RuralCoop MayJune08 draft4

USDA / Rural Development September/October 2011

Rura

lCOOPERATIVESCOOPERATIVES

SPECIALSECTION:PAGE 16

All the right movesPage 6

Features

Rural Cooperatives / September/October 2011 3

Volume 78, Number 5July/August 2011

Rural Cooperatives (1088-8845) ispublished bimonthly by USDA RuralDevelopment, 1400 Independence Ave.SW, Stop 0705, Washington, DC. 20250-0705.

The Secretary of Agriculture hasdetermined that publication of thisperiodical is necessary in the transactionof public business required by law of theDepartment. Periodicals postage paid atWashington, DC. and additional mailingoffices. Copies may be obtained from theSuperintendent of Documents,Government Printing Office, Washington,DC, 20402, at $23 per year. Postmaster:send address change to: RuralCooperatives, USDA/RBS, Stop 3255,Wash., DC 20250-3255.

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Unless otherwise stated, articles in thispublication are not copyrighted and maybe reprinted freely. Any opinions express-ed are those of the writers, and do notnecessarily reflect those of USDA or itsemployees.

The U.S. Department of Agriculture(USDA) prohibits discrimination in all itsprograms and activities on the basis ofrace, color, national origin, age, disabili-ty, and where applicable, sex, maritalstatus, familial status, parental status,religion, sexual orientation, geneticinformation, political beliefs, reprisal, orbecause all or part of an individual’sincome is derived from any publicassistance program. (Not all prohibitedbases apply to all programs.) Personswith disabilities who require alternativemeans for communication of programinformation (Braille, large print, audiotape,etc.) should contact USDA’s TARGETCenter at (202) 720-2600 (voice and TDD).To file a complaint of discrimination, writeto USDA, Director, Office of Civil Rights,1400 Independence Avenue, S.W.,Washington, D.C. 20250-9410, or call (800)795-3272 (voice), or (202) 720-6382 (TDD).USDA is an equal opportunity providerand employer.

Tom Vilsack, Secretary of Agriculture

Dallas Tonsager, Under Secretary,USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?Call (202) 720-6483, or email:[email protected] This publication was printed with vegetable oil-based ink.

p.6

04 Co-op sales, income second highest ever; 7,000 jobs added

06 All the right moves Supply co-op adjusts and thrives in changing Central Texas marketBy Dan Campbell

14 Farm Credit turns 95Producer-owned lending system celebrates birthday with online salute to its members

16 Co-ops: Sprouting ideas and innovations! USDA’s Coopertive Month salute profiles 11 noteworthy co-ops

34 Smith, Jenkins win communications honorsBy Greg Brooks and Amber DuMont

36 New Web tool helps dairy farmers capture energy savingsBy Rebecca MacLeod and Robert Madeja

Departments02 COMMENTARY

33 FOCUS ON

38 NEWSLINE

p. 16p. 14

ON THE COVER: On a weekday morning, there’s plenty of room inthe aisles at the Producers Cooperative Association supply store inBryan, Texas. But on weekends, the store is typically packed withfarmers, ranchers and “lawn and garden” shoppers, the latter amarket segment that the bright, spacious store was designed toappeal to when it moved to this new location in 2006. Story on page 6.

Editor’s note: Information for this article was compiled bythe Cooperative Programs statistics staff of USDA RuralDevelopment: Jacqueline E. Penn and E. Eldon Eversull.

armer, rancher and fishery cooperativeshad their second highest sales andincome in 2010, trailing only the record2008 levels. With four very good yearsin a row for many cooperatives, they

were able to increase employment by more than 7,000from 2009.

The year saw significantly higher prices for dairyproducts, cotton and livestock and falling prices for foodgrains and oilseeds. Farm fuel prices were up 25 percentwhile the prices of most other farm supplies decreased.The 2,310 farm cooperatives surveyed had sales of $170billion, exceeding the prior year’s sales by almost $1billion (Table 1).

Dairy products led the increase in cooperativemarketing, with sales gains of almost $2 billion (Table2). Livestock sales increased $500 million while sugarsales increased $300 million. Grain and oilseed salesdropped by more than $3 billion. Petroleum productssaw the biggest sales gain among farm supplies, withsales up $1.2 billion. Crop protectants and seed also sawsales climb, but fertilizer sales declined by $1.1 billionand feed sales dropped by almost $200 million.

Net income before taxes was up almost 4 percent, to$4.3 billion, the second highest income ever but still$500 million less than the record $4.8 billion set in2008. The past four years have all produced record, ornear record, income levels for the nation’s agriculturalcooperatives.

“These sales and income figures for 2010 are nearrecord levels, with cooperatives showing confidence inthe economy by increasing employee numbers,” saysDallas Tonsager, under secretary for USDA RuralDevelopment. “Dairy prices remain strong in 2011, as dolivestock, grain and oilseeds, pointing to another strong yearfor the ag economy.”

Marketing of food, fiber, renewable fuels and farm suppliesby cooperatives experienced slight increases over the previousyear (Table 1), according to the Cooperative Programs officeof USDA Rural Development. Gross business volume of$170 billion was the second largest ever, as was net incomebefore taxes (Figure 1).

The value of cooperative assets grew in 2009 by more than

$4 billion; liabilities and owner equity both grew by $2billion. Equity capital still remains low but is clearly showingan upward trend, 2 percentage points higher than theprevious year (Figure 2).

Patronage income (refunds from other cooperatives due tosales between cooperatives) fell by more than 23 percent, to$692 million, down from $900 million in 2009.

Farmer, rancher and fishery cooperatives remain one ofthe largest employers in many rural communities, with a totalworkforce of 184,000. The number of full-time employees

4 September/October 2011 / Rural Cooperatives

F

Figure 1—Cooperatives’ Gross and Net Business Volume, 1979-2010

Figure 2—Cooperatives’ Assets, Liabilities, and Net Worth, 2001-2010

Co-op sales, income second highest ever; 7,000 jobs added

experienced a large increase in 2010, to 129,000 (up 7,000from 2009), while the use of part-time and seasonalemployees decreased 6 percent, to 54,000.

There was a slight uptick in farm numbers, with USDAcounting 2.2 million in 2010, up 700 from 2009. The numberof farmer cooperatives continues to decline. There are now2,310 farmer, rancher and fishery cooperatives, down from2,390 in 2009. Mergers account for most of the drop,resulting in larger cooperatives.

Producers held 2.2 million memberships in cooperatives in

2009, up 0.2 percent, or about 4,000 more than in 2009. Thenumber of U.S. farms and cooperative memberships are nowabout equal, but this does not mean that every producer is amember of an agricultural cooperative. Previous studies havefound that many farmers and ranchers are members of up tothree cooperatives, so farm numbers and cooperativememberships are not strictly comparable. n


Item 2010 2009 ChangeBillion $ Percent

Products marketed:Bean and pea (dry edible) 0.163 0.166 -1.81Cotton 2.387 2.354 1.41Dairy 32.518 30.543 6.47Fish 0.225 0.200 12.69Fruit and vegetable 7.723 7.547 2.32Grain and oilseed 40.951 44.296 -7.55Livestock 3.633 3.089 17.60Nut 0.905 0.814 11.24Poultry 1.174 1.177 -0.20Rice 1.531 1.686 -9.20Sugar 4.890 4.577 6.83Tobacco 0.243 0.168 44.50Wool and mohair 0.005 0.005 0.25Other marketing 4.786 4.769 0.36Total marketing 101.134 101.391 -0.25

Supplies purchased:Crop protectants 8.095 7.710 5.00Feed 10.824 11.050 -2.05Fertilizer 11.119 12.223 -9.04Petroleum 24.482 23.264 5.23Seed 4.256 3.932 8.25Other supplies 5.144 4.819 6.73Total supplies 63.920 62.999 1.46

Services and other income 5.013 4.940 1.48Total business 170.067 169.330 0.44

Item 2010 2009 ChangeNumber Percent

Sales (Gross, Billion $)Marketing 101.1 101.4 -0.25Farm supplies 63.9 63.0 1.46Service 5.0 4.9 1.48Total 170.1 169.3 0.44

Balance sheet (Billion $)Assets 65.0 60.8 6.93Liabilities 39.2 37.1 5.68Equity 25.9 23.8 8.88Liabilities and net worth 65.0 60.8 6.93

Income statement (Billion $)Sales (Gross) 170.1 169.3 0.44Patronage income 0.7 0.9 -23.11Net income before taxes 4.3 4.1 3.71

Employees (Thousand)Full-time 129.3 122.2 5.81Part-time, seasonal 54.3 58.0 -6.29Total 183.6 180.2 1.92

Membership (Million) 2.2 2.2 0.18

Cooperatives (Number) 2,310 2,390 -3.35

Table 1—U.S. cooperatives, comparison of 2010 and 2009 Table 2—U.S. cooperatives gross business volume, 2010 and 2009


By Dan Campbell, editor

mid the sounds ofhammers, drills andidling concrete trucks,Producers CooperativeAssociation’s new $3

million agronomy center is rising alongNorth Texas Ave. in Bryan, Texas. Thefacility, scheduled for completion byfall, will be another crown jewel for thisthriving farm supply and services co-op,which owns a complex of facilities on25 acres along both sides of the road,just a few miles from Texas A&MUniversity.

When completed, rail cars and truckswill be able to load and unload undercover inside the 34,000-square-footfacility, speeding operations whileeliminating exposure to the elementsand reducing the amount of fertilizer

dust that escapes into the air. Thecenter will also include a newshowroom where the co-op’s wide arrayof agronomy products will be displayed.

The new facility should makeconditions much more comfortable foremployees and customers alike. “It canget very slick and messy here on hot,high humidity days. This facility willrepresent a big change for the better,”says Kent Dunlap, communicationsmanager for the co-op, as he leads avisitor through the construction zone.

The timing for the new agronomycenter to open, however, could havebeen better, says James Deatherage,president of Producers CooperativeAssociation (Producers). Central Texashas been suffering through a severedrought (see sidebar, page 8), causingsales of fertilizer and other agronomyproducts to slump as crops withered.

According to somemid-summerestimates, about 30percent of cropshad beenabandoned due tolack of water.

“There is nocorn crop this year — it is gone; we lostit all,” Deatherage says. “Even much ofthe irrigated corn is gone because ofheat and constant 30 mph wind thatdried it out. Irrigation pumps could notkeep up with it.”

When the Producers boardapproved the project about three yearsago, there was — of course — no wayof knowing a severe drought was justaround the corner. Regardless,cooperative directors and managementsay they have no doubts that theinvestment will prove to be another

A

All the right movesSupply co-op adjusts and thrives

in changing Central Texas market

From top: More than 60different feeds are avail-able at any one time atProducers’ feed mill, which can make hundreds of custom mixes on order.Inside the supply store, staffhave the expertise to help both farmers andhomeowners. A robotic loader does some ofthe heavy lifting in the feed mill. The exteriorof the supply store, with the feed mill in thebackground. USDA photos by Dan Campbell


valuable expansion of a co-op with atrack record of making all the rightmoves.

Cattle selloff effects could linger

Lack of water and pasture has alsocaused a big cattle selloff, the impact ofwhich could impact the co-op’s feed andveterinary supply sales for several yearsto come.

“The drought has forced me to cull alot harder than I normally would have,”says John Malazzo, who raiseschampion Braford cattle (a cross ofHereford and Brahma cattle that thrivein the climate here). He also farms2,400 acres of cotton and other crops.“We still have a little hay to feed ourcattle, but when you run out of water,that’s a different story,” continues

Malazzo, who has been a Producersboard member for 16 years. “We don’thave the ability to haul water to all ofour cattle every day.”

Beef prices are already high, andwith smaller herds next year “we maybe seeing some historically high beefprices,” Deatherage says. “Folks whosold out may find that when they go tobuy back in, the price of replacementcattle is unaffordable.”

Deatherage says that he is concernedthat beef prices could climb so high that“you can lose your consumer base —there could be a shift to an alternateprotein as prices go higher.”

A co-op has to be very careful abouthow it reacts to such changes. “Whenyour piece of the pie shrinks, theimmediate reaction is usually to cutmargins. So margins get cut in adefensive posture; business is goingdown and margins are shrinking as youtry to hold on to a smaller piece of thepie.”

The co-op, which was formed in1943 and moved to its present locationin 1960, has been seeing its piece of thepie grow steadily. Its main trade area isan 11-county area roughly within a 70-mile radius of Bryan and neighboringCollege Station.

Producers has four operating

divisions: Feed and Nutrition;Agronomy Services; Fuels andLubricants; and Agricultural Supply(which now includes lawn and garden-type supplies). Even with the drought,Deatherage says he expects all divisionsto be profitable in 2011.

He went to work for the co-op in1980, having previously operated hisown farm supply business. Thatbusiness eventually failed, but thelessons he learned from the experience— and plenty more along the road —have helped him become one of themost widely respected farm leaders inTexas. Indeed, Deatherage was recentlyelected to represent this region on theboard of directors of Land O’ Lakes, afederated farm supply and dairy foodsco-op to which Producers belongs.

Changing marketProducers’ market has been

undergoing huge changes as formerlyrural areas have become suburbanized.Where large ranches and farms oncedominated the landscape, hobby farmsand ranchettes with a few acres of landand some horses, poultry or “exotic”livestock (everything from goats toAlpacas) are now commonplace.

Rather than downsize and grumbleabout the changes, Producers hasinstead adapted by offering more goodsand services aimed at attracting thehobby ranchers and the “lawn andgarden” trade while still focusing on itscore producer-members. “We tell ourstaff all the time that we do not have


A good farm supply and service co-op can do so much tohelp its members prosper. In good times and bad, a supplyco-op is like a producer’s business partner. But one thing even the best co-op cannot do is to make it

rain. In the cattle and cotton country of Central Texas, lack of

rain this past year caused one of the worst droughts in ageneration. The night before Rural Cooperatives visited withmembers of Producers Cooperative Association (Producers)in late June, the area received 2-3 inches of desperatelyneeded, desperately welcomed rain. But that was the first measurable perception in nearly a

full month. And while the rain did a lot of good, it was too lateto help much of the crops, already parched, withered orstunted. Cattle herds had already been sharply reduced, indirect response to the lack of water and forage. “Out of the 48 years I’ve been farming, I’ve never seen a

year like this, and I hope we never see another like it,” saysJoe Wilder, after sitting down in his farm office on a sizzling-

hot June morning. “Things are dry now that I’ve never seendry before. I have pastures that look like this counter top[brown and bare].” Yield was down 60 percent from average for the winter

wheat he had recently finished harvesting — which was verylate. Wilder says that’s because wheat that normally spoutsin November didn’t come up until January. “The cotton doesn’t look much better. It’s very sporadic —

I have some cotton that is two feet high, and right next to itwill be some that is only two inches high,” says Wilder, along-time Producers board member. “The milo is the same.With soybeans, one row is up, one row is not.” Irrigation is traditionally considered “supplemental” in this

region, and not all land has access to irrigation.

Cattle herds reduced“The drought has caused an unprecedented sell off in

cattle numbers — we’re at a nearly 80-year low,” saysProducers President James Deatherage. “There is no

Drought takes heavy toll on Texas ranches, farms

“Out of the 48 years I’ve been farming, I’ve neverseen a year like this, and I hope we never seeanother,” says cotton and cattle producer JoeWilder, with grandson Jayce Wilder. The droughtalso set the stage for devastating forest and rangefires in Central Texas later in the summer. USDAphoto by Dan Campbell


the luxury of picking who our customeris, so we have to move in the directionthe market is taking us,” Deatheragesays.

Traditionally, Producers’ trade areahas been dominated by the “three Cs”of Central Texas agriculture: cattle,cotton and corn. But the cattle businesshas been coming on strongest for thepast 15 years or more. Today, about 80percent of its trade is with cow-calfoperations. The overall trend is towardmore small ranches, although thedrought could cause a temporaryreversal of that trend. The average herdof co-op members is less than 50 cows. Most of the small ranch owners haveoff-farm jobs; their cow-calf operationis typically a side business, although animportant one.

The co-op welcomes and cultivatesnon-member business to help subsidizeits producer-member business. Non-members do not receive patronage. Theco-op formerly issued class-B, non-voting stock to non-producers. But asthe pace of suburbanization increased,the proportion of class-B to class-Astock was getting out of balance, so theclass-B stock plan was halted.

Today, only producers can bemembers, although the definition of“producer” is broad. The co-op bylawsspecify that a member must produce anagricultural product with the intent tosell it. Thus, for example, a beekeeperqualifies as a producer if he or she sellshoney.

Producers averages 30 new membersa month, and today has nearly 10,000members. Only active members arecounted, as the cooperative purges fromits membership roles anyone who hasnot done business with the co-op fortwo years.

Debt-free co-opThe co-op relies 100 percent on

member equity for capital projects suchas the new agronomy center. “We don’tborrow money, which adds to ourstrength,” Deatherage says. “A $3million project for a relatively small co-op to pay for out of its hip pocket is a

pasture, which is causing the selloff. Cattle prices are actually good, but if youhave no forage or no water, you have to sell.” Crops, of course, can bounce back the next year after a drought. But it is not

as easy for the cattle industry to launch a comeback. “That’s what really worries us — that our producers are selling off assets

that will take several years to rebuild,” says Deatherage. The co-op’s numbers this year will reflect the drought. “2011 will not be one

of our best years, which is strictly weather related,” say Deatherage. “We trynot to use the drought as an excuse, but for agriculture here, weather iseverything.”When interviewed in late June, Deatherage said there was “still the

opportunity to make a cotton crop, but we are close to losing it on non-irrigatedland. With some timely rains, we could still pull out a cotton crop.”With cotton prices the highest he has seen in his life — $1.25 a pound in

June — cotton farmer and cattle rancher John Malazzo had “hopes anddreams” of a really big payday — one that would enable him to make some bigland payments this year. If only he could get near his average of three bales ofcotton per acre. “But Mother Nature put her knife right between our ribs in that regard,”

Malazzo says. “Most of central Texas crops have been devastated,” says Malazzo, a board

member of Producers and two other co-ops. Fortunately, out of the 2,400 acreshe farms, about 80 percent is irrigated. Four years ago, his farm wasflood/furrow irrigated, but much of the irrigated portion of the farm now hastransitioned to a center-pivot system. The irrigation system not only saves a great deal of labor needed for hauling

and assembling pipelines and digging out furrows, but it is also much morewater-efficient. “That’s really the most important thing — the environmentalbenefits. The center-pivot saves water, and we are already having to pump fromabout 400 feet deep.” “Here in the Brazos Valley,” he continues, “we are considered to be

supplemental irrigators. We don’t have the volume of irrigation that they do inplaces like Arizona and New Mexico, where they know they must irrigate forevery drop of water needed. Here, if we can get enough moisture from MotherNature to make it until June, then we can take it from there with our irrigation.But this year we had to pre-water, which we hardly ever do; then, by the timewe planted, there was so much wind and sun and heat that the moisture wasgone, so we had to water again.” The day after the farm got 2-3 inches of rain in June, Malazzo was still

optimistic that he might get 50 percent of a normal crop on his dryland acreage.“It’s a shame, really, when you have a price that is a chance of a lifetime.”

But even on his irrigated land, the weather-related worries won’t be over untilthe crop is harvested in October. The area is close enough to the Gulf Coastthat it can be seriously impacted by hurricanes — and cotton harvest coincideswith peak hurricane season. Still, Wilder says he feels fortunate to be a Texas farmer and rancher, even

in the grip of a drought. “We may be dry, but you see places like Joplin, Mo.,and areas around Alabama that got literally leveled by tornadoes, so maybe wedon’t have it that bad. At least we still have a roof over our heads and a bed tolie in.” n

— By Dan Campbell


big deal here, but we are fortunate to bedebt-free.”

“Our board’s top priority is to findand keep good management,” Malazzosays. “James is a good manager becausehe is 100 percent co-op — he lives andbreathes it; he has a real passion for it.On top of that, he has good businesssense and stays on top of everything.But he knows when to delegate, thenholds his team accountable for theirareas.”

Malazzo is committed to the co-opbusiness philosophy, which he says hasbeen good to his family. “I’m definitelya co-op guy — and I don’t mean justwith Producers CooperativeAssociation,” says Malazzo. He gets hisfarm operating loans from Capital FarmCredit, a co-op, and uses the services ofthe Taylor Co-op Cotton Compresswarehouse.

“In all these businesses, as co-opmembers we help guide the businessand participate in the profits. All arewell managed, so there is usually a goodchance of getting patronage every year.We spend a lot of money on our cropsand cattle, so patronage can be a bigfactor for us.”

That said, Malazzo notes thatProducers’ philosophy is “not to sell thedividend. We sell the co-op based onexpertise and service.” Patronage is justthe icing on the cake, he says.

Malazzo’s son, Jason, who recentlygraduated from Texas A&M and is nowfarming his own land, has inherited hisdad’s co-op philosophy. “I just wish wehad more co-ops around here, like a co-op cotton gin; that would help us somuch.”

But these days, that type of co-opcommitment is more the exception thanthe rule, Deatherage notes. ForProducers to keep its competitive edge,it can no longer rely on co-op loyalty.“There was much more loyalty to theco-op system years ago, but thatgeneration is fading away now — thegeneration that put their blood andsweat into building the co-ops. Memberloyalty today is always earned, neverexpected.”

Stiff competitionThe area’s growing population has

also attracted plenty of new com-petitors. “We’ve got big box stores allaround us. I can’t win a price war,” saysDeatherage. “If you sell on low price,once you no longer have the low price,you have nothing left to sell. Greatproducts, programs and services arewhat keep us afloat.

“We need to be competitive [onprice], but what we really sell is ourexpertise,” he continues. “Unlike thebig box stores, our staff has to be ableto do more than to direct you to aislefour.” The co-op thus has certifiedagronomists and master gardeners onstaff who work with customers and helpto train sales clerks, many of whom areTexas A&M students.

“Do we have people who come inand ask for our advice, then gosomewhere else to buy? Sure we do,”says Deatherage. “But information isking for us, and we truly have a staffthat is very knowledgeable about whatwe sell.”

Producers will end the year withabout $65 million in sales and a staff of140 employees, Deatherage notes.“There are many grain co-ops that willdo far more business than us with only10 employees. That’s because our focusis on service and the retail customer.”

Most producer-members understandthe importance of the non-membertrade, although occasional frustrationsmay be expressed. Deatherage recalls anincident that underscores howimportant both types of business are tothe co-op.

“It was a typical Saturday — thestore was packed. An older ranchergrabbed me as I walked by and he said:‘I’m trying to buy two tons of feed —why do I have to wait in line behind alady who is buying two 12-packs ofvegetable plants?’ I said: ‘Your co-op isprobably making more money off thosetwo 12-packs of plants than on yourtwo tons of feed.’ The rancher smiledand said he would be happy to waitbehind her!”

The co-op supply store has about13,000 products for sale, arranged in

seven “product zones,” each of whichappeal to different types of shoppersand reflect the changing demographicsof the area, says Bill Lazenby, AgSupply Division manager.

With the percentage of womenshoppers having soared, when the new,24,000-square-foot retail center wasbuilt in 2006, a big emphasis was placedon creating a very bright, spaciousenvironment with more gift items onthe aisle end-caps.

The two customers Lazenby helpedjust before being interviewed symbolizethe diverse clientele of the co-op. Onewas a woman who had just suffered ahouse fire and needed a product forremoving smoke stains from her goodceramic dishes, along with some adviceabout how to use it. His previouscustomer wanted to buy 15 miles offencing. “I was glad for the opportunityto help them both,” he says.

Overcoming doubtsCo-op board member Joe Wilder

says he was initially skeptical about themove to expand into lawn and gardensupplies. “I thought we were wastingour money,” says Wilder, who raisescattle and runs a cotton farm that hasbeen in his wife’s family for more than acentury. “But it turned out to be thebest thing we ever did. On Saturdaysnow it is hard to even get in the door— mostly packed with weekend farmersand homeowners. They like the co-opbecause we don’t just sell them aproduct; we also tell them how to useit.”

Wilder says he had the same kind ofdoubts when the co-op wanted toexpand the fueling station (built in1998). “My dad was in the servicestation business, and I thought therewas no way it would pay for itself.” Buthe said the expansion has also proven tobe a winner for the co-op.

“Sometimes it is good to be wrong!”says Wilder, who started working thefarm 48 years ago with his father-in-law,who retired in 1998. Now, Wilderfarms with his son. His twin grandsons,although only in high school, also seemintent to keep the family tradition going.


Wilder says that “99 percent offarmers will not misuse an ag chemical— they cost too much and you can getin all kinds of trouble if you do.” Henotes that some studies have shownmany problems with chemicals in thewater supplies are actually being causedby urban residents who sometimesover-treat their lawns.

So, to the extent that the co-op canhelp prevent that type of urban runoffby advising homeowners about theproper use of fertilizers and herbicides,it is doing a good turn for agricultureand the environment, Wilder says.

“Here’s a true story: I had a neighborask me about my usage rates of

Roundup on the farm. I told him Iapply about 23 ounces per acre. He wasshocked, and said he applies about agallon and a half just on his one-acrelot. I said: ‘I’m surprised you haven’tkilled everything on it!’ That’s a realproblem, and too often the farmer istaking the blame.”

Like the Malazzos, the Wilders areco-op to the core. “Yes, we are a co-opfamily. We do all of our agricultureshopping at Producers. It has been verygood to us, and we are proud of it.”

State-of-the-art feed mill Back at the co-op, Kent Dunlap is

standing in front of a panel board with

dozens of blinking lights and switches.This control room, he explains, is “thebrain” of the co-op’s sophisticated feedmill, which formulates hundreds ofcustom feed mixes.

“Everything is controlled from here,and the computer logs every function,”Dunlap says. “If there is ever anyquestion about something that occurs inthe process, we can go back to this logand identify where it happened. It surewasn’t like this when I came here in ’85;it is amazing what we can do now forprecision mixing and quality control.”

The co-op’s feed lab samples everybatch of grain or other feed ingredientspurchased and also tests all out-going

“The drought has forced me to cull a lot harder than I normally would have,” says cattle rancher John Malazzo (right), seen here with his son,Jason, and Producers’ Kent Dunlap (far left). The drought has also reduced the size of his cotton crop. USDA photo by Dan Campbell


Lights, camera, co-op! A TV cameraman focuses his lens on Texas A&M ag

economist Joe Outlaw, who is being interviewed in ameeting room at the Producers Cooperative Association(Producers) farm supply store in Bryan, Texas, which isdoing double duty today as a makeshift film studio. Outlaw, a national expert on farm policy and co-director

of the university’s Ag and Food Policy Center, is answeringquestions about the process that will result in the next farmbill, as well as the types of issues Congress and farmindustry leaders are wrestling with that will impact it. Outlaw explains that the farm bill, which will likely entail

about $30 billion in spending, is really not so much a truefarm bill anymore as it is a “food and feeding program bill.”That’s because food programs for low-income people arenow by far the biggest expenditure contained in the bill.Actual farm programs account for a very small slice of

the nation’s total budget, he says, and while farm programswill likely have to absorb their share of budget hits, thesecuts will have a very minimal role in reducing the nationaldebt simply because they represent such a tiny slice of theoverall federal budget. The TV interviewer asks Outlaw whether agriculture

would get more attention if the farm and feeding programswere separated, each with its own enabling legislation.

“Farmers have been asking that for years — and theydon’t usually like the answer,” Outlaw responds. “Butwithout combining these programs into one bill, we likelycouldn’t get enough votes for the farm programs.” A bigpart of the challenge for agriculture is that there are so fewin Congress now with a farm background, Outlaw says.

Educating the publicThe interview is being filmed for a weekly TV program

called “From the Ground Up,” an ambitious educationproject of Producers. The co-op picks the topics and setsup the interviews each week, and then local CBS affiliateKBTX produces a 2.5-minute episode that is aired everyThursday morning and is re-broadcast Saturday evenings.The program has the potential to touch about 225,000people every week. The program is “non-commercialized,”which enables the local station to market it as a newssegment.Although the primary target audience is the general

public, the program also helps to strengthen bondsbetween members and their co-op, says ProducersPresident James Deatherage.Now in its 12th season, the show has never aired a

repeat — “although I’ve been tempted to do so on a few

occasions; those weekly deadlines roll around awfullyfast,” says Kent Dunlap, the co-op’s communicationsmanager, who spearheads the program. Visiting state and national leaders and ag experts of all

kinds are often asked to do interviews on timely ag topics,while other shows are filmed on member farms andranches or even at locations such as the state capitol inAustin. Recent topics have included global warming,international trade, beef quality issues, the impact ofdrought and soaring farm production costs. “Anybody in town or passing through could wind up on

the show,” Deatherage says. “We got started with itbecause we wanted find a way to tell the story ofagriculture to the public. So we went to a local TV stationand created a show that would make our members look abit like heroes because of what they do. Too often inagriculture we let others define who we are. We can’tafford to let that happen, we must tell our own story.” The co-op also compiles a highlights video from the

year’s programs to show at its annual meeting each year.One of the co-op’s board members does the narration.“The show is so popular that we couldn’t stop it now if I

wanted to; but it is a big undertaking,” says Deatherage.“We do this because we feel we must reach out beyondagriculture and let the public and our government leadersknow more about the issues facing agriculture.” n

— By Dan Campbell

From the Ground Up Joe Outlaw of Texas A&M University faces the camerafor taping of a segment of From the Ground Up.


shipments of finished feeds. This is aU.S. Food and Drug Administration(FDA)-licensed feed mill, which allowsthe co-op to handle a range of additives,under strict FDA guidelines.

While the co-op develops feed for alltypes of traditional and exotic livestock,“beef is still king,” says Everett Lowe,now in his sixth year as manager of thefeed division, the co-op’s largest unit.Horse feed ranks second for sales, andis a rapidly growing market segment.“We still have a few dairies left, but thatsegment is diminishing,” Lowe says.

Over on the loading docks, a dozenor so young men — many of themTexas A&M students, including somefootball players — are loading bags offeed into a steady stream of pickuptrucks and trailers that are backed up tothe docks. It’s hard, sweaty work, but agood way to stay in shape, they say.

“I’ve had football players tell me thatworking on the loading docks on a hot,humid day is a better work out thantwo-a-day football drills,” says Lowe.

Although the loading docks arebuzzing with activity on this June day,Dunlap says it’s actually slower thannormal, due to the drought. Winter isthe busiest time for feed sales, becausebeef producers are then supplementingwith more feed. “It can get pretty hecticback here,” Dunlap says.

Not far away, a robotic loading armswings back and forth like ametronome, never missing a beat as isstacks pallets high with feed bags. Thepallets are then moved to the loadingdocks, where “people power” takesover.

“The robotic loader has been awonderful addition — and it veryseldom calls in sick,” Lowe jokes.

Public Enemy No. 1 for a feed millis corn toxins, especially in this climate.So the co-op lab screens every load ofcorn, cotton seed, soy oil or any otherfeed ingredients, resulting in some loadsbeing rejected. Ingredients are alsotested for nutritional profile — protein,fat, fiber. If a load doesn’t meet the co-ops specs, it’s “no sale.”

On the finished feed side of theoperation, Producers also tests to make

sure its feeds contain the nutritionalprofile promised on the label. It alsotests to ensure the structural integrity offeed cubes. “Our members are notgoing to be real happy if they wind upwith a bunch of feed dust in the bottomof the bag,” Lowe says.

The majority of feed is picked up atthe co-op, mostly in 50-pound bags.But about 25 percent of the feed is now

delivered to customers, with growingdemand for 3,000-4,000 pounds ofloose cubes that are loaded into feedhoppers.

At any one time, the co-op will have50 to 60 different feeds for sale “on thefloor,” and it produces hundreds ofdifferent custom feeds, on order.

To take advantage of the volumediscounts the co-op offers and to keepdown their fuel costs when making apick up, Dunlap says some customershave formed mini consumer co-ops.“One person will pick up for five or sixneighbors.”

Committed to membereducation

Producers’ has a strong commitmentto member education. There is an openclassroom by a large stone fireplace inthe back of the store where freeworkshops are held on Saturdays duringthe fall and spring.

“The classes can cover anythingfrom growing vegetables, to lawn care,

to pasture spraying and fertility, fruittree care — you name it,” says Wilder.“We tap Extension and industry expertsas speakers. The classes have created alot of goodwill in the communitytoward the co-op,” Wilder says. “Theyare another way we use expertise as ouradvantage over big box stores.”

Another big undertaking that the co-op stages each December is theProducers Expo, which is like a tradeshow that features about 60 vendorbooths, including some staffed by topindustry experts. “These experts cananswer just about any question aproducer has. They can normally bevery difficult to get a chance to talk toone-on-one. But our customers can talkto them at the Expo,” Dunlap says.

The expo started in 1999 and is heldthe first Saturday in December. Inconjunction with the Expo, Producersalso holds classes for the continuingeducation credits that holders ofprivate-applicators licenses are requiredto earn in order to apply restricted-usechemicals.

The co-op’s close proximity to TexasA&M University, home of theSouthwest’s top agricultural school, hasbeen a big ace-in-the-hole forProducers. The university is the sourceof a ready supply of hardworking,eager-to-please students seeking part-time work.

The co-op also benefits in manyways from the university’s expertise.The co-op, in turn, is happy to helphost and provide tours for visitinggovernment officials, farm leaders andscientists from around the world whomake stops at Texas A&M. Thesevisitors often want to also see how anAmerican farm co-op works and to visita Texas ranch or farm. Producers ishappy to oblige them. It does the samefor 4-H and FFA exchange groups.

“From agriculture and tradeministers from Europe and Asia tokindergarten students, we play a role ineducating others about what we do,”Dunlap says. Such efforts don’t justbenefit the co-op, he notes, but all ofTexas agriculture. n

Co-op President James Deatherage, right,checks out the progress on the co-op’s newagronomy center, slated to open by fall.

Editor’s note: Information for this article was provided by theFarm Credit System.

oe Freeman grew up on a farm, the son ofMississippi sharecroppers. He spent his earlyyears on the farm earning his first nickels byrunning errands for the farmer who owned it. Freeman moved to Chicago as a teenager,

and spent most of his life there, including 40 years workingfor the White Castle food chain. Despite decades living inurban America, Joe always planned to move back home. So,when he retired from White Castle as a regional director in2006, that’s just what he did.

Today, Freeman and his wife, Rosemary, operate their owncattle ranch in Mississippi. The Freemans are among thefarmers and ranchers being recognized for excellence by thenation’s producer-owned Farm Credit System, which iscelebrating its 95th anniversary this year.

Farm Credit is a national network of cooperatively ownedlenders offering financing and related services to agriculturalproducers and agribusinesses. The Farm Credit System wasestablished by President Woodrow Wilson in 1916 to fill theneed for long-term agricultural credit. Today, it serves nearly500,000 borrower-owners with more than $175 billion in


Farm Credit turns 95 Producer-owned lending systemcelebrates birthday with onlinesalute to its members

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Joe Freeman, with his wife, Rosemary, retired from a successful corporate career to start a cattle farm in Mississippi.

loans and financial services in all 50 states and Puerto Rico.

Focus on membersWhat better way to mark this milestone anniversary, its

leaders thought, than to “turn the camera” on its members:the men and women who provide the food, fabric and fuelthat sustains our nation, as well as so many others around theworld.

In July, Farm Credit launched the Producing Excellenceprogram, which uses a website — at:www.FarmCredit.com/ProducingExcellence — to highlightthe strength, ingenuity and integrity of our nation’s farmersand ranchers. The website includes a series of memberprofiles that celebrate agribusiness leaders and entrepreneursin American agriculture. Visitors to the website can also learnmore about Farm Credit’s 95-year legacy through aninteractive historic timeline.

Joe Freeman began laying the groundwork for his returnto the farm by first buying a 20-acre farm in 2003, nearwhere he was born and where he built a home. TheMississippi Land Bank, a Farm Credit System member-owned lender, provided financing for that purchase and forthe 61-acre ranch he bought three years later.

“Branch Manager Joe Hill has a real love of the land, just

like I do,” Freeman says. “We’re on the same page, so it wasa good fit working with him and the Land Bank.”

Freeman always intended to raise cattle, but first the newranch needed a lot of work to get ready to support a herd. Hespent every day clearing bramble thickets, building fencesand putting in ponds that would provide drinking water forthe herd.

Freeman has since built a 30-head herd of cattle, but heisn’t satisfied yet with his second career. He plans toeventually sell his current herd, a “scrap” herd built with anAngus bull, and buy and raise registered Angus cattle.

Turning cotton ‘trash’ into cash Not many people are able to literally turn trash into cash,

but cotton-gin operators Lisa and Gerry Kasberg, who ownand operate Birome Gin Co. in Birome, Texas, figured outhow to do just that. The Kasbergs are also profiled on theProducing Excellence website.

Disposing of gin trash — the cotton burrs, stems andbroken seeds that are left over after the seed and lint areseparated from the plant — is a problem for many ginners.After previously spreading their gin trash on local farmers’fields or selling cotton burrs as cattle feed, the Kasbergs


Lisa and Gerry Kasberg’s cotton gin is producing cotton compost made from cotton “trash” (the stems, seeds and husks left after ginning), which issold through local retail stores. Photos courtesy Farm Credit

continued on page 43


The reason so many people are using cooperatives in so many ways is

really quite simple: because they work. Whether it’s ranchers and farmers

banding together in a co-op to purchase their production supplies or to

market their crops, fishermen processing and marketing their catch as a

group, or consumers who buy their food through a food co-op, the co-op

business model can fill the bill. In addition to the more traditional uses for

co-ops, rural doctors and home care workers are examples of new areas of

co-op formation where members seek to gain the benefits derived from

group action. For USDA’s Co-op Month salute, 11 cooperative

development centers and nonprofits that help to nurture co-op

development have provided the following articles to show some of the

ways co-ops are meeting diverse needs in their states or regions.

Co-ops: ideas and innovations!

By Andrew Crow,Alaska Cooperative Development Program

laska is the country’slargest producer ofwild-caught seafood, soit’s not surprising thatAlaska is also home tothe country’s largestfishermen’scooperative. TheSeafood Producer’sCooperative (SPC) is

made up of 525 fishermen memberswho primarily harvest hook- and line-caught albacore tuna, halibut, sablefish,salmon and rockfish.

The cooperative is modeled afteragricultural cooperatives, where eachmember-owner has a capital investmentin the enterprise. The seafood industry

is highly competitive and there are fewcompanies that have survived in it aslong as SPC.

The key to its success has been itsability to adapt and change. SPC wasoriginally called the Halibut ProducersCooperative when established in 1944.It started out supplying the U.S.military with vitamin A made fromhalibut liver.

Co-op survives changing market

Shortly after World War II, scientistsdiscovered how to synthesize vitamin A,and the cooperative found that halibutliver no longer had much value. Tosurvive, the co-op had to adapt to thechanging market, which it did.

The co-op changed its name andtransformed itself into a broader,

seafood-producing enterprise. Overtime, it began to focus on high-value,branded, fresh and frozen products.Today, it markets a significant share ofAlaska’s troll-caught salmon andmarkets under its own Alaska Goldbrand. Each fish is caught and handledindividually, never allowed to “pile upon the deck.” In the co-op’s processingplant, from filet to freezer takes lessthan one hour.

So, while it has a long history, SPCscarcely resembles the institution that itonce was. The co-op’s ability to adaptto changing markets continues to be thekey to its success.

Consumers today expect a lot fromtheir food. Not only do they care aboutits taste and nutritional content, theyalso care about its environmental, socialand economic implications. SPC has


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From fillet to freezer takes less than an hour at the Seafood Producers Cooperative (SPC) processing plant in Sitka, Alaska.Photos by Dan Lamont, courtesy SPC

Alaska fishing co-op’s longevity tied to ability to adapt

By Debbie Trocha, Executive DirectorIndiana Co-op Development Centere-mail: [email protected]

he local foodsmovement is sweepingthe country whileinterest in farmersmarkets is also soaring.According to USDA,the number of farmersmarkets has increasedby more than 13percent since 2009. In

Indiana, the number of markets grew to

more than 150 in 2008, a 257-percentincrease during a 15-year period.

Consumers are looking forrelationships with local food providersas food safety concerns have increased.Many consumers want to know whogrows, processes and retails their food,and they want to help sustain local foodsystems and farms in their area.

Boot camps enhancecollaboration, profits

In response to this growing interest,a series of farmers market “boot camps”was held to increase the viability and

profitability of Indiana direct-to-consumer marketing systems and toenhance the collaboration of thoseinvolved in these forms of marketing inIndiana. The boot camps have beensponsored by the Indiana CooperativeDevelopment Center (ICDC), anonprofit organization founded in 2003to fill a void in services for cooperativesin Indiana. The Center providestechnical assistance and education tohelp startup and emerging cooperativesacross a wide variety of industries.

The boot camps have providedopportunities for training and

been able to address these expectationsby marketing itself, its members andtheir products as “the completepackage.”

When consumers buy salmon orhalibut from SPC, they are buying froma fishery that has been “certifiedsustainable” by the Marine StewardshipCouncil and caught by a fisherman whois being paid a fair price.

Story beyond the plateSPC tries to give its customers the

story behind what’s on their plate. Thecooperative is able to “connect thedots” from the fisherman on a boat, tothe restaurant or grocery store, andfinally to customers, sitting down totheir meals.

To help fishermen tell their story,SPC added a “featured fisherman” pageto its website (http://www.spcsales.com/), with vignettes describingindividual SPC members, who they are,how they started off in the industry, andthe pride they have for their work.

It’s easier for a cooperative to do thiskind of marketing. As owners, SPCmembers benefit directly when theyshare their story with their customers.

Craig Shoemaker, the SPC plantmanager, explains: “The fishermen whoproduce the product own thecooperative, and I don’t think thatprivate companies can market them-selves to that degree.”

In keeping with its successfultradition, SPC continues to changewhile remaining focused on providingthe best service to its members. n


Co-op marketing efforts strive to reduce the distance between Alaskan fishermen and consumers.

Boot camp for co-opsWorkshops for Indiana farmers marketsprovide strategies for managers, vendors

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collaboration to about 1,000 marketmanagers and vendors. Topics haveranged from how to successfullymanage a farmers market to how tomerchandise products to maximize salespotential.

Responding to requests from bootcamp attendees, the ICDC has helpedcoordinate the development of anIndiana Direct to Consumer MarketAssociation. The association will helppromote local food consumption inIndiana by connecting more farmers toconsumers through direct-to-consumermarkets, such as farmers markets, farmstands, community-supportedagriculture associations (CSAs) andagri-tourism.

The association will promote direct-to-consumer markets across the stateand help increase their visibility amongproducers and consumers while alsoaiding in direct-to-consumer marketmanagement and education. It will alsodevelop long-term, sustainable fundingstrategies.

Another potential role will be tocollaborate with governmental agencieson policy to make regulations friendlierand more supportive of direct-to-consumer markets, such as farmers

markets and agri-tourism. Theassociation would serve as a repositoryof information and resources.

After months of work, theassociation — called “My LocalIndiana” — is now a reality. Theorganization is incorporated and is inprocess of developing its marketingmaterials and a website that will serve asa hub for “all things local.”

Lost River Market a catalyst for renewal

Another “front” in the local foodsmovement is an increased interest infood cooperatives. The Lost RiverMarket and Deli in Paoli, Ind., is thefirst food co-op assisted by the ICDC.Lost River is in its fourth year ofoperation in rural southern Indiana.According to co-op board memberDebbie Turner, “Our food co-op wouldnot have opened without the support ofthe ICDC staff. Your support andexpertise came early and often duringour planning process which began inSeptember, 2006.”

Paoli did not represent the typicaldemographics associated with food co-ops. But supporters felt strongly that alocally owned food cooperative was

exactly what the community needed. Anew market for local vendors wascreated by the store, and the localcommunity had access to fresh, healthyfood without traveling an hour away.

As a result, eight new jobs werecreated, and the food market is acting asa catalyst to help revitalize downtownPaoli. It is also a vibrant communitygathering place. Two new downtownhousing projects in historic buildingsare in the works, further increasing theimportance of Lost River’s role in thearea.

With 810 current members, eightemployees and hundreds, if notthousands, of additional shoppers, LostRiver Market and Deli has certainlymade an impact by delivering healthylocal food to southern Indiana. Thereturn on investment to the localcommunity is phenomenal.

About 68 cents of every dollar spentat Lost River Market and Deli stayswithin a 100-mile radius, going towardswages, local financial partners, vendors,farmers and other local businesses.

Despite the odds, Lost River Marketand Deli is a success and provides muchneeded access to fresh, healthy, localfoods. n

The Lost River Market and Deli has proven to be a catalyst for revival of the downtown area in Paoli, Ind. Photo courtesy Lost River Market


Trail-blazing co-op helps Colorado ranchersBy Zach Devoy, President Colorado State University Farmers Union

Editor’s note: The Colorado StateUniversity Chapter of Rocky MountainFarmers Union was founded in 2002 andbrings together students from variousbackgrounds who share an interest inagriculture, cooperative development andsustainable living. A common thread amongmembers is making connections with theirrural roots. Over the chapter’s shortlifetime, its members have sponsored publicforums on issues that impact students, havepartnered with other ag-relatedorganizations to host public officials —including U.S. Congressionalrepresentatives and state legislators—andhave developed policy for Farmers Unionorganizations on the state and nationallevels.

hen I think of theAmerican spirit, threewords come to mind:innovation, dedicationand perseverance.

Denise King-Stovalland other producersbrought all three tobear on the creation ofthe Local Brands Farm

and Ranch Markets Co-op. Theformation of the co-op was not drivenby desire for profits, but rather byneighborly instinct and a desire to offermore healthy food options in theircommunities. Pursuing a new idea withdedication and a willingness toovercome obstacles has led to a newmarket for local producers in southwestColorado.

The roots of Local Brands can betraced back to simple transactionsamong neighbors. King-Stovall (RollingT Ranch Lamb) and two otherfounding ranch members of thecooperative — Last Ranch Beef andBonds Ranch Beef — began barteringwith each other because they all

enjoyed one another’s fresh-off-the-ranch quality food products.

As time passed, their extendedfamilies, friends and co-workers becameaware of the amazing products thatthese ranchers were sharing with oneanother. And so it went; like waterspreading over a planted field, businessrapidly expanded.

Suddenly there was a need toorganize the transactions into a formalbusiness model. After an unsatisfactoryattempt at becoming a limited liability

company (LLC), the Local BrandsFarm and Ranch Markets Co-op waslaunched in December 2010, withassistance from the Rocky MountainFarmers Union CooperativeDevelopment Center (CDC). Theorganization and its leaders alsopartnered with some excellent socialorganizations.

The cooperative provides productsto the Farm-to-School Program,Growing Partners, Healthy CommunityLifestyles and Community Food

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Lamb producer Denise King-Stovall is a founding member of the Local Brands Farm and RanchMarkets Co-op in southwest Colorado. Photo by Jen Burby


Systems. These programs promotehealthy eating for all ages andcommunities.

With the diligent work of King-Stovall and the other Local Brandsboard members — assisted by CDCadvisors — an application for a RuralBusiness Enterprise Grant (RBEG)from USDA Rural Development wassubmitted in June 2011, seeking fundsto help the co-op hire additionalemployees, deploy new marketingstrategies and expand its customer base.

With new markets unlocked,additional members will be recruited

from the long list of interested ranchersand farmers. With the increasedrevenues of Local Brands’ growingbusiness, the co-op hopes to be able tooffer a salary to its manager (to date,King-Stovall has not been compensatedfor her efforts).

Clearly this young, promisingcooperative has all its ducks in a row, or— more accurately — its chickens, cowsand lambs. Between the newopportunities the grant would allow itto pursue, the expanded membershipand markets and continued communityinvolvement, this cooperative is moving

in the right direction. Just like with any new endeavor, one

of the prerequisites for a successful co-op is a strong leader. With theorganization following King-Stovall’sleadership, a sometimes intimidating,unknown market has been pioneeredquickly and methodically as the new co-op blazes its trail. Although the nextchapter in this adventure promises norelief for her from the flood of phonecalls, King-Stovall says she is excited tosee what tomorrow holds for LocalBrands. n

New structure symbolizes success of Lexington Farmers Market

By Nathan Routt, Business Development SpecialistKentucky Center for Agriculture and Rural [email protected]

he Lexington(Kentucky) FarmersMarket has longprovided itsmember/owners with aplace to direct-marketa wide variety of fresh,frozen and preparedfood products to alarge and growing

customer base. From April through November, the

sights, sounds and smells of a vibrantfarmers market can be experienced atthree different outdoor locations onfour days each week. The Saturdaymarket continues indoors fromDecember through March, extendingthe season and providing a continuoussupply of seasonal products to theBluegrass Region of Kentucky.

The Lexington Farmers Market waslegally incorporated in 1975 as acooperative of less than a dozen

members under the name: Farm andGarden Market CooperativeAssociation Inc. These area farmers hadbeen selling local produce in Lexington

for many years at a semi-organizedfarmers market prior to the legalincorporation.

The decision to organize under a

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Customer traffic has soared in recent years at the Lexington Farmers Market, which has added acovered structure at the Cheapside Park location.


cooperative business structure was alogical step in the evolution of what hasbecome one of Kentucky’s mostsuccessful farmers markets. Thecooperative structure was chosenbecause the founding members wantedan organization that could help themexpand the direct-to-consumer marketchannel more effectively as a group,rather than as individuals. Thecooperative structure has served itsmembers well over its 36-year history.

Obstacles faced by co-op As the market grew slowly during

the 1980s and 1990s, issues arose thatcaused internal problems within the co-op. The market had been operatingwith volunteers to manage the dailyoperations, such as collecting daily gatefees, performing marketing tasks andother necessary activities.

As more members joined thecooperative, the use of volunteersbecame cumbersome and a lack ofmember and board policies led toconfusion and operational inefficiencies.

It was evident by the early 2000s thatthe market was in need of an overhaulfor cooperative policies, governanceand staffing.

KCARD assistanceThe Kentucky Center for

Agricultural and Rural Development(KCARD) was called to assist the co-opwith development of member policies,governance issues and to address theneed for staffing. KCARD’s mission isto promote rural economicdevelopment in Kentucky and provideshands-on technical business services.Over several years, KCARD helped theco-op develop new membershipagreements, board and memberpolicies, hold training for all boardmembers, revise the bylaws andimplement a staffing plan.

KCARD helped draft a jobdescription for the manager and assistedwith interviewing candidates. The resultwas a functioning cooperative that cameback to its roots with member/ownerswho better understood how acooperative operates.

Members now have confidence intheir board of directors, while relyingon a capable manager to carry out day-to-day operations.

Growing the marketWith smooth internal workings in

place, the market responded to the

growing demand for locally producedand value-added foods. The co-op hasexpanded to currently include 75member/owners.

Customer traffic has soared in recentyears and members have benefitted withhigher sales at their booths. Staff hastirelessly developed and maintainedrelationships with the city and makessure the market is clearly visible in thecommunity.

These efforts have paid off, as themarket recently realized one of its mostsought after goals: a new coveredstructure for the Cheapside Parklocation in downtown Lexington. Itserves as a permanent marketing fixtureand as a great venue for an annualfundraising dinner.

Even with recent success, theLexington Farmers Market still seesmany opportunities to grow andimprove the market for its membersand customers, who will rely heavily onthe strengths of their cooperativestructure in the years ahead.

For more information about KCARD’sefforts, visit: www.kcard.info. n

Co-op launch demonstratesco-ops helping co-ops, commitment to community

By E. Kim Coontz, Director California Center for Cooperative Developmente-mail: [email protected]

hen the owner ofNoah’s Ark, a naturalfood store in the ruralnortheastern Californiacommunity ofPlacerville decided toretire, he consideredeither selling the bus-iness to a sole pro-prietor or selling the

building and land for some other typeof business. It appeared that the latteroption was the likely future for thestore, until Bill Scrivani, a Noah’s Ark

customer who taught yoga classes abovethe store, said: “Why don’t we form aco-op and buy it ourselves?”

After almost three years of work —and with a lot of support from othercooperatives — that idea is about tocome to fruition. Placerville NaturalFoods Co-op will open soon, pending afew due diligence items on the part ofthe store owner. Scrivani is now the co-op president.

Store manager Melisa Clark and agroup of loyal shoppers initiated thecooperative development processthrough old-fashioned grassroots

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organizing. In 2010, thegroup began working withthe California Center forCooperative Development(CCCD). Funding fromthe Rural CooperativeDevelopment Grant(RCDG) program ofUSDA Rural Developmentsupported fundamentalbusiness, education andtechnical assistance fromCDS ConsultingCooperative and CCCD.

The Food Co-opInitiative (FCI) was able tocontribute additional grantfunding and lend itsexpertise (see page 26 formore on FCI). Fundraisingevents and well-organizedcommunity member-sharepurchases and donation drives con-tributed crucial funds to the endeavor.

The development of PlacervilleNatural Foods Co-op is saving a valuedcommunity business, retaining 14 ruraljobs and creating at least two additionalpositions. The process has substantiallyexpanded sustainable food procurementpractices and nurtured relationshipswith local producers to the bettermentof the entire community.

Co-op Principle 6: Cooperationamong cooperatives

Cooperative-focused technicalassistance, fueled by RCDG funds fromUSDA, helped generate the marketstudy and business plan. It also fosteredimportant co-op connections. Manyother food cooperatives in the regionprovided advice and insights about howto operate a successful cooperative.

BriarPatch Co-op, a natural foodscooperative in the neighboring ruralcommunity of Grass Valley, contributedextensive assistance. BriarPatchmanager Chris Maher and the store’sdeli manager, Tina Collins, spent anafternoon at the Placerville storecompleting a store audit. They sharedtheir findings and suggestedimprovements.

Key Placerville staff are spending

time at BriarPatch “shadowing” theirposition counterparts and gainingcrucial on-the-job training and advice.“BriarPatch has been great help; theyare experienced and knowledgeable,”says Clark. “The process feels to us likewe’re a teenager and having someonetell us what we’re going to be like whenwe’re all grown up.”

The Placerville steering committeeand staff attended conferencesconducted by CCCD, and in Junemembers attended the ConsumerCooperative Management Associationconference. “The conferences we’veattended have offered ideas and anopportunity to get into the co-opworld,” says Clark. “Talking to peoplein that world has been very helpful. Weused connections from conferences inour member outreach.”

Co-op Principle 7: Concern for community

Placerville Co-op development hasengendered many projects that haveproduced positive community resultsand generated valuable support for thecooperative.

The co-op has aregular table at the weeklyfarmers market where theypromote healthy, locallygrown food and shareinformation about the co-op. Co-op memberscreated a farm-to-tableexhibit that includes aninteractive activity tablefor children (geared fortoddlers to age 9) thatteaches them where foodcomes from and how itgets from farm to table.

The co-op recentlyreceived a grant from theFood Co-op Initiative tocomplete the conversionof a diesel van,contributed by acommunity member, to

run on biodiesel. The grant also fundspainting Placerville Co-op signage onthe vehicle.

Once complete, the “Veggie Van”will deliver local produce and otherfresh foods to homebound seniors andto the local community college. It willalso be used to promote sustainability inthe community through education forelementary school children and byteaching others about the biodieselconversion process.

The development of the Placervilleco-op incorporates the core cooperativeprinciples usually associated withcooperative start-ups (open membershipand democratic member control, amongothers), but it also incorporates whatsome may overlook as being specialabout cooperative development. In whatother type of business developmentwould other businesses volunteer somuch of their time to support newbusiness growth? And how manyfledgling businesses actively integratecommunity development and educationat the same time they are building anew store?

These are just a few more examplesof the co-op difference! n

Placerville Natural Foods Co-op is scheduledto open soon, thanks in part to the help ofsome co-op friends. Above, the co-op’s boothat a local farmers market.

Legends of the LakesUsing cooperative principles helps save an industry

By Tom Kalchik, Associate DirectorMichigan State University Product Center

[email protected]

Editor’s note: Founded in 2003, the Michigan State University Product Centerhelps Michigan entrepreneurs develop and commercialize high-value, consumer-responsive productsand businesses in the agriculture, natural resources and bio-economy sectors. The Center’s statewidenetwork of innovation counselors provides business counseling support to Michigan residents instarting or expanding a business or product line. It has assisted in launching 174 new businesses orbusiness expansions that increased annual sales by $309 million (cumulative, first-year sales only),created 750 jobs and retained 364 jobs.

The Legends of the Lakes Cooperative in Michigan is credited for helping to substantially raise the price membersget for their catch. Photo by Mark Breederland, courtesy Michigan Sea Grant


he lake whitefish is aprime commercialspecies of the upperGreat Lakes,according toMichigan Sea Grant.At the turn of thecentury, annualharvest was about 8million pounds.

However, declining prices andhigher production costs werecausing commercial operations toclose down. Prices dropped to lessthan $1 per pound. As the industrycontinued to focus on traditionalMidwest and ethnic markets, theprice continued to decline, dippingas low as 40 cents per pound insome high-production years.

By 2003, the industry facedproblems that threatened thecontinuation of commercial fishingoperations.

The Product Center at MichiganState University partnered with theMichigan Sea Grant program tohelp find a solution to the dilemma.The Understanding and InsightGroup was hired to help theindustry determine a strategicdirection.

Commercial fishermen,processors, regulators and marketerswere called together to address theissues using the consultant’strademarked program: Getting It!The findings of the study were:n Marketing: work to identify what

will help consumers buywhitefish, including:

• Use branding;• Use labeling;• Promote consumer education.n Operations: identify better

practices to help commercialfishermen and processors realizeprofitable opportunities,including:

• Establish standards to assuresuperior quality product;

• Build a certification program.n People: Provide better

information to help fishers andprocessors choose “best-fitopportunities” in the demandeconomy (rather than the supplyeconomy), including:

• Use a pilot project around SelectMichigan (a state brandingprogram);

• Define gaps and futureopportunities.

n Distribution: ensure continuinginfrastructure of shipping,including:

• Make direct deliveries tocustomers;

• Establish target volume and price.The industry developed a website

for consumer education andconducted a semi-successfulprogram using the Select Michigancampaign. However, the realbreakthrough came in 2007 whenthe owners of four commercialfishing boats (one of which wastribal owned) decided to combinetheir resources to incorporateLegends of the Lakes Cooperative.

This cooperative would marketLegends of the Lakes frozenwhitefish fillets. The four memberssigned a “quality pledge” thatdictated how the whitefish thatwould become Legends of the Lakesfillets were to be caught, stored,processed, frozen, packaged anddistributed. Legends recently addeda fifth member to the cooperative.

The impacts for the cooperativeinclude:n When Legends was incorporated,

the average price was 80 cents perpound for whole lake whitefish;

n Legends members now receive $6per pound for pin-boned lakewhitefish fillets at the plant for

product meeting Legendsstandards. By comparison,commodity (non-branded)producers receive $4.50 perpound.

n Legends members created abrand with standards to supportthe $6 per pound price.

n Price for Legends product isstable, while commodity whitefishprices fluctuate.

n Target audience is consumersinterested in quality more thanprice.

n In the 2010/2011 marketing year,inventory of Legends whitefishsold out three months ahead ofthe projection.Legends is continuing its product

development efforts. In 2010, itadded a frozen Whitefish Cake toits product line. This product ismanufactured from meat that wasformerly discarded during thedeboning process.

A third product – whitefishspread – was added in 2011. Thus,the members of Legends now haveproducts that appeal to the upscale,quality-conscience consumer (frozenwhitefish fillets); the mid-rangeyouth consumers (frozen whitefishcakes), and the party/snack crowd(whitefish spread). A fourth productis now under development: amicrowavable, seasoned lakewhitefish fillet.

For more information aboutLegends of the Lakes, visit:www.greatlakes whitefish.com. n

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By Stuart Reid, Executive DirectorFood Co-op Initiativewww.foodcoopinitiative.coopstuart@foodcoopinitiative.coop

ince its earlybeginnings, the FoodCo-op Initiative (FCI)has offered modest“seed grants” toqualified co-oporganizing groups.These grants havebecome an integralpart of our approach to

building relationships and providingservices that support grassroots co-opdevelopment.

Since 2005, FCI has awarded 31 seed

grants, ranging from $3,000 to $10,000.From the 17 awards made in years priorto 2011, 10 co-ops have opened andtwo more will open this year. In 2011FCI made a record 14 grant awards torural co-ops throughout the UnitedStates.

As with all co-ops, raising start-upcapital for retail food co-ops can bechallenging. Most food co-ops areconsumer-owned, and capital does notcome in until after incorporation. Eventhen, it may be some time before theco-op can afford to pay for significantproject costs. Early access to Food Co-op Initiative grants can allow the co-opto obtain professional assistance duringthe critical early stages, when the co-op’s vision and goals are formed and

planning begins. FCI’s first seed grants were made

possible by donations from NCB(National Cooperative Bank) and theBlooming Prairie Foundation. Thesewere awarded intentionally to a diverseassortment of community sizes, co-opswith dissimilar structures and visionsand for varying purposes.

Changing parameters for funding

Grant parameters have evolved aslessons were learned from earlierexperience. Priority is now given togroups that show strong organizationaltalent, likelihood of adequatecommunity support and marketstrength, and that show potential for


Planting the seeds for new food co-ops

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The Company Shops Market in Burlington, N.C., is one example of a food co-op that has been assisted with a seed grant under the Food Co-opInitiative. Facing page: Staff and board members of the new Company Shops Market. Photos courtesy Luck Photography.


the grant funds to make a meaningfulimpact.

In 2011, the seed grants weresupported by Rural CooperativeDevelopment Grant funding from theCooperative Programs of USDA RuralDevelopment, so all awardees werelocated in rural communities (by law,these USDA funds must be awarded torural recipients). A typical grant awardis for about the $10,000 maximumallowed, which is then matched bymoney raised locally.

The applicant agrees to provide FCIwith monthly updates on the project.Grant funds are disbursed when therecipient provides documentation that ithas a contract or invoice for approveduses. FCI strongly encourages all retailfood co-ops to obtain a professionalmarket study, which is an approved usefor the seed grants.

The initiative also supportsprofessional budgeting and financialplanning, legal advice for incorporationand membership structure, design work,member recruitment and capitalcampaigns. It can also support someinnovative proposals that have potentialapplicability to other co-op organizinggroups. These projects are tracked anddocumented as case studies that may beshared with other co-op organizers,when appropriate.

Building crucial relationshipsFor FCI, the importance of the

grants is all about relationships. Co-opsthat receive seed grants commit toongoing reporting, consultation andmentoring with FCI staff and itsdevelopment partners. We track theirprogress and offer advice on bestpractices, recommend professionalconsultants, and review documents,budgets and plans. FCI staff also help toconnect new boards with other co-ops,both start-up peers and well-establishedmentors.

Conference calls are scheduledmonthly (or as needed) to allow theentire board and/or steering committeeto discuss progress and ask questions.FCI staff use these calls and reportsfrom grant recipients to help the co-opstay on track.

Thanks to the many co-ops FCI hasalready worked with, we often can seeissues or obstacles developing beforethe organizing group is even aware ofthem. The relationship of trust thatevolves through regular contact andrespect allows FCI to promote bestpractices more effectively; co-ops arethen less likely to dismiss our advice asinapplicable to their “unique”circumstances.

Grant recipients are asked tomaintain this close working relationship

and to file reports for at least a yearafter receiving an award. Most co-opsare quite happy to continue thearrangement all the way through, andbeyond, their store opening.

An additional benefit of this “hands-on” approach is the strong, lastingrelationships that develop among theco-op organizers, FCI and otheradvisors and mentors. New co-ops needthe support of their peers and oftenbenefit substantially from the expertiseand assistance of established stores intheir area.

Successful food co-ops provide start-up co-ops with everything fromfinancial assistance to staff training,used equipment, policies andprocedures and help setting up displays.This is not a one-sided transaction. Co-ops that work with start-ups benefitfrom the improved skills that employeesdevelop when they become trainers andmentors.

They also find inspiration andexcitement in sharing their knowledgeand success with new co-opcommunities. Best of all, the peopleinvolved in organizing the new co-opoften become mentors and advisors tothe next generation of start-up co-ops,continuing the cycle by giving back tothe cooperative community that helpedthem succeed. n


By Cathy Smith, Executive DirectorKeystone Development Centere-mail: [email protected]

he CentralPennsylvaniaPhysician’sCooperative (CPPC)continues to grow andevolve. This pastsummer, the steeringcommittee of practicerepresentatives decidedto incorporate and

move forward with the cooperative. The group hopes to hire a

nutritionist as soon as possible, whowould ideally have a specialty indiabetes and could share time among allthe cooperative members. The mostlyrural practices that are forming thecooperative are primarily located in

Lebanon County, Pa., about 20 milesnorth of Lancaster, Pa., and 70 mileswest of Philadelphia.

The city of Lebanon, which is partof the Harrisburg-Lebanon-Carlislemetropolitan statistical area (MSA), hasabout 24,461 residents. LebanonCounty falls in the middle of the socio-economic scale. It has 102 percent ofthe state’s median household income,with a 6-percent unemployment rate.About 9 percent of the residents livebelow the poverty line. The county’spopulation in 2010 was 133,568, about1 percent of the state’s total of 12.3million people.

The members of the CPPC will bephysician practices specializing in familymedicine and primary care. Sevenmedical practices are currentlyrepresented on the co-op steeringcommittee. Several of these practices

have one to two doctors, while two ofthe practices include 8 to 12 doctors.

Motivation for the formation of thecooperative is to share resources amongpractices that continue to struggle forviability in a world of increasing costs.Small practices are not able to hirespecialty employees or capture volumediscounts in purchasing. Thecooperative allows the practices to worktogether for the benefit of eachmember.

This group has been meetingmonthly for the past year, discussinghow to work together. In addition tothe physicians, these meetings haveincluded key office staff and localhospital administrators. Besides sharingemployees, the plan is to share inpurchasing of supplies and medicines.

In the future, the cooperative wouldlike to investigate group purchase of

Doctors organizing co-op to improvemedical care in rural Pennsylvania

By sharing resources, the Central Pennsylvania Physician’s Cooperative (CPPC) hopes to help small rural medical practices reduce overhead costs.Photo courtesy CPPC

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health care insurance, or self-insuringthe healthcare of employees. Employeesgenerally prefer not to go to theiremployer for medical care, but theywould be able to go to another practicein the cooperative and still have greaterprivacy. In this way the doctors mightbe able to partially self-insure.

An important partner in this projectis the Family Medicine EducationConsortium. The executive director of

this group recognizes the importance ofthe co-op project and its significance asa model for other rural and/or smallpractices across the United States. He isable to assist with communicationbetween the Keystone DevelopmentCenter’s staff and the doctors. Becauseof busy schedules, the physicians havelimited opportunity to discuss thecooperative’s development.

The Keystone Development Center

(KDC) has been providing technicalassistance to the group for the past ninemonths. KDC staff introduced thebasics of cooperatives to the group andconducted research on other physiciancooperatives as possible models. In thefuture, it will assist the group inincorporation, writing of bylaws andfeasibility analysis of variouscooperative activities. n

By Brian Gion, CEOMontana Cooperative Development [email protected]

Editor’s note: Since its inception in 1999, theMontana Cooperatve Development Center hasprovided cooperative education and projectmanagement, assisted with feasibility studies,developed business and marketing plans,helped develop articles of incorporation andbylaws and provided clients with access to local,state and federal funding sources. It alsoanalyzes resources, assesses project eligibility,structures financial packages and developsapplications. It has provided hands-on,cooperative education and project managementassistance to 135 entities and managed anddirected 48 feasibility studies; it has managedand directed 66 business and marketing plansand provided legal assistance to 46 projects,among other efforts. The Center has formed42 cooperatives in the past seven years.

he National NativeLeadershipCooperative (NNLC)is an employment andeconomic developmentcooperative formed tocreate newemploymentopportunities forNative peoples and

Native communities. It works througheducation, project development andmarketing of members’ and membercompanies’ qualifications, workexperience and abilities.

The founders of the NNLC haveworked in communities throughout theUnited States for 30 years. Businessexperience gained in this time hasprovided valuable insight into the veryspecific problems that need to beaddressed to ensure the success of ruralU.S. economies.

The NNLC’s primary goal is to keep

as many dollars circulating within acommunity as possible through projectdevelopment and complete utilizationof all community project resources.This means that when a communityplans for a new school, activity centeror infrastructure improvements, NNLCprovides project design, specificationand project management services toensure that residents of the communityhave the opportunity to benefit from allaspects of the project. This includesgiving them a chance at theconstruction jobs created by a project.

This is a very different developmentmodel than is typically found in small-town America. Today, a very smallpercentage of the best communitycontracts are actually performed byhometown contractors. What typicallyhappens is that large constructioncompanies from somewhere else cometo town and bring their own workforceto complete the project. Very few localpeople are hired.

When this happens, millions ofdollars are lost and the local economysuffers because the money leaves townand is spent elsewhere. Studies showthat people spend the majority of theirincome where they live. So there arebig advantages to keeping those dollarsat home.

Leadership co-op creates jobs,opportunities for Native Americans

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Montana Lieutenant Governor John Bohlinger(center), congratulates Delbert Thomas andSteven Hadley for their work on the formationof the National Native LeadershipCooperative.


Economic goals of communities arebest served when members of acommunity are involved in the projectand benefit not only by the project’send use, but also by the most importantresource of any project: the jobs createdby the project.

NNLC provides a voice to the small-business person and assists communitieswith the creation of positiveemployment opportunities through

resource identification, residenteducation and training, and projectdevelopment.

Three different membership typesexist in the NNLC, each offeringdifferent kinds of services and benefits.The individual membership is for aperson seeking to expand his or herpresence as a qualified and skilledemployee. An organization membershiprepresents a Native company that is

seeking to expand its presence in thebusiness market, and the Level IIImembership represents a tribal entityseeking to expand the opportunities ofits tribal members through projectdevelopment, education and training.

The primary focus of the NNLC isthe promotion and success of individualtribal members who are either inbusiness for themselves or employees ofNative-owned companies. n

By Noemi Giszpenc, Executive DirectorCooperative Development Institutee-mail: [email protected]

Editor’s note: The CooperativeDevelopment Institute is the Northeastcenter for cooperative business education,training and technical assistance, servingNew England and New York since 1995.Its mission is to build a cooperative economythrough the creation and development ofsuccessful cooperative enterprises andnetworks in diverse communitiesthroughout the region. It provides assistanceto existing and start-up cooperatively-structured enterprises in all business sectors:food, housing, energy, agriculture, arts,health, forestry, fisheries, retail, service andmore.

hen a co-op creameryowned by dairy farmersopened in the smallhill town ofCummington, Mass.,125 years ago, little didanyone imagine thatthe enterprise wouldgo through about ahalf dozen transform-

ations before returning to its roots as acommunity-owned cooperative general

store in 2011. One year ago, current owners Alice

Cozzolino and Amy Pulley celebratedtheir 10th anniversary as owners of theOld Creamery, a beloved local grocery,deli and gathering place in a town ofjust over 1,000 people. Earlier that year,the pair had expressed to the com-munity their desire to transition thecreamery to a different form ofownership. At a packed communitymeeting, the Old Creamery Co-op wasborn.

“It’s so much more than a store. It’spart of the heart and soul of these

towns,” says Board President KimberlyLongey. “People are stepping forwardenthusiastically to help shape the nextphase of life of this 125-year-oldbusiness; it’s not just a new venture, butalso a continuation of the legacy ofAlice and Amy and all the ownersbefore them.”

The co-op is poised to conclude its$200,000 fundraising campaign, and isclose to achieving its member equitygoals. Working closely with the currentowners, the board has completedmarketing, financing, renovation,membership and business planning.With luck, it will make the finalpurchase this October.

Many volunteers have helpeddevelop each piece of the puzzle. Theproject’s supporters have been kept up-to-date throughout the process by Webpostings, e-mail, newsletters and an all-important series of monthly, in-depthco-op conversations.

There aren’t many stories of grocerystore owners seeking to sell to acommunity-owned co-op, but co-opsupporters say there should be. Bottomline: the owners of the Old Creameryare being honored and recognized fortheir hard work and dedication, and thecommunity will keep its store and

Don’t let ’em go!How co-ops can keep vital

businesses, services in rural communities

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The Old Creamery Co-op is “so much morethan a store. It’s part of the heart and soul ofthese towns,” says board President KimberlyLongey.


gathering place.

Co-op can preserve ‘social fabric’

The need to retainvalued institutions inrural areas — sources ofjobs, homes and food,not to mention socialfabric — can be metthrough the cooperativebusiness model, whichconnects private andpublic interests.

In some cases, such asthe Old Creamery,business owners areseeking a way to “move on” thatpreserves the value of what they havecreated. If the business boasts a loyalcustomer base, then conversion to aconsumer co-op can make sense.

Sometimes a store owner can sell toan existing cooperative that is lookingto expand, as was the case with FranklinCommunity Cooperative of Greenfield,Mass., which opened a second locationwhen it purchased McCusker’s Groceryin nearby Shelburne Falls.

Several scenarios make sense forconversion to a worker co-op. Abusiness owner looking to sell —especially if the business is known forgreat service from long-time,knowledgeable employees — would dowell to consider an employee buy-out.

Another example would be a businessseeking to expand its workforce from acouple of highly motivated proprietorsto a broader, but still entrepreneurial,team. The Crown O’Maine OrganicCooperative (COMOC) is in theprocess of turning a family operationinto a worker-owned co-op.

Marada Cook, daughter ofCOMOC’s founders, explains: “Afterour dad died, my sister and I becametwo heavily invested owners —financially, emotionally, mentally — inevery possible way. Our business isquickly growing and innovative, outsideof the norm of food distribution. Wewant to work with people who are asinvested in it as we are, who will workhard and bring good ideas because it’s

their business, too.” A worker cooperative helps a

business bring in more people,increasing its ability to grow and givingit longer term stability — making it lessvulnerable to the “life-events” of anyindividual.

Co-ops promote stability, growth

Stability and growth were alsoconsiderations for the Turtle RidgeCooperative in Connecticut. In 2010,this group of consumers took over theMill River Valley Gardens CSA(community-supported agriculture),which had been run for 21 years byretiring farmer Walter Greist. Now theconsumer-members help plan thegrowing season and work on the farmalongside a hired farmer.

These consumer-members achievedstability in their source of local produceand increased membership 15 percent.With the majority of Connecticutfarmers now approaching retirementage, communities need innovative waysto preserve working farmland.

Achieving stability is also the keymotivation for the conversion ofmanufactured home parks into resident-owned cooperative communities(ROCC). As a certified technicalassistance provider in the ROC-USAnetwork, Cooperative DevelopmentInstitute has assisted the conversion ofprivately owned parks, such asOakwood in Ware, Mass., now the

Quabbin SunriseCooperative, andnonprofit-owned parks,such as Bunker Hill inWindsor, Vt. In bothcases, the residents cannow rely on themselvesto manage the sharedresponsibilities of parkupkeep and don’t need tofear the dislocation ofpark closure or theuncertainty of rising lotrents.

In Auburn, Maine,organic dairy farmerswho are members of the

Organic Valley cooperative formedMaine Organic Milling Cooperative(MOM) to buy the privately held BlueSeal mill in order to preserve aninvaluable organic feed resource. MOMnow produces organic rations for dairycows and other livestock throughoutNew England.

“When the Blue Seal mill in Auburnclosed down [in 2009], it left manyMaine organic dairy farms with limitedoptions,” says Steve Russell, an OrganicValley farmer-owner and member of theMaine Organic Milling board ofdirectors. “As local, organic dairyfarmers, it is essential to our businesses— and frankly to the survival of ourfarms — to source the highest qualityorganic feed for our animals at pricesthat keep us profitable. We need thisfeed mill right in our own backyard.Our cooperative model and the attitudeof banding together is what keeps usand our farms together.”

Rural communities are used torelying on themselves for their basicnecessities and understand the value ofinterdependence among neighbors. Theentrepreneurial spirit and hard work ofbusiness owners and the community-minded dedication of nonprofits can behonored and sustained past the timethat individuals are ready to move on.The benefits that these businesses andorganizations bring to theircommunities can continue, and evenincrease, through broadened ownershipin a democratic cooperative. n

Dan Lemke, Communications DirectorAgricultural Utilization Research Institutewww.auri.org

leader in Minnesota’sdairy industry iscelebrating its richhistory and looking toits future. First DistrictAssociation cooperativerecently marked its90th anniversary with amajor celebration,while plans to expand

its operations by 30 percent andmodernize production processes getunderway. First District Associationcurrently provides cheese and wheyproducts to customers all over theworld.

Several years ago, First Districtbegan looking at new technology toreplace 30-year-old equipment at itsLitchfield, Minn., processing facility forgreater efficiency and newopportunities.

“It’s never been our goal to see howbig we can become vs. how good we canbecome,” says First District PresidentClint Fall. “Our goal is to maintain thereputation and quality First District isknown for.

“At the same time, we producecommodity dairy products used as foodingredients, so it is very competitive.We need to be competitive on a globalbasis.”

The Agricultural UtilizationResearch Institute (AURI) was broughtin to help determine the project’sfeasibility before the dairy processormade the commitment to move ahead.After a thorough evaluation, FirstDistrict chose to move forward with theexpansion and installed a state-of-the-art whey evaporator complex. It wasone of the state’s first major dairyprocessing expansions in years.

Three major construction phases dueto be completed by fall 2012, including

equipment replacement or expansionthroughout the plant and a state-of-the-art milk-processing system, will allowFirst District to enhance both efficiencyand quality, two critical elements thatwill boost Minnesota’s ability tocompete globally.

“Expansion plays an important rolein securing the future success of FirstDistrict and the entire Minnesota dairyindustry,” Fall says. “These plans willallow us to successfully market ourproducts, satisfy customer needs andcompete in a dynamic, growing globaldairy industry.”

The First District cheese plantproduced 144 million pounds of cheesein 2010, or 4.54 pounds per second.The expansion will give the cooperativethe ability to process 5 million poundsof milk a day — a 25- to 30-percentincrease in production capabilities.

First District provides cheese tomany of the most well-known fast foodchains, restaurants and nationalgrocery-store chains in the form ofspreadable cheese, popular name-brandsnack foods and bakery products. FirstDistrict’s whey products find their way

into leading brands of chocolate, infantformula, bakery products andpharmaceuticals.

First District has about 620 directmember-owners, and nine membercreameries with 430 patrons. Together,they will produce over 1.5 billionpounds of milk this year.

“This expansion is tremendous newsfor the dairy producers in the regionbecause First District will be able totake in more milk, expand services tocurrent and new members and satisfytheir customers,” says Jennifer Wagner-Lahr, senior director for innovation atAURI. “It also shows a long-termcommitment to Minnesota’s dairyindustry and is an example that realinnovation is taking place in ruralcommunities.”

AURI is an agricultural researchorganization that provides scientific andtechnical assistance to Minnesotaindustries, cooperatives andentrepreneurs to help them takeadvantage of innovative opportunities inbiobased products, renewable energy,co-product utilization and food. n

Growing Minnesota’s dairy capacity

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First District Association President Clint Fall is overseeing the growth of hisdairy processing cooperative. The Litchfield, Minn., co-op is in the process ofboosting milk processing capacity by about 30 percent. Photo courtesy AURIand Rolf Hagberg



Focus On: Walton EMCCo-op program helps rescue disabled woman’s home

The stone forthe columns ofMaureenRichardson’shome in GoodHope, Ga., washauled by trainfrom StoneMountain in1916. With helpfrom WaltonEMC’s OperationRound Up, otherparts of thehome will getneededrevitalization.Photo courtesyWalton EMC

mong the first things you notice when you driveup to Maureen Richardson’s home in GoodHope, Ga., are the majestic oak treessurrounding it and the sturdy rock columnsanchoring the porch. You can immediately tell

the 1916-built home has character. It has memories to relive andstories to tell. But it’s also crying out for a little help. For many years, Richardson, who is disabled, had the help of

her dad in maintaining the home. But since he died in 2001, shehas struggled to keep up with needed repairs. As time wore on,roof leaks became more frequent. To keep her belongings frombeing damaged, Richardson shuffles them about the house todrier areas. A section of the rear of the home is also in distressdue to a leaning foundation. Eventually, her insurance company sent a laundry list of

repairs required to keep her homeowner’s insurance. She didn’tknow how she'd get them done. “You know that knot you hang onto at the end of your rope? Mine was fraying,” says Richardson.Then came Walton EMC’s Operation Round Up. Walton Electric Trust, the volunteer board that administers

Operation Round Up funds, is providing a grant to purchasebuilding materials for needed repairs. The grant is going evenfurther because volunteers are furnishing labor.

When the roof leaks are fixed and railings are installed onoutside steps, she has plans to move in her 82-year-old mother,who now lives alone. “It’s a blessing to have Operation RoundUp,” says Richardson. “I owe them my undying gratitude.” Operation Round Up funds come from Walton EMC customer-

owners who allow their electric bill to be rounded up to the nextdollar. The resulting change stays in the cooperative’s 10-countyservice area and cannot be used to pay electric bills. Other recent grants include:

• Step by Step Recovery Inc. — $6,000 for a residential programthat provides shelter for men and women undergoing drug andalcohol abuse treatment.• Place of Seven Springs — $10,000 to fund an emergencyassistance program that provides emergency housing, food andprescription medications.• Family Promise — $5,000 for a van transportation program.• Hebron Community Health Center — $10,000 for Raising the Barof Quality Care, a program that offers non-emergency primarycare services to people with low income and no insurance.• Various types of assistance for three other families.Walton EMC is a customer-owned electric utility co-op that

serves 118,000 accounts in a 10-county service area betweenAtlanta and Athens.

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Editor’s note: This article is excerptedfrom the June/July issue of TheCommuniqué, the newsletter of the Co-opCommunicators Assoc. It was written byGreg Brooks of Walton EMC and AmberDuMont of Maryland-Virginia MilkProducers.

laire Smith, director ofcorporate relations forSunkist Growers, is the2011 winner of theH.E. Klinefelter Award,

recognizing her for a career that hasdemonstrated excellence in the use ofcommunications to build strongercooperatives. The award was presentedto Smith during the annual institute ofthe Cooperative CommunicatorsAssociation (CCA), held in SanAntonio, Texas, in June.

Winning CCA’s top award for ayoung communicator, the Michael

Graznak Award, was Jason Jenkins,managing editor of Rural Missouri, a540,000-circulation monthly tabloidnewspaper published by the Associationof Missouri Electric Cooperatives.

Master of myriadresponsibilities

“During Claire’s watch as director ofcorporate communications, she hassuccessfully helmed a myriad ofresponsibilities, from growernewsletters, news releases, speech-writing, producing corporate videos andeven addressing acts-of-God disasters tothe media with aplomb,” says Sunkist’sDirector of Marketing Leland Wong.Among the words used to describeSmith by those supporting hernomination are: “mentor, dedication,professional, inspiration and grace.” Butperhaps the most complimentary of thewords is, simply, “friend.”

A native of Houston, Texas, Smith

earned a journalism and advertisingdegree from Texas Tech. Prior tojoining Sunkist, she was assistant vicepresident of marketing and public andmember relations for the Farm CreditBanks of Sacramento, where shedirected the advertising program for afive-state area, managed memberrelations activities, served asspokesperson and was managing editorof the news magazine.

As if her current duties with Sunkist,the California-based citrus cooperative,aren’t enough, she also shares herexpertise with Fruit Growers SupplyCo., a cooperative affiliate of Sunkist.Always with an eye toward giving backto her profession, Smith has served in avariety of leadership roles in severalorganizations, including: the NationalCouncil of Farmer Cooperatives; thePublic Relations Society of America;the International Association ofBusiness Communicators and theSouthern California chapter of theNational Agri-Marketing Association.

Her CCA involvement is long andvaried. A 22-year member, Smith servedtwo terms on the board and co-chairedthe successful 1993 Institute inMonterey, Calif. An Institute presenterand newsletter contributor, she has alsowon several top awards in the CCACommunications Contest.

“Her wisdom in big-picture decisionmaking is a true asset to ourorganization, and she was often thecalming factor in heated discussions,”says CCA President Allison Morgan, ofTennessee Farmers Cooperative.

“Keeping the welfare of others in theforefront is a trademark of ClaireSmith’s style, even when her own lifehas had more than its share oftragedies,” says her Klinefelterapplication. “No matter how you peelit, when it comes to co-op

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Smith, Jenkins wincommunications honors


communications, Claire Smith has seenit all and done it all, better than justabout anyone,” says another nominator.

Graznak winner a trailblazer“Innovator. Trailblazer. The total

package.”That’s how the Graznak Committee

summed up its choice in selectingJenkins as the 2011 Graznak Awardwinner. “Jason’s portfolio showedvariety, creativity and mastery ofcooperative communications,” saysK.D. Graham, a member of theselection committee and 2006 Graznakrecipient. “He is simply the totalpackage.”

The award recognizes acommunicator under age 35 whosework symbolizes accomplishments,contributions, competence and promise.

CCA created the award in 1977 tohonor the memory of Michael Graznak,an outstanding CCA member who diedwhile on field assignment for hiscooperative, Farmland Industries.

Jenkins serves as a writer,photographer and editor for RuralMissouri and also oversees themagazine’s digital and social mediapresence. He won best of show honorsin the 2008 and 2010 CCAphotography contest and was the 2009CCA Photographer of the Year. He’salso earned second runner-up honors inWriter of the Year judging.

Starting in 2008, he began shootingcovers for Rural Missouri and for storiesdesigned to run a year later. It has giventhe magazine a more seasonal look.Now, every cover photo is taken a yearin advance.

When a powerful ice storm hitMissouri in 2007 and triggered requestsfor information from news mediaoutlets, government officials and thegeneral public, Jenkins designed aStorm Information Center that wentinto action after 2008 and 2009 icestorms. At the height of the 2009storm, Jenkins’ Storm InformationCenter received more than 1.5 millionweb hits. He packaged photographscoming in from around the state withpress releases showing progress on therestoration efforts and an interactivemap highlighting the affected areas.

The website has earned a great dealof praise from the governor’s office andwas in constant use by the StateEmergency Management Associationduring the crisis. In February, theassociation tested the center from aremote location following a recordsnowfall that made it impossible to getinto the office. The site againperformed to perfection and was inconstant use at the state’s EmergencyPreparedness Center, where it wasprojected on a giant video screen.

Going beyond CCA, Jenkinsmanages the website for the StatewideEditors Association and he is a valuedmember of the Outdoor WritersAssociation of America. He was recentlyelected to their national board ofdirectors and chairs the group’sstrategic planning committee.

CCA’s board awarded Steve Jacobs,production coordinator for GEORGIAMagazine, the 2011 Outstanding LeaderAward. The award is given annually to aCCA member who demonstratesexceptional leadership through his orher volunteer activities within theorganization.

The next CCA institute will be heldJune 2-5, 2012, in Tucson, Az.

Calcot’s Mark Bagby, as “Arizona Jones,” his wife Heidi (right), as femme fatale AdelaideWisenheimer, and Teri Ditsch as Jones’ evil nemesis, Teresa Desperado, starred in a videospoofing “Indiana Jones.” It was followed by a live, bullwhip-cracking performance to invite CCAmembers to next year’s conference in Tucson, Ariz. USDA photos by Dan Campbell continued on page 43


By Rebecca MacLeod, National Energy Efficiency LiaisonUSDA Natural Resources Conservation Service Robert Madeja, Business AnalystInnovation Center for U.S. Dairy

new web tool isavailable for membersof dairy cooperativesacross the United Statesto help them discover

the cost savings and other benefitsassociated with energy efficiency on thefarm. Under the leadership of America’sdairy farmers, the Innovation Centerfor U.S. Dairy (Innovation Center)worked with USDA’s Natural ResourcesConservation Service (NRCS) andUSDA Rural Development to developthe tool — SaveEnergy — for dairy farmers.

SaveEnergy was just launched inSeptember to serve dairy farmers as aguide to all of the local, state andfederal sources of financing available forenergy audits and energy efficiencyimprovements. It also providesinformation and resources on howenergy efficiency can be realized ondairy farms, the benefits of energyaudits and real-world examples of dairyoperations that have profited fromenergy audits.

Many existing websites offerinformation about energy efficiency.SaveEnergy, however, is uniquelydesigned to bring all of the availableoptions together as a one-stop resourcethat helps dairy farmers to identify andcompare all appropriate resources, tosimplify the decision-making processand to help dairy farmers make energychoices that fit their particular operation.

“Dairy farmers are busy people. Thisis all about convenience and cost-savings,” says Erin Fitzgerald, seniorvice president of sustainability for theInnovation Center for U.S. Dairy andDairy Management Inc., which

manages the dairy checkoff program onbehalf of the nation’s farmers. “Byaggregating the various sources offinancing in one place, we hope toreduce time, frustration and confusionfor farmers and the field representativesand customer service teams who workwith them. Quite simply, our goal is togive more dairy farmers access toenergy savings. If the opportunity is outthere, we want to make sure farmershave a shot at it.”

The website facilitates the use of anenergy audit, which is a good first stepin the energy savings process. “Whenperformed by trained professionals, afarm energy audit has been proven toreduce a dairy farm’s energy use by 10to 35 percent (according to actual auditsconducted by EnSave, Inc.). The farmenergy audit inventories a farm’scurrent systems and equipment relatedto the milking parlor and housing,identifies the cost of energy andprovides a detailed recommendationabout actions, upgrades and potentialsavings that could most benefit thefarm,” Fitzgerald says.

The hierarchy of energy recom-

mendations on a dairy farm isillustrated by EnSave (a designer andimplementer of agricultural efficiencyprograms) as an “energy pyramid,” thebase of which is analysis, energyconservation and efficiency. Otherrecommendations, including use ofrenewable energy, should be consideredafter implementation of all efficiencyupgrades.

Tool links farmers to local resources

One of the tool’s most importantfeatures is the SaveEnergy Finder. TheSaveEnergy Finder is an interactive mapthat instantly connects the user to stateand local financial assistance programsfor energy audits, incentives or rebatesfor equipment retrofits and acustomized listing of local equipmentsuppliers and installers.

“The goal is to help dairy farmersmake management improvements thatreduce energy use and cost,” saysChristine Brodeur, manager of forwardcontracting operations for Dairylea andDairy Farmers of America-Northeast.She is also a member of the Innovation

A

New Web tool helps dairyfarmers capture energy savings


Center’s Sustainability Council.“A qualified farm energy audit

identifies areas for change that couldresult in the best return on investment,”Brodeur continues. “While oppor-tunities differ, there are often programsthat could either partially or completelycover the cost of an audit or assist withan equipment update. This tool helps usto match farmers with those availableprograms.”

The web tool highlights energyefficiency programs and services offeredthrough USDA and provides contactinformation for USDA personnel whocan help with applications forassistance. NRCS provides financialassistance toward developing anAgricultural Energy Management Plan(AgEMP), which determines energyused in farm activities, including milkcooling, irrigation pumping, heatingand cooling of livestock productionfacilities, manure collection andtransfer, grain drying and othercommon on-farm activities.

The AgEMP will identify activitieswhere the farm could be more energyefficient. USDA Rural Development

administers the Rural Energy forAmerica Program (REAP), whichprovides grants for energy audits andrenewable energy developmentassistance. It also provides funds toagricultural producers and rural smallbusinesses to purchase and installrenewable energy systems and makeenergy efficiency improvements.

Many rural electric cooperatives andutility companies provide support forenergy efficiency improvements and arefeatured on the interactive map as well.The tool will help to connect dairyfarmers with utility providers — asector they may not have previouslyconsidered as a partner in loweringenergy consumption.

Dairy farmers, cooperatives andother dairy trade organizations canexpect more good things on the horizonfor farm energy efficiency. Additionalresources available on the SaveEnergytool will be added as changes occur inthe farm energy efficiency sector. In themeantime, farm energy efficiency is justone of 10 projects currently under wayat the Innovation Center for U.S. Dairyto help achieve the industry’s voluntary

goal to reduce greenhouse gas (GHG)emissions of fluid milk production(from cow to consumer) by 25 percentper gallon of milk by 2020.

A number of strategies exist to helpdairy farmers reach this ambitious goal,including the installation of anaerobicdigesters — another project facilitatedby the Innovation Center and its USDApartners. This is another example of thestrength of partnership, with theInnovation Center providing outreach,NRCS handling technical support fordesign of waste management andUSDA Rural Development supportinginstallation costs of alternative energyoptions that utilize the anaerobicdigesters’ output.

Simple changes can lead to real savings

The SaveEnergy web tool is a greatstarting point because simple changes— such as changing light fixtures or amilk compressor — could generate realfarm savings.

“Farmers are the originalconservationists. Historically, we haveraised the bar by reducing, reusing andrecycling, using new technology andimproving management practices onour dairies,” says Steve Graybeal, adairy farmer leader of MarylandVirginia Milk Producers CooperativeAssociation and a member of theInnovation Center for U.S. Dairy’sSustainability Council. “Still, manyfarmers aren’t aware of how easy oraffordable it could be to adopt energyefficient best practices. We want tochange that with tools like SaveEnergy.”

The tool will help dairy farmersreduce costs, become more energyindependent and keep their competitiveedge. To learn more, visit theInnovation Center for U.S. Dairy atUSDairy.com/SaveEnergy or call 1-800-732-1399. n

Opposite page: A technician collects equipment data on a dairy farm during an energy audit.Most dairy farms reduce energy use by 10 to 35 percent as the result of an energy audit. Photocourtesy EnSave. Below: Dairy cattle on a Michigan dairy farm await milking. USDA photo byLance Cheung

Farmer Co-op Conference tofocus on globalization,innovative finance

Global demand and supply directlyimpact prices for American agriculturalproducers. The business side of thefood chain — including food security —can require investment intransportation, terminals and othersignificant assets. How will agriculturalcooperatives reinvent themselves inresponse to challenging opportunities?What financing options exist, and howwill co-op members be rewarded?

The current global economic impacton agriculture, the challenges thesevolatile economic conditions create forag cooperatives and some of theresponses adopted by co-ops will beaddressed at the 14th annual FarmerCooperatives Conference, Nov. 3-4 inMinneapolis, Minn.

Organized by the University ofWisconsin (UW) Center forCooperatives, this annual event featuresthe latest research, trends, criticalthinking, innovative approaches andcase studies about cooperatives asbusiness entities. Attendees areagribusiness managers, board members,educators, researchers, accountants andmany other professionals.

“It is the one national conferencethat focuses on agricultural cooperativesthemselves, rather than on the state ofthe industry or an industry sector,” saysAnne Reynolds, assistant director forthe UW Center for Cooperatives.

The theme this year is “MeetingCompetitive Challenges: CooperativeStructure and Finance for the Future.”Eight sessions in two days will addressglobal challenges in the food producer

market, innovative approaches tofinance, consolidation amongcooperatives, price volatility, energy andthe credit marketplace, and managingrisk for cooperatives and theirmembers.

“Listening to experts weigh in onpotential market developments may alsoprovide attendees with the foresight toprepare for adverse or positive marketdevelopments,” says Jennifer KeelingBond, assistant professor in agriculturaland resource economics at ColoradoState University and a member of theconference planning committee.“Seeing how other cooperatives havemade adaptations may inspire audiencemembers to try something new at theirown co-op. This event not only createsa forum where practitioners andacademics can share ideas andobservations, it also provides a

tremendous networking opportunity fortop cooperative leaders.”

Early registration for the conference,to be held at the Radisson Plaza HotelMinneapolis, is encouraged. Moreinformation about the conference andregistration is available at:www.uwcc.wisc.edu, or by contactingReynolds at 608-263-4775 [email protected].

NFU supports Year ofCooperatives; Johnson stressesneed for rural development

The National Farmers Union (NFU)board of directors has passed aresolution in support of naming 2012the “International Year ofCooperatives,” as previously designatedby the United Nations GeneralAssembly. The U.S. Senate isconsidering a similar resolution,introduced by U.S. Senators TimJohnson of South Dakota and ThadCochran of Mississippi.

“NFU has a long history ofsupporting the development of farmer-owned cooperatives as a way for farmersto add value to the food, fiber andenergy they produce,” says NFUPresident Roger Johnson. “Cooperationis one of the three sides of NFU’striangle. Cooperatives and cooperativeeducation are keystones of ruralcommunities and remain essential toour future.

“The cooperative business model hasbeen expanded beyond the agriculturesector to serve the needs of manydifferent industries, consumers andpatrons who want to enjoy the benefitsof a business that they own andcontrol,” he continues. “The NFU

38 July/August 2011 / Rural Cooperatives

NewslineSend co-op news items to: [email protected]

Co-op developments, coast to coast


Chad Parker has been named as thenew deputy administrator for USDA’sCooperative Programs. The office isresponsible for assisting the nation’sproducer-owned cooperatives with co-opeducation materials (including RuralCooperatives magazine), research,statistics, technical assistance and co-opdevelopment assistance. It alsoadministers financial programs that canbenefit co-ops, including: the Value AddedProducer Grant program; RuralCooperative Development Grant program;Small Socially Disadvantaged Producer Grant program; andthe Rural Business Opportunity Grant program. Cooperative Programs is an integral part of the Rural

Business-Cooperative Service, which is within USDA RuralDevelopment. Parker says he will strive to foster partnerships between

rural economic development entities in the private sector,cooperatives, business development associations, rurallenders, other rural development interest groups and theRural Business-Cooperative Service.“Chad is going to be a great leader for this program and

will carry on its long tradition of service to the nation’scooperatives and their members,” says Dallas Tonsager,under secretary for USDA Rural Development, himself astrong advocate for cooperatives. “In addition to abackground in agriculture and working with co-ops, Chadhas the advantage of knowing the inner working of USDAvery well, which will prove to be a great advantage.”Parker started his USDA career working with electric

cooperatives as a rural development specialist with theRural Electrification Administration (REA), a job he held from1991-1995. The REA is now called the Rural Utilities Service,

also part of USDA Rural Development. Hethen became a senior loan specialist withthe Community Programs office of USDARural Development, which helps build astrong rural infrastructure by providingfinancial assistance for essentialcommunity facilities, such as police andfire stations and equipment, medicalclinics and hospitals, schools andcommunity centers and industrial parks.From 1998 until 2010, he was director forthe direct loans and grants branch of thatoffice.

Most recently Parker was acting deputy administratorfor the Single Family Housing program of USDA RuralDevelopment. “My background is in agriculture, cooperatives and

economic and community development,” says Parker. “Ibelieve my experiences have prepared me for the challengeof broadening USDA’s role in supporting rural cooperatives.I look forward to learning more about the needs of thenation’s cooperatives and how USDA can continue tostrengthen its historic partnership with them.”Parker earned his MBA from the Pamplin School of

Business at Virginia Tech in 1991. He also earned a BS inMarketing, with a minor in English, from the same universityin 1988. As a youth he raised Duroc and Landrace swine, and as

a 4-H member he participated in its wildlife, livestock anddemonstration/public speaking programs. He was also anFFA member. “I welcome any suggestions readers may have about

how USDA can enhance ongoing rural cooperativeassistance efforts,” Parker says. He can be contacted at: [email protected].

Chad Parker to lead USDA Co-op Programs

board is pleased to see the U.N.recognize the role that cooperativesplay in economic development aroundthe world.”

In other NFU news, Johnsonaccompanied President Barack Obamaand Agriculture Secretary Tom Vilsackin August on a three-day Midwesternrural tour. The trip took them throughMinnesota, Iowa and Illinois.

Johnson emphasized the importanceof safety nets, rural development

programs, conservation and renewableenergy. “As Congress begins to writethe next farm bill, one thing that thelegislation must include is a strongsafety net for farmers and ranchers,”said Johnson.

“With the struggling economy, wemust deploy rural developmentinitiatives to create jobs,” he said,adding that “renewable energycontinues to be a big part ofdevelopment in rural areas.”

Nearly half of nation’s milk supply now under FARMumbrella

Today’s consumers want to know thatthe food they purchase is safe,wholesome and nutritious. TheNational Milk Producers Federation(NMPF) reports that U.S. milkproducers are demonstrating thatcommitment by enrolling at a rapidpace in the National Dairy FARMProgram: Farmers Assuring Responsible

Management (FARM). Since theprogram began in September 2010, 45percent of the nation’s milk supply —coming from cooperatives, farmers andproprietary processors — has beenreenrolled in the FARM program.

Voluntary and open to all producers,FARM is a national dairy animal care,third-party-verified program designedto demonstrate dairy farmers’commitment to outstanding animal careand a quality milk supply. “Telling thisstory is essential at a time whenconsumers want to know how theirfood is produced,” says John Miles,Land O’Lakes FARM implemen-tationleader. “The FARM program helps usreach out to customers, consumers andthe entire marketing chain. It sends astrong message that Land O’Lakesmember producers work hard caring fortheir animals and producing qualitymilk.”

FARM was created by NMPF, alongwith support from Dairy ManagementInc.

Participating producers are providedcomprehensive training materials andundergo an on-farm evaluationconducted by a trained veterinarian,extension educator, co-op field staffmember or other FARM-trainedprofessional. Evaluators then provide astatus report and, if necessary,recommendations for improvement.

Blue Diamond wins food safetyaward; hosts event focusing ontrade, jobs

Blue Diamond, the leading U.S.almond grower and manufacturer,announced that its Sacramentomanufacturing facility was named“Plant of the Year of the Pinnacle Club”by the American Council for FoodSafety and Quality. The Council, whichmaintains state‐of‐the‐art food labs andtesting facilities, promotes betterunderstanding of food safety issuesamong growers, processors andpurchasers of dried fruit and tree nuts.It has a formal working partnershipagreement with the U.S. Food andDrug Administration.

At its annual meeting in July, the

Council recognized top performingmembers and companies in the area offood quality and safety, designatingthem for the “Pinnacle Club.” Thisrecognition is based on scores from

tri‐annual, unannounced GMP (goodmanagement practices) and sanitationaudits, certification of HACCP (HazardAnalysis and Critical Control Points)plans and achievement of higher levelsof food safety certification. BlueDiamond’s award recognizes it as the“best of the best” in a group of about 75plants and facilities inspected. BlueDiamond is a producer co-op owned bymore than half of the state’s almondgrowers.

In other Blue Diamond news, jobcreation that could result from approvalof pending free trade agreements(FTAs) was the hot topic at anagricultural roundtable held at the co-op’s headquarters in Sacramento. Theroundtable was led by United StatesTrade Representative Ron Kirk, whosaid Congress was expected to considerapproving FTAs with South Korea,Colombia and Panama when itreconvened in September. If approved,the trade deals would greatly increasethe ability of U.S. exporters to competein the global marketplace.

Ambassador Kirk commended

California’s agricultural organizationsfor making the state the largest exporterof agricultural goods in the nation.“Every billion dollars in agricultureexports supports almost 8,500 jobs, on

the farm and onproduction lines,”Ambassador Kirk said.He urged participantsto educate theirfriends and neighborsabout the positiveimpact that tradeagreements andexports bring to localcommunities.

Almonds areCalifornia’s largestfood export (valued at$2 billion annually)and the nation’s sixthlargest food export.Seventy percent of thealmond crop isexported to 95countries. It isestimated that a

record, 1.95-billion-pound crop will beharvested this year. California growsmore than 80 percent of the world’salmond supply. Worldwideconsumption of almonds has grownevery year since 2005 at an averageannual growth rate of 10 percent.

Livestock genetics co-op wins Compass Award

Accelerated Genetics, a Wisconsin-based global provider of bovine geneticsand research, has been presented withthe Compass Award for its long-termcommitment to excellence in thestewardship of its employees’ retirementassets. The award was given to the co-op by Francis Investment Counsel, anationally recognized expert retirementplan investment consulting organ-ization.

“The leadership team at AcceleratedGenetics has put in place andmaintained over many years a system ofin-depth due diligence, rigorousongoing oversight and consistentemployee education that representsindustry best practices,” says Mike


U.S. Trade Ambassador Ron Kirk discusses pending tradeagreements in Sacramento. At left is Karen Ross, secretary ofthe California Department of Food and Agriculture; at right isBlue Diamond President and CEO Mark Jansen.


A hallway display case at USDA headquarters inWashington, D.C., was recently re-designed by stafffrom the National Council of Farmer Cooperatives(NCFC). The display now provides an overview of therole and functions of U.S. farmer co-ops andincludes samples of co-op products. Responsible forthe display overhaul (bottom photo, from left) are:Brandon West, an NCFC intern and Kansas StateUniversity student from Marion, Kan.; KathleenHeron, NCFC manager of member relations anddevelopment; Kelsey Swango, NCFC’s manager ofgovernment affairs; and Emily Parkman, an NCFCintern and student at Clemson University, fromSwansea, S.C. USDA photos by Dan Campbell

Telling the co-op story at USDA

Francis, president of Francis InvestmentCounsel. This has led to above averageresults.

Whereas 84 percent of AcceleratedGenetics employees save in their co-op’s plan, other plans average a 74-percent participation rate, according toVanguard, a leading manager of mutualfunds. Further, the average AcceleratedGenetics co-op saver defers 8 percent ofhis or her income to the plan, vs. a

national average of 6.9 percent ofincome.

CHS, Cargill eye expanded scope for TEMCO

CHS Inc. and Cargill announced inAugust that the two agribusinesscompanies are in discussions to expandthe scope of TEMCO LLC to includeother Pacific Northwest export assetsowned by the companies. TEMCO,

which operates an export facility inTacoma, Wash., is owned equally byCHS, the nation’s largest ag co-op, andCargill.

TEMCO currently exports corn,soybeans and milo to Asia Pacificmarkets. Cargill and CHS both saidthat the TEMCO joint venture hasbeen successful and that they areconsidering expanding the scope inanticipation of continued demand for

wheat, feed grains, oilseeds and by-products in Asia.

CDF fund to help co-ops hit by hurricane

Citing the need to help in therecovery of cooperatives impacted byHurricane Irene, the CooperativeDevelopment Foundation (CDF) hascreated the Hurricane IreneCooperative Recovery Fund. The fundwill direct tax-deductible contributionsspecifically to individuals andcooperative businesses along the EastCoast and throughout New Englandthat have experienced losses. The fundalso will seek to assist organic farmerswho are prime suppliers to foodcooperatives. For complete details, visit:www.cdf.coop.

The first contributions to the fundwere $5,000 from the NationalConsumer Cooperative Bank (NCB)and $5,000 from the NationalCooperative Grocers Association(NCGA). The fund will seekcontributions from all sectors of thecooperative business community andfrom the general public.

“Regions throughout the continentalUnited States have been hit by adevastating series of storms, tornadoes,floods and wildfires. In the latest majorstorm, Hurricane Irene, the victimsagain include co-ops and theirmembers; we want to help them,” saysCDF Executive Director Liz Bailey.“The devastation has been massive,with flooding and wind damage that hasinundated both urban and rural areasfrom North Carolina to Vermont. Thisis all about co-ops helping co-ops.”

Missouri co-op, USDA helpcollege expand energy program

A Trenton, Mo.-based electric co-ophas been recognized by USDA for itsrole in helping a local college obtainfinancing for a new agricultural campus.Grundy Electric Co-op worked withNorth Central Missouri College toobtain a $740,000, interest-free loanunder USDA Rural Development’sRural Economic Development Loansand Grants (REDLG) program. The

program helps co-ops underwritecommunity-development and job-creation projects.

The new campus will help studentsprepare for careers in fields that includealternative energy and wind energytechnologies. The farm’s solar panelsand a 10-megawatt wind turbine willallow hands-on training. Students mayalso participate in internships atnorthwest Missouri wind farms fromwhich Springfield-based AssociatedElectric Cooperative purchases power

for its distribution co-op members.The Barton Farm project marks the

third time the co-op has worked withUSDA on REDLG-assisted efforts tobenefit the college. Previous projectsinvolved construction of a communitycenter and gym as well as constructionof a health center and other facilities.

Editor’s note: reprinted courtesy ECTMagazine.

CoBank, U.S. AgBank mergerapproved by stockholders

CoBank and U.S. AgBankstockholders have approved a proposedplan of merger between the two banks.Ballots were tabulated at specialmeetings Sept. 7 in Colorado and

Kansas. Regulations issued by the FarmCredit Administration, the independentregulator for the Farm Credit System,prohibit the disclosure of exact votetallies in order to preserve voterconfidentiality. However, thestockholders of both organizationsapproved the merger by substantialmajorities.

“We’re delighted that ourstockholders have demonstrated suchenthusiastic support for this merger,which will create an even stronger,

more durable bank that is better able tofulfill its mission to serve futuregenerations of rural borrowers,” saysEverett Dobrinski, board chairman ofCoBank. “We look forward to receivingfinal regulatory approval and closingthe merger at the beginning of theyear,” adds John Eisenhut, boardchairman of U.S. AgBank.

CoBank and U.S. AgBank executed aletter of intent to merge in December2010. The merged bank will continueto do business under the CoBank nameand be headquartered in Colorado, butwill also maintain U.S. AgBank’sexisting presence and operations inWichita, Kan., and Sacramento, Calif.The bank will continue to be organized


A classroom at North Central Missouri College (NCMC) where students can train forcareers in wind energy and other alternative energy sources. Photo courtesy NCMC


decided to begin composting it instead.Cotton compost is a nutrient-rich soiladditive that effectively breaks up claysoils, but no one was producing it yet intheir central Texas region.

Using a large aerobic in-vesselcomposter they installed in 2007, theKasbergs are now able to produce 15cubic yards of compost a day, althoughtheir composting process takes severalmonths. Today, Birome Gin is the onlycentral Texas gin that is baggingcompost. They sell in bulk and also bagand market their “Birome Gin’s Best”through garden stores in the Waco area.

“Burrs used to be a cost to the gin,”Gerry Kasberg says. “When it gotwhere they didn’t cost you, it was a big

deal. Now it’s nice to be able to make alittle money off them.”

It is because of innovations like thisand the Kasbergs’ experience and goodbusiness sense that the 100-year-old gincontinues to thrive, according to theKasbergs’ Texas Land Bank loan officer,Ryan Janek.

Nearly a century of service “After 95 years of supporting

agriculture and rural America, FarmCredit is proud to introduce America’shardworking farmers and ranchers —such as the Freemans and Kasbergs —to consumers as we celebrate thisimportant milestone,” says JoyUpchurch, a Farm Credit Systememployee for more than 30 years andvice president of AgFirst Farm CreditBank, one of the wholesale banks within

the Farm Credit System. Farmers, ranchers and agribusiness

leaders have developed new, moreefficient and sustainable ways to thrivein the business of agriculture, all whilebringing safe, high-quality products tomarket. Each Producing Excellenceprofile highlights the individuals whohave dedicated their lives to agriculture.

Farm Credit is planning additional95th Anniversary initiatives throughoutthe coming year, including activitiesaround its partnership with America’sHeartland, a PBS television programfeaturing American farmers andranchers who share a passion for hardwork and excellent products, as well as acommitment to food safety,sustainability, environmentalstewardship and animal welfare. n

Farm Credit turns 95continued from page 15

Top award winners in each of thefour CCA contest areas were:• Writer of the Year — Megan McKoy-

Noe, National Rural ElectricCooperative Association, for a

portfolio of articles.• Publication of the Year — “Fresh,”

produced by the communications staffof Tennessee Farmers Cooperative;

• Photographer of the Year — KyleSpradley, of the Missouri Associationof Electric Cooperatives, for aportfolio of photos.

• Programs and Projects, Best of Show:the 2010 Dairy Farmers of America(DFA) annual meeting, produced by

the DFA communications team.USDA’s Rural Cooperatives magazine

won two honors: Editor Dan Campbellwon second place for feature writing for“The Little Co-op that Could,” about aVermont food cooperative; AssistantEditor Stephen Thompson won anhonorable mention for news writing for“Biofuel Prometheus,” about a biodieselcooperative. n

Smith, Jenkins wincommunications honorscontinued from page 35

and operate as a cooperative, witheligible borrowers earning cash andequity patronage based on the amountof business they do with theorganization.

The bank will have more than $90billion in projected assets post-mergerand a well-diversified loan portfolioencompassing every major sector ofU.S. agriculture, as well as the ruralwater, power and communicationsindustries. Robert B. Engel, CoBank’spresident and CEO, will remain thechief executive of the combined entity.Darryl W. Rhodes, president and CEOof U.S. AgBank, will retire inconnection with the merger.

“Through its wholesale lending to 30Farm Credit associations and directlending to agribusiness and ruralinfrastructure companies, the combinedbank will be one of the leadingproviders of credit to America’s ruraleconomy,” Rhodes says.

Worker co-ops eligible for SBA pilot program

In a recent meeting at the U.S. SmallBusiness Administration (SBA),National Cooperative BusinessAssociation (NCBA) leaders discussedthe different types of cooperatives andhow they relate to the agency’s lendingprograms. SBA staff determined that

worker cooperatives are eligible forloans from lenders participating in itsnew Intermediary Lending PilotProgram (ILP) program.

ILP Intermediaries were selected lastsummer and should be ready to startmaking loans under the program thisfall. NCBA will continue to assist SBAon this issue, including exploring thefinancing of all types of cooperativesunder SBA’s other lending programsand plans to work with them in thefuture.

For more information, contact R.L.Condra, NCBA’s director of publicpolicy at: [email protected], or 202-383-5480. n

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