RuralCoop MayJune08 draft4 - USDA Rural Development November/December 2009 / Rural Cooperatives By...

USDA / Rural Development November/December 2009

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By Greg Berberich, CEOMatanuska Telephone Association

Editor’s note: this guest commentary originally appeared in theAnchorage Daily News.

ast spring Alaska’s Matanuska TelephoneAssociation mailed checks to ourmember/owners, ranging in size from $10 to$24,000. These were capital credits returns,which are sent annually to members based on

their share of the cooperative’s margins. A cooperative exists for the benefit of its members, who

are also its customers. And while this benefit is predicated ona service-over-profit philosophy, even during challengingeconomic times the success of the cooperative form ofbusiness is clear: its singular focus is on creating long-termvalue for its owners.

In a marketplace where the traditional for-profit businessmodel has often demonstrated an inability, and at timesunwillingness, to create sustainable value for its investors, alocally owned cooperative, dedicated to its customers,

employees and the communities it serves, is a preciouscommodity.

The global economic crisis is a prime example of how thebigger some companies grow, the more their prioritieschange. In order to satisfy the demands of investors, theyoften create an environment of profit and risk-taking thatshifts the focus from the sound business practice of servingtheir customers to serving themselves.

In contrast, a defining point of a cooperative is that itfocuses on its members and gives them a democratic voice inits governance. In co-ops, member-owners have a closeassociation with the enterprise as producers, employeesand/or consumers of its products and services.

Excess economic benefits are distributed proportionallyaccording to each member’s patronage in the cooperative: themore revenue a member generates, the greater the benefitsreceived in return.

Co-ops are typically formed to meet consumer needs notbeing served by existing market participants. Manycooperatives were created to bring telephone service to ruralcommunities because for-profit providers knew there would

2 November/December 2009 / Rural Cooperatives

Commentary Cooperatives make good sense,serve their communities

The ChugachMountain Rangetowers above theheadquarters of theManatanuskaTelephone Association(MTA) in Palmer,Alaska. The co-opemploys 400 peopleand pumps millions ofdollars into the localeconomy. Photocourtesy MTA

continued on page 39

Features

Rural Cooperatives / November/December 2009 3

Volume 76, Number 6November/December 2009

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.

Mention in Rural Cooperatives ofcompany and brand names does notsignify endorsement over othercompanies’ products and services.

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.8 p. 14

ON THE COVER:

The nation’s dairy producers have been through a wringer during thepast year as milk prices plummeted. Dairy co-op leaders discuss whatthey are doing to help producers and what type of structural action isneeded to prevent a reoccurrence of the situation. See page 8. Photoillustration by Stephen Hall

4 What Cooperatives Are (and Aren’t) Economist says co-ops represent the aggregates of economic unitsBy Charles Ling

8 Storm Shelter Dairy co-ops strive to help members survive severe market downturn By Dan Campbell

14 Banking on the Future U.S. farm credit co-op model paying dividends in Armenia By Pamela J. Karg

18 Identity Heft, Part IILand O’Lakes freshens image with new co-op brand identity, logo and tagline

22 Marginal Land Tapped for Biofuels New York land bank co-op could be first of its kind By Anne Todd

Departments2 COMMENTARY

7 LEGAL CORNER

21 UTILITY CO-OP CONNECTION

25 NEWSLINE

31 2009 ARTICLE INDEX

p. 22


By Charles Ling, Ag EconomistCooperative Programs USDA Rural Development

any factors are converging to bring newattention to the cooperative business model.Discussions about a possible role for co-opsas part of national health-care reform and anexplosion of interest in local foods, farmers

markets and community-supported agriculture and fisheries— which often employ co-op business models — have addedto this attention.

During the past 10 or 15 years, we’ve also seen manyexperiments with variations on the traditional co-op businessmodel, as have occurred with some new-generationprocessing co-ops and producer-owned limited liabilitycorporations (LLCs), including those involved in renewableenergy production. As such, it is timely to take a fresh look atwhat a cooperative is and how it differs from an investor-owned business.

Emelianoff’s definitionA concise definition of a cooperative by Ivan V. Emelianoff

— in explaining the economic structure of cooperative

What Cooperatives Are (and Aren’t) Economist says co-ops represent the aggregates of economic units

Graphic by Stephen Thompson

associations about 70 years ago — remains refreshingly clearand applicable today. His work marked the beginning of anew era in the development and evolution of cooperativetheory. The narrative of ideas presented in this article isprimarily drawn from Emelianoff’s book, and will hopefullyshed light on the nature of cooperatives.

In Economic Theory of Cooperation, Emelianoff carefullyreviewed the worldwide literature on cooperative theory fromthe late 19th century until 1939. He came to the conclusionthat for economic analysis of cooperatives, the economicstructure of cooperative organizations should be clearlydefined, and that the definition should be free from theencumbrance of sociological, legal, technical, social-philosophical and ethical considerations.

Against this backdrop, Emelianoff established thisdefinition: “Cooperative organizations represent theaggregates of economic units.” While that is more “barebones” than many definitions of cooperative, it crystallizesthe essence of what cooperatives should have in common.

“Aggregate” is commonly defined as: “Any total or wholeconsidered with reference to its constituent parts; anassemblage or group of distinct particulars massed together.”Further, as defined by Emelianoff: “An economic unit, oreconomic individual, is an economic body admittedlycomplete and sufficiently integrated for individual existenceand independent (in conditions of an exchange economy —interdependent) economic functioning.”

Co-ops as aggregates of farmsIn the agricultural context, farms are such economic units.

The nature of cooperative associations as aggregates ofmember-farms is clearly discernible in the embryonic formsof such associations. For example, a buying club of farmersmay want to purchase certain goods together, such asfertilizer.

The buying club would have someone take orders frommember-farmers and place orders with a vendor, as well asperform other related chores. If the vendor requires adeposit, members may advance money to the buying club forthe deposit requirement in proportion to their respectivebuying volume.

There may be an elected committee to facilitate decision-making if the number of members is large. Members mayeach have one vote if their purchasing volumes are about thesame. Otherwise, some form of proportional voting may beadopted to conciliate large-volume members.

When the fertilizer (for example) is delivered, memberspay the balance of their obligations. After the transactionshave been completed, payment to the vendor and otherexpenses are subtracted from the sum of money paid bymembers. Any surplus is returned to members in proportionto the volume of fertilizer they have purchased.

This buying service is conducted at cost; every aspect of amember’s transaction through the buying club is in

proportion to their patronage (buying) volume. The buyingclub may be disbanded after fulfilling its joint-buyingpurpose.

This scenario shows that the buying club represents theaggregate of its member-farms, through which they purchasefertilizer. If the buying club metamorphoses into a permanentpurchasing cooperative association, the picture may lookmore complicated. However, the underlying nature of thecooperative as an aggregate of member-farms remains thesame.

Making it permanentIn this new scenario, the person who manages buying

orders and other chores will be the manager of thecooperative (usually a hired professional). The committee ofmembers becomes the board of directors. Advanced paymentsby members to the cooperative become equity capital forfinancing the operation and for carrying inventories andowning facilities.

Year-end surplus is returned to members as refunds inproportion to patronage volume, but a portion may beretained as revolving capital. The principles ofproportionality and service at-cost remain intact, but theirpractices may be less evident because the operation hasbecome more complex.

Although the above example is based on purchasingcooperatives, the same line of reasoning also applies tomarketing cooperatives. The difference between purchasingand marketing cooperatives is: instead of procuring goods, amarketing cooperative markets products produced bymember-farms.

In either case, the member-farms coordinate theiractivities through the cooperative, but each fully retains itseconomic individuality and independence.

A cooperative may be described as a center of member-patrons’ coordinated activities, or as an agency owned andcontrolled by members through which they conduct theirbusiness. In this respect, it is identical with the specialdepartments or branches of single member-farms.

For example, a dairy cooperative is the collectivemarketing arm of its member dairy farms; a farm supplycooperative is their supply purchasing department; and alivestock-genetics cooperative is the breeding service branchfor its members. As some would say: a cooperative is an off-farm extension of the farming business.

Characteristics of co-opsBeing aggregates of member-farms, cooperative

associations have these characteristics in common:a) The equity capital of a cooperative is the sum of

advances needed for financing anticipatedtransactions of individual members of thecooperative; it is not the same as the entrepreneurialcapital of an investor-owned corporation.



b) The member-owners of a cooperative areindependent farmers who have chosen to coordinatecertain activities via a cooperative. They are not thesame as the stockholders of an investor-ownedcorporation, who are a diverse set of shareholdersjoined solely by common investment.

c) The surplus or deficit of a cooperative is the accountpayable to, or receivable from, the member-patronsof the cooperative on their current transactions; thisis not the same as the profit or loss of an investor-owned corporation.

d) The sum for patronage refunds to members is thesum either underpaid (overcharged) to the members,or — in case of a deficit — overpaid (undercharged)to members on their transactions through themarketing (or purchasing) cooperative; the sum forpatronage refunds is not the profit of the cooperativeor its income.

e) The dividend on capital, if any, does not represent aprofit or any income of the cooperative; it is theinterest payment for using capital advanced bymembers. By contrast, investor-owned corporationspay dividends to shareholders out of earnings.

f) All the economic functions of a cooperative areultimately the economic functions of the member-farms performed through the cooperative as theircollective branch or collective department.Therefore, all economic services of cooperativeassociations are performed at cost.

Emelianoff emphasizes: “None of such traits can beunreservedly used as an unerring test of a truly cooperativeorganization, since these traits only indirectly disclose theeconomic character of the cooperative aggregate….The onlycomprehensive and indisputable test of the cooperativecharacter of organizations is their aggregate structure.”

Unique aspects of co-ops The unique aspects of cooperative character, however, are

often not readily apparent. There are many reasons for this,some examples being:• Cooperatives only reflect the characters and aspirations of

their membership, which are diverse and manifest thediversity of the population, the geographical regions andthe commodities involved. Such differences directly, orindirectly, have a certain bearing on the character of anassociation and its cooperative ideals. The variability of theexternal characteristics of cooperatives is kaleidoscopic andinfinite. Differences in their external and superficialfeatures obscure cooperatives’ ultimate economic characterof being aggregates of their member-farms.

• Most cooperatives are incorporated. The legal vestments ofincorporated cooperative associations also cloak theireconomic structure as aggregates of member-farms to sucha degree that they are often mistaken to be the same as

investor-owned corporations. This is one of the principalsources of confusion in understanding cooperativeorganizations.

• A lack of distinction between the concept of an investor-owned corporation as a profit-seeking economic unit andthe concept of a cooperative as an agency of its memberfarms is another factor that confuses many. Use of commonaccounting terminology for both business models adds tothis confusion. As the above list of co-op characteristicsshows, such conventional terms as “profit,” “capital,”“shareholders,” “dividends,” etc., should be used withreservations when describing cooperatives.

• In governance, a cooperative board of directors —including its board election rules, composition, function,responsibilities and interaction with management — is notthe same as the board of an investor-owned corporation(especially the publicly traded ones). Consequently, the roleof the top manager of a cooperative is also somewhatdifferent from that of an investor-owned corporation (evenif they have the same title).Emelianoff’s conclusion that cooperative organizations

represent the aggregates of associated economic unitsprovides a clear insight into how cooperatives organize andfunction. This insight is not limited to agriculturalcooperatives.

A unique mode of organizing coordinationIn a paper dealing with the issue of economic coordination

some 45 years later, James Shaffer echoed (though withoutciting) Emelianoff’s definition of cooperatives as aggregatesof member-farms. Because member-farms are independententities, represent independent profit centers and actindependently, except that they jointly own the cooperative,the cooperative association is neither a horizontal integrationof its member-farms nor a vertical integration betweenmember-farms and the cooperative. He asserted that “thecooperative is a third mode of organizing coordination.”

References: Emelianoff, Ivan V. Economic Theory of Cooperation:

Economic Structure of Cooperative Organizations, Washington,D.C. 1942 (litho-printed by Edwards Brothers, Inc., AnnArbor, Michigan), 269 pages. (A reprint by the Center forCooperatives, University of California, 1995, may be accessedat: http://cooperatives.ucdavis.edu/reports/index.htm.)

Shaffer, James D. “Thinking About Farmers’Cooperatives, Contracts, and Economic Coordination,”Cooperative Theory: New Approaches, ACS Service ReportNumber 18, U.S. Department of Agriculture, AgriculturalCooperative Service. July 1987, pp. 61-86.

American Heritage Dictionary of the English Language,New College Edition, Houghton Mifflin Company, Boston,1976. n


Legal CornerWhat Is Democratic Control?

By Stephanie M. Smith,Senior Legal Adviser Cooperative ProgramsUSDA Rural Development

he cooperative businessmodel is drawing extraattention these days inthe media. Industriessuch as health care,

dairy and utilities have attractedheadlines and sparked discussions aboutwhat cooperatives are and how theyfunction. Furthermore, members withincooperatives are retooling their effortsto “bullet-proof” their organizationsagainst the financial downturn.

One way that members are seekingto sustain their cooperatives is toencourage participants to contributeequity beyond what is proportional totheir use of the organization and to seekoutside or non-member equity. Thequestion then emerges as to whetherthese deeper pocket cooperativemembers can seek more control of thecooperative in return.

If cooperatives are looking to attractmembers with deeper pockets orincentivize them to buy more productsand services offered by the cooperative,should these members be given moreweight in voting rights than othercooperative members? With respect tooutside or non-member equityinvestors, should voting rights beproportional to their level ofinvestment? In both of these scenarios,does the notion of these alternativeforms of voting shake the veryfoundation of one of the fundamentalprinciples of cooperatives: democraticcontrol equals one member/one vote?

Cooperatives traditionally allow forevery member to have one vote(sometimes evidenced by their beingissued one share of voting commonstock) because they are user-controlled,not investor-controlled, organizations.Although the basic premise for thisconcept was based on cooperativemembers having democratic control toencourage an egalitarian existence, thequestion is: do other methods of votingalso constitute democratic control?

Federal laws do not expressly definethe term “democratic control.” Federallaws related to cooperatives — such asCapper Volstead, the CoBankborrowing eligibility statute and the AgMarketing Act of 1929 — allow foralternative voting, but do not specifywhat those alternatives are. InternalRevenue Code Section 521 andSubchapter T, which describe howcooperative corporations are required tocalculate their taxable income, are silenton this issue.

The Internal Revenue Service (IRS)has not provided a statutory definitionof “democratic control.” It has,however, long been in favor of onemember/one vote, based on its relianceof case law, as revealed in certain priorrevenue rulings. In Rev. Rule 93-21, itheld that the cooperative principlesprovide the basis for determiningwhether a corporation is operating on acooperative basis for purposes ofSubchapter T (see Puget SoundPlywood, Inc. v. CIR, 44 TC 305, June14, 1965 and Etter Grain Co. v. UnitedStates, 462 F.2d 259, 263 (5th Cir.1972).

In fact, the IRS has generallyreferred to “democratic control” as “the

periodic assembly of the members at ademocratically conducted meeting atwhich each member ordinarily has onlyone vote” (GCM 38061, 1979 WL52855).

However, IRS co-op trainingmaterials have referred to “membercontrol” and not specifically to “onemember/one vote.” Therefore,apparently cooperative members cancontrol their cooperative either throughone vote per member or through someother weighted voting system thatrelates to the amount of business(referred to as “patronage”) that eachmember does with the cooperative. Intwo private letter rulings, the IRSdetermined that a cooperative’s proxyvoting arrangement satisfied thedemocratic control requirement andapproved a weighted vote for thenomination of directors of a federatedcooperative (PLR 200629018 and PLR9725011).

As confusing as this may be,cooperatives can have some level ofcomfort in how to govern theirorganization by examining the statutoryrequirements of their state laws. Somestate co-op incorporation laws requireone member/one vote. In those statesthat do not, cooperatives have severalalternative forms of governance. Themost widely used is some type of“weighted voting” based on a member’spatronage, delivery rights and/or equityinvestment (assuming it is reflective ofpatronage). Other forms of weightedcontrol may be evident in some form ofmembership delegate system wherebymembers in different districts arerepresented by one or more delegates.



Storm Shelter

Dairy co-ops striveto help memberssurvive severe marketdownturn

By Dan Campbell, [email protected]

hen the national andworld economies fellinto recession in the fallof 2008, the impactslammed home with a

vengeance on many farms across thenation. But few have borne the brunt asheavily as dairy farmers.

“It would be difficult to overstatehow bad the situation is,” says StevenRowe, senior vice president and generalcounsel with the Northwest DairyAssociation/DariGold in Seattle, Wash.“Our members’ operations vary in sizefrom 50 cows to many thousands ofcows. But no size, sector or method offarming has remained profitable duringthis period.”

A survey of nine dairy cooperativesby “Rural Cooperatives” in Octobershows a unanimous perception that thedownward spiral for milk prices hasindeed been a crisis for the industry.“This cost-price squeeze is the worst Ihave seen in the dairy industry,” saysRichard Cotta, President and CEO ofCalifornia Dairies, Artesia, Calif.“Many producers have gone out ofbusiness in California either throughforced sellouts or the CWT[Cooperatives Working Together, theindustry-funded herd-retirementprogram]. The 4-percent drop off inmilk production is all the evidence oneneeds.”

From a record-high, U.S. all-milkprice of $21.90 per hundredweight inNovember 2007, milk prices hit a lowof $11.30 in July 2009. Co-ops in someregions report widespread farm failures,and many more are likely still to come.

“From coast to coast, America’s

dairy farmers are struggling to survivethe worst economic conditions since theGreat Depression,” confirms DairyFarmers of America (DFA)President/CEO Rick Smith. “Facedwith record-high production costs andthe lowest milk prices in years, farms ofevery herd size are losing money oneach pound of milk they produce.”

Farm failures in Northwest Dairy’sterritory (Washington, Idaho, Oregonand far Northern California) have beencommon, Rowe says. “We’ve hadbankruptcies, while some are sellingtheir cows to others. There was oneunfortunate situation where the farmerjust quit — literally just walked awayand a neighbor had to come in and carefor the cows. Liens are being enforcedon farms almost every day. There aremany other farms just hanging on.”

But some co-ops report minimal lossof farms, as producers have so far beenable to get by digging into equity andtightening their belts. “Market attritionhas been very slow, in spite ofprolonged low milk prices. It appears asif the bankers also think waiting forprice recovery is a better option thanloan foreclosure,” says Michigan MilkProducers Association (MMPA)General Manager John Dilland.

Mitigating the situation somewhat isthat “many of our producers raise mostof their own hay and silage, which hashelped reduce current cash needs forfeed costs, since the feed was laid-in lastyear,” Dilland says. Still, many moreMMPA members have chosen to sendtheir herds to slaughter under the lastround of the CWT program than inany previous rounds of the program.

Florida-based Southeast Milk Inc.also reports a minimal loss ofproducers. “Fortunately, there havebeen few dairy farmers exit the business

due to the financial situation,” says co-op CEO Calvin Covington. “Most aredigging into their equity, reducingexpenses, have a good banker and hopethat prices will soon improve.”

Impact extends farbeyond farms

The ramifications of the crisis extendfar beyond the farm gate, or even theco-op office. Not only dairymen, butthose who supply the industry — graindealers, hay dealers, pharmaceutical andequipment suppliers and financialinstitutions — have been negativelyimpacted, says Cotta.

DFA’s Smith concurs. “In many partsof the country, dairies are bedrocks oftheir rural communities,” Smith says.“In regions that have been especiallyhard hit, the agriculture service industryalso is struggling as farmers have cutspending on both essential and non-essential services, and rely increasinglyon equity and credit to maintain theiroperations.”

As a rule of thumb, Rowe says thatfor every $1 invested on a farm, another$5 to $7 is invested in non-farmlocations — such as suppliers, down-stream processors, retailers, etc. “I canonly assume there is a lot of othersuffering related to the dairy situation.”

As a feed mill operator and a farmsupply co-op, as well as being a milkhandler, Southeast Milk has beenfeeling both the primary and secondaryimpacts of the crisis. Sales at both thefeed mill and dairy supply business havefallen off.

Reversal of fortune There is no mystery as to the

identity of the “truck” that ran downthe dairy market. Co-op leaders areunanimous in saying it was the national



and global recession that causeddemand to wither, seemingly overnight.

This situation was made even moreacute by the fact that there had been a“bull market” and record-high milkprices the previous 2 years. The markethad been bolstered by a cheap dollarthat led to a surge in demand on exportmarkets. High demand triggered asurge in production, much of which wasstarting to fill the pipeline just in timeto collide with the recession.

“The worldwide economic collapselast fall dealt our industry a double

whammy,” Smith says. “Dairy exportsdropped more than 50 percent duringthe first 5 months of 2009, according toUSDA. Then, as all that milk backed upin domestic markets, belt-tightening byU.S. consumers and slow movement byretailers to cut dairy prices exacerbatedthe situation.”

Foremost Farms (Baraboo, Wis.)President David Fuhrmann also sees theloss of exports as being a keycomponent of the market collapse.“The downturn in the world economyat the end of 2008 and early 2009

caused dairy exports to vaporize,” hesays. Prior to the worldwide economiccrisis, 11 percent of U.S. milkproduction was exported as cheese,butter, whey products and nonfat drymilk.

Dairy farmers responded to thatdemand by ramping up milkproduction, reinvesting in facilities andnew technology and keeping cows inthe milking string longer rather thansending them to slaughter, Fuhrmannsays.

AMPI dairy farmers and field representatives take a break from making the rounds at the La Crosse County Fair in La Crosse, Wis.,to discuss the dairy market. Milk prices plunged from nearly $22 per hundredweight in late 2007 to $11.30 last July. Photo by SherylMeshke, courtesy AMPI


Co-ops pull out stopsto help members

Co-ops have responded in manyways to try to help their members.Some have sped up payment and equityrevolvement schedules, or even dippedinto reserves to make extra payments.Other co-ops have delayed scheduledcost increases for milk hauling andother services, while some co-ops havetightened the belt on expenses byfreezing salaries and hiring. DFA evenestablished a hotline for farmers dealingwith financial and psychological stress.

Prairie Farms, Carlinville, Ill., movedaggressively to enhance prices tomembers by about $1 perhundredweight after March 2009,amounting to about an extra $9 milliongoing directly to co-op members. “This

has come out of Prairie Farms’earnings,” says Executive VicePresident/CEO Edward Mullins.“Payout of allocated earnings is beingsped up. The cash payment portion ofearnings from the 2008-2009 fiscal yearis being increased from 60 percent to75 percent.”

California Dairies took steps todiscourage increases in production.“One thing we reluctantly did wasimplement a cooperative-wide SupplyManagement Program to help stopincreasing milk production whengrowth was exceeding our ability tohandle milk,” says Cotta. “Morerecently, we have paid an early advanceon our cooperative profits.”

At MMPA, Dilland says the co-ophas been striving to get as much moneyto members as possible to help themride out the down market. “We havemaximized producer pay prices withinour available budget, which hasincluded increasing monthly advancepayments, early payment of cashpatronage refunds and equityretirements, as well as the payment of ayear-end supplement payment.”

Northwest introduced the ProducerRetention Program, designed to createfinancial incentives for members to stayin business, which returned anadditional $13 million to producers, ornearly $2 per hundredweight. “We alsodeferred certain increases in haulingcosts and service-fee charges,” Rowesays.

Co-op government affairs offices andco-op trade groups have shifted intooverdrive to educate congressionalrepresentatives about just how criticalthe situation has grown, and lobbied forassistance.

Co-ops are also fighting thedownturn by throwing greater effortinto new product and marketdevelopment to bump up demand. Insome cases, new processing machineryand/or facilities are helping in theseefforts.

“We understand the importance of

manufacturing infrastructure thatgenerates returns to help weather timeslike these,” says Associated MilkProducers Inc. (AMPI) (New Ulm,Minn.) President/CEO Ed Welch. “Forexample, we recently installed a wheyprotein concentrate dryer at ourPaynesville, Minn., manufacturingplant. The co-op can now move intothe growing protein market.”

DFA recently completed a $23-million expansion at a plant in FortMorgan, Colo., and has a $39.4 millionexpansion underway in Schulenburg,Texas. It also has a number of new retaildairy products hitting the shelves.

“We’re also finding supply-chainsavings,” says Smith. “Several projectsare underway to improve transportationefficiency, including negotiatingreduced hauling rates, a newtransportation management system toconsolidate loads and a pilot program toreduce members’ transportation costs.”

Lessons learned?While opinions vary as to what

should be done to try to bring balanceback to the market — and to reducemarket volatility in the future — mostco-op leaders contacted say revivingexport markets and use of the DairyExport Enhancement Program willcontinue to be a key to the health of theindustry. A number of respondents alsosay the time has come for the industryto take a long, hard look at a newindustry-wide production managementprogram.

Several co-op leaders expressed thefear that the industry will not learnlessons from the current market crisis,and that there will be another surge inproduction once prices improve,

DFA recently completed a $23-millionexpansion at this plant in Fort Morgan,Colo. Photo courtesy DFA


leading to yet another inevitable over-saturation of the market.

“I fear that as prices begin to rise inthe future, the dairy community willcome back with a new flush of milk andcrush the milk market again,” saysNorthwest’s Rowe.

“Hopefully, the industry can learnfrom this period of low milk prices andnegative margins and work to developlong-term plans to prevent or at leastlessen the flow from future suchoccurrences,” says Southeast’sCovington. “The challenge is that whenmilk prices recover, and marginsimprove to a profitable level, there isless interest in doing something. Wemust not let improved milk prices slowdown efforts to make long-termimprovements.”

“In the long run, you cannot avoidthe supply-demand equation,” addsCotta. “The industry needs to find atool to reflect strong market signals tothe trade quicker and better. Perhaps asliding scale support purchase price orsome form of crop insurance for milk isneeded.”

DFA’s board recently adopted aproposal called the Dairy GrowthManagement Initiative (DGMI). “Thisplan, which would require legislativesupport, is designed to replace thecurrent CWT program and would serveas an effective tool to manage/minimizevolatility,” Smith explains. DGMIwould be a producer-funded, producer-governed program that would allow forgrowth in the industry while providinga variety of mechanisms to quicklyadapt to changing market forces andstabilize milk prices.

“DFA is collaborating with other

cooperatives and industry groups onDGMI and working with NMPF toadvance this plan, or something similar,and achieve congressional support on asolution that will improve the outlookfor America’s dairy farmers,” Smithsays.

AMPI is urging national dairyleaders to implement a dairy price

stabilization program to “ensure wedon’t go through another stretch likethis,” Welch says. An effective program,he continues, must include importcontrols and impose tariff quotas onsuch products as milk proteinconcentrate, casein and butter fat. MilkIncome Loss Control (MILC) and theDairy Product Price Support Program(DPPSP) must also be maintained, hestresses. “When the Farm Bill passedmore than 1 year ago, most didn’t thinkthese programs were relevant. AtAMPI, we’re glad they are in placetoday.”

Supply management —last resort?

Prairie Farms’ Mullins says he thinkssupply management should beexamined, but only as a last resort, andthat tools for price and incomeprotection should be more readilyavailable to dairy farmers who want touse them. “We need to regain access toexport markets on a continuing basis,”Mullins says. “The U.S. dairy industryshould be a player in world dairymarkets all the time, not just a supplierof last resort to the world.”

The domestic market also needs tobe grown, in part by enhancing theschool milk program, Mullins says.

Rowe thinks federal milk orderpricing “needs to be simplified, notmade more complicated. I have noproblem with discussion of supplymanagement, but it is extremelyimportant that we do not end up withsomething that tries to predict thefuture — which we have ample proof ofthat none of us are good at — or thatwould hinder our ability to fill

AMPI’s new whey dryer at Paynesville,Minn., is opening new markets for theco-op. Below: A Northwest DairyAssociation field representative pays acall on members. Photos courtesypictured co-ops


international demand at a moment’snotice. We have to grow the pie. Ibelieve the world has a desire for dairy,and as world economies come back,dairy will be in demand again. We as anindustry need to be ready.”

AMPI’s Welch says MILC has beenan effective, counter-cyclical dairyprogram during this unprecedentedmarket downturn. “The temporaryincrease in the DPPSP was also a goodmove,” Welch says. “Implemented for 3months — August through October2009 — the program will cost thegovernment very little. The program’s“invisible” floor price has beenmaintained without the CommodityCredit Corporation purchasing a poundof cheese. Cheese buyers are notinterested in having the governmentbuild inventory at that price. They wantit in their warehouses.”

But Southeast Dairies’ Covingtonsees trouble ahead if the industrydepends too much on dairy pricesupports. “Government programs, suchas the increase in dairy support prices,are just a band aid and provide no long-term solution. In actuality, they helpextend the misery of low milk pricesand prolong milk-price recovery,”Covington says.

He favors eliminating the dairy pricesupport program, and instead expandingthe use of risk-management tools,which he feels should be made moreuser friendly. Covington also supportsallowing contracting on all classes ofmilk and developing a different methodof pricing milk used for the fluidmarket that is more in tune with themarket.

“Establish basic milk prices on acompetitive situation,” he urges, “anddevelop a pricing mechanism thatallows the U.S. to be a more consistent

exporter of dairy products.” He wouldalso like to see an economic incentive,via a market for dairy farmers to breeda portion of their herd to beef bulls.

Rowe thinks the MILC programneeds to be re-examined, saying it is nolonger clear what the program isaccomplishing.

The overall market situation wouldbe worse had it not been for effortssuch as milk support prices, exportincentives and the CWT program,Smith says. “The CWT program hasremoved 225,000 cows so far this yearand another herd retirement is inprogress (as of late October). The DairyExport Incentive Program (DEIP) hashelped to export more than 82 millionpounds of nonfat dry milk and 35million pounds of butter in an effort toreduce inventory levels. In addition tothese short-term efforts, we need tofind ways to minimize, and managethrough, volatility in the future. Agrowth management plan that allowsfor growth, provides a mechanism tomore quickly react to changing marketconditions and helps stabilize the milkprice is needed to ensure thesustainability of our members and thehealth of the U.S. dairy industry.”

Rowe says the major flaw in CWT isthat “two-thirds of the people pay in,and 100 percent get the benefit.” Hedoes, however, credit CWT as anindustry self-help effort to cut downexcess supply. “I don’t see any othersector of agriculture doing that.”

Signs of recoveryMMPA’s Dilland says there are signs

that a price recovery has begun. “Butthere is still a lot of inventory thatneeds to move, and current milkproduction still needs to come down.”

AMPI’s Welch is encouraged by the

recent weakening of the dollar, whichmay once again open global markets.“Dried milk proteins are becomingmore affordable abroad. The differencebetween today and early 2008 may bestrong production in New Zealand,another milk protein exporter,” Welchsays. “World buyers, too, may be lesswilling to tolerate the extreme marketvolatility of the past few years.”

Rowe says he is “just beginning tosee some more international activity,but it is still very tenuous. I have a veryguarded sense of optimism.”

The strengthening on cheesemarkets at the end of September “isencouraging and hopefully means weare past the low point in prices and onthe road to recovery,” says Foremost’sFuhrmann. Through September, milkreceipts from same-member farms areup significantly from a year ago, henotes. He also salutes the manybusinesses that provide goods andservices to dairy producers for “workingpatiently with farmers, and forextending lines of credit and repaymentschedules.”

Retail demand for cheese has beenstrong due to lower prices andpromotional activities, Fuhrmann says,leading to a 5-percent increase in salesthat has helped offset weak food servicesales.

“Milk production is coming down,and demand is starting to improve,”says Larry Salathe, a USDA economist.“The market is tightening both on thedemand side and on the supply side.”

Still, a way has to be found tostrengthen milk checks soon. “What weneed right now is [more] dollars perhundredweight,” says Welch. “The onlyway to achieve that will be a change insupply and demand. That may demanda price-stabilization program.” n


By Pamela J. Karg

Editor’s note: Karg is a freelance writerfrom Baraboo, Wis., with extensiveexperience working with cooperatives. Shecurrently lives in Armenia, where she is avolunteer with the United MethodistCommittee on Relief/Armenia. She also isan agricultural cooperatives instructor atthe Agribusiness Teaching Center, auniversity department funded by USDAthrough Texas A&M University.

top Farm CreditAdministration officialrecently saw first-handhow the co-op lendingstructure is working to

extend much-needed capital infusion tofarmers in a former Soviet republic.

Leland “Lee” Strom, chairman ofthe board and CEO of the Farm CreditAdministration, spent the first days of

October — National Co-op Month —witnessing the successes and challengesfaced by Farm Credit Armenia (FCArmenia). From small-scale vegetablefarmers to owners of newly constructedwineries, sometimes in broken Englishand other times through a translator,FC Armenia member-borrowersrepeatedly told Strom that the U.S.farm credit cooperative model isworking well here as a partner thathelps them finance their dreams.

“It’s one thing to read about it, andI’ve read a lot about Farm CreditArmenia. It’s a whole different thing tosee it first-hand and to hear the storiesof what Farm Credit Armenia means tothe agriculture industry, the farmersand the businesses associated withthem,” says Strom, who was appointedto a 6-year term on the FCA board in2006 and was designated chairman andCEO in May 2008. He also serves as a

board member of the Farm CreditSystem Insurance Corporation(FCSIC).

Bridging the cultural chasm As part of his agricultural tour of a

country about the size of Marylandbordered by Iran, Georgia, Turkey andAzerbaijan, Strom learned more aboutthe challenges land-locked Armenia hasfaced in its past 100 years. He realizedthe cultural chasm farmers andagribusiness owners had to cross fromthe former Soviet collective ideals tothe internationally recognized, freeenterprise cooperative model.

“I better understand the basicchallenges they’re facing here, and theyare complex. But I also see that acooperative farm lending institution isthe right structure, and it’s working,”say Strom, owner of a third-generationcorn and soybean farm near Elgin, Ill.

U.S. farm credit co-op model paying dividends in Armenia Banking on the Future

Against the backdrop of Mount Ararat, visitors tour a vegetable farmwith a drip-irrigation system installed as part of ACDI/VOCA’s Water toMarket program. Farm Credit Armenia is struggling to secure thecapital needed to back farmers who are adopting new technologies.Photos by Pamela J. Karg


Organizations such as USDA andnon-governmental organizations(NGOs), such as the United MethodistCommittee on Relief and ACDI/VOCA(which promotes economic develop-ment in emerging democracies), set upfarm programs soon after Armeniadeclared its independence from theSoviet Union in 1991. Since then,farmers and processors have learnedmore efficient production techniques,basic business skills, how to organizecooperatives and have started youtheducation programs, such as 4-H.

They’ve also learned about micro-

credit and how to jump-start thecountry’s Cooperative Extension-likeinformation and training system. OtherNGOs, such as the Center forAgribusiness and Germany’s GTZ,followed with more help. While thiswork is ongoing, improving farm creditbecame the next logical step.

Access to credit is essential for thenation’s farm sector to advance, saysFred Johnston, agricultural projectcoordinator for USDA’s ForeignAgricultural Service (FAS) in Armenia.“As we’ve learned from the micro-creditexperience, credit is a crucial

component in the development ofsustainable enterprises of all sizes.Credit allows farmers and processors totake advantage of the technical trainingthat they have or are receiving. It’s anessential element in the recipe forsuccess of rural enterprises in anycountry.”

The co-op commitment In Armenia, there are institutions

that claim to serve agriculture, but theyhave neither a real mandate nor anyincentive to do so, Strom says. “Regularbanks may abandon agriculture shouldthe rural economy falter or morelucrative opportunities arise. Acooperative organization such as FarmCredit Armenia is owned by itsmembers and, through its bylaws, isrequired to serve only rural clients.”

If credit is the next logical step, theissue of sustainability looms large over

Farm Credit Armenia has been working to extendcredit to agricultural operations in the fertileArarat Valley, such as this fruit-drying operationnear Artashat. Below: Trout in Lake Sevan havebeen over-fished, so this aquaculture operationnear the resort town of Jermuk has beendeveloped to help meet the demand for fish inArmenia and Russia.

FC Armenia and its members. It received an initial infusion of capitalfrom Millennium Challenge Account-Armenia (MCA) and continues toget technical support from the Farm Credit Administration, the FarmCredit System and the USDA. Strom says he hopes the Armeniangovernment “will see how this structure can and will work, is working,and will help in its sustainability.”

He sees parallels between the 1916 start of the American Farm CreditSystem, funded through legislation signed by President WoodrowWilson, and the struggles Armenia faces today. “The U.S. Farm CreditSystem started small and has grown to serve over 40 percent of U.S.farmers. I can see the same thing happening in Armenia,” Strom says.

Johnston explains that USDA has been working to foster farm creditin Armenia for many years, beginning with a Credit Clubs project.When FAS assumed management of the project from USDA’sCooperative State Research, Education, and Extension Service(CSREES) in April 2005, FAS began to look for ways to make the

project sustainable. While there were several organizations involvedwith micro-credit and others that claimed to serve agriculture, the needsof agricultural lenders were not being met.

“With that in mind, FAS engaged the U.S. Farm CreditAdministration to review the state of agricultural lending in Armeniaand make recommendations,” Johnston explains. “One of theirrecommendations was to set up a farm credit organization that waslegally mandated to serve rural Armenia in good times and in bad. Basedon that recommendation, we worked with the Farm Credit System andthe Farm Credit Administration to set up Farm Credit Armenia.”

Key questions As Strom sat through an FC Armenia board meeting during his week

in Armenia, he reflected on more parallels. Where should a new officebe constructed to more conveniently serve existing and new ruralmembers? Who should be selected from the 170 applicants to fill 11new loan officer positions? When starting from scratch, what are theavailable sources of capital the cooperative needs to remain a viablepartner for farmers and agribusinesses?

“These are some of the same issues Farm Credit started with in 1916in America. Boards of directors deal with some of the same issues every


By Pamela J. Karg

ith a lifetime ofexperience in farmingand finance, one mightthink William Eymanwould want to relax,

enjoy the fruits of his labor and watch hiscrops grow. Maybe keep track of hisretirement account. He’s doing all that, butalso much more, using his experiences tohelp agricultural banks around the worldgrapple with new economies.“After I retired from full-time farming, I

went to work for the United State Bank [innortheast Missouri] full time,” explains the79-year-old from Knox City, Mo., as hepacks up after a 6-week assignment in theRepublic of Armenia. “I also felt I was afifth-generation Knox County Americanfarmer losing touch with a changingworld, so I decided it was time to see thatworld.” Eyman and his wife, Rosalyn, a retired

art instructor, packed their bags andheaded to the Czech Republic on whatwas his first of many assignments aroundthe world.“It’s been a chance to go all over the

world and work in finances in manyemerging countries or economies. Either Igo in to work starting banks or with loanofficer training,” Eyman explains. His workalways involves the agricultural side ofthe bank’s portfolio and people.

From Tanzania to Siberia To date, he has worked through

organizations as diverse as the WorldBank and International Monetary Fund,ACDI/VOCA and the InternationalExecutive Service Corps. The countries inwhich he’s worked include Armenia,Ghana, Uganda, Tanzania, Ethiopia (twice),Kenya, Kyrgyzstan (twice), Republic ofGeorgia (twice), Zambia, South Africa,Latvia, Poland, Romania (twice),Macedonia, Russia (five times), western

Twyla and Lee Strom (left) of the U.S. Farm Credit Administration and ArmenGabrielyan (center), CEO of Farm Credit Armenia, learn how this farmer andhis grandson are using a line of credit to upgrade their greenhouse.



Siberia, The Czech Republic and Brazil.“I’ve really enjoyed the people more

than anything,” he says. “Whetherworking side-by-side with eager loanofficers wanting to learn how they canhelp their local banks and farmers prosperin emerging capitalist economies, orseeing the country through their eyes,they’ve all always been very kind. Andthey’ve always wanted to show me thebest their country has to offer, and tolearn so they can create a future forthemselves, their families and theircountry.” Eyman is generally on assignment for 2

months at a time. Often working long daystraveling to remote areas, he spends mostof his time on farms or in the classroomwith loan officers for hands-on, one-on-one or small-group training. That was thecase during his trip earlier this year to

Armenia, a semi-arid, land-locked formerSoviet republic located between Georgia,Iran, Azerbaijan and Turkey. Eymanworked with local ACDI/VOCA employeesas part of its “Water to Market” (WtM)program.The fragmentation of Armenia’s

agricultural production base is keepingthe country’s farms from achieving thescale necessary for efficient production.Though rural family landholdings average3.5 acres, these farms are usually madeup of three or more smaller parcels indifferent locations. As a result, farmers get low yields and

inconsistent quality and cannot assembleenough produce to meet market demand.That makes Armenia a food-deficitcountry and requires it to import costly,and sometimes uncertain, imports throughthe only two open borders it has with

neighbors: Georgia and Iran.

Farmers facenumerous challenges More importantly for Eyman‘s

purposes, limited financial resources anda lack of information about on-farm waterusage and pest management have led towidespread use of herbicides andpesticides that come from dubioussources and are applied with rudimentaryspraying devices, according toACDI/VOCA. Due to the small-scale, highly

fragmented and diverse production offruits and vegetables, local marketing iscarried out by small traders, or even bythe producers themselves. Thus,throughout rural Armenia, the labor-intensive ag sector produces low yieldsand poor incomes for small farmers. ACDI/VOCA, in partnership with

ARCADIS Euroconsult from theNetherlands and VISTAA in Armenia, wasawarded an $18.4 million contract toimplement the Water to Market project aspart of the Millennium Challenge Armenia(MCA).Like other countries’ farmers with

whom Eyman has worked, small-scaleArmenian farmers have no money andlittle access to credit. As a result, theycan neither improve their knowledge onhow to be better farmers, or fund anyimprovements. A majority end up in asubsistence cycle, hoping to producemore than their families can consume sothat they can try to sell the extra forwhatever the market may bring. Nearly 15percent of Armenia’s 2.8 million peoplelive on less than $1 a day.The smallest Armenian farms list

assets such as hoes and bicycles as partof the balance sheet they completed withloan officers under Eyman’s tutelage. “Itdoesn’t compare at all with U.S. farmoperations,” he says.

Missouri farmer helping ag banks in developing countries

Working side-by-side with loan officers eager to learn how they can help their localbanks and farmers prosper has been one of the greatest “paybacks” for farm creditvolunteer Bill Eyman (right), seen here with translator Roman Asatryan in RepublicSquare in Yerevan, Armenia. Photo by Pamela J. Karg



ditor’s note: In the Sept-Oct. issue, CoBankresponded to a series of questions dealing with theco-op’s decision to update its corporate image witha new logo and tagline. In this issue, BarryWolfish, senior vice president for corporate

marketing and communications at Land O’Lakes (LOL), discussesthe same process as LOL approached it. This discussion refers to theco-op’s corporate logo, not the co-op’s famous Indian Maiden brandlogo, which is still used for its dairy foods division.

Land O’Lakes is a farm supply and dairy foods cooperative with3,200 direct producer-members and 1,000 member-cooperativeswhich serve more than 300,000 agricultural producers. The co-ophandles 12 billion pounds of milk annually and produces a widevariety of dairy food products.

Question: Why did your co-op decide it was time to changethe logo?

Barry Wolfish: “In late 2007, the company conducted acommunications audit, which looked at all aspects of ourcommunications efforts. We took a really deep dive,examining things like culture and process, as well as thevehicles and elements we saw and used every day. Werecognized that there was a significant opportunity toincrease the visibility and awareness of our corporate identityand that our existing corporate brand identification was notworking very hard to establish personality and distinctivenessfor Land O’Lakes Inc.”

Was this part of a larger “re-branding” effort?“Again, the pursuit of a new corporate brand identity came

out of our communications audit. We felt it was an elementof our overall corporate communications we could enhance.”

Did you do it in-house, or hire an agency? “We worked with a Twin Cities-based integrated

communications firm called OLSON. The agency conductedthe communications audit for us and eventually developedthe new corporate brand identity in conjunction with ourCorporate Communications department.”

What was the timeline and budget? Did you stick to it?“We had a very accelerated timeline and were working on

a number of projects connected to, and driven by, theupdating of the corporate brand identity. Some of thoseprojects included redesigning our corporate website andcreating new marketing collateral, such as our corporatebrochure and first Corporate Social Responsibility report.

“So, from the time we started thinking about creating anew corporate brand identity until it was introduced, it tookbetween 4 and 5 months. A meaningful amount was investedin the various aspects of the project as part of an ongoingcommitment to increase our investment in corporateidentification and awareness.”

Did this effort also involve a new tagline to go with thelogo?

“Yes. We developed our “growingtogether” tagline shortlyafter the completion of our communications audit and used itthroughout most of 2008. The tagline was incorporated intothe design of the new corporate brand identity.”

Land O’Lakes freshens image with newco-op brand identity, logo and tagline


The new Land O’Lakes logo (above) and the old one it recently replaced (below).

“The new corporate brand identity ismuch more dynamic and appealing. Themore we see it, the more it really feels

like we made the right decision.”


Did you have any problemsregistering logo as newtrademark?

“No. We had our LawDepartment register the newcorporate brand identity;they encountered noproblems registering it.”

What kind of review orapproval process did youfollow?

“Land O’Lakes Presidentand CEO Chris Policinskiand the CorporateMarketing and Communications team worked closely withthe agency throughout the process. We went through anumber of iterations before we got to the final version. Chrisshared our recommended approach with the Land O’Lakesboard.

How many revisions did it go through?“There were three rounds of review before we arrived at

the final version.”

Did you do consumer/customer testing?“Our communications audit involved asking employees,

members and other stakeholders about their thoughts andfeelings about the co-op.”

In what ways is the new logo being used?“We are using our new corporate brand identity

extensively. You’ll find it on our corporate website,letterhead, business cards, corporate brochure, signage,annual report, Intranet site, member magazine and clothingand other collateral items. Moving forward, the corporateidentity will be featured prominently in all public endeavors.”

Any special effort to launch the new brand?“We introduced the new corporate brand identity to

employees during an employee meeting in February. Themeeting was held in our corporate headquarters andbroadcast to more than 20 facilities around the country. So,we had a very large, captive audience that heard about itfirsthand.

“Employees returned to their desks after the meeting tofind a screensaver of the new corporate brand identity. Wealso added the new corporate brand identity to the employeeIntranet site that morning. We rolled the corporate brandidentity out to members the following week at our annualmeeting. Chris introduced it to all the members inattendance.

“All the presentations and materials handed out after thatpoint contained the new corporate brand identity. We

continued to communicate the rollout in our membermagazine, Internet site and other vehicles.”

What was the biggest mistake you made?“Waiting so long to update the old logo. The old one used

a common font and really didn’t convey much about theorganization. The new corporate brand identity is muchmore dynamic and appealing. The more we see it, the moreit really feels like we made the right decision.”

Major lessons learned?“To develop something like a new logo or brand identity,

you need a foundational document from which to base it.This document articulates exactly what the brand is andshould convey. It’s something that needs broad alignmentamong your key decisionmakers before moving forward. Thecreative aspect of designing a logo will be based almostentirely on it.”

What was the smartest thing you did?“We hosted luncheon meetings for our administrative

assistants to discuss the rollout of the new corporate brandidentity. These employees are really in the front trenches asfar as the rollout is concerned. They order the business cardsand letterhead; they create presentations; and they advise thepeople they support on its use and misuse.

“So, we felt it was really important to discuss thephilosophy behind the new corporate brand identity, itsproper uses and how to get the resources they needed toincorporate it into their departments or businesses. Webelieve this step really helped to facilitate the introduction ofthe new corporate brand identity throughout the company.”

What has the reaction been like so far?“Very positive. We’ve received great feedback from

members, employees and others outside the company. Peopleseem to have embraced it quickly.” n

“To develop something likea new logo or brand identity,

you need a foundational document from which to base it.”

Barry Wolfish


By Anne MayberryRural Utilities ServiceUSDA Rural Development [email protected]

wo rural electriccooperatives inMissouri are engaged ina “green energy”research project that

has the potential to help resolve someair-quality issues while also yielding anew source of renewable fuel. Thetechnology — while still years awayfrom being commercially viable — usesalgae to remove carbon dioxide fromelectric power plant emissions, thenconverts it into products such asbiofuels and livestock feed. It is hopedthe technology can eventually help easeconcerns over carbon capture andclimate change.

The two cooperatives — AssociatedElectric Cooperative in Springfield andCentral Electric Power Cooperative inJefferson City — are working withLincoln University and the MissouriUniversity of Science and Technologyto determine whether algae can usesolar energy to capture carbon dioxideand reduce power plant emissions. Thedemonstration project will use carbondioxide in flue gas from Missouri’sChamois Power Plant to feed the algae.

The work is funded by thecooperatives and USDA’s NationalInstitute of Food and Agriculture(formerly the Cooperative StateResearch, Education, and ExtensionService).

Radio show calltriggers project

Using algae to reduce carbon dioxideemissions is probably not high on the

list of “green energy” projects beingconsidered by most electric utilities. Sohow did these cooperatives becomeinvolved in this research?

“One of Missouri’s rural electriccooperative managers was a guest on aradio show discussing energy, when oneof the algae researchers called him,”explains Nancy Southworth, manager ofcorporate communications forAssociated Electric Cooperative Inc.Chamois, a small coal plant in centralMissouri, has been the site of otherresearch, and the plant manager wasopen to these types of projects, she says.

“The bigger picture is this: rightnow there is no answer to the questionof how to sequester carbon dioxideemissions generated at power plants,”notes Southworth. “Any research thathas the potential to reduce carbondioxide from emissions can benefit us,particularly as our nation wrestles withclimate-change legislation that willaffect operation of coal plants. Our co-ops are dependent on coal forelectricity.”

The use of algae to develop arenewable transportation fuel was firststudied by the U.S. Department ofEnergy more than 30 years ago. Backthen, algae research focused on the use

of carbon dioxide from coal-firedgeneration plants to produce biodiesel.But because such alternative fuels werenot then financially feasible because ofcompetition from traditional petroleumproducts, the process was shelved, beingdeemed to lack commercial application.

Renewed interest in technologyToday, any process that has the

potential to cost-effectively capturecarbon dioxide is of growing interest.The big question, of course, is whetherthe project can move from the researchstage to commercial viablility. Successmay hinge not just on the ability ofalgae to reduce emissions, but on thevalue of the byproducts created in theprocess.

The algae use energy from sunlightto feed on the carbon dioxide. Thealgae can also produce oil, which can beprocessed into bioplastics and ethanol;livestock feed is another byproduct ofthe process.

“We are an agricultural state, so ourmembers are interested in thepossibility that this process mayproduce biodiesel and livestock feed,”Southworth says. “But they alsounderstand that we are a long way from

Uti l i ty Co-op Connect ionAlgae may help filter CO2 from power plant emissions

University and co-op officials turn the valve to officially commission the new algaeresearch facilities at the Chamois Power Plant, where tanks of algae absorb power plantemissions. Photo by Jim McCarty, courtesy Association of Missouri Electric Co-ops



By Anne ToddUSDA Rural Development

ost of the land around Danby, in upstate NewYork, is considered marginal for farming.Goldenrod, a weed, grows naturally inabundance, as do perennial grasses. Further,the number of farmers in the area has been

declining, resulting in less cultivation of the land (whichquickly reverts to brush when not cultivated). Because ofthese conditions, many fields are not very productive.

While others might view this as a signal of decline, Danbyresident Elizabeth Keokosky saw opportunity in those wild,woolly fields.

Keokosky, a Cornell University employee who is pursuinga master's degree in city and regional planning, realized thatthe marginal land she saw all around her was ideal for thealternative energy biofuels market, in part because it doesn’tcompete with farmland dedicated to food production.

She came up with the idea of forming a land bankcooperative that would allow local farmland owners to markettheir grass to be sold as bio-feedstock.

Pilot takes shapeKeokosky soon set to work organizing a pilot project

called the Danby Land Bank Cooperative. Under this pilotproject, local member-producers of the co-op would leasetheir land to be harvested as biofeedstock for grass pellets orbriquettes to burn as fuel.

“Our estimates indicate that biomass could heat up to 40percent of the homes in the county, and that assumes averageefficiency. If homes were super-insulated that number couldbe larger,” says Ed Marx, Tompkins County Commissioner ofPlanning and Public Works.

In return, farmers’ land would be cleared for free and theywould receive tax benefits, supplies and — eventually, if allgoes as planned — a share of the profits generated. Ifimplemented, Keokosky believes this proposed cooperativemodel could be the first of its kind in the United States.

New York farmers are eligible for a real property taxreduction, known as an agricultural assessment, if they haveat least seven acres of productive agricultural land and gross

at least $10,000 in annual sales. By participating in thecooperative land bank, member-producers may becomeeligible for this agricultural assessment.

In February, Keokosky held the first meeting with Danbyresidents to discuss the proposed project. The people inattendance, including landowners, citizens and town boardmembers, were enthusiastic about the concept and excitedabout the possibility of Danby entering the alternative energymarket.

Tompkins County teamed up with Cornell to apply for a$500,000 grant from the U.S. Environmental ProtectionAgency (EPA) to establish a county-wide rural biomassdemonstration project and implement a self-sustainingbiomass fuel model for the county. The rural biomass projectwould have accounted for about half of the $500,000.

While they were not successful in the quest for the EPAgrant, the co-op is working closely with Cornell CooperativeExtension of Tompkins County, which has played aleadership role in all aspects of this effort, to find otherfunding sources.

Economic potential Since the kick-off meeting only a few months ago, 20 local

land owners have joined the pilot and contributed more than300 acres toward the project. In addition, a steeringcommittee and advisory committee have been formed tosupport the pilot and move forward toward full realization ofthe land bank. Members of the Tompkins County PlanningDepartment and Cornell University Cooperative Extensionare advisors to the project.

“We want the land bank to become the trusted entity thatwill bring biofuels entrepreneurs to the area,” says Keokosky.She sees an ideal opportunity to create an economic “virtuouscycle” for the community, where the land bank would providethe bio-feedstock and local suppliers would then distributethe grass pellets to consumers for fuel.

The economic potential for the land bank cooperative inthe biofuels market, and the resulting benefits for the Danbycommunity, are significant. For example, in the future, theland bank could invest in a local pellet mill to produce itsown briquettes. This would reduce costs, increase profits andbring more jobs to Danby. In addition, the land bank could

Marginal Land Tapped for Biofuels New York land bank co-op could be first of its kind


Members of theDanby Land BankCooperative hope toprocess weeds andperennial grasses intobiomass heatingpellets (below). Co-opsteering committeemembers (from left)include: ElizabethKeosky, Tony Nekutand Mike Rutzke.Photo by Ted Crane,courtesy Danby LandBank Cooperative


expand into other biofuels production, such as biochar, afeedstock byproduct. As the project moves forward, it willcreate an impetus for grants and other developmentopportunities in Danby.

What’s next for land bank?Keokosky hopes that the project will ultimately expand

Danby’s business opportunities, provide networking andgrowth opportunities for local producers, and sustain thelocal economy and soils. She has almost met all the goals forthe first year of the pilot project: She is on track to sell someof the goldenrod to a distant pellet producer and sell hay amember has donated. The two sales will provide more thanthe necessary $10,000 in gross sales for the pilot project,though contractor costs will need to be subtracted.

Working closely with Cornell Cooperative Extension ofTompkins County, the county is researching and seekingfunding sources for the Danby Land Bank project. Keokoskyhopes to be able to use some of those funds, if approved, forthe legal work needed to formally incorporate as acooperative organization.

The Danby Land Bank Cooperative recently launched aWeb site at: http://www.danbylandbank.com. The Web sitewill promote its mission and services, its goals for 2010 andprovide information and resources about grass-basedbioenergy to member-producers and the public. To learnmore about the Danby project or the benefits of grass pelletuse, visit the Web site or send e-mail to [email protected]. n

Ed Marx, Tompkins County Commissioner of Planning andPublic Works, discusses more details of the land bankcooperative project:

Question: Will there be any help for county residents inpurchasing the special stoves needed to burn the biomasspellets? Do you think it will it require a “hard sell” to getconsumers to convert to using biomass pellets?

Ed Marx: “The idea of the project is to demonstrate both thetechnology and the economics of transitioning to this heatsource. The purchase and installation of the heating unit willbe heavily subsidized for participants in return for theiragreeing to supply the data for the study. We hope thatdemonstrating both the practicality and the economicbenefit of using biomass will spur others to make thedecision to change to biomass as a heating fuel. We don'texpect that this will occur in a wholesale mannerimmediately, but as existing heating equipment needs to bereplaced and fossil fuel sources become increasinglyexpensive, a gradual transition would occur.”

Q: How important is a local ownership structure for the LandBank Cooperative?

A: “The benefit of the local ownership structure is that byhelping to cover the costs of rural land ownership, it willallow local people to continue to live on the land andcontribute to a revitalized rural economy. The hope is thatthe cooperative will provide them with the ability to managethe resource for local benefit. This is truly a grassroots effort(excuse the pun).”

Q: How important is a local pellet plant to the economicviability and long term success of the land bankcooperative? Can the county do anything to facilitatedevelopment of a local plant?

A: “The local pellet plant is essential. We need to be able todemonstrate a reliable local supply in order to give peoplethe confidence to change the source of something so criticalas their heating fuel. Also, a local processor is essential tothe economics of the local biomass resource. Transportingbiomass long distances is not likely to be economicallyefficient or environmentally sustainable in the long run. Thegrant would provide some seed money to help in getting thelocal mill up and running. We may also be able to offer othereconomic incentives through our Tompkins County IndustrialDevelopment Agency or through other Federal or Stateprograms.”

Q: Going forward, what do you think the biggest challengewill be to take this project from a pilot phase to a sustainedoperation?

A: “As with any small business or new industry, I suspectthat scaling up will pose some challenges. The Land BankCooperative will either need to grow or spawn similargroups around the county. The same is true for thepelletizing operation, the purveyors of heating equipment,etc. However, partners in the community are working tosimultaneously develop all aspects of the supply chain forboth the fuel and equipment, and we firmly believe that all ofthese challenges can be overcome.” n


Bravante Produce joins SunkistBravante Produce, a well-known

grower/shipper in the California citrusindustry, is the newest member ofSunkist Growers, the grower-ownedcitrus marketing cooperativeheadquartered in Sherman Oaks, Calif.“We are excited about our affiliationwith Sunkist,” says George Bravante,managing partner of the Reedley,California-based operation. “Sunkisthas an excellent marketing andtransportation network and a brand

name that is knownworldwide for itspremium products.We’re looking forwardto enjoying the benefitsof Sunkist membership,which we believe willenable us to improvevolume andprofitability.”

Bravante Produce is apremier grower, packerand shipper of freshcitrus, with a modern 3-year-old packing facilityin Reedley, and grovesthroughout the SanJoaquin Valley. With aproduct list thatincludes navel andValencia oranges,lemons and minneolas,Bravante is bringing2,000-plus acres ofcitrus into the Sunkistsystem.

“We’re extremelypleased to welcomeBravante into our

organization,” says Russ Hanlin,Sunkist president and CEO. “They arean experienced, respected grower andpacker, and bring to our system nearly1.4 million cartons of quality citrus anda philosophy of excellence that matchesour own.”

Bravante is projected to add 1million field cartons of navels, 200,000field cartons of Valencias, 150,000 fieldcartons of lemons, and 20,000 fieldcartons of minneolas to Sunkist’sportfolio for the 2009-10 season.

University to developurban food co-op

The University of Nebraska-Lincolnhas been awarded a $10,000 grant bythe U.S. Environmental ProtectionAgency (EPA) to develop an urban foodcooperative that involves urban part-time growers in an agricultural regionfocused primarily on commodity cropproduction. The grant is one of 43awarded to teams of college anduniversity students across the countrywho will design creative technologies toaddress sustainability challenges.

The People, Prosperity, and thePlanet (P3) Phase I awards for the2009-2010 competition challengestudents, working together oninterdisciplinary teams, to design andbuild sustainable technologies thatimprove quality of life, promoteeconomic development and protect theenvironment.

The competition begins in Phase Iwith the award of $10,000 grants tostudent teams who submit applicationsthat focus on a wide range of categories,including water, energy, agriculture,environment, materials and chemicals,and information technology. Afterworking on the project for 8 months,the teams will take their designs to the6th Annual National SustainableDesign Expo on the National Mall inWashington, D.C. At the Expo, theprojects will be judged by a panel ofexperts, and a few will be awarded P3Awards and Phase II grants up to$75,000 for students to further theirdesigns, implement them in the field, ormove them to the marketplace.

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

Co-op developments, coast to coast

Bravante Produce is bringing nearly 1.4 million cartons ofadditional citrus fruit annually into the Sunkist system.Photo courtesy Bravante Produce

Michigan co-opacquires grain facility

Cooperative Elevator Co., Pigeon,Mich., has announced the purchase of agrain-receiving facility in NorthBranch., Mich. The co-op had beenoperating the facility under alease/purchase option since July 2008,with marketing provided through J & JFarm Services in North Branch. It ex-ercised the purchase option on Sept. 1.

Cooperative Elevator Co., which hasbeen operating since 1915, has a 17-million-bushel grain capacity and isowned by more than 900 Michiganfarmers. It also has plants in Akron, BadAxe, Deckerville, Elkton, Fairgrove,Gagetown, Ruth and Sebewaing. JeffRender is the North Branch plantmanager.

“We will work hard to earn the trustand respect from the North Branch areafarmers,” says Patricia Anderson, theco-op’s CEO.

Missouri biomass co-op first to earn BCAP payments

USDA’s Farm Service Agency (FSA)has made the first matching paymentunder the new Biomass Crop AssistanceProgram (BCAP) to Show Me EnergyCooperative of Missouri. The co-op isthe first biomass conversion facility in

the nation to qualify under BCAP, a2008 Farm Bill Program. Less than amonth later, it was paying producers forbiomass materials; FSA matched the

payments with BCAP collection,harvest, storage and transportation(CHST) program funds.

Show Me Energy has more than 500biomass producers supplying materialssuch as switchgrass, straw, corn stover,sawdust, woodchips and other biomassmaterials.

According to Show Me EnergyCooperative CEO Kurt Herman, “Ourplant produces fuel pellets fromagricultural waste products, but couldexpand to produce cellulosic liquidfuels.” Herman alsosays pellets producedby Show Me Energyare used to heathouses and livestockfacilities. KansasPower & LightCompany’s Sibleyplant is testing pelletsto determine if thebiomass fuel couldsupplement coal forgenerating electricity.

The BCAPprogram encouragesbiomass conversionfacilities to signagreements withFSA. The agreementcan be downloadedfrom: www.fsa.usda.gov.Once signed up, FSAconfirms qualificationsand assigns facilitiesidentification numbers. Producers whosell eligible materials to qualifiedbiomass conversion facilities can thenapply for FSA payments that match theamount received from the facility. Thepayments are authorized under theCHST component of BCAP.

For example, if a qualified biomassconversion facility pays a producer $30per dry ton for biomass, the materialowner or producer would be eligible fora matching payment of $30 per dry tonfrom FSA. Eligible material owners orproducers, who market eligible materialto a qualified biomass conversionfacility, may apply for the matchingCHST payment at their FSA countyoffice. An application must be

submitted before the eligible material issold and delivered to a qualifiedbiomass conversion facility.

2.4 million agri-touristsvisit California farms in ‘08

The University of California (UC)Small Farm Center says Californiafarmers and ranchers hosted more than2.4 million agricultural tourists in 2008,based on results from California’s firststatewide economic survey of agri-tourism operators. A number of

cooperatives of farms and ranches havebeen formed nationally to promoteagri-tourism.

The survey’s preliminary findingssuggest agri-tourism can indeed be aprofitable supplement to a farm orranch business. Agricultural tourismallows travelers a chance to visitworking farms and ranches and caninclude experiences such as pickingtheir own fruit, visiting a petting zoo,touring a vineyard, buying freshproduce or riding horses.

Small farms made up more than two-thirds of the farms that reportedoffering agri-tourism. The survey wasconducted by a group of researchersfrom the University of California


Agriculture Secretary Tom Vilsack (farleft) tours the Show Me Energybiomass plant in Missouri. USDA photoby Charlie Rahm

Larry Knapp, owner of Yosemite Trails Pack Station nearFish Camp, Calif., is one of the ranchers and farmers inCalifornia who played host to 2.4 million agri-tourists in 2008.Photo courtesy Larry Knapp


Cooperative Extension and the UCSmall Farm Program, with fundingfrom the California CommunitiesProgram.

USDA: 5,200 farmersmarkets now open

Agriculture Secretary Tom Vilsackhas announced that the number offarmers markets in the United States isup more than 13 percent from a yearago. The online Farmers MarketDirectory now lists 5,274 marketsnationwide, up from 4,685 in 2008.

“Farmers markets assure thatconsumers have easier access to localfruits and vegetables and this growthdemonstrates incredible interestconsumers have in purchasing fromlocal producers,” said Vilsack. “Farmersmarkets also connect the community tothe local farmers who produce the freshfood, and play an important role in thedirect marketing of produce to localconsumers.”

Since USDA’s AgriculturalMarketing Service began to trackfarmers markets in 1994, the numberhas grown by nearly 4,000 nationwide.

USDA’s support of farmers marketsis just one component of the “KnowYour Farmer, Know Your Food”initiative to help develop local andregional food systems and spureconomic opportunity. By successfullyrestoring the link between consumersand local producers there can be newincome opportunities for farmers andwealth can be generated that will stay inrural communities. There also can be agreater focus on sustainable agriculturalpractices and families can better accesshealthy, fresh, locally grown food.

New distribution dealin Poland for CRI

Cooperative Resources International(CRI), Shawano, Wis., has announcedthat P.H. Konrad KrzyztopfPrzezdziecki is the new distributor inPoland for CRI’s dairy and beef cattlegenetics. Nick Kirby, managing directorof CRI Europe, notes the newrelationship will provide advantages for

both companies. “P.H. Konrad will be acredible outlet for CRI geneticsthroughout Poland. At the same time,CRI will share its expertise derivedfrom experience as a major globalplayer in the field of bovine genetics.” P.H. Konrad was established in 1995 asa marketing firm for dairy and beefbreeding stock. In 2002, the companyexpanded its services into the geneticsector to create access for Polishproducers to the world’s best genetics.It is the largest importer of bovinesemen in Poland.

CRI has also entered into a long-term agreement with Flying CraneDairy, one of China’s largest producersand distributors of premium infantformula and milk powder. According toa report in the “Business Journal ofMilwaukee,” CRI will advise FlyingCrane as it constructs 10 dairy farms tohouse 10,000 dairy cows. CRI willprovide Flying Crane with expertise infarm construction, dairy productiontechnology, advanced operationconcepts and farm management.

CRI, a member-owned holdingcooperative, is comprised of threesubsidiaries: Central LivestockAssociation, AgSource CooperativeServices and Genex Cooperative Inc.

USDA awards $4.8 millionfor co-op development

Agriculture Deputy SecretaryKathleen Merrigan in Septemberannounced that 28 organizations in 21states have been selected to receive $4.8million under the CooperativeDevelopment Grant program of USDARural Development. The announce-ment was made as part of the “KnowYour Farmer, Know Your Food”initiative, a USDA-wide collaborationthat connects people more closely withthe farmers who supply their food andincrease the production, marketing andconsumption of fresh, nutritious foodthat is grown locally in a sustainablemanner.

“The cooperative business modelcontinues to be successful in creatingwealth in rural communities and canalso play an important role instrengthening our food systems,”Merrigan said. “USDA is proud to be apartner in the effort to bolster thesecooperatives and help them increase thevalue and appeal of the products and

services they deliver.” USDA Rural

Development is awardinga $200,000 grant to TheOhio State UniversityResearch Foundation tosupport the foundation’sefforts to help individualsand new and emergingcooperative businessentities. The Foundationwill provide technicalassistance to a statewidefarmers marketmanagement networkcooperative and to anewly formed purchasingcooperative for businessesin Appalachia.

The Value-AddedAgriculture DevelopmentCenter in Pierre, S.D.,

has been selected to receive a $200,000grant to continue supporting thecreation of producer-owned, value-added agriculture. The Center will helplocal growers educate the public,

Representatives of Cooperative ResourcesInternational (CRI) and China’s Flying Crane Dairysign an agreement, under which CRI will help set up10 dairy farms with 10,000 cows in China. Photocourtesy CRI


lenders and producers about thebenefits of value-added agriculture.These efforts often increase sales oflocally grown crops in addition toincreasing local agriculture’scontribution to area residents’ healthand to the local economy.

Cooperative Development Grantprogram funds may be used fortechnical assistance, research andinformational materials to help ruralresidents form cooperative businesses orimprove the operations of existingcooperatives.

Below is a complete list of theselected grant recipients. Funding ofeach recipient is contingent upon therecipient meeting the conditions of thegrant agreement. • Alabama: Federation of Southern

Cooperatives/Land Assistance Fund –$200,000;

• Alaska: University of AlaskaAnchorage – $197,783;

• California: California CooperativeDevelopment Center – $200,000;

• Colorado: Rocky Mountain FarmersUnion Educational & CharitableFoundation – $200,000;

• Georgia: Southwest Georgia UnitedEmpowerment Zone Inc. – $50,000;

• Indiana: Indiana CooperativeDevelopment Center Inc. – $126,521;

• Iowa: Iowa State University –$200,000;

• Kentucky: Kentucky Center for Agand Rural Development – $200,000;

• Massachusetts: CooperativeDevelopment Institute – $200,000;

• Michigan: Michigan State University– $200,000;

• Montana: Montana CooperativeDevelopment Center Inc. – $200,000;

Lake County Community DevelopmentCorporation – $99,696; Fort PeckAssiniboine & Sioux Tribes – $50,000; • Nebraska: University of Nebraska –

$200,000;• North Carolina: North Carolina State

University – $200,000; • North Dakota: North Dakota

Association of Rural ElectricCooperatives – $200,000; CommonEnterprise Development Center –$200,000; ABLE Inc. – $50,000;

Griggs Steele Empowerment Zone –$30,600;

• Ohio: Kent State University –$200,000; The Ohio State UniversityResearch Foundation – $200,000;National Network of ForestPractitioners - $200,000;

• Oklahoma: East Central University –$199,966;

• Pennsylvania: Keystone DevelopmentCenter Inc. – $200,000;

• South Dakota: Value-AddedAgriculture Development Center –$200,000;

• Virginia: Virginia Foundation forAgriculture, Innovation & RuralSustainability – $200,000;

• Washington: Northwest CooperativeDevelopment Center – $200,000;

• Wisconsin: Cooperative DevelopmentServices, Inc. – $200,000.

GROWMARK salestop $6.1 billion

GROWMARK had sales of $6.1billion for the 2008-09 fiscal year, withnet income of $96.9 million. It returned$82 million in patronage refunds toGROWMARK member cooperatives.

“The 2009 fiscal year has beenchallenging for many farmers as theyattempted to plant a crop withextremely volatile pricing for fuel,fertilizer and grain,” said Bill Davisson,GROWMARK chief executive officer.“Overall, I believe this has been asuccessful year on many fronts, andwhen looked at historically, this is stillprojected to be the fourth-highestincome in our history.”

The Energy Division enjoyed strongincome again, and investments continueto be made in division infrastructure,including biodiesel blending capabilitiesat the Menard County, Ill., terminal andat Madison Service Co.’s Roxana, Ill.,bulk plant. GROWMARK receivedmore than $50 million in patronagefrom the National CooperativeRefinery Association (NCRA). Thecooperative owns nearly 19 percent ofthe refinery operation located inMcPherson, Kan.

Seed Division sales hit $240 million,a 23-percent increase over the previous

year. FS corn sales grew 5 percent thisyear, Davisson said. An 18-percent salesincrease was reported by the CropProtection Division. GROWMARKrecently reorganized field-levelpersonnel to support crop specialists increating and delivering whole-farmcropping plans through FS Green PlanSolutions.

Plant food operations resulted in agross income loss. Davisson cited a

worldwide economic downturn, whichcreated significant demand destructionand oversupply of fertilizer, resulting ina huge drop in fertilizer prices afterinventories at GROWMARK were inplace for fall application. “Still, if youevaluate plant food results over 24months instead of 12, it was the bestperiod of internal income in ourhistory,” Dawson said.

The cooperative’s Facility Planningand Supply Division posted increases insales and gross income for the fourthconsecutive year. Contributing to thissuccess was the construction ofcommercial grain storage facilities andprograms with equipmentmanufacturers as FS membercooperatives invested in applicationequipment and rolling stock.

In addition to grain partneringefforts with local FS membercooperatives in Illinois and Ontario,Canada, the GROWMARK System isadding storage capacity and connectingfarmers with more end-use marketsthrough a partnership with CentralStates Enterprises.

MID-CO Commodities had $1million in income this year and will


GROWMARK’s Energy Division enjoyedstrong income in 2009.


NCB Co-op 100 revenuehits $209 billion

The nation’s 100 largestcooperatives earned $209 billion in2008, up $36 billion from 2007.NCB (formerly NationalCooperative Bank), which compilesthe list annually, reports that the2008 total represents a 157-percentincrease from the first Co-op 100report NCB issued in 1991, whenAmerica’s top 100 cooperativesgenerated $81.4 billion in revenue.

While the companies andrankings change year to year, thecooperative sector continues toadvance, playing an increasinglyinfluential role in the nation’seconomy, says Charles E. Snyder,president and CEO of NCB. “Therecord-setting dollar amounthighlights the benefits ofcooperatives’ adaptable structure,ultimately enabling theseorganizations to prosper even in themost difficult of climates. As a bankcreated and focused on providing

financing to this community, we’re

proud to have been instrumental inthe expansion of these businessesover the past 30 years.”

As the report indicates,cooperatives remain a driving forcein today’s marketplace, generatingover $500 billion in annual revenue.Total assets of all cooperativesnationwide surpass $1 trillion. Nineagriculture cooperatives made thetop 100 for the first time in 2008.

The top co-ops, based on revenueby economic sector, include:• Agriculture: CHS Inc., Saint Paul,

Minn., $32.1 billion, up from $17.2billion in 2007, which maintainedits first place position overall onthe NCB Co-op 100 list. LandO’Lakes Inc., Saint Paul, Minn.,$12 billion (second place overall);Dairy Farmers of America (DFA),Kansas City, Mo., $11.8 billion(third place overall);

• Grocery: TOPCO AssociatesLLC, Skokie, Ill., $9.9 billion(fourth overall); Wakefern FoodCorp., Elizabeth, N.J., $8.4 billion(fifth overall);

• Hardware & Lumber: ACEHardware, Oakbrook, Ill., $3.8billion (11th overall); Do it BestCorp., Fort Wayne, Ind., $2.5billion (17th overall);

• Finance: CoBank, GreenwoodVillage, Colo., $2.7 billion (14thoverall); Navy Federal CreditUnion, Merrifield, Va., $2.7 billion(15th overall, up four slots from2007);

• Healthcare: HealthPartners Inc.,South Bloomington, Minn., $3billion (13th overall); GroupHealth Cooperative, Seattle,Wash., $2.7 billion (16th overall);

• Energy & Communications:National Cable TelevisionCooperative Inc., Lenexa, Kan., $2billion (21st overall); Basin ElectricPower Cooperative, Bismarck,N.D., $1.5 billion (32nd overall, upfrom 67th in 2007).Cooperatives directly employ

nearly 500,000 people across thecountry, and when including indirectand induced effects, support morethan 2 million jobs nationwide. Asmany sectors absorb the slowingactivity of the current economicconditions, cooperatives and theirmembers often fare better in difficultconditions than investor-ownedfirms, due to their adaptablestructure and governing body.

Since cooperatives are controlledby their members, the individualswho use and benefit from the goodsand services provided, cooperativescan more readily readjust to marketconditions than many of theirinvestor-backed counterparts. As aresult, cooperatives are organized tomaximize returns and are preparedto weather a downturn, like today’scurrent marketplace.

The entire NCB Co-op 100report is available at:www.ncb.coop/uploadedfiles/coop100_2009_web.pdf.

CHS is the nation’s largest cooperative,with sales of $32.1 billion. Below: Foodtesters at TOPCO Associates, the nation’slargest grocery co-op, which had $9.9billion in revenue last year.

Navy Federal Credit Union’s mascotcongratulates children who participated ina recent fun run. Navy Federal is thenation’s second largest financial co-op,with $2.7 billion in revenue last year.


return $250,000 in cash patronage.AgriVisor, LLC, a joint venturebetween GROWMARK and IllinoisFarm Bureau, continues to bring abroad spectrum of products and servicesthat help producers develop andimplement risk management strategiestailored to their operations.

For the second year in a row,General Manager John Knobloch ofAGRILAND FS, in Winterset, Iowa,received the prestigious Chairman’sAward for Excellence in Managementfrom GROWMARK Chairman DanKelley at the cooperative’s annualmeeting in Chicago. The award is thehighest honor GROWMARK bestowsto member cooperative managers whohave achieved outstanding results in thefollowing management categories:percent or dollars of sales increase,credit administration, operating expenseefficiency, and return on investedcapital.

California small farmconference set

The 2010 California Small FarmConference will be held Feb. 28 toMarch 2 in San Diego. The conferencewill feature five short courses with off-site tours of local farms and farmersmarkets; 25 focused workshops onissues of conservation, businessmanagement, marketing andproduction; numerous networkingopportunities and three keynoteaddresses by industry leaders.

Russ Parsons, food columnist for theLos Angeles Times, will be the keynotespeaker. He has been the newspaper’sfood editor, managing editor anddeputy editor and is the author of thecookbooks How to Read a French Fry andHow to Pick a Peach.

USDA loans $2.4 billion to RECsAgriculture Secretary Tom Vilsack

on Sept. 30 announced that 58 ruralutilities and cooperatives in 33 stateshave been selected to receive $2.4billion in loans and loan guarantees tobuild and repair over 12,000 miles ofdistribution and transmission lines andmake system improvements that will

benefit almost 113,000 rural customers.Vilsack made the announcement duringa Rural Tour stop in Las Cruces, N.M.,as part of the Obama Administration’seffort to develop infrastructure andbuild the economy of ruralcommunities.

Several of the loan guaranteessupport renewable energy ventures. Forinstance in Fitzgerald, Ga., FitzgeraldRenewable Energy LLC has beenselected to receive a $139 million loan

guarantee to build a biomass-fueledpower generating facility. The plant willuse locally produced wood fuel waste togenerate 55 megawatts of renewableelectric power. The fuel typically will bewaste wood provided by vendors within50 miles of community.

Multitrade Rabun Gap LLC, locatedin Rabun Gap, Ga., has been selected toreceive a $20.7 million loan guaranteeto construct and operate a 17 megawattwood-fueled biomass facility. Thefacility has a significant amount ofexisting equipment already on site,including a wood-fired boiler that waspreviously used to supply steam and

electricity to a textile manufacturingoperation. The new biomass facility willuse native renewable fuel from the localforest industry and is expected to sellpower to a Georgia cooperative under along-term power purchase agreement.

$71 million to bolsterrural co-ops, business

An Ohio farmer cooperative isamong the rural businesses nationwidereceiving $71.7 million in AmericanRecovery and Reinvestment Act funds,made available through the Business &Industry (B&I) Guaranteed LoanProgram, administered by USDA RuralDevelopment. Altogether, $1.7 billion isavailable to businesses across thecountry through the Recovery Act andB&I loan funding.

In Franklin County, Ohio, a farmer-owned cooperative was selected toreceive a $7.5 million loan guarantee.The loan will help provide businessservices to more than 50,000 livestockfarmers in Ohio, Kentucky, Michigan,Indiana, Illinois and Missouri. The B&Iloan will help the cooperative continueto maintain health insurance for itsnearly 500 employees, many of whomlive in counties with unemploymentrates 125 percent greater than thenational average and counties that havebeen affected recently by naturaldisasters.

Eligible B&I applicants includeprivate businesses, cooperativeorganizations, corporations,partnerships, nonprofit groups,federally recognized Indian tribes,public bodies and individuals. Funds aretargeted to create and retain qualityjobs and serve difficult-to-reachpopulations and areas hardest hit by thecurrent economic downturn. Learnmore about the program by visitingwww.rurdev.usda.gov/rbs/busp/b&i_gar.htm.

More information about USDA’sRecovery Act efforts is available at:www.usda.gov/recovery. Moreinformation about the federalgovernment’s efforts on the RecoveryAct is available at: www.recovery.gov.

Willie Wiredhand, the mascot of thenation’s rural electric cooperatives (RECs),was incorrectly referred to as WillieWirehands in the last issue of “RuralCooperatives.” But, as can be seen in thisphoto, he’s not taking it too hard.Illustration by Richard Biever, courtesyIndiana Statewide Association of RECs


TITLE FEATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ISSUE—PAGEAbout Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24Bagby, Dorman Named Top Co-op Communicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 30Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 14Bigger methane role for farmer co-ops? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 16Bigger role seen for Ohio farmers’ markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 28Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 10Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16City Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 28Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 20Conner to head NCFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 35Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 22Conversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 13Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 4Co-op educators see critical need to ramp-up, expand education efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 30Co-op Hall of Fame inductees played crucial role in co-op movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 31Co-op not just a home, but a support system for members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 7‘Co-op 100’ revenues top $173 billion in ’07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 36Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4Core principles of Stroud Community Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 24Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 26Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24CWT removes 101,000 cows; NMPF launches new task force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 40Dairy co-op financial performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 5Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that bankrupted VeraSun . . . . . . . . . . . . .March/April 16Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 32Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14Full Sail for Shipwrights’ Co-op

Dissatisfied working for others, craftsmen are now the bosses of boat-repair business . . . . . . . . . . . . . . . .Sept./Oct. 22Generosity by local farmer cooperative is appreciated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 40Green Thumbs Up

Interest in community gardens sprouting across America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 26Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16High-priced inventory from ’08 big problem for some supply co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 7Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former inmates, others . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

2009 Art ic le IndexInformation appearing in Rural Cooperatives magazine during calendaryear 2009 has been indexed to help you find past articles. Articles areindexed by issue and page. Back issues can be found online at:www.rurdev.usda.gov/rbs/pub/openmag.htm


How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20Humboldt Creamery Files Chapter 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 33Identity Heft

CoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity, logo,and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Kick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9Learning from potato bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 9Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Marginal Land Tapped for BiofuelsNew York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22

Market Power ProblemBargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29Natural turf still preferred for sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 10NCB Co-op 100 revenue hits $209 billion . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 29NCBA supports role for co-ops in national healthcare reform . . . . . . . . . . . .July/Aug. 39New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26New life for an old town

Wine co-op helps transition from tobacco while boosting agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

News that Gets UsedMedia tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22Organic Valley sales top $528 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 37Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4

Place at the TableNFU delegates carry family farmer concerns to Capitol, White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Possible benefits and associated costs from byproducts of anaerobic digestion of dairy manure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 20

Possible benefits of a cooperative effort to support the adoption of anaerobic digesters bydairy producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 21Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14Royal Treatment

Rhode Island farmers join forces to market RI Royal brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6Tillamook’s commitment to community includes environmental

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24USDA educational publications seen as valuable resource . . . . . . . . . . . . .March/April 30USDA, Justice Dept. to hold workshops to explore ag competition,

antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11Waste Not

Minnesota dairy farms use manure digesters to produce methane gas . . .May/June 14Webinar examines starting worker-owned cooperatives . . . . . . . . . . . . . . . . . .July/Aug. 33What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4

Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

MAGAZINE DEPARTMENTSCo-op Development ActionGreenhouse grows more than plants – co-op teaches youth about

nutrition, community involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25National network of practitioners connects forestry cooperatives . . . . . . .March/April 12Succession planning critical to future of small Iowa meat-processing

plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

CommentaryCalifornia’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2Cooperatives make good sense, serve their communities . . . . . . . . . . . . . . . . .Nov./Dec. 2‘Go-Local’ Movement: How will your co-op be affected? What is

your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2Growing world population presents challenge and opportunity

for U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2Local ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2Rural America Runs on Co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 2

Focus On…Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

In the SpotlightPark sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

Legal CornerCapper-Volstead, Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 17 Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19What Is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

Management TipLook in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

NewslineRecord sales, income for Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 34Tree Top buys Oregon fruit puree companyDFA pays $12 million to settle with CFTCBlue Diamond says confidence key to future market stabilityWFC-MAC now Cooperative NetworkMooney to chair NMPF; CWT to continue in ‘09CHS notches fifth consecutive year of record earnings in ‘08CCA speakers available to address key co-op issuesUSDA program aims to help African-American farmersBrownlee to fill key USDA communications roleG&T co-ops support Iowa wind farmUSDA funding biorefinery projects‘Grower-owned’ key to Musselman’s new applesauce advertising campaignLamb co-op buys out partnerMontana co-ops to merge

CoBank earnings surge to $538 million . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 32Smith, Bozick win top honors at NCFC’s 80th annual meetingWisconsin economic recovery plan aims to boost state’s dairy co-opsGlobal co-op award competition launchedStudy boosts ethanol status for environmental qualityDoes your co-op rock? Send videos to NCGAVideo focuses on credit unionsIrwin new CEO at Welch’sRural Economic Development funds awarded in 13 statesSunkist sales top $1 billionHal Doran remembered for dedication to co-opsHelping family farms prosper

AGP marks 25th year with record cash returns . . . . . . . . . . . . . . . . . . . . . . . .May/June 31Maine fishing co-op opens certified processing facilityAgStar buys six VeraSun plants; hopes to re-sell to farmer co-opsRecord revenue at DFA in ‘08; plunging milk price sparks effortRecord milk volume, sales growth at AMPIAgri-Mark earns $11.8 millionNCFC meeting explores impact of climate change laws on ag


Record sales, manager payments for LO’LTwo-thirds of milk supply enrolled in CWT programHog co-op files for bankruptcyN.Y. Times includes special co-op sectionUSDA accepting applications for co-op development grants

E85 signs sprouting along Wisconsin Interstates . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 37Wisconsin co-op to link local farms and institutionsUnited Co-op returns record $2.37 million in cash to membersUSDA offers $25 million loan to reopen SoyMor BiodieselAgStar sells three ethanol plantsFishermen create new CSF: Cape Ann Fresh CatchDFA launches Texas plant expansionPCCA forms new company to produce fashion jeansReport: broadband critical to future of rural America$1 billion in USDA electric loans to strengthen rural infrastructureFoster Farms bids on Humboldt

Consumers pick favorite farmers markets . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 36Idaho potato growers pursue anti-trust caseVermont’s City Market named top U.S. food cooperativeIndiana co-ops form new feed businessUSDA offering $18 million in Value-Added Producer GrantsMontana landowners to build wind-power projectCourt approves Humboldt saleCWT accepts third herd retirement of yearOntario groceries form co-op to promote sale of local foodFrederick awarded NSAC’s Silver BowlNew co-op law book publishedUSDA grants help handicapped farmers

Bravante Produce joins Sunkist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 25University to develop urban food co-opMichigan co-op acquires grain facilityMissouri biomass co-op first to earn BCAP payments2.4 million agri-tourists visit California farms in ‘08USDA: 5,200 farmers markets now openNew distribution deal in Poland for CRIUSDA awards $4.8 million for co-op developmentGROWMARK sales top $6.1 billionCalifornia small farm conference set$71 million to bolster rural co-ops, businessUSDA loans $2.4 billion to RECs

Page From the PastCooperatives: tools for self-help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 47Revamped member-relations program turns around negativity

toward co-op . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 39

Utility Co-op ConnectionAdelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39Need for new baseload capacity, expanded transmission are huge

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

Value-Added CornerFamily Farmers Seed Cooperative: Colorado co-op aims to meet

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21

SUBJECTSCo-op Advantages/ImpactCo-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4

Agri-TourisumCity Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28New life for an old town


BargainingLearning from potato bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 9Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

CommunicationsBagby, Dorman Named Top Co-op Communicators . . . . . . . . . . . . . . . . . . .Sept./Oct. 30Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity,logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

News that Gets UsedMedia tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

ConferencesKick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11Managing Risk

Farmer Co-op Conference eyes strategies for business in volatilemarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28


Co-op DevelopmentBanking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14Co-op Hall of Fame inductees played crucial role in co-op movement . . . . .July/Aug. 31Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24Greenhouse grows more than plants – co-op teaches youth about nutrition, communityinvolvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14Succession planning critical to future of small Iowa meat-processing plants .July/Aug. 32What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

Co-op Principles/Advantages/ImpactCo-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34What Cooperatives Are (and Aren’t)Economist says co-ops represent aggregates of economic units . . . . . . . . . . . .Nov./Dec. 4What Is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

CottonCalcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26

DairyConversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . .July/Aug. 13Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4Place at the Table

NFU delegates carry family farmer concerns to Capitol, White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Storm ShelterDairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Switching On Cow PowerCo-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Tillamook’s commitment to community includes environmental stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8


Waste NotMinnesota dairy farms use manure digesters to produce methane gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 14

DirectorsCo-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

EducationCo-op educators see critical need to ramp-up, expand education efforts . .March/April 30Greenhouse grows more than plants – co-op teaches youth about nutrition, communityinvolvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25Park sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

EnvironmentCalifornia’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2Growing world population presents challenge and opportunity for

U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34Tillamook’s commitment to community includes environmental

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Farm SupplyCooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Farmers MarketsBigger role seen for Ohio farmers’ markets . . . . . . . . . . . . . . . . . . . . . . . . .March/April 28

Finance/Tax/Legal/LegislativeBanking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that bankrupted VeraSun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 16

High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20Identity Heft

CoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22Passing the Stress Test


A Place at the TableNFU delegates carry family farmer concerns to Capitol, White House . .May/June 8

Storm ShelterDairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

USDA, Justice Dept. to hold workshops to explore ag competition,antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11

Foreign Co-opsBanking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . .May/June 22Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17

ForestryForestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

Fruits, Nuts, VegetablesCo-op not just a home, but a support system for members . . . . . . . . . . . . . . . .Jan./Feb. 7Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16

Making a MarketCo-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

New life for an old townWine co-op helps transition from tobacco while boosting agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

Ripe Time DeliveryCarolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Royal TreatmentRhode Island farmers join forces to market RI Royal brand potatoes .March/April 22

So Far, So GoodPotato co-op achieving mission to bring stability to market . . . . . . . . . . . . . . . .Jan./Feb. 8

Grains & OilseedsIdentifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21Passing the Stress Test


Livestock & PoultryCity Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14Succession planning critical to future of small Iowa meat-processing

plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32

ManagementCommunications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20Conversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . .July/Aug. 13Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity,logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

MarketingAbout Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former inmates, others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

Identity HeftCoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16

Identity Heft, Part IILand O’Lakes freshens image with new co-op brand identity,logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6Passing the Stress Test



Royal TreatmentRhode Island farmers join forces to market RI Royal brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

So Far, So GoodPotato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8


Member Relations/BenefitsCo-op not just a home, but a support system for members . . . . . . . . . . . . . . . .Jan./Feb. 7Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8


MergersManaging Risk

Farmer Co-op Conference eyes strategies for business in volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Renewable EnergyBigger methane role for farmer co-ops? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 16Ethanol Crunch


Feeding the Concrete CowDryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32

How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20Kick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11Local ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24Waste Not

Minnesota dairy farms use manure digesters to produce methane gas . . .May/June 14Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Specialty CropsHoney Co-op Buzzing in Chicago


Market Power ProblemBargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Natural turf still preferred for sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 10

StatisticsCo-op Economic FootprintMulti-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . . . . . .May/June 4Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Sustainable/Local/OrganicAbout Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . .May/June 22Family Farmers Seed Cooperative: Colorado co-op aims to meet

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

‘Go-Local’ Movement: How will your co-op be affected? What is your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2

Green Thumbs UpInterest in community gardens sprouting across America . . . . . . . . . . . . .May/June 26

Legacy of CooperationPlunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20

Place at the TableNFU delegates carry farmer concerns to Capitol, White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8


TradeMaking a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8TransportationOvercoming constraints to growth in biofuels industry . . . . . . . . . . . . . . . . . .Jan./Feb. 18

USDAAdelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21USDA, Justice Dept. to hold workshops to explore ag competition,

antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11

Utility Co-opsAdelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32Need for new baseload capacity, expanded transmission are huge

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Value Added Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26Family Farmers Seed Cooperative: Colorado co-op aims to meet

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4National network of practitioners connects forestry cooperatives . . . . . . .March/April 12New life for an old town



Worker-Owned Co-opsBuilding a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10Full Sail for Shipwrights’ Co-op

Dissatisfied working for others, craftsmen are now the bosses of boat-repair business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 22

Succession planning critical to future of small Iowa meat-processing plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32

Webinar examines starting worker-owned cooperatives . . . . . . . . . . . . . . . . . .July/Aug. 33Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

AUTHORSBerberich, GregCooperatives make good sense, serve their communities . . . . . . . . . . . . . . . . .Nov./Dec. 2

Borst, AlanMarket Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Brockhouse, BillRipe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14Burdett, BruceRoyal Treatment

Rhode Island farmers join forces to market RI Royal brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

Campbell, DanCommunications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7News that Gets Used

Media tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

Passing the Stress TestGrain co-ops and lenders work as a team to meet unprecedented credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4



Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Chesnick, DavidLargest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Cline, HarryCalcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16

Coontz, KimWorker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

Crooks, AnthonyOpportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Fannin, BlairPark sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

Farrell, JohnLocal ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2

Freeman, JeanLook in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

Gordon, DonCalifornia’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2

Gray, Thomas W.Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

Healy, DonnaCity Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28

Henry, Kellen M.Honey Co-op Buzzing in Chicago


Hogeland, JulieMaking a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

Karg, Pamela J.Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov.-Dec. 16

Liebrand, CarolynSwitching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Ling, K. CharlesDairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4

Little, Jane BraxtonForestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

Littlefield, Dee AnnFeeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32Maras, PhilpShenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

Mayberry, AnneAdelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39Need for new baseload capacity, expanded transmission are huge

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

Patrie, BillCreating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24

Perry, MikeLegacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . . .May/June 20

Pitman, LynnCo-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Pleasant, BruceRipe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Policinski, ChrisGrowing world population presents challenge and opportunity for

U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2

Reynolds, BruceBuilding a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10

Robinson, RobinOpportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Schultz, MadelineSuccession planning critical to future of small Iowa meat-processing plants .July/Aug. 32

Simerly, RitaGreenhouse grows more than plants – co-op teaches youth about

nutrition, community involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

Smith, Stephanie M.Capper-Volstead, Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 17 Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19What is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

Thompson, StephenEthanol Crunch


Full Sail for Shipwrights’ Co-opDissatisfied working for others, craftsmen are now the bosses of boat-repair business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 22

New life for an old townWine co-op helps transition from tobacco while boosting agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

So Far, So GoodPotato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

Waste NotMinnesota dairy farms use manure digesters to produce methane gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 14

Todd, AnneFamily Farmers Seed Cooperative: Colorado co-op aims to meet

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14

Marginal Land Tapped for BiofuelsNew York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22


Tillamook’s commitment to community includes environmental stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Tonsager, DallasRural America Runs on Co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 2

Torgerson, Randall‘Go-Local’ Movement: How will your co-op be affected? What is

your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2

Wadsworth, JamesCo-op educators see critical need to ramp-up, expand

education efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 30

a viable project that can successfullysequester carbon dioxide.”

With climate-change legislationmoving through Congress, anyapproach that can keep costs affordablefor rural electric utilities is of interest.Southworth says that AssociatedElectric Co-op is among six utilities

serving Missouri that are looking atcarbon sequestration. A U.S.Department of Energy grant is fundinganother project that will inject food-quality carbon dioxide into a sandstoneformation 1,900 feet under the plantsite.

“This project will look at stability —what happens after the carbon isinjected,” Southworth says.

The sequestration projects are long-term efforts. Southworth says that therate at which the carbon dioxide can be

“bubbled” into the algae is critical, butthis is one aspect of the research thathas been determined. Next, researchersDr. Keesoo Lee of Lincoln Universityand Dr. Paul Nam of the MissouriUniversity of Science and Technologywill look at the effect of coldertemperatures on algae growth.

“This winter will be the first for thealgae project,” Southworth says.“Currently, the effect of the coldertemperatures is not known.”

Uility Co-op Connectioncontinued from page 21


The same principle applies in themethods by which directors arenominated and/or elected. Somecooperatives have director districts withdifferent numbers of directors assignedto each district. The bottom line is thatsome members may have more say thanothers.

The governing aspect of cooperativesis evolving in order for cooperatives to

compete in a more competitive anddiversified financial and economicenvironment. At the end of the day,however, cooperatives must stillmaintain the basic cooperativeprinciples, including having “demo-cratic control” in the governance oftheir organization in order to keep theirstatus as a cooperative.

The possible risks that cooperativesface if they do not have democraticcontrol are: • Loss of Subchapter T eligibility;• Loss of eligibility as a 501(c)(12)

organization; • Possible lawsuits from members

against board members for breach oftheir fiduciary duty. As cooperatives start to “think

outside the box” regarding thegoverning structure of theirorganization, make sure yourcooperative does not inadvertentlyabandon the principle of democraticcontrol. Any form of member votingother than one-member/one-vote, or amethod of weighing board memberrepresentation should be carefullystudied to make sure that it does notresult in defacto control of yourcooperative by an individual or smallgroup.

Legal Connectioncontinued from page 7


be insufficient returns on their investment in those markets. In 1953, none were stepping up to fill the communication

gap in Eagle River and the Matanuska-Susitna Borough. Inresponse, valley residents joined together to createMatanuska Telephone Association (MTA). Fifty-six yearslater, MTA — built through the dedicated labors of local menand women — is an industry leader and powerful economicengine in the region.

This year alone, MTA will pump tens of millions ofdollars into the local economy by employing more than 400Alaskans. We will continue to support our service areathrough donations of both time and money to localorganizations to help make our communities stronger.

Because we are not required to pay dividends to outsideinvestors, another benefit of the co-op model is that we areable to continually reinvest in our infrastructure, which isvital to the long-term health of our company.

As a result, MTA is in an excellent position to compete

with other providers, who now, 56 years late, see our marketas a profitable business proposition — for their investors.

Without the cooperative model, dividends issued by for-profit organizations traditionally flow outside of Alaska. Notso with capital credits. They stay right here to be circulatedback into Alaska’s economy because they are paid to localresidents, business owners and government organizations.This year, about $30,000 was paid to the Matanuska-Susitnaand Anchorage School Districts.

There are other co-ops in Alaska that serve multiplecommunity needs, such as credit unions, and REI sportinggoods. The success of co-ops has been due in large part tothe fact that their customers are their owners. While nobusiness model works without dedicated employees, strongethical management and relevant product offerings, the co-opmodel in today’s environment bodes well for the future.

While many large companies are under pressure to payout higher dividends, co-ops re-invest in themselves, theircustomers and the communities they serve. At a time whenthere is less money for corporate re-investment, co-ops willcontinue to thrive for this reason alone. n

Commentarycontinued from page 2

Roman Asatryan concurs. The young Armenian manbefriended Eyman and volunteered as a translator and tour guidein the evenings and on weekends. Asatryan’s parents are typicalof many small landowners who raise mostly produce to feed theirfamilies, selling any excess in the marketplace.

Subsistence farming“People in rural areas and small villages farm to stay alive,”

Asatryan says. “They really don’t have any assets more thanwhat they can carry in their hand or store in the small shed mostpeople build on their land.” Eyman notes that larger Armenian landowners may own

enough to hire someone to operate the farm, while the owneralso runs a one-room general merchandise store or a small food-processing operation. Separating the farm operations from otherbusinesses was challenging. “I was on tarragon [herb] farms and vineyards, in wineries

and cheese factories and greenhouses, all the time working withArmenian loan officers who would, in turn, train other Armenians.Then, on behalf of the farmers who qualified, I would go to creditorganizations to present recommendations on who could viablyhandle a loan,” Eyman explains. “A large part of the goal was tohelp the farmers install drip irrigation to improve farm yields.”Working from a loan policy he first developed in Ethiopia,

Eyman introduces the document in every country. He follows upwith other policies and forms, such as a basic balance sheet,cash-flow assessment and collateral inspections sheets. Thecountries are free to use them as is, or adapt them to specificnuances in their customs and cultures. The WtM project hasreached all 10 Armenian marzes, or provinces, through its train-ing and credit programs and has established demonstration sites.“The business of banking in agriculture has similarities

around the world,” he says, adding that “it’s a wonderfulexperience to help people who are looking to the future.” n

Missouri farmer helping ag banks in developing countries continued from page 17

month or every quarter they meet,” notes Strom. “But thenyou realize this is just the beginning for Farm CreditArmenia’s five directors, outside director and staff — at atime when there are global financial challenges.”

Strom says one solution he has offered is to speakfavorably about FC Armenia and how its members haveembraced the cooperative structure and principles as a meansto rebuilding the agricultural sector in their country’semerging free-market economy.

“I do agree with Lee’s assessment,” says Johnston. “But Iwould add that I think Farm Credit Armenia offers anopportunity for other donors and investors to fund a greatorganization that is built on sound cooperative and creditprinciples.” As potential donors and funders look into FCArmenia, he thinks they will recognize the same opportunityto serve rural Armenia as MCA did when it provided it withlending capital.

“Farm credit in Armenia today is where the U.S. systemwas 50 years ago,” Strom says. “Look what has been accom-plished in the United States. The same can be done here.” n

Banking on the Future continued from page 16

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