acquires Empire Livestock

Dairylea Cooperative Inc., Syracuse, NY, hasassumed ownership and control of the assets ofEmpire Livestock Marketing Cooperative, Ithaca,NY. Dairylea plans to operate Empire as a fullyautonomous subsidiary. Dairylea has been provid-ing administrative services for Empire since theearly 1990s. Empire is the largest livestock market-ing organization in the Northeast, operating ninemarkets across New York State.

March 199530. (D) Southern Milk Sales Merges with Mid-Am

Southern Milk Sales (SMS), Montgomery, AL,merged with Mid-America Dairymen, Inc.,Springfield, MO. Mid-Am has managed SMS oper-ations on a contract basis for the past 3 years.Coordination of marketing programs was the goalwhen the management contract was establishedwith full merger to follow.

February 199531. (D) Coble Dairy To Merge with Mid-Am

32.

Members of Coble Dairy, Lexington, NC, votedunanimously to merge with Mid-AmericaDairymen, Inc., Springfield, MO. The recent merg-er of Mid-Am and Dairymen, Inc., and their subse-quent aggressive marketing program and strongposition in Class I fluid milk market in theSoutheast prompted the merger. It provides Coblewith the opportunity to preserve members’ equityand market milk profitably in the future.

(S) Canadian, U.S. Co-ops (UCO, GROWMARK)Join Forces

GROWMARK, Inc., Bloomington, IL, has pur-chased the assets of United Co-operatives ofOntario-the largest farm supply and marketingcooperative in the Canadian province-for $34million. Despite geographic differences, the agri-

33. (F) CoBank, Springfield Banks To Consolidate

Stockholders of CoBank, the Farm Credit Bank ofSpringfield (MA), and the Springfield Bank forCooperatives have overwhelmingly approvedtheir consolidation to form CoBank, ACB(Agricultural Credit Bank). The new bank will bebased in Denver, CO. The merger is intended topresent a significant opportunity for all the banksto improve service to customer-owners, strengthenfinancial performance, and achieve strategic busi-ness objectives. The consolidated bank will act as awholesale lender to the Farm Credit Associationserving cooperatives and associations in eightStates of the First Farm Credit district.

34. (L) Noba Joins CRI*

culture of Ontario and of the Midwest are compati-ble because they have strong roots in cooperationamong farmers.

Noba, Inc., an artificial insemination cooperativein Tiffin, OH, merged into Cooperative ResourcesInternational (CRI), Shawano, WI. Noba becomesthe third subsidiary of CR1 and joins 21st CenturyGenetics and Wisconsin DHIC.

December 199435. (FV) Pro-Fat Completes Acquisition of Curtice

Burns

Pro-Fat Cooperative, Inc., a 700-member agricul-tural marketing cooperative at Rochester, NY, hascompleted its acquisition of Curtice Burns Food,Inc. It will become a wholly-owned subsidiary ofPro-Fat. Both will continue to operate under twoseparate boards. The two had been partners in ajoint venture in which Pro-Fat was the primarysupplier of fruits and vegetables processed byCurtice Burns.

November 199436. (D) Mid-Am, DI Merger Receives Justice Approval

The merger of Mid-America Dairymen, Inc., ofSpringfield, MO, and Dairymen, Inc., of Louisville,KY, has been approved by the U.S. JusticeDepartment, clearing the way for the cooperativesto file required merger certification papers withthe States of Kansas and Kentucky, respectively,where the cooperatives are chartered. With more

15

than 92 percent of Mid-Am’s 360 delegates voting,93.4 percent favored the merger. The new coopera-tive will continue to use the Mid-Am name. Themerger will combine Mid-Am’s 14,000 memberswith DI’s 3,000 members in an organization thatwill cover much of the United States.

June 199437. (D) Gulf Dairy To Merge with Mid-Am

Gulf Dairy Association, Kentwood, LA, has votedto merge operations with Mid-America Dairymen,Inc., Springfield, MO. Gulf Dairy will operate as asub-region within Mid-Am’s existing SouthernDivision. Also, Highland Dairy-Mid-Am’s jointventure with Prairie Farms Dairy Inc., Carlinville,IL-has acquired Gilt Edge Dairy, a subsidiary ofthe Dean Milk Co. in Norman, OK. Prairie Farmsmanages Hiland while Mid-Am supplies the rawmilk.

April 199438. (G) Colorado Co-ops Join Forces

Members of Consumers Co-op, Inc., and FarmersUnion Co-op Elevator, both in Wray, CO, have con-solidated their operations. Eighty percent of themembers voting favored unification. The newcooperative, known as Great Plains Cooperative,Inc., will be one of the largest in Colorado.

February 199439. (D) Prairie Farms, Allen Dairy Merge

Allen Dairy, Fort Wayne, ID, has merged withPrairie Farms Dairy, Inc., Carlinville, IL. AllenDairy processes 130 million pounds of fluid milkannually and has about 100 members.

October 199340. (FV) Wenoka Announces Merger

Wenoka Sales, the marketing division of theWenatchee (WA) Okanogan CooperativeFederation, has merged into a new company,Majestic Valley Produce, also headquartered inWenatchee. Majestic will market for Wenatchee’ssix warehouses plus three other packing sheds. Sixof the nine members of Majestic are cooperatives.

February 199341. (D) 21st Century Genetics, Wisconsin DHIC Merge

to Form CRI*

Cooperative Resources International (CRI), a hold-ing cooperative, formed by 21st Century Genetics,an artificial insemination cooperative fromShawano, WI, and Wisconsin DHIC (WDHIC),Verona, WI. Several operations from both coopera-tives are combined under the new holding cooper-ative.

May 199242. (D) Dairymen’s Creamery Association Merges

with Darigold

Dairymen’s Creamery Association @CA),Caldwell, ID, has merged with Darigold Farms atSeattle, WA, retroactive to Dec. 1,1991, when DCAmembers approved the combination. The 76-year-old DCA has been serving diary farmers in north-ern Idaho and eastern Washington State. Themerger is the latest in a number of new changes forDarigold in the past few years. It recently opened anew manufacturing plant in Sunnyside, WA.

43. (D) Mid-Am, A-G Cooperative Consolidate

A-G Cooperative in Arcadia, WI, has consolidatedwith Mid-America Dairymen, Inc., Springfield,MO. The addition of AG’s members and state-of-the-art cheese plant and whey processing center isexpected to fill a void in Mid-Am’s NorthernDivision. Consolidation assured continuation ofthe plant at Arcadia and market security for mem-bers through Mid-Am.

February 199244. (G) Twenty-two Riceland Co-ops Acquired

Riceland Foods, Inc., Stuttgart, AR, has acquired22 affiliated local grain-drying cooperatives.Nearly 6,000 members of the affiliates participatedin the vote, with 94 percent favoring the move. Thetotal package cost Riceland about $48 millionincluding obligations to redeem $34 million inequities and $13.6 million in long-term debt.Current and former members received $11.6 mil-lion in redemptions of the dryer’s certificates ofequity. Members saw immediate benefits in theform of lower drying charges and the freedom todeliver grain to the nearest facility. Over the next 5

16

years, Riceland plans to invest $30 million forimprovements. The former affiliate boards will becontinued to provide marketing advice toRiceland, collect and distribute earnings derivedfrom grain origination, and redeem members’ allo-cated equity.

January 199245. (D) Wisconsin Dairy Co-ops (Tri-State Milk,

Chaseburg Coop Creamery) Merge

Two Wisconsin dairy cooperatives have agreed tomerge. The move allows both Tri-State MilkCooperative at West Salem and ChaseburgCooperative Creamery Company to continue theiroperations. The surviving Tri-State, which previ-ously had no processing facility, will supply milkto Chaseburg so its cheese plant can operate moreefficiently.

46. (FV) Fruita Buys United Fruit Growers

Fruita Consumers Cooperative Association, Inc.,Fruita, CO, will acquire United Fruit Growers,Palisade, CO. United will continue to operateunder its branch manager. Its retail operations atEast Valley will expand to handle farm productionsupplies. The fruit packing and marketing func-tions will be continued. New contracts and addi-tional fruit growers will be sought.

September 199147. (S) Indiana Farm Bureau, Countrymark Merge*

Indiana Farm Bureau Cooperative Association,Indianapolis, IN, and Countrymark, Inc.,Indianapolis, IN, merged to form CountrymarkCooperative.

November 199048. (D) Greenwood Co-op Joins LOL

Members of Greenwood (WI) Milk ProductsCooperative voted to join Land 0’ Lakes, Inc.(LOL), at Minneapolis and thereby relinquish theClass A member status they had held for the past25 years. Greenwood will become LOL’s seventhmajor plant and first in central Wisconsin. It pro-vides a strategic link between LOL’s Minnesotaservice area and members of its Lake to Lake sub-sidiary in eastern Wisconsin.

October 199049. 6) Illinois Co-ops Form Gateway FS

Two southwestern Illinois cooperatives-MonroeService Company and Randolph ServiceCompany-have merged to form Gateway FS, agrain marketing and farm supply cooperative atRed Bud, adjacent to the cooperative’s grain eleva-tor. Combined volume of the new cooperative willbe $73 million. The new operation will have 100employees and facilities at 14 locations in adjoin-ing Monroe and Randolph counties. Gateway isexpected to save $200,000 a year after its first yearof consolidation by eliminating duplicate insur-ance, audits, annual meetings, and personnel.

April 199050. (FV) Welch’s Completes U.S. Grape Purchase

Assets and operations of U.S. Grape, Sunnyside,WA, have been transferred from Tree Top, Inc., anapple-processing cooperative at Selah, WA, toWelch’s. Sale of the former Tree Top subsidiary toWelch’s was formally completed earlier this year.Facilities were closed and offered for sale. Storedjuices were transferred to Welch’s facility atGrandview, WA. The 51 grape growers, who hadcontracted more than 1,000 acres of vineyards toU.S. Grape, became members of National GrapeCo-operative that owns Welch’s.

January 198951. (F) Jackson, Spokane Join National Bank for

Cooperatives

The addition of the Jackson and Spokane Banks forCooperatives gives the new National Bank forCooperatives (NBC) a base of about 2,400 stock-holders, $11.3 billion in assets, and $8.8 billion inloans outstanding, based on June 30,1988 figures.Stockholders in the Jackson and Spokane districtsapproved the merger with NBC and stockholdersin the eight other districts, both by number andequity, and the Central Bank also approved it forcooperatives in Denver.

Listing IndexApril 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111. (S) Farmland, Cenex Harvest States Work

Toward Consolidation* . . . . . . . . . . . . . . . . . . .ll2. (L) CR1 AI Subsidiaries Consolidated* . . . . . . . . .ll3. (L) Central Livestock Joins CRI* . . . . . . . . . . . . . . .11

17

March 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114. (G) Northwest Grain and Prairie States

toMerge* . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..ll5. (F) CoBank, ACB, St. Paul Bank Agree

ToMerge* . . . . . . . . . . . . . . . . . . . . . . . . . . . ...12

February 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126. (FV) Pro-Fat Cooperative Completes

Acquisition of Agripac” . . . . . . . . . . . . . . . . .12

January 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127. (D)

8. (D)

Maryland and Virginia Milk Producers ToMerge With Carolina Virginia MilkProducers, . . . . . . . . . . . . . . . . . . . . . . . . . . ...12Three California Cooperatives ExploreMerger+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...12

December 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129. (D) California Gold To Merge with DFA ....... .1210. (D) Florida Dairy Cooperatives Merge ....... .23

October 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1211. (D) Darigold To Purchase Echo Spring

Dairy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...1212. (S) Southern States/Gold Kist Deal

Complete* . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

September 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1313. (S) Countrymark, LOL Members

Approve Purchase* . . . . . . . . . . . . . . . . . . . . .13

July 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1314. (S) Farmland and Farmers Petroleum

Propose Merger* . . . . . . . . . . . . . . . . . . . . . . . .13

May 1998 .................................... 1315. (D) Land 0’ Lakes, Dairyman’s Creamery

Merger Plan Approved* ................ .1316. (S) Farmland To Buy SF Services* ........... .13

March 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1317. (S) CENEX, Harvest States Members Approve

Unification . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

November/December 1997 . . . . . . . . . . . . . . . . . . . . .1318. (L) Southern States, Michigan Livestock

EyeMerger . . . . . . . . . . . . . . . . . . . . . . . . . ...13

September/October 1997 . . . . . . . . . . . . . . . . . . . . . . .1319. (D) Dairy Farmers of America Formed ....... .13

March/April 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1420. (D) Dairylea, DHIA Combining Operations ... .1421. (D) Atlantic Dairy, Land O’Lakes Merge ..... .14

July/August 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1422. (L) Equity Livestock Acquires Midwest

in Wisconsin .......................... .14May/June1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1423. (D) WDCI, Fort Collins Milk Producers

Uni fy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

March/April1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1424. (L) Livestock Breeding Cooperatives (Atlantic

Breeders, Eastern AI, LABC) Merge ...... .1425. (FV) Naturipe Acquires Florida Berries ...... .14

October 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1426. (D) Foremost Farms To Buy Morning Glory ... .14

September 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1427. (FV) Washington Apple Co-ops (Blue

Chelan, Trout) Merge ................. .14

May 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1428. (D) MM1 and Eastern Milk Approve Merger .. .1429. (L) Dairylea Acquires Empire Livestock ...... .15

March 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1530. (D) Southern Milk Sales Merges with

Mid-Am . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

February 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1531. (D) Coble Dairy To Merge with Mid-Am ..... .1532. (S) Canadian, U.S. Co-ops (UCO,

GROWMARK) Join Forces .............. .15

January 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1533. (F) .CoBank, Springfield Banks To

Consolidate ........................... .1534. (L) Noba Joins CRY ....................... .15

December 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535. (FV) Pro-Fat Completes Acquisition of

CurticeBurns . . . . . . . . . . . . . . . . . . . . . . . . .15

November 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1536. (D) Mid-Am, DI Merger Receives Justice

Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

June 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1637. (D) Gulf Dairy To Merge with Mid-Am ...... .16

18

April 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1638. (G) Colorado Co-ops Join Forces ............ .16

February 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1639. (D) Prairie Farms, Allen Dairy Merge ........ .16

October 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1640. (FV) Wenoka Announces Merger ............ .16

February 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1641. (D) 21st Century Genetics, Wisconsin

DHIC Merge to Form CRP .............. .16

May 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1642. (D) Dairymen’s Creamery Association Merges

with Darigold ......................... .1643. (D) Mid-Am, A-G Cooperative Consolidate ... .16

February 1992 ................................ 1644. (G) Twenty-two Riceland Co-ops Acquired ... .16

January 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1745. (D) Wisconsin Dairy Co-ops (Tri-State Milk,

Chaseburg Coop Creamery) Merge ...... .1746. (FV) Fruita Buys United Fruit Growers ....... .17

September 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1747. (S) Indiana Farm Bureau, Countrymark

Merge* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

November 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1748. (D) Greenwood Co-op Joins LOL ............ .17

October 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1749. (S) Illinois Co-ops Form Gateway FS ......... .17

April 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1750. (FV) Welch’s Completes U.S. Grape Purchase . .17

January 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1751. (F) Jackson, Spokane Join National Bank for

Cooperatives .......................... .17

References

Business Wire, Inc., various news reportings, 1998.

Cobia, David W. Cooperatives in Agriculture, PrenticeHall, New Jersey, 1989.

PR Newsletter Association, Inc., various news report-ings, 1998.

Porter, Michael, E. Competitive Strategy, The Free Press,A Division of Macmillan, Inc., New York, NY, 1980.

Various newspaper reportings, i.e., The IndianapolisStar (IN), The Star Tribune (MN), The Kansas CityStar (MO), Grand Forks Herald (ND), The BismarkTribune (ND), The Pan tagraph (IL), The SundayOklahoman (OK), The Daily Oklahoman (OK), TheOmaha World Herald (NE), The Arkansas Democrat(AR), The Fresno Bee (CA), The Des Moines Register(IA).

U.S. Department of Agriculture, Farmer Cooperatives,Agricultural Cooperative Service, Washington, DC,Vol. 55, No. 10, January 1989 - Vol. 61. No. 1 April1994.

U.S. Department of Agriculture, Farmer Cooperatives,Cooperative Services, Rural DevelopmentAdministration, Washington DC, Vol. 61, No. 2,May 1994 - Vol. 61, No. 8, November 1994.

U.S. Department of Agriculture, Farmer Cooperatives,Rural Business and Cooperative DevelopmentService, Washington, DC, Vol. 61, No. 9, December1994 - Vol. 62, No. 6, September 1995.

U.S. Department of Agriculture, Farmer Cooperatives,Rural Business and Cooperative DevelopmentService, Washington, DC, Vol. 62 No. 7, October1995 - Vol. 62, No. 9, December 1995.

U.S. Department of Agriculture, Rural Cooperatives,Rural Business - Cooperative Service, Washington,DC, Vol. 63, No. 1, January/February 1996 - Vol.65, No. 2, March/April 1998.

U.S. Department of Agriculture, Posifioning FarmerCooperatives for the Future, A Report to Congress,Agricultural Cooperative Service, Washington, DC,October, 1987.

Wadsworth, James J. Cooperative Restructing, 2989-2998,RBS Service Report 57, Rural Business-CooperativeService, USDA, Washington, D.C., November, 1998

19

Appendix table I- Unifications shown in RBS cooperative list, 199%97*

1989 1990 1991 1992 1993 1994 1995 1996 1997 Total

Numbers

consolidations 55 41 76 74 58 47 65 54 41 511Acquisitions 33 27 59 33 41 14 25 18 16 266Total 88 68 135 107 99 61 90 72 57 777

Percentage of tota/

Merges andconsolidations 62.5 60.3 56.3 69.2 63.7 77.0 72.2 75.0 71.9 65.8Acquisitions 37.5 39.7 43.7 30.8 36.3 23.0 27.8 25.0 28.1 34.2

’ The actual change may have occurred a year or more earlier. The year-to-year variation is partially due to the reporting mechanism.

20

U.S. Department of AgricultureRural Business-Cooperative Service

Stop 3250

Washington, D.C. 20250-3250

Rural Business-Cooperative Service (RBS) provides research,

management, and educational assistance to cooperatives to

strengthen the economic position of farmers and other rural

residents. It works directly with cooperative leaders and

Federal and State agencies to improve organization,

leadership, and operation of cooperatives and to give guidance

to further development.

The cooperative segment of RBS (1) helps farmers and other

rural residents develop cooperatives to obtain supplies and

services at lower cost and to get better prices for products they

sell; (2) advises rural residents on developing existing

resources through cooperative action to enhance rural living;

(3) helps cooperatives improve services and operating

efficiency; (4) informs members, directors, employees, and the

public on how cooperatives work and benefit their members

and their communities; and (5) encourages international

cooperative programs. RBS also publishes research and

educational materials and issues Rural Cooperatives magazine.

The U.S. Department of Agriculture (USDA) prohibits

discrimination in all its programs and activities on the basis of

race, color, national origin, gender, religion, age, disability,

political beliefs, sexual orientation, and marital or family

status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for

communication of program information (braille, large print,

audiotape, etc.) should contact USDA’s TARGET Center at

(202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director,

Office of Civil Rights, Room 326-W, Whitten Building, 14th and

Independence Avenue, SW, Washington, D.C. 20250-9410 or

call (202) 720-5964 (voice or TDD). USDA is an equal

opportunity provider and employer.