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lCOOPERATIVESCOOPERATIVESSeptember/October 2015

C O - O P M O N T H S P E C I A L S E C T I O N / Page 22

Apple Co-op Lookingfor Next Big Thing

By Roger Johnson, PresidentNational Farmers Union

Cooperative Month is a time when allcooperatives are urged to offer some level ofeducation to help make more people aware ofthe many advantages of the cooperativebusiness model, and to renew their own

commitment to adhering to the cooperative way of workingtogether. At National Farmers Union (NFU), cooperativesare not just considered a smart business idea; they are actuallya founding principle that goes right to the heart of who weare and where we came from as an organization.

Those roots go back to Point, Texas, where in 1902,farmers began organizing to find strength in numbers and acommon voice in business and national policy. The

organization’s founders were responding to business practicesthat took advantage of farmers and used the concentratedpower as buyers to not only treat farmers unfairly, but also topit them against one another.

Among the first actions taken by Farmers Union was toform cooperative warehouses to store its members’ cottonuntil market prices would improve. This concept grew, alongwith the organization, from the county level to the state andnow the national level. The first major cooperative successstories happened in the 1920s and 1930s, when farmers werefighting both extreme drought and a huge slump in prices.

It was during this time that Farmers Union membersworked together in earnest to create supply and marketingcooperatives, better known as Farmers Union oil and elevatorco-ops. The co-ops and Farmers Union county and stateorganizations were formed hand-in-hand, sharing the sameleaders and members, which remains true even today.Farmers Union members believe in and belong tocooperatives, and cooperatives continue to embody the heart

and soul of Farmers Union.But the forefathers of Farmers Union did not stop at

forming purchasing co-ops. Our members also wereorganizers and leaders in forming credit unions, rural electricand telephone cooperatives and many other agricultural andrural co-ops. We were committed to the value of the businessof working together, promoting both viability andsustainability long before those were catch phrases. (Editor’snote: See page 8 of this magazine for an article about the 100thanniversary of South Dakota Farmers Union for a look at the hugeimpact the organization has had in that state.)

Farmers Union members created marketing, supply andservice cooperatives, and eventually processing and value-added cooperatives. Many farms today would not be inbusiness if they did not belong to five or more cooperatives.Most cooperatives adhere to the seven cooperative principles,

a type of mission statement that spells out how they willconduct business. One of these seven co-op principles isconcern for community. Cooperatives are the cornerstones ofmany communities, forming the nexus of the rural economyand putting their money and efforts back into theircommunities.

Another ideal — or founding principle — shared byFarmers Union and cooperatives is the mutual commitmentto education. Together, we dedicate resources to educationalprograms that allow individuals to improve their personal andprofessional abilities. We put effort into programs that buildcommunities. We develop and deliver engaging educationalactivities to youth with the goal of creating a new generationof movers and shakers who are well versed in cooperation.And, we encourage our members to be involved in ourcooperatives and our organization.

As part of that education and outreach mission, NFUholds its annual College Conference on Cooperatives

2 September/October 2015 / Rural Cooperatives

Commentary Cooperatives: Not only a guiding principle, but also our North Star

“Agriculture has become more, not less, concentrated,and farmers still find themselves as price takers, not price makers.

For this reason, cooperatives remain as important todayas they were at our founding…”

continued on page 45

TA K I N G O W N E R S H I P :A C O - O P M O N T H S P E C I A L S E C T I O N

Features

Rural Cooperatives / September/October 2015 3

Volume 82, Number 5September/October 2015

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

Lisa Mensah, 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.

04 The Missing PieceCo-op’s new processing machine will help strengthen natural fibers industry

08 The Elevator and Beyond S.D. Farmers Union marks 100 years of supporting cooperatives to benefit farming and rural lifeBy Lura Roti

16 Building a Better AppleCo-op pursues premium market niche by producing, marketing new varietiesBy Julia Stewart

21 National Co-op Month Proclamation

22

Departments02 COMMENTARY

12 FOCUS ON: STAPLCOTN

39 NEWSLINE

p. 4

ON THE COVER: Bill and Angell Clark farm 105 acres ofSweeTango and other apples in Washington’s ChelanValley. They are members of the Next Big Thing (NBT)Cooperative, which is pursuing the premium apple varietymarket. With them is employee Susy Galvan (right). Seearticle on page 16. Photo Courtesy NBT Cooperative

p. 16 p. 30 p. 34

Articles about farmer co-ops’ 2014 sales/financial trends, as well as on theTop 100 ag co-ops, will appear in the Nov.-Dec. issue.


Alpacas, such as this, yield justone of the many types of animalfiber produced by members of theNatural Fiber Producerscooperative. The fiber is used forluxury yarns and fabrics indemand by the fashion industry.


With the domestictextile industry indecline, the 1980s was arough period for theU.S. natural fibers

industry. It was made worse whenvirtually all dehairing machines in thecountry were purchased by Europeancompanies and shipped overseas. Thatadded greatly to the time and expenseneeded to prep U.S. natural fibers forprocessing into the luxury yarns used inthe fashion industry.

This void in the domestic market hasnow been filled, thanks to the purchaseof a technically advanced dehairingmachine from Italy by the NaturalFiber Producers (NFP) cooperative.The co-op is owned by 318 producersof all types of animal fibers, primarilyalpaca, llama, and sheep. In recentyears, they have broadened theirhorizon to include bison, yak,cashmere, angora and musk ox, amongothers.

The machine, made by Italianmanufacturer Cormatex, was describedby an industry trade journal as “one ofthe most powerful, sophisticated

The Missing PieceCo-op’s new processing machinewill help strengthennatural fibers industry


dehairing machines available in theworld today.” Occupying 500-square-feet of floor space, the machine canprocess from 20 to 65 pounds of fiberper hour, depending on the type offiber.

It is one of only four such machinesoperating in the world, according to theco-op. “We believe there is only oneother dehairing machine (a much oldermodel) in the entire country. However,it is not generally available to most inthe industry,” says co-op spokespersonDiane Johnson.

The co-op’s purchase was madepossible by two Business & IndustryGuaranteed Loans, worth a combined$420,000, issued by the Rural BusinessCooperative Service of USDA RuralDevelopment.

NFP headquarters is in Homedale,Idaho, but the new machine has beeninstalled in Springfield, Ky., in a12,000-square-foot building owned byU.S. Natural Fibers. The machine willoperate in the same building as thatcompany’s “scouring train,” machinerythat washes and cleans the fiber beforeit moves on for dehairing.

A grand opening and ribbon-cuttingfor the new machine was held Sept. 17-18 at the plant in Springfield.

Bringing industry back homeLack of access in the United States

to dehairing during the past 30-35 yearshas caused many luxury fiber producers,as well as U.S. textile manufacturers, tooutsource their production to overseasprocessors, Johnson says. “Now,Natural Fiber Producers has becomethe provider of the missing piece of thetextile puzzle in the United States.”

The first big order for the co-op’sdehairing service was placed before themachine was even in operation. TheBuffalo Wool Co., Kennedale, Texas,and Buffalo Gold Premium Fibers,Goodnight, Texas, shipped over 4,000pounds of raw buffalo fiber to theKentucky plant, where it is beingprocessed into soft, usable fiber.

While individual co-op producers

continue to make improvements intheir animals’ fiber quality andconsistency through herd managementand breeding programs, Johnson saysmany fibers are greatly improved withdehairing, a crucial step in theproduction of luxury textiles.

“Having this machine in the U.S.provides that opportunity andreinforces the growth of ‘Made inAmerica’ and ‘Buy Local’ campaigns,”says NFP President Brian Willsey. Itwill also mean more textile industryjobs across the United States, he adds.

“The initial plan was to house themachine at Mountain Meadow Wool inBuffalo, Wyoming,” Willsey says,noting that Mountain Meadow wasinstrumental in helping the co-opidentify the specifications needed in adehairing machine. But the need for anautomatic feeder increased themachine’s overall length beyond theavailable space in the Wyoming facility.

U.S. Natural Fibers was then in theprocess of building its new facility inKentucky, and it was soon identified asa “a natural fit for the twoorganizations,” which agreed to acollaborative effort, Willsey says.

Co-op members invested to makethe downpayment for the machine, withthe purchase financed throughSpringfield State Bank and theKentucky Agricultural FinanceCorporation, with backing by USDA.

Separating the coatsMost of the animals raised by co-op

members are single or dual-coated. Theouter coat is usually heavy, coarse hairthat protects the animal against harshweather conditions. The under coat isthe soft, downy fiber needed for luxuryfabrics. Some animal breeds — such asAngora and Mohair goats, as well assome types of sheep — produce two“crops” of fiber per year.

Dehairing separates the outer andunder coats, leaving the more skin-friendly downy under coat to be“carded” for processing into yarn. Inthe dehairing process, the thick outer

coat and “guard hairs,” often called“waste” in the industry, Johnson notes,are collected in a waste bin. In somecases, a customer will request that this“waste” be returned for further use.The co-op also has plans to use thisfiber for more industrial-type uses, stillin product development.

Any fiber producer may arrange forproduct to be scoured and dehaired,although there is a minimum batch sizeof 100 pounds per color. For non-members, the fiber can then be shippedwherever the owner wishes for furtherprocessing (the co-op can makerecommendations regarding appropriatetextile mills).

The co-op sets stringent sorting andgrading standards for members, becausefiber consistency is critical to qualitycontrol in the yarns and finished goods.The co-op’s business model allowsmembers to have their productsreturned to their farms or to keep theirfiber in the co-op’s wholesale pool. Products in the wholesale pool aremarketed to members and retailers atwholesale cost, with those profits beingreturned to the members. Throughproduction of value-added products,wholesale and retail profit marginsincrease by $14-$61 per pound,Johnson says.

Hybrid fiber key to successWhen the co-op started in 2006, it

was primarily for alpaca producers. Butto make the fiber more suitable for abroader array of fashion items, it needsto be blended with other types of fiber. “Alpaca fiber has little, or no, memory,”Johnson says, explaining that it will nothold its shape in clothing, such assweaters, that is stretched during use.Hence, when blended with other fiber,such as sheep wool, angora or mohair,the garment will hold its shape better.Blending with silk will provideadditional softness, drape and luxury.

In 2012, the co-op opened itsmembership to include all natural fiberproducers, including, but not limited to,llama, sheep, angora, mohair, cashmere,


yak, buffalo and qiviut (or musk oxwool) producers.

Depending on the growth of thenew commercial dehairing servicesin the next year, the co-op willconsider the purchase of a seconddehairing unit, Johnson says.

For more information about theco-op, visit: http://naturalfiberproducers.com. To learn moreabout the co-op’s dehairingservices, e-mail: [email protected]. ■

Clockwise from upper left: The co-op’s new dehairingmachine, purchased with assistance from USDA, will allowmore natural fiber to be processed in the United States; asample of yarn made from the co-op’s fiber; bison areanother important source of natural fiber handled by theco-op; samples of bison fiber prior to (left) and after (right)dehairing.


By Lura Roti

Editor’s note: The author is a SouthDakota-based journalist. This article iscondensed and adapted from three articlesthat appeared in Union Farmer, the SouthDakota Farmers Union membershippublication. To read more about theanniversary, visit: www.SDFU.org.

Owen Jones, 77, canclearly remember theday electricity came tohis family’s Britton,S.D., farm. “It made a

big difference when we went to milkcows, because we could turn lights on

in the barn and didn’t have to worryabout tipping over a lantern,” says thethird-generation farmer, referencing thekerosene lantern which hung on a wirethat ran the length of the barn. Forlight, Jones, his dad and brothers wouldsimply slide the lantern along as theydid chores.

Jones was 12 years old when LakeRegional Electric Cooperative broughtelectricity to rural Marshall and Daycounties. His dad, Arthur, was amongthe founding members responsible forthe co-op’s development. “Dad was astrong cooperative-minded person,”says Jones. “Early on, he realized that ifhe wanted a better lifestyle in the

country, he would have to work for itand organize cooperatives.”

It’s no surprise that Arthur Jones wasalso actively involved in his localFarmers Union chapter. Cooperativedevelopment was the original mission ofFarmers Union when South Dakotafarmers and ranchers established theorganization in 1914.

“Cooperatives are the reason theFarmers Union organization began,”explains Doug Sombke, South DakotaFarmers Union (SDFU) president. “Itsfounders felt that they didn’t have a realgood market for their products, so theydecided to collectively market theirproducts,” in pursuit of better prices.

S.D. Farmers Union marks years

The Elevator and Beyond

of supporting cooperatives to benefit farming and rural life100


Gresham: driving force for NFU That basic concept — that farmers

could obtain better prices for theirproducts if they were united — is whatdrove National Farmers Union (NFU)founder and first president NewtGresham. According to historianLynwood E. Oyos’ book, “The FamilyFarmers’ Advocate,” Gresham“constantly reiterated that familyfarmers needed a voice and anorganization to fight for their rightsand survival.”

Gresham and the organization’s 10founding members established theFarmer’s Educational and CooperativeUnion of America near Point, Texas, in1902. According to Oyos’ account, by1914 the message was carried to SouthDakota by J.K. Weinmaster, a FarmersUnion member from Nebraska. Thefirst farmer he visited to discussFarmers Union was Knute Strand, whofarmed about eight miles southwest ofMitchell, S.D.

Strand loaned his buggy toWeinmaster to spread the co-opmessage to his neighbors. On Feb. 6,1914, Strand was among the state’s 17charter members.

The message of “together we canaccomplish what we can’t alone”resonated with farmers across the state.Within two years, the state had the5,000 dues-paying members required toreceive a state charter from the nationalorganization.

Less than a decade after receivingthe state charter, Farmers Union grain,livestock, insurance, wholesale andretail marketing cooperatives wereserving their member/owners in severalSouth Dakota counties. By the 1930s,Farmers Union oil, cream buyingstations and credit union cooperativeswere also established in rural townshipsand communities across the state.

“Co-ops have played an importantrole in our state’s progress,” saysSombke, a fourth- generation farmerfrom Conde, S.D. “When companies

Co-op elevators of today dwarf those of 100 years ago, when South Dakota Farmers Union(SDFU) began its work to strengthen the market position of family farmers. The state’sutility infrastructure (below), much of it owned and operated by co-ops, has undergone asimilar transformation. Photos courtesy SDFU


didn’t want to invest in theinfrastructure necessary to bringelectricity, telephone service, fuel andagriculture inputs to the countryside,our state’s farmers and ranchers bandedtogether to form member-ownedcooperatives.”

Spurring healthy competitionAlong with providing needed

services, cooperatives created marketingcompetition in the face of monopoliesrun by off-farm interests. According toOyos’ book, by the 1880s, SouthDakota’s grain producers were at themercy of “an unfair price structuredetermined by milling magnates andcommodity firms in the Twin Cities andChicago.”

This issue also extended to livestockproducers, who faced their own set ofcorporate competitors, explains Jim

Woster, a retired stockyards buyer whotoday advocates for a number of SouthDakota agricultural organizations.

“I started working for FarmersUnion Livestock the morning after Igraduated from South Dakota StateUniversity in 1962,” Woster says. “Inthose days, most livestock farmersdidn’t sell that many cattle. When theydid sell, they were not in the position tocompete with corporations. FarmersUnion Livestock played a valuable rolein getting those producers a fair price.”

The competition cooperatives bringto the marketplace, whether forpurchasing inputs or for marketinggrain, remains important today, explainsDave Andresen, CEO of Full Circle Ag,a full-service agriculture cooperativethat serves ag producers in 12 countiesin northeast South Dakota andsoutheast North Dakota.

“In the last few years, we’ve seen alot of money come into productionagriculture from outside interests —Wall Street, Silicon Valley andinternational players like China andJapan. If you do business with aninternational corporation, the profitsleave the country,” Andresen explains.“When you do business with your localcooperative, the money stays in thecommunity and profits are returned tothe farmer/owners.”

Andresen appreciates the roleFarmers Union continues to play insupporting cooperatives through youtheducation and lobbying state andnational government. “Only 1.7 percentof the people serving [in Congress] inD.C. have any ties to agriculture; yetthey are setting our farm policy,” hesays. “If it had not been for FarmersUnion and other farm organizations

“Cooperatives are the reason the Farmers Union organization began,” says Doug Sombke (foreground, third from left), president of the South DakotaFarmers Union (SDFU). With him are sons and fellow farmers (from left) Byran, Bryce and Brett. Photo courtesy SDFU.


stepping up and lobbying Congressduring the recent rail crisis, I don’tthink we would have seen anyresolution.”

Co-ops: a rural lifeline For some, the term “cooperative”

may evoke images of towering grainelevators. However, for most SouthDakotans, cooperatives serve as alifeline to technology, capital, productsand services which extend beyond thelocal grain elevator and have allowedrural communities, farmers, ranchersand businesses to grow and thrive.

Sombke and his family belong to anumber of co-ops, including: atelecommunications co-op, an electricco-op, a fuel and energy co-op, twoagriculture grain and agronomy co-ops,a banking co-op and a rural water co-op.

“Those of us living in rural SouthDakota benefit from the cooperativesour forefathers founded when privatecompanies decided it would not pay toinvest in the rural infrastructure,"Sombke says.

Because cooperatives operate under anonprofit business model, they returnprofits locally. When investor-ownedfirms enter the picture, cooperativesalso help keep prices in check, saysScott Parsley, assistant general managerat East River Electric PowerCooperative and District 8 SouthDakota state legislator.

“We serve as a yardstick for pricing.Because we are member owned and therates are set by the board of directors,those who pay the rates are setting therates,” Parsley explains. “Ascooperatives, we aren’t satisfying someinvestor who may live in another stateor country; it is our job to work for thepeople who own us.”

Delivering exceptional service is thegoal of co-ops, says Bill Troske, a semi-retired cow/calf and crop farmer fromTurton, S.D., who has served on theboard of directors for James ValleyTelecommunications. “Service is thename of the game. When members call

in, they don't get a recorded voice; theyget a real person.”

Exceptional service led the 60-year-old cooperative to begin providing cellphone service. “Our members wantedit, but the larger companies were notproviding service to this part of SouthDakota,” Troske says.

80,000 S. Dakotans can’t be wrong

David Kayser raises corn, soybeansand cattle with his sons near Alexandria,S.D. He has been a member of the localagriculture cooperative his grandfather,Art Jarding, helped found. He

Each year, more than 3,000 South Dakota youth attend Farmers Union-sponsored education programs, including district and state camps where theylearn about how cooperatives work and the value they bring to their localcommunities.

Ensuring that co-ops are included in college curriculums is also important toFarmers Union. Lake Area Technical Institute and South Dakota State Universityare among post-secondary programs across the state which offer classesfocused on the cooperative business model.

“We feel it is important to expose this business model to young people,” saysBarry Dunn, South Dakota Corn Utilization Council Endowed Dean of the SDSUCollege of Agriculture & Biological Sciences, and SDSU Extension director. “It isa great model — to stand on our own and to be responsible for our owncommunity, today and in the future.”

Farm and utility co-op members also benefit from co-op education. “Many cooperative members are so far removed from the days before

electricity and telephone services, that they tend to take cooperatives forgranted,” says Jeff Nelson, retired general manager of East River Electric PowerCooperative. “This is where rural advocacy organizations, like Farmers Union,play a valuable role as they look at ways to sustain and bring in the nextgeneration of cooperative members.”

For many next-generation producers, co-op education begins on the farm.SDFU President Doug Sombke says his cooperative business philosophy andloyalty was inherited from his father and grandfather. The latter was a foundingmember of the Farmers Union Oil Co. of Ferney, and both men served on the co-op’s board of directors.

Today, Sombke encourages his three grown sons, who farm with him, toremain actively involved in co-ops. “I hope I’ve instilled the same level of respectfor cooperatives in my sons. This can be challenging, because they are so farremoved from the challenges we faced before cooperatives came to rural SouthDakota.

“Even though I served on our co-op board for more than 20 years and attendednumerous annual meetings of all the cooperatives we are members of, I couldhave done a better job of emphasizing the importance of being actively involvedin our co-ops to my sons,” Sombke says. “We recognize this as a trend, so,during Farmers Union leadership camp, teens actually establish and runcooperatives. This hands-on participation helps develop future generations ofactive cooperative membership.”

Bottom line, he says: “You can’t beat the cooperative model.”

Education essential to future of co-ops

continued on page 45


Question: What is Staplcotn’s primarymission, and who comprises yourmembership?The mission of Staplcotn is to enhance its

members’ incomes by providing cost-effective marketing and warehousing of cotton in a mannerthat fosters members’ trust and confidence in the cooperative.So, our charge is pretty straightforward: create value for ourmembers and conduct our business in such a way that itreflects well on our owners.

Staplcotn is a 100-percent producer-owned company. Wepresently handle more than 13,000 farm accounts in 11states: Mississippi, Louisiana, Arkansas, Missouri, Tennessee,Alabama, Florida, Georgia, North Carolina, South Carolinaand Virginia. Total membership in the Association, consistingexclusively of growers and share-rent landlords, is 7,570marketing and warehousing members.

■ Please provide a “thumbnail history” of the co-op.Staple Cotton Cooperative Association (now known as

Staplcotn) was formed in 1921 by Mississippi planter OscarBledsoe and a group of other Mississippi Delta cotton

producers to provide area farmers a more lucrative way ofmarketing their crops. It is the oldest cotton marketingcooperative in the United States. This relatively new conceptfor agricultural cooperative marketing was prompted whenBledsoe was traveling by train to Memphis, Tenn. He wasseated behind cotton buyers who were boasting about theprofits they were making off of Mississippi cotton producers.He was one of those producers.

After much time, consideration, research, organization andexpense, Bledsoe and 10 others created a cooperativemarketing plan and underwrote it with $1,000 each. By 1921,the campaign for membership closed with 1,800 signaturesand the articles of incorporation were filed in Nashville,Tenn. Mississippi law did not allow growers to form acooperative selling organization at that time. Today,Staplcotn, based in Greenwood, Miss., has over 7,500members and markets between 2 and 3 million balesannually.

■ What new or innovative services are you offering thatdifferentiate your co-op in the marketplace?In most respects, the company is similar to other

Focus On: StaplcotnGreenwood, Miss.


cooperatives in that our focus is the member. However, somecooperatives are more involved in the production process ofthe goods they market, or they provide a lot of auxiliaryservices to their members. While we, of course, focus on

member service — in terms of making it easy to do businesswith the cooperative — we are intently focused on marketingand storing cotton.

From a marketing perspective, we develop and maintain aglobal customer base for our product, provide an excellentprice-risk management platform for our membership andmake sound risk-management hedging decisions to maximizethe price we can return to the members for their cotton. Ourwarehousing division seeks to minimize the members’ cost ofstorage while, at the same time, providing excellent service toour marketing division and other cotton shippers.

One advantage that our cooperative has is the integration

of our marketing and warehousing divisions. While they areseparate profit centers and different memberships, the twodivisions are aligned closely to achieve maximum efficiencyand profitability. The textile mills that purchase and receive

our cotton rate our performance very high. The integrationof these two divisions helps make us better cotton suppliersand, therefore, we have great access to the global textileindustry.

■ What are your primary cotton markets?We sell cotton in more than 20 countries each year. The

U.S. textile industry is still our largest market, but we relyheavily on sales to the broader export market to help balanceour customer book. China, Turkey and Mexico are three ofthe larger markets for us, year in and year out. Vietnam is amarket that is showing significant growth and promise as well.

“One advantage that our cooperative has is the integrationof our marketing and warehousing divisions.”

The bountiful crop harvested by its members will fill this complex of co-op cotton warehouses (below), near Greenwood, Miss. Photos courtesy Staplcotn


■ How much do fashion trends impact your business, andwhat are the advantages of cotton fiber vs. synthetic fiber?Fashion trends and innovation in fiber and fabric definitely

impact cotton consumption and therefore our business.Undoubtedly, cotton is the best fiber out there in terms ofsoftness, absorbency and breathability. Plus, it is natural andrenewable! But synthetic fibers are occupying more rackspace these days due to their low and stable price and someproduct innovation. Polyester, the most common man-madefiber, still has issues like pilling, clinginess and odorretention, but clearly today’s polyester does not have thesame stigmas it did a decade ago.

Today’s fashion trend is generally moving toward lighterfabrics, performance textiles and “stretchy materials.” We’veseen textile mills move to finer count yarns and more fabricblends, which means less cotton per square foot of fabric.Fortunately, we are breeding cotton varieties that areproducing better fiber qualities, particularly in terms oflength, allowing us to meet the trend’s demand.

■ Who, or what, is your primary competition? Is foreigncompetition increasing?Man-made fibers are the biggest competition. There has

been a lot of investment and innovation in man-made fibersover the past decade. There is a huge capacity of man-made

fiber production that seems to be ever growing. Thatcapacity keeps prices low and stable.

Within the world of cotton, U.S. cotton is generally muchsought after. U.S. cotton is appreciated world-wide for itsquality and lack of contamination by foreign fibers and othermatter within the bales. We have a firm belief that if we canget people to buy more cotton, U.S. cotton will get its share.

Foreign cotton production is actually coming down a bitin response to lower prices and changing farm policies,particularly in China. However, Indian and Pakistani yieldsare on the rise, and they have strong domestic textile industries.

Cotton will always be needed by the world, but those thatcan yield the most with the least inputs will be the ones who

ultimately supply it. All things being equal, the U.S. hasmany comparative advantages when it comes to growingcotton competitively. For starters, we have great farmers anda lot of excellent soil suitable for cotton production.

■ The cotton market has been depressed the past severalyears. Has this been a supply vs. demand situation, or areother factors at play? Do you see any light ahead?The depressed prices we are witnessing in cotton are

basically supply and demand driven. However, the supply anddemand situation we find ourselves in has its roots in the wildprice increase of 2010 and 2011, and in governmental policy.The short-term tripling of cotton prices in 2010 and 2011incentivized retailers to include more man-made fiber in theirofferings. So, cotton consumption shrunk globally inresponse.

With the price run-up, acreage increased at exactly thetime we were losing demand. After the decrease inconsumption and increase in production, the market was notable to fully correct itself because in China, the epicenter ofglobal textile production, cotton prices were kept artificiallyhigh by its purchasing all of the excess production. Man-made fiber production, cotton production and world cottontrade all had an impact.

Essentially, Chinese policy encouraged cotton production

with high prices, thereby discouraging cotton consumptionvs. man-made fiber consumption. From 2010 to 2014,Chinese ending stocks rose from 10.6 million bales to 65.6million bales. Most of those bales were simply put into theChinese government’s inventory.

China has made some modifications to its producer-support programs which are leading to less Chinese cottonproduction. But man-made fiber prices in China are stillmuch lower than the price of cotton in China. Therefore, weare not getting as much cotton consumption back as wewould like. Further Chinese policy modifications are stillneeded, and the global cotton industry must collaborate andinnovate in order to gain back fiber market share. There is

“…Bledsoe was seated behind cotton buyers who were boasting

about the profits they were making off of Mississippi cotton producers.

He was one of those producers.”


some light at the end of the tunnel, but it will take a while toget there.

■ Why does a co-op business make good sense for a cottonfarmer?Contrary to how some might view it, I believe being a

member of a cooperative is very entrepreneurial. It allows theproducer to enter the supply chain past the farm gate. In ourcase, for example, the producer members own themerchandising firm and participate in the benefits of sellingto the end user, vs. going through a middleman.

From a price-risk management standpoint, it is a veryeconomical way to get professional hedging expertise. And itallows the producer to spend more time making goodfarming decisions and increasing yield. With the markets, theproducers do not have much control over the outcome, butwith production they have a lot more influence.

■ How do you market your co-op to gain more members?We do a small amount of advertising, mainly to promote

our brand name and to emphasize our core values oftrustworthiness and excellent performance. You might say ourmarketing strategy to members is pretty old-fashioned in thatwe prefer to have personal interactions with our membersand potential members. Our network of field representativesvisits producers to explain the details of our payouts and howour program works.

Honesty, integrity, trust, fairness and professionalism arethe qualities on which our reputation is based, and anypromotion of the cooperative that we do seeks to maintain

that reputation. In the end, we knowthat the marketplace is competitive andwe have to pay a fair price to maintainand grow our membership.

■ What is your outlook for the cropthis year?Cotton prices, like other row crops,

are hovering below the cost ofproduction for many producers. All therow crops are in over-supply situations.However, the U.S. supply and demandsituation is not expected to be nearly asover supplied as the global situation.The U.S. crop size influences globalcotton prices because the U.S. leads theworld in cotton exports and the futuresmarket is domiciled in the U.S. Cottonproduction in the U.S. should be downfrom last year, but to what extent, wedon’t know.

Another question will be our abilityto export as much cotton as in previous

years, as China and Turkey are likely to import less cottonthis year. They are the largest two U.S. customers and maybuy less than in previous years. Barring any major surprises,futures prices in the 60-70 cent per lb. range are likely. Atthat price level, producers in the U.S. and globally will find itdifficult to earn a good profit unless they have a bumpercrop.

■ What new technology — be it in farming, processing ormarketing — is impacting the cotton industry?Seed genetics, module-building cotton harvesters and a lot

of various farm technologies are all having positive impactson cotton. There are so many it is impossible to name themall. Seed genetics are helping our members produce betterlint and yields. They have considerably increased cotton’sdrought tolerance, which makes cotton a preferred crop toplant for many non-irrigated producers.

Larger and faster equipment is helping producersmaximize prime planting and harvesting windows by gettingin and out of the field when conditions are optimal. It is veryimportant for cotton to be harvested under the rightconditions to preserve fiber quality and to remove as muchcotton off the stalk as possible. The new harvesters that buildmodules of seed cotton that are ready to haul to the gin onboard have reduced the amount of extra labor and specialtyequipment needed to harvest cotton. Many producers find itdifficult to find the very short-term seasonal labor needed forcotton harvesting that is not needed for their other crops’harvest. ■

Tennessee cotton farmers (from left) Michael Roane, Richard Kelley and Brad Williams are among the thousands of grower-members in 11 states who own the Staplcotn Cooperative. Photo courtesy Staplcotn


By Julia Stewart

Editor’s note: Stewart is a 20-yearveteran of U.S. apple and produce tradeassociations and is married to Minnesotaapple grower Dennis Courtier. She splitsher time between Washington, D.C., andMinnesota. This article is provided courtesyNext Big Thing, A Growers’ Cooperative.

Tom Rasch, Jr.,remembers all too wellthe dark days the U.S.apple industryexperienced in the

1990s. So when the opportunity arosein the 2000s to try growing andmarketing apples a different way, he bitthe fruit.

The Greenville, Mich., grower cameof age working beside his parents, TomSr. and Judy Rasch, on their 160 acresof orchards. He took over the operationbearing their family name — TomRasch & Son Orchards LLC — in themid-1980s. An industry innovator,Rasch was one of the first growers inthe state to adopt high-density orchardtechnology, in which smaller trees aretrained to trellis systems, increasingtheir fruit volume and quality.By the 1990s, however, a number of

market forces had combined to driveapple prices down through the floor.Apples had become commodities atretail, and a flood of apple juiceconcentrate from China effectivelyended the market for U.S. juice apples.Further, a hangover lingered from thedevastating 1989 Alar crisis, which hadcaused sales to drop precipitously amidconsumer concerns over the safety ofthe fruit. Farm-gate prices that decadeaveraged only 20.8 cents a pound forfresh-market apples. In contrast, in2012 the average price was 45.3 centsper pound.

“We barely survived,” Rasch reflects.“Then, the founders of Next Big Thingsought me out to be a member of theirgroup of elite growers.”

Rasch is one of 44 apple growerswho are members of “Next Big Thing,A Growers’ Cooperative” (NBT). Itsmembers hail from across the UnitedStates and Canada. Their ranks includeboth small and large producers.

Market ‘turned on its head’NBT was the brainchild of

Minnesota apple grower DennisCourtier, owner of Pepin HeightsOrchards Inc. While Minnesota is asmall player in the U.S. apple industry,

ranked 20 out of 29 commerciallyproducing states in 2014, Courtier iswell known in the industry for newvariety innovation. He was one of thefirst commercial producers to grow andmarket Honeycrisp apples in the 1990s. Honeycrisp — a “fruit phenomenon”produced by the University ofMinnesota’s (UMN) apple-breedingprogram — has turned the applecategory on its head. By 2014, it hadrocketed to become the No. 6 applevariety in the United States, based onproduction. Honeycrisp’s successspurred a flurry of new varietyintroductions, and the apple categorybegan to lose its “commodity” image.

Like Rasch, Courtier had sufferedthrough the early 1990s. Honeycrispsaved his orchards, but soon it wasbeing grown in geography it wasn’tsuited to, and, arguably, beingovergrown. The university had releasedit as an “open variety” — meaning thatafter paying a small royalty to a variety’sdeveloper, any grower can buyHoneycrisp trees and sell the fruit asthey wish.

If apple growers were to befinancially healthy in the long term,Courtier felt that apple production andmarketing would have to change

Building a Better AppleCo-op pursues premium market niche by producing, marketing new varieties


significantly. And so NBT was born.Courtier served as its first chairman;Pepin Heights’ then-marketing chiefTim Byrne was its first president.

Setting the standardToday, the co-op searches out and

tests promising new apple varieties fromaround the world. When groupmembers decide they’ve found a worthyvariety, NBT buys the rights for itsgrower-members to produce andmarket it. The co-op then setsproduction and packing standards sothat only the best quality fruit isshipped to market. It also invests tocreate a consumer market for the brand,including outreach to retailers andconsumers using traditional and newmedia. It engages consumers on socialmedia — a new approach for a singleapple variety.

“We have to please consumers.When they get [our apples] in theirhands, they have to taste good,” saysRasch. “New varieties with good flavorand good characteristics… are here tostay.”

Like Courtier and Rasch, fourth-generation farmer and first-generationapple grower, Bill Clark and his wife,Angell, also knew that something would

Apple varieties have evolved to be treated asintellectual property, and interested parties“pay to play.” Here, SweeTango variety applesripen in the orchard of a Next Big Thing (NBT)Cooperative member’s orchard. All photoscourtesy NBT


have to change for small apple growers,such as themselves, if they wanted tostay in the business. Indeed, they feltthe situation was even more critical forsmall growers than for larger growers.

The Clarks grow apples inWashington’s Chelan Valley.Washington is the giant of the U.S.apple industry, producing nearly 60

percent of the country’s entire applecrop in 2013. The Clarks are small fishin the state’s very large apple pond,farming 105 acres of both conventionaland organic apples.

The Clarks watched the decline ofthe Red Delicious (Reds) variety from afront-row seat. Chelan was historicallyknown for producing prime-qualityReds. Then the variety was “bred togrow red” in parts of the state thatweren’t good “terroir” (or growingterritory) for it. That fruit didn’t tasteas good or store as well.

The variety’s popularity withconsumers fell far and fast.

Washington’s Red Deliciousproduction fell by 27 percent from 1999to 2012. In 2015, Red Delicious isforecast to no longer be the most-grown variety grown in the state. Overthe years, the Clarks’ Red Delicious andGolden Delicious trees have graduallygiven way to Honeycrisp and othervarieties.

“As consumers ourselves, we knowthat if we consumers don’t get a goodapple, we don’t come back for a while,”says Bill Clark. “NBT is managing whogrows an apple, where it grows, whatthe eating experience is. That’sparamount to the variety’s sustainability,

and that rolls down to oursustainability.”

Let your taste buds danceThe first apple variety NBT has

taken to market is SweeTango®,another UMN product. Unlike the“open release” Honeycrisp, UMNdebuted SweeTango as a licensed

variety, a model being adopted bynumerous apple breeders. Applevarieties have evolved to be treated asintellectual property, and interestedparties pay to play.

Pepin Heights competed for, andwon, the North American license forMinneiska trees and their SweeTangofruit. The license was transferred to

NBT once the co-op was up andrunning, and the variety had proven itsworth.

NBT growers think SweeTangotastes even better than its famous“mom,” Honeycrisp, and “dad,” UMN’sZestar variety. All of NBT’s membersgrow Minneiska apple trees. Minneiskafruit that meets NBT standards is sold

by co-op-member marketers under thebrand name SweeTango.

As of the 2015 apple harvest, about800,000 Minneiska trees are in theground nationwide. Most are

conventionally grown, while a smallpercentage are organic. (It is verydifficult to grow apples organically eastof the Mississippi River because of the

“The commodity model doesn’t work for a small grower.We have to do something different, or something better,because we can’t do it cheaper.”

In the 1990s, a number of market forces combined to severely drive down apple prices. “Webarely survived,” says Tom Rasch Jr. (third from left). With him are sons (from left) Devin, Ericand Kyle.


amount of moisture received.) While production ramps up to goals,

SweeTango apples are available for alimited time only each fall. Pent-updemand for the variety each fall servesto cement its premium branding.Strategically, NBT doesn’t intend forSweeTango to ever become a year-round apple, so as not to risk its“commoditization.”

Designing a business for the future

As a premium variety, SweeTangofetches higher grower and retail pricesthan commodity varieties. During the2014 apple season, SweeTango garneredfour times more per carton than the“commodity variety” Red Delicious.

What made Rasch decide to joinNBT? “I liked the idea of a managed

variety. From production, to storage, topacking all the way through sales,everything was going to be managed,”he said. “It made sense that if weweren’t overproducing something, weshould be able to get a better price.”To ice the cake, “The fruit wasexceptional — the best apple I everate,” he says. “The quality of the apple,the growers I was associating with andthe marketing that we were going to bebuying into all looked to be promising.”

The Clarks were attracted to NBTbecause “the commodity model doesn’twork for a small grower,” says BillClark. “We have to do somethingdifferent, or something better, becausewe can’t do cheaper.”

“And then we heard the name!” addsAngell. That’s when they knew they’dmade the right decision to join the co-op. “By coming up with a great name…[we knew] that the folks making thedecisions were aligned with what webelieved is important,” says Bill.“Marketing is huge; it gave us a lot ofconfidence that [the co-op was] puttingso much into marketing,” Angell notes.

The money that NBT spends onmarketing, production research andadministration means that its growersmight not make as much as they couldon a box of fruit. But NBT’s growersalso understand that the co-op’s strategyof production and quality controlsshould mean that the prices they receivewill remain higher than they would inan unmanaged setting.

“We’ve seen Honeycrisp turn into afree for all,” says Angell Clark. “Asgrowers, we all want the stability andlongevity that lead to sustainability,”adds husband Bill. “That happens byhaving brand standards.”

The winding road to successIts members and leaders note that it

hasn’t all been wine and roses at NBT. “There have been challenges at everystep, concerns and issues all along theway,” Rasch notes. “But as a group ofaccomplished growers workingtogether, we’ve been able to overcome

“Marketing is huge,” says Angell Clark, seen here with husband Bill. NBT’s marketing plans gavethe Clarks confidence in the co-op’s overall strategy.


most of these.”David Cudmore concurs with Rasch.

Cudmore is president and CEO ofScotian Gold Co-operative Ltd. inNova Scotia, Canada, and chairs NBT’sboard of directors. The 103-year-oldScotian Gold co-op has 55 grower-members who farm 2,500 acres ofapples, producing just under 900,000bushels per year.

When Courtier pitched the idea ofNBT to Cudmore, “I was quiteskeptical,” he recalls. “I’ve been in co-ops since the 1980s; I think they are notreally understood in the apple industry.Apple co-ops have had a mixed recordof success — many work, but not all ofthem.”

Cudmore says there are two primarychallenges to overcome in bringingtogether disparate industry leaders.First, NBT’s members “can becompetitors in the other parts of their[business] lives. To bring them together,to work together and trust each other,has been a huge challenge,” he says.

Further, “they are used to working intheir companies’ best interests. It can bea challenge to put their individualinterests aside to work for the good ofan entire organization,” says Cudmore.“They have to take their grower hatsoff and put their co-op hats on; and theissues facing the co-op can be very

different than the issues [they] face asgrowers.”

Fully launched in 2006, NBT todayhas 44 grower-members. The price ofentry was $10,000 per production unit;a unit equals 10,000 packed boxes offruit. A nine-member board governsNBT, with three directors from each ofthe co-op’s three geographic districts —East, Central and West. (The Canadianproduction, in Quebec and NovaScotia, is included in the East region.)

The board meets in person twice ayear on average, and by phone asneeded, usually about once every monthor two. The full membership gathersfor an annual meeting, with the mostrecent one in Nova Scotia in early 2015.

The co-op has one full-timeemployee, President Theron Kibbe,whose background is in cooperatives.The logo and brand statement weredeveloped by an award-winning firmthat specializes in brand development.The co-op outsources marketing to anationally known agency. Expert

consultants research and advise ontechnical issues related to productionand storage.

Engaged NBT members invest theirtime in the co-op’s three committees:the Best Practices Committee, whichaddresses production and storage issues;the Marketing Committee, and the

Finance/Audit Committee. The co-opalso funds research into productionissues, retail marketing, advertising,public relations and social mediaactivities.

“The kind of people who are in thisorganization aren’t waiting for someoneelse to come up with the ideas,” saysBill Clark.

NBT paid out its first patronagerefund to members in 2014; anotherpayment is planned this year.

“I think NBT has been verysuccessful,” Cudmore says. “To bringthis group together to work collectivelyon one project…to be recognized as astructure that can work to introduceother apples in North America, thoseare real successes.”

What’s next?With SweeTango launched and its

strategy progressing on schedule, NBTmembers are turning their attention toidentifying the co-op’s next act. Theyrecently decided to purchase the U.S.and Canadian license to a line of applevarieties members found in a breedingprogram of an international group ofapple marketers; details are being kepton the “down low” for now.

What’s the prognosis for Next BigThing, A Growers’ Cooperative? “I don’t think we’ve seen anything yet.This is a very successful business modelto launch other varieties,” Cudmoreconcludes.

“I’m a real believer. We just jumpedon the opportunity to buy more[SweeTango] lots, we feel it has anexciting future,” adds Bill Clark. “Iwould hope that this apple and the co-op can go far enough into the futurethat our two children can benefit fromit. It means sustainability and successfor us as a family, and as a farmbusiness.”

“I believe that SweeTango is going tobe the most profitable apple on thisfarm by far. SweeTango is here tostay… until the next big thing comesalong, anyway,” winks Rasch. ■

■ Co-op founded in 2006■ 44 growers across three U.S. regions and two

Canadian provinces ■ First variety introduced: SweeTango®, developed

by University of Minnesota■ Taste notes: Crisp and sweet, with a “lively touch of citrus, honey and spice”■ Available early September until gone (usually in December)■ Available in a variety of retail outlets, coast to coast ■ Website: www.sweetango.com■ Social media: Twitter: @SweeTango; Facebook: Facebook.com/SweeTango; Instagram:

sweetango_apple; Pinterest: Pinterest.com/sweetangoapples■ SweeTango® is a registered trademark of Regents of the University of Minnesota

N B T/SweeTango fact file

Rural

U N I T E D S TAT E S D E PA R T M E N T O F A G R I C U LT U R E

Office of the SecretaryWashington, D.C. 20250

NATIONAL COOPERATIVE MONTH

October 2015By the Secretary of Agriculture of the United States of America

A P R O C L A M A T I O N

WHEREAS producer- and user-owned cooperatives are essential to the U.S. economy and to ruralAmerica, delivering supplies to farmers and ranchers and helping them market their products, supplyingtelecommunications and energy to rural communities, and providing financial and other importantservices; and

WHEREAS cooperatives unite their member-owners, thus improving their bargaining power, increasingtheir marketing clout, and reducing costs based on volume purchasing of production supplies while addingvalue through pooled product marketing; and

WHEREAS cooperatives fill market voids by providing high-quality services and products that otherwisemay be unavailable; and

WHEREAS member-owners manage their cooperatives through democratic governance processes,serving as a voice for their members on legislative issues and enhancing the viability of their communitiesby generating jobs and paying taxes;

NOW, THEREFORE, in recognition of the vital role that cooperatives play in improving economicopportunity and the quality of life in rural America, I, Thomas J. Vilsack, Secretary of the United StatesDepartment of Agriculture, do hereby proclaim October 2015 as National Cooperative Month. Iencourage all Americans to learn more about cooperatives and to celebrate cooperatives’ accomplishmentswith appropriate ceremonies and activities.

IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of September 2015, the two-hundred fortieth year of the Independence of the United States of America.

THOMAS J. VILSACKSecretary


By Kimberly Roush and Hannah Scott

Editor’s note: Roush is program assistantand Scott is program manager with theOhio Cooperative Development Center.

Great River Organics Inc. is afarmer-owned cooperative of sevencertified-organic farms in central andnorth-central Ohio. The co-op isworking to “grow regional farmbusinesses, preserve Ohio farmland andprovide a larger scale, local alternativeto organic produce from outside Ohio.”

Great River Organics (GRO)officially became a cooperative inDecember 2014, with support from theOhio Cooperative Development Center(OCDC) at the Ohio State University

South Centers. OCDC’s mission is toimprove the economic condition ofrural areas of Ohio and West Virginiathrough cooperative development.

Funds from a “mini-grant” programoffered by OCDC allowed GRO to hirethe services of an attorney and anaccountant, as well as to develop andprint marketing materials, all of whichare helping to lay the foundation for theco-op’s success. In addition, GRO is aparticipant in the Ohio and WestVirginia Food Hub Network, facilitatedby OCDC, which provides educationand networking opportunities tosupport the development of food hubsin the region.

GRO aggregates, markets anddistributes farmer-owners’ organic

C O - O P M O N T H S P E C I A L S E C T I O N

If there’s a will, there’s a way. As the articles in this year’s Cooperative Monthspecial section attest, that way is often a co-op way for producers and otherrural residents seeking solutions to a common need. Co-ops are businesses thatallow their members to “take ownership.” Cooperatives are helping Montanapoultry growers to pursue a new processing facility, Latino farmers inMinnesota to progress from farmworkers to farm owners, and homecareworkers in Washington state to obtain a living wage and benefits that willenable them to continue to perform their crucial work. On the following pages,you can read about these and many other examples of co-ops being launched orassisted by the nation’s network of cooperative development centers.

Certified Organic, Certified Co-op

Ohio farmers join forces in GRO to grow their market reach

These tomatoes — inspected by GRO boardmember Michael Jones and General ManagerCharlotte Graham — will be distributedthrough the co-op’s weekly CSA (communitysupported agriculture) deliveries.

Taking Ownership, With Co-ops


produce. In early August, the tablesstretching through the middle of theco-op’s warehouse in Columbus, Ohio,were filled with tomatoes in variousshades of red, purple and green. Therewere also bell peppers, leafy greens anda myriad of other vegetables. A groupof employees and volunteers was fillingbags for the Great River Market Bag, acommunity-supported agriculture(CSA) program that includes about 300members throughout central Ohio.

Co-op’s unified visionThe other major component of the

cooperative is the development of awholesale business focused on makingGRO farmer-owners’ produce widelyavailable to consumers.

“The cooperative businessmodel…incorporates the unifiedcooperative’s vision of making local,certified organic food a normal fixturein people’s lives while helping farmerssustainably grow their operations,” saysGRO board member Michael Jones.“To accomplish this, in part, thegrowers feel strongly about seeing theirorganic products readily available inplaces where people most frequentlyshop: grocery stores. To create asustainable income, our cooperativemembers seek the opportunity to sellcases, or acres, of food.”

GRO has been working to buildrelationships with area partners to offerlarger volumes of organic produce. Atthe same time, the farmers of GROhave been working together to developquality standards to both ensure high-quality products for their CSA and toallow them to provide retail partnerswith certified-organic products thatmeet and exceed industry specifications.

Co-op model ensures grower control

Jones and Charlotte Graham,recently hired as GRO’s generalmanager, make it clear that thecooperative model is integral to GRO’sidentity. The business was originallystarted as a limited liability company

A Pathway to Ownership

LEDC provides Latino farmer co-opwith means to acquire land

By Jaime VillalazE-mail: [email protected]

Editor’s note: Villalaz is a businessdevelopment specialist with the LatinoEconomic Development Center inMinneapolis.

In November 2011, staff from theLatino Economic Development Center(LEDC) in Minneapolis, Minn., metwith nearly 30 of residents of LongPrairie, Minn., who were interested inthe creation of a farming cooperative asa way to promote economicdevelopment. After several meetingsthroughout that winter, the cooperativebecame a legal entity in April of 2012.The eight original members eachcontributed $250 to start the AguaGorda Cooperative (which means “Fat

Water” Cooperative, in Spanish).The co-op’s founding members hadfarmed for most of their lives, but they

(LLC), but its farmers eventuallyrealized that member-ownership wouldbest meet their ultimate goal, which, inJones’ words is “to bring prosperity tothe farmers.”

“I think what is so great about theco-op is that it enables growers to havemore control over the way they dobusiness in the marketplace by being

part of this cooperative, having thecollective marketing power,” saysGraham. Another benefit of the co-opis that its farmers can rely on the staffof GRO for these vital marketing anddistribution services, leaving them withthe time needed to concentrate on theirown efforts to grow quality organicproduce.

While it may be young, GRO isalready thinking about the future. Thecooperative plans to grow the wholesaleportion of the business, allowingcurrent farmer-owners to expandproduction while adding new certified-organic farmer-owners throughoutOhio.

For more information about GreatRiver Organics Inc., visit: www.greatriverfarms.org, e-mail Graham at:[email protected] or call:614-929-5525.

Co-op members apply plastic mulch coveringto help protect beds of newly plantedvegetables.

The business was originallystarted as an LLC, but its farmerseventually realized that member-ownership (a co-op) would bestmeet their ultimate goal: “to bringprosperity to the farmers.”


had various levels of farming skill andknowledge. After leaving their nativeMexico, they harvested grapes, peaches,strawberries and other produce inCalifornia as migrant workers beforesettling in Long Prairie to work in year-around positions on dairy farms or meatpacking plants.

Operating their own co-op was anew experience for the members.Therefore, the first step in ensuring thegroup’s success was to train them incooperative organization andmanagement. Learning aboutmanagement came next, and the basicelements of raising organic produce in

the Minnesota climate followed. Thisrequired that LEDC, as a sponsoringorganization, hire an experiencedorganic Latino farmer to providetraining.

With a $5,400 loan guaranteed byLEDC, and the trainer’s and members’strong desire to succeed, they took thenext step, searching for land to farm.Lyle Danielson, Long Prairie’sEconomic Development Director,offered assistance by leasing the co-opsix, 40x40 foot plots in the city’scommunity garden. It was theirbeginning.

Early success spurs growthAgua Gorda’s first year of operation

was a modest success. With the sale ofnearly $7,000 worth of crops,cooperative members were able to payback their loan. Nearly 50 percent ofAgua Gorda’s earnings were from salesto local residents.

After the first year of operation, theco-op sought to expand production,which meant that additional land wasneeded. Conversations with the LongPrairie City Council led to securing

three acres of land, with access to water,at the city’s industrial park.

Their early success led to anoptimistic plan for 2013. Co-opmembers planted 18,000 vegetableplants in early May. While sales grew to$18,500 that year, the cooperative onlysold half of its produce.

In 2014, Agua Gorda Cooperativeexpanded operations to 5.5 acres. It alsobought a tractor and other farmequipment. Sales climbed to $42,000that year. Much of the sales resultedfrom working with Shared Groundmarketing cooperative and beingawarded a contract to grow for LaLoma Tamales — a Minneapolisrestaurant, food wholesaler and cateringbusiness. Under this contract, the co-op

would supply 30,000 pounds oftomatillos (a staple of Mexican cuisine)and 3,000 pounds of Serrano peppers.

Agua Gorda became a foundingmember of Shared Ground Farmers’Cooperative in Minneapolis, which soldits members’ produce through acommunity supported agriculture(CSA) program and to upscalerestaurants.

Big steps in 2015This year, Agua Gorda has again

expanded its acreage and production. Itis now a certified organic producer andhas received Good Agriculture Practice(GAP) certification on its 5.5-acre plot.In addition, the cooperative has leasedan adjacent 54-acre property with an

Members of the Agua Gorda Cooperative are growing organic produce for the Minneapolis market.

In most cases, it is very difficultfor Latino small farmers to obtainland ownership as individuals;but access to land as a co-op isan option that Agua Gorda hasshown is possible.

Co-op members develop a game plan for theday’s work.


By Courtney BernerCooperative Development SpecialistUW Center for Cooperatives

As the business world growsincreasingly complex, an effective boardis critical for a cooperative’s success. InAugust, the University of WisconsinCenter for Cooperatives (UWCC)tested a new format for deliveringinformation on “best practices” forboard leadership. It involved aninteractive roundtable that facilitatedlearning among the directors of adiverse range of cooperatives.

The event targeted directors fromcooperatives of all sectors and sizesfrom across Wisconsin. Topics includedthe role of the board chair and otherleadership positions, ways to facilitateeffective meetings and developingstrategies for good decision-making

processes. Other topics included waysto develop a more efficient board, howto conduct a CEO performance reviewand leadership succession planning.

The roundtable brought togethercooperative board leaders from a rangeof sectors and industries, includingagriculture, grocery, transportation,food processing, farm supply andenergy. Participants included a numberof well-established, successful worker-,producer- and consumer-ownedcooperatives. These included OrganicValley, Adams-Columbia ElectricCooperative, Willy Street GroceryCooperative, Landmark ServicesCooperative and Union CabCooperative, among others.

Cross-sector learningEven though many of the directors

from these cooperatives boast years ofexperience serving on boards, theyfound value in exchanging ideas withdirectors from different co-op types andsectors.

“To me, the value of this event forour directors is gaining exposure andunderstanding from other cooperativedirectors that the challenges we facehave been, and continue to be, faced byother cooperatives,” said a member ofan agricultural marketing cooperative.“Our own particular size (global level

Learning From Each Other

UW Center roundtable encourages peer learning among co-op directors

“It was great to hear howcooperatives that are verydifferent from ours met theirchallenges.”

The Yahara River Grocery Cooperative (YRGC) implemented a new governance system in 2014. Itwas just one of the many co-ops that participated in idea-sharing roundtables sponsored by theUniversity of Wisconsin Center for Cooperatives. Photo courtesy YRGC

option to purchase the land.

LEDC trains beginning farmers LEDC has developed a beginner

farming model for Latinos wishing tofarm. Called “Farm IncubatorCooperatives,” the goal of the effort isto create a pathway for low-wagefarmworkers to become farm owners.

The Agua Gorda Cooperative is thefirst LEDC client to make thistransition. Five other Latinocooperatives have been organized inMinnesota and Wisconsin, which arefollowing the Agua Gorda example.

LEDC’s loan program incorporatesmicro-farming loans which includeworking capital and equipment loans.

Access to land and farming skills are thebiggest barriers for Latinos to enterinto farming. LEDC’s assessment isthat, in most cases, it is very difficult forLatino small farmers to become ownersof land as individuals; but access to landas a cooperative is an option that theAgua Gorda Cooperative has shown ispossible.


now) is pushing us into a new realm ofchallenges.”

While the primary goal of theroundtable was to encourage peerlearning between cooperative leaders, itbecame apparent that the roundtableformat also provided an excellentopportunity to deliver cost-effectiveeducation and support to newlylaunched cooperatives that havereceived technical assistance fromUWCC. We hoped that mixingdirectors from start-ups withestablished co-ops would increase ideaand skill sharing between the twogroups and strengthen cross-sectoralconnections within Wisconsin’s co-opcommunity.

New co-ops well representedIn addition to established

cooperatives, the event attracted anumber of UWCC’s start-up and “co-op conversion” clients, including:• Big Water Coffee Cooperative, which

UWCC helped convert to a workercooperative in 2015;

• Yahara River Grocery Cooperative,which implemented a new policygovernance system in 2014;

• Allied Community Cooperative,which is working to open a grocerystore in an underserved neighborhoodin Madison;

• Fifth Season Cooperative, a multi-stakeholder, local food cooperativelaunched in 2011;

• Hop Exchange, a marketing co-op forhop growers, and

• A Milwaukee-based start-up brewerycooperative in its early planningstages, among others. As we had hoped, the relatively new

co-op directors found value in hearinghow more established cooperativesapproach governance and boardleadership issues.

“It was fascinating to hear fromdiverse sector perspectives,” a food co-op director said. “It was great to hear

how cooperatives that are very differentfrom ours met their challenges.”

Members of fledgling cooperativesalso found inspiration in theirexchanges with established cooperatives.“I want to let you know that I have arenewed commitment because of theroundtable discussions,” a member of anew community owned co-op said. “Ilearned that a cooperative can grow andoperate to become an effective elementfor its members.”

Based on feedback from roundtableparticipants, the UWCC plans to hosttwo additional roundtables in thecoming year. The roundtables willcontinue to include co-ops of all types,sizes and sectors. However, futuregatherings will include breakoutsessions for established and start-upcooperatives while still providing sharedmeals and networking time toencourage the two groups to share keylearning and strengthen cross-sectoralrelationships.

Changing the Game

Montana Poultry Growers Co-op seeks to take flightwith new processing facility

By Laura GinsburgProgram Manager for CooperativeDevelopment, Lake County CommunityDevelopment Corporation, Ronan, Mont.

The Montana Poultry GrowersCooperative, now in its ninth year ofoperation, is pursuing some game-changing actions — includingconstruction of a new processing plantthat will cater to small producers —which it believes will propel the state’spoultry production to new highs.

The statewide producers’ co-op wasone of the first businesses to develop aninspected, mobile processing facility for

chickens. But the results have beenmixed for the mobile unit.

This mobile processing unit traveledall across “Big Sky Country,” and was ahuge benefit to some members. But thetrailer itself did not fare well after thewear and tear of many thousands ofmiles traversed on our state’s many dirtroads.

The low volume of birds processed,combined with the long distancestraveled and the fact that it did notmeet most members’ needs, ultimatelymeant that the unit was noteconomically viable.

The co-op tried an alternate strategy

that involved placing several smallerprocessing units at locations across thestate. But these units no longer couldoffer food-safety inspection, preventingsale of the birds to the public. So whilethis strategy has allowed farmers tocontinue to process birds for their ownuse, it has not created a viable optionfor those seeking to sell them.

Bulk feed purchasing The co-op has explored other ways

to make poultry production moreprofitable. One effort has involvedhaving the cooperative make bulk feedpurchases from a certified organic feed


mill. By purchasing together, membersgain sizable discounts while also savingon delivery charges.

Feed orders are delivered to theLake County Community DevelopmentCorporation in Ronan, where membershave access to a forklift to load bulkbags and pallets onto their vehicles.

The co-op also offers classesthrough the National Center forAppropriate Technology (NCAT) onpastured poultry production, businessplanning and poultry slaughtering.

Joint effort to build plantAn exciting new project involves a

partnership between the co-op and twoother businesses seeking to build a new

poultry processing plant. One of the partners, Homestead

Organics Farm, in Hamilton, Mont.,has raised heritage-breed turkeys andchickens for many years. To expandproduction and processed-bird sales,Homestead has been exploring thepossibility of building a state-inspectedprocessing facility.

Another partner is Living RiverFarm, a neighbor of HomesteadOrganics, which has been working toattain the goal of raising at least 7,000birds annually. It was quick to offer itssupport for a new processing plant.

With help from the Poultry GrowersCo-op and many farmers across theregion, Homestead Organics sought

funding for a new facility. It raised alarge portion of the needed fundsthrough a campaign on Kickstarter (anonline fund-raising website), received agrant through Montana’s Departmentof Agriculture, and is currently seekingthe balance required through non-traditional finance.

“Montana small farmers and poultryhobbyists now have zero options forregulatory compliance [for processedbirds],” Laura Garber, co-owner ofHomestead Organics, said during theappeal for funds on Kickstarter. “Thereare no state-licensed poultry processingfacilities, except for those located on theHutterite colonies. Montana needs asmall-scale poultry processing facility.”The new plant, when built, she said, willbe “ready and able to meet the demand!”

Under the current arrangement,Homestead Organics will own theprocessing facility and much of theequipment. The Poultry Growers Co-op will be the managing entity and willown a portion of the equipment. Theco-owner of Living River Farm, BeauMcLean, will oversee day-to-dayoperations and be a primary user.

The facility will include an inspectedprocessing area, a packaging room andeducational space. Groundbreakingoccurred Aug. 2, and once completed(anticipated by spring 2016), it will bethe only inspected poultry processingplant available for rent in Montana,opening doors and new markets forpoultry producers.

Lake County CommunityDevelopment Corporation’s (LCCDC)Cooperative Development Center hasprovided technical assistance to theproject and is committed to its success.The center will be compiling a casestudy as construction continues andafter the doors open.

LCCDC has been a cooperativedevelopment center for 15 years,servicing western Montana andpartnering across the PacificNorthwest. For more informationabout the center, visit:www.lakecountycdc.org.

Having had only limited success with mobile processing, members of the Montana PoultryGrowers Cooperative are now partnering with others to pursue a new poultry processing plant.


Maine Farm and Sea Co-op

Multi-stakeholder co-op’s goal: revolutionize Maine’s food system

By Brian Van SlykeCommunicationsCooperative Development Institute

Support for local foods has become aphenomenon across the country.Although enthusiasm for this movementand its institutions has grown, smallfarmers, food producers and fishermanstill face extraordinary hurdles inbringing their food to the market. Thisis especially true when it comes tofeeding major community institutions,such as universities and hospitals.

Individual farmers rarely have readyaccess to the institutional food marketdue to lack of relationships with keybuyers. Corporate policy generally

doesn’t support local purchasing, andthere is a lack of adequate infrastructureto meet the demands of larger markets.Further, multinational corporationswield a great deal of control over themarket. Farmworkers, food preparersand cafeteria workers often have onlyseasonal employment opportunities.

Many local food projects, whileimportant, do not necessarily have alarge-scale impact on a region’s foodsystem.

Co-op aims to make wavesWith these issues in mind,

Cooperative Development Institute(CDI) staff member Jonah Fertig beganexploring the idea of building a multi-

sector, multi-stakeholder food and farmcooperative that could revolutionizeMaine’s food system. CDI, which helpsdevelop and provide technical assistanceto cooperatives throughout NewEngland and New York, has beeninvolved in starting multi-stakeholderfood cooperatives before, including theNew Hampshire Community SeafoodCooperative, Eat Local Eastport andthe County Co-op and Farm Store.

The difference here lies in the sizeand the scope of this project.

Earlier in 2015, CDI beganfacilitating the creation of Maine Farmand Sea Cooperative (http://www.mainefarmandsea.coop). The cooperativebrings together farmers, distributors,

The Maine Farm and Sea Co-op (MFSC) is pursuing the state’s institutional food market as the primary buyer for its members’ crops, meats andseafood. Photos courtesy MFSC


food service workers, chefs andconsumers with the aim of providinglocal food to local Maine institutions —such as universities and hospitals. CDIis leading the project through all of itsphases, ensuring that the deliverables ofa project of this size are met whiletraining members as well as the boardof directors to take the reins.

Building from success of other initiatives

Maine Farm and Sea Cooperativewill serve local mainstay institutionsthroughout the state. These are knownas “anchors” — major institutions (suchas schools, universities, citygovernments and hospitals) that haveconsiderable purchasing power and thatare deeply rooted in the community,meaning they are unlikely to pack upand leave or go out of business.

The multi-sector cooperative willprovide food management services tothese institutions, initially focusing onthe Maine university system. By doingso, the cooperative will be able to

fundamentally change the lives ofworkers, consumers and producerswhile simultaneously building a localfood system rooted in democraticownership and economic equity.

“With increasing demand for locallygrown food by consumers and studentsalike, we felt the time was right to bringlocal foods to an institutional level,”says Ron Adams, former director ofPortland Schools Food Programs andboard member of the cooperative.“While our immediate goal is securing

the University of Maine System foodservice management contract, our largergoal is to provide locally produced foodand food services to a number ofinstitutions. As a locally ownedbusiness, we will re-invest our profits inMaine by creating new managementpositions, paying workers a fair wageand investing in rural economies.”

This concept of local foodprocurement for major institutions isnot without precedent. The Universityof Massachusetts-Amherst has alteredits purchasing practices to support localfarmers. The university is locallysourcing 13 percent of the food servedto 17,000 students — 45,000 meals aday. In Maine, the Portland PublicSchools intends to purchase 50 percentof its food locally by 2016.

A step further Maine Farm and Sea Cooperative

will be taking such efforts a step furtherby being owned and governed by thepeople it impacts: its multi-stakeholdermembership. This includes many low-and median-income Maine farmers,

fishermen, distributors, food producers,food service professionals, students,faculty and ordinary Maine residents.The membership classes are: Producers(Maine farmers, fishermen, distributors,food producers); Workers (food serviceworkers); and Consumers (students,faculty, and Maine residents).

The multi-stakeholder cooperativeconcept is fairly new in the UnitedStates, and even where they exist theyare typically only made up of twomembership classes. That’s one of thethings that makes Maine Farm and SeaCooperative so bold: it aims to have aregional impact while being owned andgoverned by all of those it is impactingand serving. It is an individualcooperative while also an entirecooperative system.

There are three tenets of thecooperative’s mission that help defineits unique position. They combine theneeds and best interests of themembership across the different sectors.These three principles are:• To supply and serve the highest

possible percentage of locallyproduced Maine fruit, produce,meats, seafood and value-added foods;

• To manage food service at affordableprices for Maine universities,businesses, hospitals, and otherinstitutions where food is served; and

• To earn a fair profit while creatingjobs for Mainers, helping rebuild aresilient Maine food system, andprotecting our environment.CDI — which is building on the

success of others — is documenting itswork to help replicate such co-ops inother states.

Starting by aiming high“Traditionally, the barrier to making

locally grown food available on theinstitutional level has been thelogistics,” says Michael Hillard,economics professor at University ofSouthern Maine and supporter of thecooperative. “The Maine Farm and SeaCooperative presents a promisingmodel by bringing together expertise at

The co-op is being coordinatedand energized by those who havebeen in the field and the regionfor many years and who will bebringing their insight and passionto the table.

One of the co-op’s core business principles isto “manage food service at affordable pricesfor Maine universities, businesses, hospitalsand other institutions.”


all stages of delivering healthy, local andsustainable food to Maine’s majorinstitutions, including school systemsand the University.”

The co-op is pursuing a five-yearcontract for food service at campuseswithin the University of Maine system,and in the future it will seek contractswith other institutions statewide. Foodservice is a highly complex, capitalintensive business — especially on sucha large scale. So CDI and the co-op areworking diligently to gather a teamwith a proven track record and decadesof front-line experience in foodproduction, local foods organizing,cooperative organizing, farming,business development and institutionalfood service. The co-op is beingcoordinated and energized by those

who have been in the field and theregion for many years and who will bebringing their insight and passion to thetable.

The cooperative will supply a rangeof products and service, including local,sustainably produced food; talented,experienced food service staff, chefs andmanagers; an up-to-date kitchen andservice equipment, tools and supplies. Italso plans to cater services for events atuniversities and off-site.

Marada Cook, president of CrownO’Maine Organic Cooperative and aboard member of the Maine Farm andSea Cooperative, believes strongly inthe potential impact of the cooperative.“In addition to providing locallysourced food on an institutional level,Maine Farm and Sea Cooperative will

provide farmers and fishermen withconsistent demand for their products atpredictable and fair prices, enhancingMaine’s rural economies and creatingjobs,” she says.

Through these efforts, Maine Farmand Sea Cooperative hopes to transforminstitutional food purchasing, expandlocal ownership in institutional foodservice, facilitate the procurement andsupply of local foods from farmers andfishermen for anchor institutions andlocal residents, expand workerownership, and build communitywealth. This can be done because we’reworking together to build a food systemby the people of Maine, for the peopleof Maine.

Kentucky Groundbreakers

Co-op farmers now grow sweet potatoes in fieldsformerly planted with tobacco

By Kara Keeton

Editor’s note: Keeton is a Kentucky-basedjournalist. This article is provided courtesyKCARD.

The LaRue County, Ky., farmerswho formed Kentucky GroundbreakersInc., a marketing cooperative, havereplaced their old cash crop, tobacco,with a new one: sweet potatoes.

“We knew that once we startedraising the crop, we would have a lotmore power to market if we cametogether [in a co-op],” explains TravisCleaver, a farmer-member of KentuckyGroundbreakers. “We had heard aboutKCARD [Kentucky Center forAgriculture and Rural Development]services, and turned to them to helpestablish the cooperative. They havejust been phenomenal. They helped us

plan, explained how a co-op works,helped us look at the potential marketsfor sweet potatoes and really held ourhand through the whole process.”

It was in late 2013 when the farmersbegan looking at the possibility ofraising sweet potatoes as a cash crop.Cleaver was working with specialists atKentucky State University to conductsmall-scale vegetable production fieldtrials when he saw the potential ofgrowing sweet potatoes here.

“I was looking for a cash crop thatmy father and some of the oldermembers of the group could easilygrow,” Cleaver recalls. “I knew theywouldn’t want to be out every daypicking green beans to take to market,but they could go out and drive thetractor and pick up sweet potatoes atharvest.”

Further, sweet potatoes need


relatively few inputs, compared to manyother crops, he notes. “I saw a potentialmarket for the product, as morerestaurants are offering them on themenu.”

Another selling point for sweetpotatoes, in the eyes of the formertobacco farmers, was the ability to useequipment they already had on theirfarms for growing tobacco. The abilityto utilize tobacco setters, sprayers andother equipment meant that the farmerswould not have to invest heavily inequipment to begin their sweet potatooperations.

“We have been able to use most ofour equipment that we used in thetobacco field,” says Cleaver. “Our onlybig purchase as a cooperative has beenthe potato digger. We wanted to makesure to have good harvestingequipment.”

Industry connections critical for success

Along with helping the farmers withthe cooperative development process,Cleaver says KCARD played asignificant role in helping members ofthe co-op connect with individuals inthe industry as they developed theirorganization. KCARD helped connectthe group with the KentuckyHorticulture Council and withUniversity of Kentucky Extensionagents and specialists who haveprovided guidance for the project. Evenmore importantly, they have helped thefarmers connect with other producerswho are raising sweet potatoes.

“KCARD put us in touch with agroup of farmers in eastern Kentuckywho diversified their operations byadding sweet potatoes to theirproduction,” says Cleaver. “Many of thefarmers were also former tobaccofarmers. They have given us suggestionsand guidance on everything from theproduction side to the marketing sidefor the product.”

Kentucky Groundbreakers producedits first crop in the summer of 2014,with each of the five members of the

cooperative planting only one-fourth ofan acre.

“We wanted to start small last year,as we were still building the cooperativeand identifying the markets for thepotatoes,” says Cleaver. “Our goals forthat first year were to get experienceproducing the crop and marketing thesweet potatoes as a group.”

Though they were not an officialcooperative last year, the group of fivefarmers came together and marketedtheir crop together working with a newcompany, Proud Processing andDistribution, based in Bardstown, Ky.

Working togetherWhile the members all kept some

sweet potatoes to sell at farmer markets,the majority were sold through ProudProcessing. “Marketing our croptogether with Blake Roby [of ProudProcessing] was a good experience, sowe felt that moving forward withestablishing the cooperative was rightfor our group,” says Cleaver.

Inclement weather put a damper onplans to expand acreage in 2015. “Thisyear we were all hoping to put outlarger crops, but weather conditionswere a challenge,” Cleaver explains. “Afew of us were able to put out a half anacre, and the rest did at least one-fourthacre again.”

In August 2015, the farmers finalizedall the required paperwork andregistered Kentucky GroundbreakersInc. as a cooperative with the KentuckySecretary of State. The foundingmembers of the cooperative include:Daniell Price, William Curle, KennethCleaver, Travis Cleaver and ScottCurle, all of LaRue County. All the co-op members say they will again markettheir crops through the co-op this fall.

“One of the strengths of this groupis their approach,” says Brent Lackey,KCARD business developmentspecialist. “They have been focused onbuilding a strong foundation for asustainable cooperative by focusing ongrowing a quality crop as they learnabout production efficiencies, developmarkets and establish the business.They have shown a commitment towork together to develop an additionalrevenue stream for everyone in the co-op and other small-scale farmers in thearea, not just themselves.”

“As we grow, I would like to get to apoint where we can store, grade andprocess our own sweet potatoes,bringing more marketing opportunitiesfor our product,” says Cleaver. “Ofcourse, getting to that point will takesome time, so I am looking forward to along working relationship with the teamat KCARD as we continue to grow ourcooperative.”

“Our goals for that first year wereto get experience producing thecrop and marketing the sweetpotatoes as a group.”

Co-op members William Curle and TravisCleaver survey a plot that will be planted withsweet potatoes. Much of the land beingfarmed by the co-op formerly producedtobacco. Photos by Kristi Breckenridge,courtesy Kentucky Groundbreakers.


Powering California’s backcountry

Electric co-op investing in membership andrenewables to keep the lights shining

By Gwenaël Engelskirchen

Editor’s note: Engelskirchen is acooperative development associate with theCalifornia Center for CooperativeDevelopment.

Amidst fir trees and pines, ranchlandand the peaks of the Sierra Nevadarange, sits California’s scenic SierraCounty. Located west of Reno, Nev.,Sierra County’s population of just over3,200 makes it the next-to-lowestpopulated county in the nation’s mostpopulous state. With its sparsepopulation density, serving the countywould not be a high priority for mostprofit-driven utility companies. But it isa priority for a member-owned co-op.

Even the tri-county region of Sierra,Plumas and Lassen counties innortheastern California has a combinedpopulation of just under 55,000 (lessthan 0.1 percent of California’spopulation of almost 39 million people).This three-county region exemplifiesthe type of geography that America’srural electrification program —launched during the presidency ofFranklin D. Roosevelt — was developedto serve, linking low-population ruralcommunities to the power grid.

The Plumas-Sierra Rural ElectricCo-op (PSREC) was formed in 1937,part of a wave of more than 1,000 otherlocally owned electric cooperativesstarted in rural areas all across theUnited States during the late 1930s.PSREC started with an initialmembership of just 643.

Gene Rowland, an early customerwho is quoted on PSREC’s website,describes what the start of the co-op

meant to the community: “One of thegreatest things was that the women hadfreezers and refrigerators for thepreservation of food. Ruralelectrification was the turning point inmany people’s lives. We went frombackwoods to modern living.”

Committed to ‘deeply rural’ areas

Today, PSREC serves more than6,500 member-owners, and theimportance of the co-op in Sierra,Plumas and Lassen counties stillstrongly coincides with the originalobjectives of FDR’s rural electrificationprogram. Within these deeply ruralcounties, the cities and largest towns areserved by investor-owned and municipal

utilities. Without the co-op, however,the most rural customers would likelynot be served.

“The co-op membership representsjust over 10 percent of the populationof those three counties,” notes JessicaNelson, manager for Golden StatePower Cooperative — a statewide tradeassociation for three California-basedelectrical distribution co-ops — and theformer manager of member services atPSREC. “And that [number] reflectsthe people living in the most remote,least accessible areas. If PSREC were aprofit-driven company, as opposed to anonprofit, it would not be positioned toserve the needs of our most ruralcommunities in the same way.”

Drawing from its long history ofproviding access to electricity, Plumas-Sierra Rural Electric Cooperative isnow reaching into the future,continuing to respond to its members’needs. This includes meeting thedemand for more renewable andaffordable sources of energy, which it ispursuing through its geothermal andsolar energy programs.

Co-op a geothermal pioneerPSREC was a pioneer in developing

one of the first successful geothermalheat pump programs in California.According to the CaliforniaGeothermal Heat Pump Association: “Ageothermal heat pump is a centralheating or cooling system that pumpsheat to, or from, the ground. It uses theearth as a heat source (in the winter) ora heat sink (in the summer).”

These ground-source heat pumpssignificantly reduce the use of fossilfuels, such as coal or natural gas, for

Dealing with the challenges of heavilyforested and mountainous terrain is routinefor utility co-op crews, such as this one, inCalifornia’s “deeply rural” Sierra County.


heating. One of the biggest challengesfor expanding geothermal power wasthe cost of system installation.

PSREC became part of an innovativesolution to this cost challenge in 1993,when it launched a lease program.Under this “geothermal loop lease”program, PSREC paid the upfront costof installing and maintaining ageothermal system while its member-owners had the opportunity to leaseback the use of the system from the co-op. The program has been highlypopular with the co-op’s members andhas resulted in PSREC having one ofthe nation’s highest rates of geothermalinstallation.

“Since many of the GeoExchangeinstallations are in vacation homes,customers are able to leave theirheating on all winter,” according to aco-op report. This reduces the odds offrozen pipes and for the need to“winterize” a summer home. “Sincegeothermal heat pumps are so cost-effective, the customer’s heating billsremain relatively low even though theyare operating throughout the wintermonths.”

In one subdivision, 60 percent of thenew homes built installed geothermalsystems. According to PSREC General

Manager Bob Marshall, the co-op hasto date installed 450 such systems.

Investing in community solar PSREC is also investing in solar

projects and is currently assessing bidsto build a 100-kilowatt community solarfarm. A community solar farm wouldallow customers who are unable toinstall solar panels on their homes tononetheless “go solar.” This approachalso maintains affordable energy formember-customers across the system.By consolidating the solar arrays, the“energy farm” allows for increasedefficiencies, due to the economy of scaleand easier maintenance.

“Although there are many providersof solar power, we believe thatcooperatively developed programs willfulfill the need for both security andreliability at more affordable costs,”

says co-op General Manager BobMarshall. Additionally, PSRECparticipates in a solar rebate programthat offers incentives for installing solarsystems on individual homes andbuildings.

Both of these renewable energysources have helped PSREC weatherthe recent California drought, whichhas increased demand for energy whilereducing the amount of powerproduced by hydroelectric sources (dueto low water flow). In addition, thedrought has killed many trees, some ofwhich have fallen on power-lines duringstorms, resulting in higher costs for treeremoval – both in repair andpreventative situations.

“One of the major advantages ofbeing a member of a cooperative,”Marshall says, “is that you aren’t subjectto the whims of a for-profit utilitydeciding whether or not maintenance inyour area is a priority. The SierraNevada is a tough place to run anelectric utility; we make sure we groomour system, practice proper forestrytechniques and build redundant powerlines to the Nevada grid to keep thelights on in a tough winter…and wemanage to do it at competitive rates.”

“The Sierra Nevada is a tough placeto run an electric utility… we groomour system, practice proper forestrytechniques and build… to keep thelights on in a tough winter.”

Filling the Gap

Bay City Co-op Market hopes to provide healthy food, boost local economy

By Chris BardenhagenCooperative Development AssistantE-mail: [email protected]

The Bay City Cooperative Marketwas recently incorporated as a Michiganco-op that is working to open a naturalfoods grocery store. The goals are toprovide healthy food at a fair price, topromote local and regional foodproduction, and to retain capital and

jobs in the community. Further, the co-op hopes to create an equitable,rewarding workplace for its staff whileproviding a boost to an economicallystruggling neighborhood.

The fledgling co-op plans to launcha feasibility study and marketingcampaign this fall. The MichiganCooperative Development Center (partof the Michigan State UniversityProduct Center) has provided funds to

cover attorneys’ fees associated with theincorporation of the cooperative and ishelping to guide the group through thebusiness development process.

High-poverty area to be servedBay City is a small city surrounded

by farms. With a population of 34,932,it qualifies as “rural” for somegovernment programs. The city servesas a commercial and cultural center for

the surrounding rural areas, includingthe northern section of Michigan’s“Thumb” region.

It is hoped that the food co-op willserve both the residents of the city andthe surrounding area. Plans also includehosting a local farmer’s market. Furtherpotential is seen for the co-op to serveas a food hub that would connectfarmers with buyers in other parts ofthe state.

The group faces some seriouschallenges. Bay City has a high povertyrate of 22.4 percent. While thedowntown area has many viablebusinesses, it is undergoingredevelopment.

Residents of subsidized housingcomplexes and other downtownresidents do not currently have agrocery within walking distance. Co-opleaders are dedicated to finding adowntown location for the store tomeet the needs of the underservedresidents.

Strong community supportCommunity support is very strong

for the food co-op project, both becauseof its potential to provide healthy foodand for its economic developmentaspects. The mayor’s office, cityplanning office and the Bay CommunityFoundation have all expressed supportfor the co-op.

Co-op organizers held a community

meeting in March at a local library topresent the business concept to thepublic. The meeting was “standingroom only,” with more than 125 peoplein attendance. Local farmers, cityofficials and the press were amongthose attending.

The co-op organizing board has usedlocal news media, social media —including Facebook — and word ofmouth to spark interest and support forthe co-op. Organizers conducted a web-based survey, which more than 900 arearesidents responded to, expressingoverwhelmingly positive support for theco-op.

Next steps, challengesThe group is working to secure

funding for a marketing study, afinancial feasibility study and a formalbusiness plan. It is currently engaged inworking out the details of a campaignto raise capital.

A major challenge is setting the pricefor a voting-membership share. Thisinvolves finding a balance between theneed to raise a significant amount ofcapital with the need to set amembership share price at a level thatwill attract the necessary number ofmembers. A large member base willhelp establish the co-op’s creditabilitywith lenders and other sources ofcapital.

Many food co-ops charge between$150 and $300 for a family membershipshare. But many of these groceries havethe advantage of being located in auniversity town or other communitywith a higher socio-economic level.

New challenges will arise as theproject evolves. Starting a natural foodgrocery usually takes a minimum of twoto three years, according to the FoodCo-op Initiative, a clearinghouse forinformation and an important resourcefor food co-op start-ups.

The Bay City Cooperative Market’sboard knows that success requirespatient commitment while workingmethodically toward the goal ofopening a store that will be a viablebusiness.

Co-op board members take a walking tour ofsome possible sites for the new grocery co-op they plan to launch in Bay City, Mich.

Bridging the Digital Divide

Resident-owned communities benefitwhen members are proficient with new technology

By John McNamaraCooperative Development SpecialistNorthwest Cooperative DevelopmentCenter

Manufactured home communities

play an important role in meeting theneed for affordable housing in theNorthwest and across the nation.Through cooperative action, manypeople now have the opportunity tocreate resident-owned communities

(ROCs), securing the land beneath theirhomes for perpetuity.

Once a cooperative completes such apurchase, residents have responsibilitiesto govern and manage theircommunities. The Northwest


Cooperative Development Center(NWCDC), a ROC USA® certifiedtechnical assistance provider (CTAP), ischarged with providing guidance tocommunity leaders as they carry outthese duties. A major challenge ismaintaining good communicationsamong co-op members and helpingthem balance their work/life needs.

Though much is accomplished withface-to-face meetings, it is becomingincreasingly important to supplementcommunications with Internettechnologies.

Efforts by the FederalCommunications Commission (FCC),USDA, the White House and manyutility co-ops have sought for years tobridge the rural/urban “digital divide,”and much progress has been made inconnecting rural residents to broadbandand “next-generation” Internet. But adigital divide still exists between ruraland urban communities.

Promoting technology literacyAnother gap exists for many co-op

resident-owners regarding their abilityto understand and use new computer-based technology. Resident-ownedcommunities often have limited abilityto bridge this divide, whether caused bya lack of hardware or software, or theability to use it — or for all of thesereasons. NWCDC, in partnership withROC USA, is seeking to close this gapby bringing the benefits of moderninformation technology to thecommunities in its network.

Daniel Luis Arrañaga, a CTAP forNWCDC, is leading an effort toaddress the communications challengesfacing residents by developingeducational programs that help peoplemaster new technology. To accomplishthis, ROCs are testing standardizedcurriculum and software systemsdesigned to help co-op membersdevelop increased technology self-sufficiency. The curriculum should alsohelp CTAPs better manage a growingportfolio of clients. Communities in theWashington towns of Moses Lake and

Puyallup are serving as a pilot projectintended to create a nationallyreplicable model.

There are broad aspirations for theinitiative. Arrañaga notes that “aresident-owned community is morethan just a homeowners’ association; itis a business that requires constantattention, maintenance, oversight andnurturing.” Goals are to promoteresidents’ computer fluency and moreefficient and productive time allocation

for CTAPs, he notes. Another goal is tohelp build leadership in communities.

By helping communities improvetheir ability to communicate throughmodern technology, the ROCs canbuild a more sustainable communitymodel.

Many resident-owners of ROCs havenever had — nor necessarily needed —access to information technology (IT).For some people — often retiredindividuals — the Internet was not apart of their work or social life. Forothers, their work or budget didn’tpresent the need for IT skills.

To overcome this challenge,NWCDC has partnered with studentsfrom The Evergreen State College(TESC) in Olympia to create acurriculum to teach adults basic skills ine-mail, on-line editing and typing.Arrañaga began using Google Docs, afree software word processingapplication, to work with communitymembers.

“The great thing is that I can get onthe document with board members whoare 250 miles away and train them onhow to make an agenda without makingan eight hour round-trip drive,” saysArrañaga.

The goal of this initiative is to giveresident-owners a greater sense ofownership by using IT to researchsolutions to community problems, findneeded vendors and to create an archiveof organizational documents that allmembers can access and share. It willreduce the need for CTAPs to providesome of these services, opening moretime to work with new clients andproviding for more efficient use offunds needed to develop new ROCs.

In addition to interns from TESC,staff from across the ROC USAcommunity are providing peer review.“The use of information technology isvital to running any business in this dayand age,” says Arrañaga, “which is whythis [initiative] takes aim at bridging thedigital divide.”

“A resident-owned community ismore than just a homeowners’association; it is a business thatrequires constant attention,maintenance, oversight andnurturing.”

Doug Winscot and Lacy Hopper celebrate thecreation of the Elmwood HomeownersCooperative. Below, a young resident of thePonderosa Homeowners Cooperative wasamong those celebrating the conversion oftheir community to a resident-owned co-op.Photo by Mike Bullard, courtesy ROC USA



Preparing for a ‘Silver Tsunami’

New rural elder care co-op aims to help seniors stay in homes longer

By Deborah Craig

Editor’s note: Craig is a cooperativedevelopment specialist with NorthwestCooperative Development Center.

A new homecare cooperative is beingformed to bring client-centered care tothe coastal town of Port Townsend,Wash. A small, close-knit, maritimecommunity on the northeast tip of theOlympic Peninsula, Port Townsend hasa population of just under 10,000 and istruly a place where “everyone knowsyour name.”

A sense of community runs stronghere, and that commitment tocommunity is especially felt for theelders. When local caregivers,dissatisfied with current homecareoptions, met to discuss alternatives,central to their concern was the abilityto create locally owned, quality home-care services.

Co-op steering committee memberKippi Waters considers forming ahomecare co-op essential for meetingthe needs of the aging population ofPort Townsend. “The aging baby-boomer wave sweeping America ispractically a tsunami here in PortTownsend, where we have the oldestmedian age in the state of Washington,”Waters says. “I believe that client-based,community-centered homecare is onlypossible with the cooperative model.The care of our elders belongs in thehands of our community. Only then canwe see the paradigm shift that is muchneeded in the caregiving industry.”

Need for rural elder careBetween 2010 and 2030, the number

of older Americans is predicted todouble, to 72.1 million. For the first

Kate Nichols, a caregiver/member-owner of the Circle of Life Caregiver Cooperative, helps clientBess Christman get some exercise, ably assisted by golden retriever Amber. Photo by KathleenEnglish, courtesy Circle of Life.


time in history, people over 65 willoutnumber children under 5. And,because of medical advances and theincreases in life expectancy, people 90and over now compromise 4.7 percentof the older population (age 65 andolder) compared with only 2.8 percentin 1980!

Some are calling this wave of agingAmericans the “Silver Tsunami” and itis rapidly headed our way. Withprofessional caregivers already in shortsupply, this leaves many wondering,“How will we care for these people?”

This care crisis is even more pressingin rural communities. Of all groups,America’s rural elders may be the mostadversely affected by the challenges ofgrowing old. As people age, theytypically require more health careservices.

At the same time, however, theyoften become less mobile due tophysical disability or chronic illness.

This creates challenges for rural elderswhose younger family members haveleft the community, and the nearestneighbor can be miles away.

As a result, older people frequentlyare forced to move prematurely toassisted living or nursing facilitiesbecause they are unable to meet theirown day-to-day needs. This shift toinstitutionalization is costly, and muchof the cost burden falls to governmentprograms such as Medicare andMedicaid.

Keeping seniors in homes, longer

Assistance from trained, professionalin-home caregivers offers a solution tothis dilemma. Homecare, which ispersonalized to the individual, can be amuch more affordable way to care forrural elders.

By encouraging independence andself-directed care, homecare keepselders in charge of their own lives for aslong as possible. It is with this goal inmind that Port Townsend caregiverscame together to consider starting ahomecare co-op.

Inspiration and encouragement forforming a co-op came from anothernearby homecare co-op: Circle of LifeCaregiver Cooperative (http://www.circleoflife.coop/).

Proven modelJust a short ferry ride and a two-hour

drive north of Port Townsend lies thecity of Bellingham, Wash., home toCircle of Life (COL), a seven-year-oldhomecare cooperative. Started in 2009with just a handful of caregivers, COLnow boasts annual revenue of morethan a $1 million and employs morethan 50 caregivers who benefit from thehighest pay rate for in-home caregivingin the county.

With job satisfaction high amongworkers and a steady supply of clients,COL is in a great position to help outthe Port Townsend caregivers. In thespirit of cooperation, COL has been agreat resource to the Port Townsendgroup, sharing documents, answeringquestions and just being a model forwhat is possible.

“Of course we support the new co-op emerging in Port Townsend andwant to help them anyway we can,” saysboard Chair Alice Robb, who joined theco-op in 2008. That’s the meaningbehind the 6th Cooperative Principle:Cooperation Among Co-ops.”

As the Port Townsend caregiverscontinue to meet and take all thenecessary and legal steps towardestablishing a homecare co-op, they areamazed and grateful for the supportfrom the Northwest CooperativeDevelopment Center, COL and theircommunity at large. Their vision of aworld where elders thrive in theirhomes and in the community is quicklybecoming a reality in Port Townsend.

“I believe that client-based,community-centered homecare isonly possible with the co-opmodel. The care of our eldersbelongs in the hands of ourcommunity.”

By Robin Seydel and Dan Hobbs

Editor’s note: Seydel is a senior staffmember with La Montañita Cooperative;Hobbs is senior cooperative developer for theRMFU Cooperative Development Center.

Rocky Mountain Farmers UnionCooperative Development Center(RMFU) and La MontañitaCooperative of New Mexico havedeveloped a strategic partnership tobetter assist food and farm cooperatives

in New Mexico, Colorado andWyoming. The result is theestablishment of the SouthwestDevelopment Services Co-op (SDS),which is being incubated at LaMontañita’s headquarters in Albuquerque.

Old Problems, New Solutions

RMFU teams with La Montañita to offerexpanded technical services to co-ops


Over the years, RMFU and LaMontañita have assisted hundreds ofexisting and emerging cooperatives,both regionally and nationally.Unfortunately, they have also seen thedemise of too many of these co-ops.Starting and sustaining cooperativebusinesses requires a wide range ofskills, resources and commitment.

It can be challenging to assemble allof the necessary pieces for businesssuccess. For example, the vast majorityof farmer and food cooperatives startedduring the last two decades or so in ourregion have struggled with setting upand maintaining basic operationalsystems.

Professional services co-op needed

RMFU and La Montañita staff wereholding a joint meeting, reviewingcommon cooperative operationalchallenges and ways to more effectivelyhelp co-ops, when Robyn Seydel, asenior La Montañita staff member,suggested the need for a second-tiercooperative — a professional servicescooperative.

As a result, the SouthwestDevelopment Services Cooperative wascreated as a new strategy to assist local

cooperatives, especially during theirvulnerable start-up years. Formation ofSDS is in keeping with Co-op Principle6: Cooperation among Cooperatives,and Principle 7: Concern forCommunity.

SDS is currently operating as aprogram of La Montañita Co-op, withits actual incorporation as a co-opexpected to happen in 2016 or 2017.Two USDA Small, Socially-Disadvantaged Producer Grants and agrant from New Mexico’s McCuneFoundation are providing the initialfunding to launch the program.

Starting and operating successfulfarm and food cooperatives takesspecialized knowledge of the industry,markets and finances. With itsmanagement team’s thousands of hoursof experience, La Montañita bringsextensive expertise to the SDS, both asconsultants and in training, coachingand mentoring area food andcooperative businesses.

With strong recent growth in theregion’s local foods movement, theoperational expertise developed by LaMontañita over the past 40 years is ingreat demand.

Some of the groups SDS has assistedduring its first year include: The SweetGrass Beef Co-op, Family Farmers’Seed Co-op and Arkansas ValleyOrganic Growers, as well as food co-ops in the New Mexico towns ofEspanola, Dixon and Taos, and theColorado towns of Trinidad, Alamosaand Manitou Springs. SDS has alsohelped a number of emerging food hubsin the region.

Menu of services for business growth

SDS services include: organizationalstructure development, businessplanning, cooperative modeldevelopment, director training,membership structure and programdevelopment, human resource services,branding strategy and media planningand contracting. Other services include:community outreach planning and

project development, websitedevelopment, fundraising and capitalcampaign strategy, accounting/accountmanagement and financial systems andoperational assessments. Still otherservice include: facilities management,food safety, security/loss prevention, ITsystems, procurement and contracting.

Going forward, as RMFU and LaMontañita continue to engage food andagriculture groups, they will bereferring many of them to theSouthwest Development ServicesCooperative for potential membershipand targeted technical services. The

primary benefit of membership in thenew cooperative will be discountedprofessional services.

RMFU’s Cooperative DevelopmentCenter, www.rmfu.org/co-op, wasfounded in 1996, and has since thattime served well over 150 cooperatives,small businesses and otherorganizations. The Center’s mission isto build a more just, healthy, thrivingand inclusive economy throughcooperative enterprises in Colorado,New Mexico and Wyoming.

La Montañita,www.lamontanita.coop, is a community-owned consumer cooperative whichopened its first store in 1976, at thattime serving 300 families inAlbuquerque. Since then, La Montañitahas grown to 17,000 members who ownsix stores throughout New Mexico. LaMontañita helps local producers accessmore markets. More than 1,100 localproducts from 400 local producersmake it to small community grocers,restaurants and commercial kitchensthrough its co-op’s Co-op DistributionCenter.

This organic seed display advertises that it isproduced by a farmer-owned co-op,something that resonates with manyconsumers.

The vast majority of farmer and foodco-ops started during the last twodecades in our region have struggledwith setting up and maintaining basicoperational systems


CHS investing in CF nitrogen; cancels plans for N.D. plant

CHS Inc. is investing $2.8 billion innitrogen fertilizer manufacturingthrough CF Industries Nitrogen LLC.The co-op calls this “a historic step”that links CHS Inc.’s membercooperatives and farmer-owners to “along-term, assured fertilizer supply.”The new strategy means CHS iscanceling plans for a proposed $3 billionfertilizer plant at Spiritwood, N.D.

In related news, CF Industries (CF)has announced that it has agreed to buythe fertilizer production assets of Dutchfirm OCI NV. That deal makes CF theworld’s largest publicly traded maker ofnitrogen fertilizer, according to pressreports.

“This investment links CHS’strength as the nation’s largest fertilizerwholesaler with CF Nitrogen’smanufacturing platform, creating supplysourcing efficiency and economics forour owners,” says Carl Casale, CHSpresident and CEO. “In short, throughCF Nitrogen, CHS will be able to adddirect value and provide sustainedaccess to dependable, patronage-eligiblefertilizer products comparable to oursuccessful 70-year-old petroleumrefining platform.”

Given the dynamic market fornitrogen fertilizer manufacturing anddistribution, investing in CF Nitrogencreates access to more immediatebenefits for CHS owners and customersthan would a plant that would requireabout four years to build, Casale said.“Ultimately, we determined that theconstruction cost, water supplychallenges, overall risk profile and timerequired for the Spiritwood project hadchanged significantly since it was first

considered. As a result, we concludedwe couldn’t achieve the level of returnsneeded to justify the increased costs andrisks.”

Casale continued, “We deeplyappreciate the tremendous support andassistance from the Jamestown andSpiritwood communities, NorthDakota’s governor, elected officials andstate agencies and organizations like theNorth Dakota Farmers Union; andother government leaders who havesupported us through our due diligenceprocess.”

The value of the CF/OCI NV deal isabout $8 billion, based on CF’s currentshare price, including the assumption ofabout $2 billion in net debt. The boardsof both companies unanimouslyapproved the deal.

The transaction includes OCI’snitrogen production facilities in Geleen,Netherlands, and Wever, Iowa, as wellas the company’s interest in anammonia and methanol complex inBeaumont, Texas. Also included is its

global distribution business, based inDubai, United Arab Emirates.

The combined entity will alsopurchase a 45-percent interest, plus anoption to acquire the remaininginterest, in OCI’s Natgasoline project inTexas. Upon completion in 2017, it willbe one of the world's largest methanolfacilities.

Founded in 1946 as a fertilizerbrokerage operation by a group ofregional agricultural cooperatives, CFIndustries grew by expanding itsdistribution capabilities and diversifyinginto fertilizer manufacturing. Through2002, the company operated as atraditional supply cooperative.However, in 2003, in response tochanging market conditions, itconverted to a publicly traded company,with an initial stock sale in 2005.

MFA Oil assumes control of joint venture

MFA Oil Co. has purchased Big OTires’ interest in their joint venture —

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

Co-op developments, coast to coast

To secure a dependable source of nitrogen fertilizer for its members, CHS Inc. has made a majorinvestment in CF Industries. Seen here is CF’s facility in Donaldsonville, La. Photo courtesy CFIndustries

Bore/MPC LLC. MFA Oil Co. is afarmer-owned cooperative, based inColumbia, Mo., with more than 40,000farmer-owners. Big O Tires LLC is adivision of TBC Corp.

“This is a good deal for MFA OilCo.,” says Rusty Coats, director ofretail tire operations. “Not only was thecost of the buyout favorable, but thesingle company ownership will allow usto be quicker and more flexible in ourbusiness decisions.”

Formed in 1998, Bore/MPC is a BigO Tires franchisee that owns andoperates 14 Big O Tires stores inMissouri and Arkansas, with two newstores (one in each state) slated to openthis year.

The company will retain theBore/MPC name, but will now be awholly owned subsidiary of MFA OilCo. All the stores will remain as Big Ofranchise stores, with Bore/MPC beingthe franchisee. Consumers will see nochanges, as the joint venture was treatedlike all other franchisees, according toCoats.

“As Big O Tires continues to lookfor opportunities to expand, thispurchase will make that process, andothers, more efficient,” says MarkFenner, MFA Oil president and CEO.

N.D. co-op buys feed business Scranton Equity Exchange, of

Scranton, N.D., has purchased Woody’sFeed & Grain of Dickinson, N.D.Scranton Equity is an agriculturecooperative established in 1914 thatoffers a full line of agricultural services.In the feed business for more than 100years, the co-op operates one of theregion’s biggest feed mills and marketsin four states.

Woody’s Feed & Grain, in operationfor 46 years, produces and ships feednationwide. It specializes in high-performance horse feed, cattle feed andother livestock feeds. Its productionfacility is highly automated and has railaccess.

The consolidation of the twocompanies will have many productionand marketing synergies, the co-opsays. The merger will allow Scranton

Equity to expand its local livestock feedmarket and to move its horse feedproduction to Dickinson, from where itwill continue to market horse feednationwide.

GROWMARK reports $8.8 billion in sales

GROWMARK had estimated salesof $8.8 billion in 2015, with pretaxincome of $140 million. An estimated$61 million in patronage refunds will bereturned to GROWMARK membercooperatives and farmer-owners.

“We remain committed to

foundational principles that honor thewisdom and direction of our founders,”CEO Jim Spradlin said during hisremarks at the co-op’s annual meeting.The co-op’s energy, agronomy andretail grain units all achieved businessgrowth and recorded earnings aboveexpectations. The retail supplies groupperformance was slowed due to asoftening ag economy and widespreadweather-related challenges during thesummer.

The co-op’s energy division reported2.2 billion gallons sold. Boosted by theCouncil Bluffs lubricants blendingfacility, income generated by lubricantoperations doubled, with a record sixmillion gallons of lubricants sold,

generating gross income of $70 million.The seed division reported sales

exceeding 4.7 million acres. Net incomewill exceed budget and rank as thesecond-best earnings on record. Cropprotection division sales are projectedto increase 1 percent from the previousyear, making 2015 the second-bestvolume year for the co-op. The plantfood division, now known as the cropnutrients division, saw sales volumeexceed 3.2 million tons, the fifthconsecutive year of record volume.

The grain division announced a newretail grain partnership being formed inNorthern Illinois. FS Grain willcombine the strength of NorthernGrain Marketing and Eastern GrainMarketing with the local expertise,management and ownership of AgViewFS, Carroll Service Company, ConservFS, GRAINCO FS and Heritage FS.The new venture will support theoverall grain division operations, whichgenerated $19 million in income infiscal 2015.

NCFC joins Field to MarketThe National Council of Farmer

Cooperatives (NCFC) is joining Fieldto Market: The Alliance for SustainableAgriculture, a multi-stakeholderinitiative working to unite theagricultural supply chain in defining,measuring and advancing thesustainability of food, fiber and fuelproduction.

“Sustainability is an emergingpriority for farmer cooperatives as wework to demonstrate how the U.S.agriculture industry is improvingagainst key environmental goals andaccelerate the pace of progress,” saysCharles Conner, president and CEO ofNCFC. “By joining Field to Market, weaim to provide tangible solutions tohelp co-ops respond to consumer andsupply chain demands in areas such assustainability, social responsibility andtransparency.”

Working together with growerorganizations, academia, conservationgroups, public sector partners andleading companies, NCFC will help tocatalyze opportunities for continuous


Jim Spradlin


improvement in productivity,environmental quality and human well-being across the agricultural valuechain.

“Farmer cooperatives play a vital rolein the food and agriculture sector andare a critical partner in advancingsustainability at the landscape level,”says Rod Snyder, president of Field toMarket. “We are pleased to welcomeNCFC to Field to Market and lookforward to developing strategies forhow co-ops can partner with theagricultural supply chain to helpfarmers improve their productivity,profitability and environmentaloutcomes.”

NCFC is a national associationrepresenting America’s farmercooperatives, whose members include amajority of our nation’s more than 2million farmers, ranchers and growers.

Idaho ag co-ops mergingTwo Idaho agricultural cooperatives

— Valley Wide Cooperative and ValleyCo-ops Inc. — have agreed to mergeafter receiving “overwhelming supportthrough the voting process from bothsets of board members and themembership of thecooperatives,” according to a jointannouncement. Co-op leaders say themerged co-op will increase buyingpower and help expand product andservice offerings.

“We are encouraged by the supportboth memberships have conveyed andwill now concentrate on meeting theexpectations of our patrons and willcommunicate our progress as we movealong,” says Dave Holtom, CEO ofValley Wide Cooperative. Both co-opshave retail, energy (propane and bulkfuel) and agronomy divisions.

The new co-op will be based inJerome and operate under the ValleyWide Cooperative name. Thecombined business will have about 700employees serving more than 3,000members through 43 locations. Eachcompany is firmly rooted in Idaho (bothwere started in the 1930s). The mergerwas to take effect Sept. 1.

Valley Co-ops serves agricultural

producers, commercial businesses andfamilies in Southern Idaho. Formedthrough the merger of Idaho GrangeCo-op and Wendell Grange Supply in1991, both cooperatives had servedcustomers since the 1930s. Valley Co-ops serves patrons in the Magic Valleyfrom nine locations with a team of 200employees.

“Valley Wide Cooperative hasexperienced growth and successthrough several mergers over the past15 years and operates by thecooperative principle that more can beaccomplished working together than asindividuals,” Holtom says. Valley Wideserves patrons from western Wyomingto eastern Oregon through 34 locationswith a staff of more than 350.

According to a report in the CaptialPress, the new cooperative intends toexpand some operations in Idaho’sMagic Valley and Treasure Valley. The

cooperatives have partnered in the paston agronomics, including farm chemicaland fertilizer sales.

United Suppliers merges with Land O’Lakes

United Suppliers Inc., Ames, Iowa, ismerging with the crop inputs businessof Land O’Lakes Inc., Arden Hills,Minn. The merger will build on therecent successes of the two companiesand aims to create a single, relevant andcompetitive system of independentagricultural retailers.

“This merger will allow us tocontinue to meet our customers’ needsthrough each company’s successful go-to-market strategy while providing forthe size and scale to compete in anenvironment of consolidating suppliersand competitors," says Chris Policinski,president and CEO of Land O’LakesInc.

The 18th Annual Farmer CooperativesConference, Nov. 5-6 in Minneapolis, willprovide a unique opportunity to hearcooperative leaders assess their businessenvironment and discuss major issues affectingfarmer-owned cooperatives. Topics will include:

• Fertilizer Markets and the Changing Supply Chain — An update on fertilizermarkets and the most significant drivers of change in the supply chain.

• Rural Broadband: Challenges and Opportunities — Modern agriculturedemands modern digital connections. What’s on the horizon for high-speedInternet access?

• Sustainability in the Value Chain — How can companies embedsustainability into the supply chain while creating value for members andcustomers?

• Recent Trends in Cooperative Restructuring, Mergers and Acquisitions —Practical advice on successful strategies from experienced advisors inagribusiness restructuring.

• Big Data: Data Warehousing, Standard Setting and Legal Issues — Whatare the emerging issues for agriculture in this fast-growing field?

• Investing in Rural Infrastructure — Strong rural economies require strategicinvestments in infrastructure.

Among the speakers are: Shirley Bloomfield, CEO, National TelephoneCooperative Association; Piet Boer, board chair, FrieslandCampina; NeilFleishman, senior industry analyst, Green Markets; Adam Holton, senior vicepresident, CHS Inc.; and Mary McBride, president, CoBank. For more details, visit: http://bit.do/ FCC2015 or www.uwcc.wisc.edu.

Conference topics range from fertilizer to broadband


The first step of the merger will beto combine the two companies’ seedand crop protection businesses underWinfield US LLC; a second step willmerge the crop nutrient business.Customers are expected to benefit fromexpanded product offerings, enhancedprecision agriculture services, tools andtechnologies, improved productinsights, consulting services and more.

In 2014, WinField had $4.9 billionin seed and crop protection productsales while United Suppliers had $2.6billion in crop protection, seed and cropnutrient sales. The merger is expectedto be completed in October.

USDA invests $18 million to boost rural business

Agriculture Secretary Tom Vilsackhas announced loans and grants for 92projects worth $18.1 million to helpsupport the start-up or expansion ofrural small businesses. These funds arepart of more than 20,000 grants andloans to more than 85,000 ruralbusinesses USDA’s Rural Business-Cooperative Service has awarded sincethe start of the Obama administration.

“These funds will allow small andemerging businesses and theorganizations that support them to getthe financing they need to strengthentheir operations, create jobs and expandeconomic opportunities,” SecretaryVilsack said.

USDA is awarding the funds throughthe Rural Economic Development Loanand Grant (REDLG) program, theIntermediary Relending Program (IRP)and the Rural Business DevelopmentGrant (RBDG) program. USDAprovides grants or zero-interest loansthrough the REDLG program to ruralutilities (most of which are co-ops)which, in turn, fund projects to createand retain employment in rural areas.Vilsack announced $11.7 million inREDLG loans and grants for 18recipients.

One of the organizations receivingfunds under the REDLG program isthe South Mississippi Electric PowerAssociation, which has been selected fora $2 million loan. It will lend part of

that to the city of Greenwood, whichwill buy and renovate a building for theMilwaukee Tools company. This projectis expected to create more than 100 jobsin Lenore County.

Lenore is one of many countiesacross the nation USDA has targetedfor special assistance through theStrikeForce Initiative for Rural Growthand Opportunity. USDA launchedStrikeForce in 2010 to increaseinvestments in rural communitiesthrough intensive outreach and strongerpartnerships with community leaders,businesses, foundations and othergroups that are working to combatpoverty.

Pendleton Grain to marketthrough McCoy Grain

Pendleton Grain Growers (PGG), amember-owned agricultural marketingand supply cooperative serving thefarming communities of EasternOregon and Eastern Washington, hasannounced a marketing agreement withMcCoy Grain Terminal LLC (MGT)to market 100 percent of PGG’s grain.“We want to encourage ourmembership to start capitalizing on theresources now available to themthrough this agreement,” says RickJacobson, general manager of PGG.“This is a great way for our growers toreceive the most competitive bid whilereducing exposure to risk and fees.”

As a result of this agreement, PGGmembers will benefit from:• Improved market access and

merchandising expertise;• Access to MGT’s 50-60 million

bushel marketing alliance;• More competitive bids, efficiencies

and reduced fees.MGT is a partnership of the Pacific

Northwest Farmers’ Cooperative(PNW), Cooperative AgriculturalProducers Inc., (CoAg) and Mid-Columbia Producers. With the additionof PGG, MGT will market grain frommore than 70 country storage elevators,including 11 with rail-loadingcapabilities, eight with river terminals(three on the Snake River; five on theColumbia River), and a shuttle loading

facility with capacity for 110 cars. PGGwill continue offering all marketingservices at its grower trading desk at thePendleton facility.

Shipwrights’ co-op buysTownsend Bay Marine

The purchase of Townsend BayMarine by the Port Townsend(Washington) Shipwrights Co-op isexpected to have long-term benefits formaritime industries. “This salecelebrates a new generation of themarine trades,” Deputy Port DirectorJim Pivarnik says of the transaction,

according to a report in the PeninsulaDaily News. “As environmentalregulations become stricter, indoorrepair will become a requirement atsome point, and the active use of thisspace guarantees this ability.”

“We have been around for 35 years,and we will now be around for another35 years,” says Chris Chase, one of the13 members of the co-op, a coalition ofboat builders that was founded in theearly 1980s. “This deal lets us grow andchange, and be ready for theenvironmental regulations that will beput into effect in the next few years.”

The amount paid by the co-op hasnot been disclosed. The previous 17-year lease with the port was cancelledand replaced by a new 35-year lease.

Co-op members swing into action on a repairjob. Photo courtesy Port TownsendShipwrights Co-op


The longer lease was necessary toamortize the loan. Port commissionersunanimously approved the terms of thenew lease at a special meeting.“Everyone comes out as a winner,” saysPort Attorney Pat O’Malley. For moredetails, visit: http://www.peninsuladailynews.com/.

USDA’s Bruce Reynoldsrecognized as ‘catalyst for co-op change’

A call to action in 2007 inspired thisyear’s John Logue Award winner fromthe Association of CooperativeEducators (ACE). Bruce Reynolds ofUSDA talked with John Logue, theKent State University professor whofounded the Ohio EmployeeOwnership Center, about whetherUSDA loan programs could beimportant tools for financing ownershipconversions. Since then, Reynolds hasworked to support regulation changes

so that USDA’s Business & Industry(B&I) loan guarantee program could beused for transferring rural businessesfrom retiring owners to workers.

The process is ongoing, sayReynolds’ nominators, but, “ultimately,Dr. John Logue’s call and BruceReynolds’ nine-year persistence mayhave an important impact onconversions to employee ownership inthe United States.” Reynolds is

deserving of the ACE honor in manyother ways, they add.

The award recognizes an individualor organization whose educationalprograms, technical assistance orresearch acts as a catalyst for change bycreating innovative cooperatives thatpromote a democratic workenvironment and economicsustainability for people andcommunities. Reynolds, whose careerworking with co-ops has spanned closeto four decades, has been instrumentalin the reorganization or creation of anumber of cooperatives and has writtenabout the process to assist othersleading similar changes.

His articles also form the basis of apopular guideline for cooperativegovernance. Reynolds’ recent writingshave included pieces that focused on therole of cooperatives in promotingcommunity development and thedifferent approaches co-ops pursue in

obtaining the consensus needed to run acooperative.

Reynolds and five other awardrecipients were celebrated at the annualACE Awards Banquet in July at theUniversity of Massachusetts in Amherst.The ceremony was part of ACEInstitute, July 12-15, that broughttogether researchers, trainers,educators, students, communicators,elected leaders and economic

developers of cooperative organizationsto share information.

Other award winners included: • Outstanding Contribution to

Cooperative Education and Training:Darry Reed, York University;

• William Hlushko Award for YoungCooperative Educators (two winners):Emily Lippold Cheney, USACooperative Youth Council, andToolbox for Education and SocialAction;

• Reginald J. Cressman ACE Award:Dennis Bolling, United Producers Inc.

• Outstanding Contribution to ACE byan Organization: UMASSCooperative Enterprise Collaborative.Institute participants also toured the

Connecticut River Valley, which is aleader in sustainable and workercooperative development. ACEmembers are primarily from the UnitedStates, Canada and Puerto Rico. Moreinformation is at: www.ace.coop.

UN hails co-ops as vehicle for sustainable development

Cooperatives will play an “invaluablerole” in the international community’sroll-out of sustainable developmentgoals, United Nations Secretary-General Ban Ki-moon said July 4 inobservation of International Day ofCooperatives. He appealed for allnations to recommit to the co-opbusiness model, saying it can help makethe vision of a sustainable future areality for everyone.

“Inequality is a fundamental obstacleto development, depriving people ofbasic services and opportunities to buildbetter lives for themselves and theirchildren,” the Secretary-Generaldeclared. “The cooperative model helpsmeet this challenge. Cooperatives striveto uphold the principles of equality anddemocratic participation,” says Ban.

Ranging from micro co-ops to multi-million-dollar businesses across theglobe, cooperatives operate in allsectors of the economy and provide 100million jobs worldwide — 20 percentmore than multinational enterprises,according to 2011 figures from the UNFood and Agriculture Organization

Association of Cooperative Educators (ACE) award winners for 2015 are (from left): Adam Trott,Emily Lippold Cheney (kneeling), Brian Van Slyke (kneeling), Erbin Crowell, David Morgan, BruceReynolds, Darryl Reed, Dennis Bolling and Andrew Stachiw. Photo courtesy ACE

(FAO), the UN International Fund forAgriculture Development (IFAD) andthe UN World Food Programme(WFP). In 2008 alone, in the midst ofthe global financial crisis, the largest300 cooperatives in the world had anaggregate turnover of $1.1 trillion,comparable to the gross domesticproduct (GDP) of many largeeconomies.

In his message, the Secretary-General pointed to a wealth of researchshowing how cooperatives have helpedlower the wage difference between menand women and promote greaterequality in the work place and trainingopportunities.

Frontier Co-op adding fertilizer plant

Frontier Cooperative Co., Brainard,Neb., is adding a 53,000-square-footdry fertilizer plant to its facility inSchuyler. The project is part of a five-year expansion plan, according to areport in the Columbus Telegram.

The 100-year-old co-op says thebuilding, now under construction, willhold about 22,000 tons of fertilizer. It islocated near the co-op’s elevator and asmaller fertilizer plant in Schuyler. Thefertilizer plant is expected to be inoperation by about September 2016,according to Jon Brabec, co-op seniorvice president of marketing and sales. Brabec told the Telegram that the dryfertilizer plant — Frontier’s largest —will ensure the cooperative has enoughfertilizer to serve its customers. The sitewas selected because of its access to therailroad and its central location. Brabecdeclined to put a dollar figure on theinvestment. Frontier, which mergedwith Husker Co-op in January 2014,has 23 locations in eastern Nebraska.

Southern States to open N.C. superstore

Southern States continues itsexpansion into the Charlotte, N.C.,area with a new farm supply superstoreslated to open in Mooresville at the endof October. The new location is one of

the company’s largest, with two leasedunits totaling 27,000 square feet.

The store will have a 12,000-square-foot showroom that will feature avariety of farm and home supplies,including animal feed and residentialfertilizer. A 5,000-square-foot outsidedisplay will showcase farm-relateditems, such as fencing and bunk feeders.The “ag room” will house productssuch as livestock handling equipment.

The store opening will create 22 newjobs. Southern States operates morethan 1,200 retail outlets across 23 states.

Robert Lacey to lead PYCO PYCO Industries Inc., a federated

co-op owned by cotton gins, has namedRobert Lacy as its new president andCEO, effective Oct 1. Lacy succeedsGail King, who will retire Sept. 30,ending a career of more than fivedecades at the cotton oil mill.

PYCO (formerly Plains CooperativeOil Mill) is a cottonseed processingfacility located in Lubbock, Texas, since1936.

Lacy has served as senior vicepresident of PYCO since 2002, and vicepresident of marketing since 1996. Agraduate of Eastern New MexicoUniversity, Lacy began his career withPaymaster Oil Mill Co. in 1984 andjoined Plains Cooperative Oil Mill in1990. He also serves on the board ofthe National Cotton Council, TexasAgricultural Cooperative Council andTriangle Cooperative Service Co.

Skyland Grain making $18million in upgrades, expansions

Skyland Grain will be adding morethan $18 million in new facilities andequipment to its south-central andwestern Kansas locations. Skyland is aregional joint venture between CairoCooperative Equity Exchange, JohnsonCooperative Grain Co., SyracuseCooperative Exchange and ADM GrainCo.

New facilities in the eastern divisioninclude two 500,000-bushel grainbunkers at Cunningham and Calista

locations. The new bunkers will beready for the 2015 harvest. A newchemical warehouse and a 7,500-tonliquid fertilizer storage facility also willbe located in Cunningham andoperational by spring 2016.

Other upgrades include three newscale-houses located in the Cairo area,high-speed legs at all new sites and anew dry-air flow spreader at thePenalosa location. In 2016, there will benew grain bins at Cunningham (750,000bushels), Calista (1.2 million bushels)and south of Cairo (500,000 bushels).

In the western division, which servessouthwest Kansas and eastern Colorado,Skyland Grain installed three newbunker locations..

Co-op Council, UNL create new professorship

The University of Nebraska-LincolnDepartment of Agricultural Economicsand the Nebraska Cooperative Councilhave signed an agreement to create anew professor of agricultural and ruralcooperatives. The tenure-track positionwill be jointly funded for the first sixyears by the council and the Institute ofAgriculture and Natural Resources.

The new faculty member willdevelop and conduct training forcooperative members and leaders.Research on issues relevant tocooperatives and undergraduateteaching will also be part of the newrole. The Nebraska CooperativeCouncil is the state’s major tradeassociation representing agriculturalcooperatives. The council and theUniversity of Nebraska have partnered,both formally and informally, oneducational programs since the council’sinception in 1945.

California Dairies expands product line

Building upon its successful dairyingredients business, California Dairies,Inc. (CDI) has diversified its powderedmilk offerings to include high proteinpowders — milk protein concentrates(MPC) and milk protein isolates (MPI).


The addition of these new productsdemonstrates CDI’s vision to becomethe leading source of dairy nutrition fora healthy world.

MPC and MPI are high-value milkpowders used in high protein drinksand bars as well as infant products,yogurts and cheeses. The production of

MPC and MPI is a natural extension ofCDI’s powdered milk portfolio andmeets the needs of its customers forhighly functional milk powders.

“The driving force of CDI’s strategicplan is to profitably market member-owners’ milk through productinnovation and an expanding product

portfolio. The inclusion of high proteinmilk powders to our portfolio is yetanother example of how CDI executesits strategy and creates value for itsmember-owners,” said AndreiMikhalevsky, CDI CEO. ■


(CCOC), an event that was attendedthis year by more than 150 individualsfrom 25 states and Puerto Rico. CCOCattendees learned how cooperativebusinesses are adapting to changingenvironments and heard from

cooperative experts from across thenation on why member-ownedbusinesses are thriving in industriesranging from senior housing tohealthcare.

To bring cooperative education tolife, students toured housing, retail andmarketing cooperatives in Minneapolisand St. Paul. They also visited theheadquarters of CHS Inc., the nation’slargest agricultural cooperative, andheard from cooperative leaders, farmers

and government experts.Since the founding of Farmers

Union 113 years ago, agriculture hasbecome more, not less, concentratedand farmers still find themselves asprice takers, not price makers. For thisreason, cooperatives remain asimportant today as they were at ourfounding, and have not only built thefoundation of our national organizationto fight for family farmers, but alsocontinue to serve as its North Star. ■

Commentarycontinued from page 2

purchases 100 percent of his inputsfrom Farmers Alliance of Mitchell.

“The cooperative business structureprovides us with a voice on not only thegoods and services we receive, but alsoin the cooperative’s governance,” Kayser says.

He is not alone in his thinking. Morethan 80,000 South Dakotans arecooperative members. Whether theybelong to an agricultural, electric,banking or telecommunicationscooperative, they are members of acooperative, so their voice is heard,explains Lucas Lentsch, South Dakota’ssecretary of agriculture.

“It’s about having a local voice that isreflective of the needs of friends andneighbors,” Lentsch says. “Cooperativesunite those with common interests andprovide them with access to products orservices they need.” In many South

Dakota communities, the solutionsprovided by cooperatives continue todrive economic prosperity, he adds.

In response to fewer farms andpeople in some areas of the state, manycooperatives have adapted their businesspractices and consolidated, says JeffNelson, retired general manager of EastRiver Electric Power Cooperative. “Byjoining together, cooperatives are betterable to overcome the costs of servingrural areas.”

Value in supply-chainownership

“Ownership of the supply chainbrings value,” says Randy Knecht, aHoughton, S.D., farmer. Hiscooperative, Full Circle Ag, is one ofmany local cooperatives which aremembers of CHS Inc., a national co-op,or other regional federated co-ops.“CHS is a great logistics company,” hesays. “It provides our local cooperativewith ag inputs and fuel in a timelyfashion and connects our commoditiesto the global marketplace.”

“We have to remain competitive in

the marketplace to return value to ourcustomers,” says Jeff Dragseth, generalmanager of CBH Cooperative.Dragseth recalls a recent conversationwith a member who runs a largefarming operation who told him thatpatronage was not that important tohim. “What matters (most) is that hecan depend upon his cooperative toinvest in the assets he needs…when heneeds them, whether that is in peopleor equipment.”

Ultimately, co-ops do much morethan capture profits and deliver vitalservices to members. They help buildstronger communities.

“The value captured fromcooperatives isn’t always monetary,”says Kayser. “I look at our localcooperatives as providing employment,fire fighters, emergency responders andother services to rural South Dakota.Really, the cooperative is an extensionof my community.”

Those pioneers who founded SDFU100 years ago would be proud to seethat the co-op seeds they planted solong ago continue to flourish today. ■

S.D. Farmers Union marks 100continued from page 11


New

Running a Food Hub: Lessons Learned From theField, SR 77

This report is part of multi-volume, technical reportseries: Running a Food Hub. This first volumecompiles a number of best business practices forstarting or expanding a food hub enterprise. Itincludes operational profiles of the food hubsprofiled in the report.

Running a Food Hub, Volume II: A BusinessOperations Guide, SR 78

The report’s main focus is on the operational issuesfaced by food hubs, including choosing anorganizational structure, choosing a location,deciding on infrastructure and equipment, logisticsand transportation, human resources and risks. Itexplores the different decision points associatedwith the organizational steps for starting andimplementing a food hub.

Periodicals Postage PaidU.S. Department of Agriculture

United StatesDepartment of AgricultureWashington, DC 20250

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NOTICE:❑ Check here to stop receiving this publication and mail this

sheet to the address below.❑ NEW ADDRESS. Send mailing label on this page and changes

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For a downloadable version of this art and many other Co-op Month promotional materialsyour co-op can use, visit: www.cooperativenetwork.coop.

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