Rural

USDA / Rural Development November/December 1999 USDA / Rural Development November/December 1999

President Clinton credits

tomato co-op for role in 

saving rural town

President Clinton credits

tomato co-op for role in 

saving rural town
2 September/October 1999 / Rural Cooperatives

As a result of low commodity prices

and costly emergency spending by the

government, we are once again

considering revising federal agriculture

policy. I believe any new policy ought

to include incentives for further

development of farmer-owned cooperatives. More specifically, we should

explore how cooperatives can change

the economic structure of agriculture

in a way that empowers farmers to

counterbalance the effects of concentration, and that helps to stabilize

prices in the food chain. 

While there are many examples of

successful farmer-owned cooperatives,

farmers have barely scratched the surface

in the development of marketing cooperatives. I believe the “next generation”

of marketing cooperatives will provide

real opportunity to effectively change

the structure of agriculture to the

benefit of producers and consumers.

Over the years, we have experienced

considerable industrialization in the

agriculture sector of our economy.

Today, there are slightly less than two

million farms, down from seven million

in the 1930s. We have also experienced

a considerable reduction in the number

of agriculture processors. During this

period of industrialization, the processing industry has become quite concentrated, but production has remained

highly competitive. There are many

farmers selling identical commodities

to a very limited number of buyers —

in some cases only a couple of buyers

exist for a commodity and they dominate the marketplace. Except in times

of severe shortage, every farmer needs

a processor, but the processor does not

need every farmer. Thus, the producer

is a price taker.

“Next generation,” member-owned

marketing cooperatives, however,

would allow the farmers to pool their

commodity and contract as a single

entity with a processor. Such an

arrangement can dramatically change

the structure of the agriculture economy

to provide greater balance between the

producer and processor. Additionally,

by joining together and contracting

future sales, producers can strategically

decide to control production or store

commodities to keep supply balanced

with demand. 

Such strategic production and marketing can lead to greater profitability for

the farmer and greater price stability

for the consumer. Marketing through 

a cooperative can also benefit the

processor. For example, it is more

efficient to enter into a single contract

with one cooperative than many contracts with individual farmers. It would

also be easier to control the quality of

the commodity purchased and to plan

for the longer term.

As we consider changes to federal

agriculture policy, there are a number

of proposals that could be put on the

table for study and consideration. For

example, we should explore the potential benefits of utilizing member-owned

cooperatives to administer the federal

crop insurance program. It may be

beneficial to consider granting farmers

a better loan rate if they market their

commodities through cooperatives.

Widespread use of cooperatives could

lessen today’s wide swings in commodity

prices, reducing the need for loandeficiency payments. 

More stable market prices could 

also reduce the cost of federal nutrition

programs.

There are other changes to be

considered, as well. As we deliberate

changes to federal agriculture policy, it

is important to recognize not only the

significant role cooperatives have

played in the past and in the present,

but also to recognize an even more

significant role they can play in the

future.

Jill Long Thompson

Under Secretary, USDA Rural Development

COMMENTARY

Next generation cooperatives
Rural Cooperatives / November/December 1999 3

FEATURES

4 President Clinton hails co-ops as engine for

rural progress

Arkansas tomato co-op breathes new life into dying rural town

Pamela J. Karg

7 Supply cooperatives’ income slides downward

Beverly Rotan

10 Bridging the gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program

Pamela Karg

18 Organizing for the future

Browntown: small co-op with big plans

Bill Tarpenning

20 Thumbs up

Michigan soybean farmers keeping value at home with 

new-generation cooperative

Laura Moser

30 Sales rebound for largest farmer co-ops, 

but net margins decline

David S. Chesnick

DEPARTMENTS

2 COMMENTARY

9 A CLOSER LOOK AT...

26 MANAGEMENT TIP

29 NEWSLINE

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Dan Glickman, Secretary of Agriculture

Jill Long Thompson, Under Secretary,

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United States Department of Agriculture

Rural

November/December 1999 Volume 66 Number 6

On the Cover:

President Clinton praised Hermitage Tomato Co-op Association President Randy

Clanton and his fellow co-op members for helping to revive the fortunes of

Hermitage, Arkansas. The president used the co-op's packing house for the latest

stop on his "New Markets Initiative" tour, designed to show the importance of

investing in depressed rural areas. Story on page 10. USDA photo by Anson Eaglin
4 November/December 1999 / Rural Cooperatives

By Pamela J. King, 

Field Editor

omato farms and the

economy of Hermitage,

Ark., were dying on the

vine just a few years ago.

The local agricultural industry was on a

downhill slide. But the formation of a

tomato growers’ cooperative has helped

farm families foster new economic

vitality in their southern Arkansas

community. The progress has been so

impressive that President Clinton and

Agriculture Secretary Dan Glickman

visited the Hermitage Tomato Cooperative Association in early November

during a trip touting the president’s

New Markets Initiative. 

The trip illustrated how a partnership between tomato farmers, the

United States Department of Agriculture, the Farmers’ Bank of Hamburg

and Burger King Corporation has created 118 sustainable jobs and brought

economic prosperity to Hermitage. 

The federal officials, along with local

government leaders and community

members, say the cooperative’s success

demonstrates how even a small, farmerowned food processing facility can add

value to a local crop and bring muchneed economic vitality and sustainable

jobs to a struggling rural area. For their

part, co-op leaders say USDA Rural

Development’s decision to back a $3

million loan for the co-op through its

Business and Industry Guaranteed Loan

Program was a key to the economic

revival of the farms and community. 

“We came here today because of the

success of this co-op and because we

want every rural community in America to know what you have done and 

to know that they can have a better

future,” Clinton told the crowd that

filled the two main streets of Hermitage,

located about 95 miles south of Little

Rock.

Clinton continued: “In every little

old rural community where people are

about to give up and they think their

kids are going to have to leave home to

find work — I want them to see this on

television tonight and say, ‘if we get our

act together, if we work together, if we

have a partnership between the local

community, the people who are producing food, the people who can buy it

and the government and the bankers,

we can make it.’ We can turn our

community around. We can create a

new market.” 

Reversing rural decay 

Hermitage’s 644 people have long

known that something needed to

change if the town was to have any

future. The town included one restaurant, a couple auto garages, a TV store,

two banks and a real estate/car dealership office. Most of their high school

graduates were leaving the community.

Most residents commuted daily to larger communities for jobs. 

In 1998, Bradley County’s unemployment rate was 10.7 percent, but has

now improved to 8.5 percent. Although

this is a positive change, it is still much

higher than the national average of 4

percent. The county’s poverty rate in

1990 was 24.9 percent, but has dropped

to 22.5 percent.

In 1996, USDA Rural Development

helped 18 farmers organize the cooperative that started to turn life around for

their family farms as well as Hermitage.

USDA then negotiated a Memorandum

of Understanding with Burger King

Corporation and Restaurant Services

Incorporated through which the

restaurant giant committed to buying

locally produced commodities. Through

this agreement, the Hermitage Tomato

Cooperative Association, Burger King

and Restaurant Services Inc. became

business partners.

In 1998, the cooperative received a

$3 million Business and Industry

Guaranteed Loan from USDA to

purchase and to modernize a tomato

cleaning and packaging facility in

Hermitage. An additional $1 million

loan guarantee financed the cooperative’s second processing facility.

A small local bank, the Farmers

Bank of Hamburg, Ark., originated the

loans. Loans of this size are difficult for

small banks that do not have the

deposit base to generate very many —

or very large — loans. However, this

President Clinton hails co-ops 

as engine for rural progress

Arkansas tomato co-op breathes new life into dying rural town

T

Co-ops will be a big part of farming and

rural growth in the 21st century,”

Agriculture Secretary Dan Glickman said

during his remarks in Hermitage, Ark..

USDA Photos by Anson Eaglin
Rural Cooperatives / November/December 1999 5

bank is committed to helping local

businesses utilize the loan guarantees

available through USDA Rural Development’s Rural Business-Cooperative

Service, Glickman pointed out. The

lender may sell much of the guaranteed

portion of the loan to the secondary

market and not have it count against

the regulated loan-to- deposit ratios

the bank must maintain. 

Co-op sales soar

Sales for the co-op have soared from

$60,000 to nearly $4 million annually.

Shipments have increased from 3,400,

20-pound cases of tomatoes annually to

570,000 cases. In addition to Burger

King, major customers include Kroger,

SuperValu, Fleming Foods and Associated Wholesale Grocers. Each is a

large customer that none of the individual farmers could have supplied on

his or her own.

The co-op has a waiting list for new

members. The processing facility now

employs up to 120 people during the

peak season. And during the early

November visit, Clinton and Glickman

announced that the farmers will to do

even more to boost the value of their

crop through diversification, as well 

as experiment with the production of

greenhouse tomatoes so growers can

expand business to a 9-month growing

season. The expansion could also

include an additional 100 jobs in 

the facility. 

“If I may say so, it was a whopper 

of a deal...which allowed everyone to

have it their way,” Glickman said, alluding to the co-op’s surging sales to Burger King — to the delight of the Hermitage audience.

“Now you can build that repackaging facility and farm supply store you’ve

been talking about, and spend more of

Bradley County dollars here,” Clinton

said. He added that cooperative efforts

offer the best promise to turn around

those areas of rural America that

haven’t kept pace with current economic prosperity enjoyed in more urbanized

areas. Agriculture can’t sustain the

economy anymore under the old rules,

Clinton said. But the Hermitage tomato

growers have proven that people can

make a living in rural America and do

something good.

Since the Hermitage cooperative

started, a second cafe has opened on

Main Street and a new elementary

school is being built for the 550-student

district. The U.S. Department of

Transportation is assisting Arkansas

officials in improving State Highway 15

and building a bypass in Hermitage,

which will be known as “Co-op Road.” 

The new frontage road not only

complements the expansion plans of the

cooperative, but also has stimulated

other development, including plans for

a full-line, full-service farm supply store

and a convenience store. The new road

makes it easier for trucks to travel to

and from Hermitage on tomato runs.

And it has all helped to renew hope,

said Randy Clanton, the president and

chief executive officer of the cooperative, who shared the November podium

with Clinton and Glickman.

President Clinton confers with Hermitage Mayor Mike Colvin (left) and Randy Clanton, leader of the Hermitage Tomato Growers Cooperative, during a special New Markets Initiative event staged inside the co-op’s tomato packing warehouse.
6 November/December 1999 / Rural Cooperatives

Creating “new markets”

The Arkansas co-op stop was the

second New Markets Initiative trip by

the Administration in four months. In

both instances, the remarks of Clinton,

Glickman and others highlighted the

untapped potential in America’s underserved markets, especially in rural

areas. This second trip put a special

emphasis on how corporations and

communities could leverage that

potential through long-term, sustainable partnerships. Through the New

Markets Initiative, Clinton wants to

encourage the private sector to invest

in rural communities so that all communities can share in the prosperity of

current economic expansion.

The New Markets idea poses two

questions. First, does America have a

moral obligation to give people a

chance to succeed who haven’t participated in the current economic recovery

and who want desperately to work?

Second, if we are enjoying the longest

peacetime economic expansion in

history, how do we continue to find

new jobs and new opportunities with

no inflation? 

President Clinton says the answers

are new markets. Hermitage is a

perfect example of what that means,

added Secretary Glickman. “Hermitage

has shown how a few innovative folks

— with some help from their government and a commitment from the

private sector — can help turn a community around and create a brighter

future for all of its people,” he said.

Glickman acknowledged that there’s

been a lot of pain and struggle for

America’s small farmers and ranchers

these last couple of years. On top of

low prices and weak export markets,

they’re trying to do business in a topheavy farm economy, where so much is

controlled by so few.

“To survive, they need to have some

kind of ownership in the marketing,

processing and distribution of their

goods,” Glickman said. “That way,

they get to keep a greater percentage of

the consumer dollars spent on the food

that they produce. Co-ops will be a big

part of farming and rural growth in the

21st century. And USDA will continue

to be there, with the resources and

technical assistance necessary to support them.” ■

President Clinton greets Co-op President Clanton as Secretary Glickman leads the ovation.

President Clinton discusses his New Markets Initiative with a co-op member.

The Bradley County Pink is the

world’s best-tasting tomato, local

denizens claim. Tourists even schedule

visits to the county in June to coincide

with summer harvest and the Pink

Tomato Festival, held up the road from

Hermitage in the county seat of Warren. 

But the county’s agricultural base is

broader than tomatoes. Forestry, beef

and poultry bolster tomatoes as the

major industries in Bradley County. Of its

nearly 419,000 acres, nearly 354,000

acres are forest land, primarily loblolly

pine and hardwood timber. Commercial

forests represents 88 percent of the land

mass. Of that, 51 percent is owned by

industry and the remaining 49 percent is

state, federal and privately owned.

County farmers produce 5,500 to 6,000

head of beef cattle each year that are

marketed through the Saline and

Ouachita Valley Sale Barn in Warren,

about 20 miles north of Hermitage. Some

20 million broilers and approximately

100,000 broiler hatchery hens also are

produced annually in the county.

But the tomato is what has put

Bradley County in the national spotlight.

Over 600 acres of fresh-market tomatoes

are produced annually. ■

Bradley Pink Tomato

—world’s best?
Rural Cooperatives / November/December 1999 7

By Beverly L. Rotan, 

Ag Economist

USDA Rural Development

hat happens on the

farm impacts the

cooperatives with

which it does business.

That was especially true this past year

for supply cooperatives and their

member-farms. With farm income

falling, the economic impact on local

cooperatives handling farm supplies

was negative.

Overall sales between 1997 and 1998

were down 4.7 percent. Individual farm

supply products — petroleum products,

feed, and fertilizer — were also down,

with petroleum having the greatest

decrease, 7.7 percent. Feed sales were

down as a result of reduced ingredient

costs and fertilizer sales were down due

to the overproduction of nitrogen.

Although total farm supply sales

declined by two percent, seed sales

increased by almost 20 percent (table 1).

Agricultural chemicals and other farm

supplies both increased, four percent

and three percent, respectively. Grain

sales continued to decline in the 1997-

98 farm year, the decline was higher

than the 1996-97 decrease. Insufficient

grain exports were blamed for this

downward slide. Cost of goods sold was

down by almost six percent, and this

decline was the reason gross margins

grew by about four percent. Cost of

goods averaged 89 percent of net sales.

There were 329 local cooperatives

handling farm supplies that provided

detailed financial information to the

U.S. Department of Agriculture’s Rural

Business-Cooperative Service. Some of

the cooperatives also marketed farm

products — grain being the most

prominent. Small cooperatives made

up 37 percent of the respondents. Of

those, 55 percent sold principally farm

supplies. Most of the larger cooperatives (22 percent) marketed grain.

Farm supply cooperatives’ 

income slides downward

W

Table 1—Farm supplies sold and grain marketed by cooperatives, 1997 and 1998

Name ‘97 Total Average ‘98 Total Average Percent

Dollars Change

Farm Supplies Sold

Feed $1,337,301 $1,269,206 -5.1 

Seed $145,243 $173,893 19.7 

Fertilizer $1,514,616 $1,486,492 -1.9 

Agricultural Chemicals 1,184,354 1,236,412 4.4 

Petroleum Products $2,371,398 2,188,902 -7.7

Other 883,012 910,544 3.1

Total $7,435,923 7,265,449 -2.3

Farm Products Marketed

Grain and Other $6,807,973 6,315,869 -7.2 

Total 6,807,973 6,315,869 -7.2 

Total sales $14,243,896 13,581,318 -4.7 

Table 2—Comparable abbreviated income statement, 1997 and 1998

Item Total average Total average Percent 1997 1998 Change

Dollars Percent

Sales 14,243,896 13,581,375 -4.7

Cost of goods sold 12,822,845 12,105,333 -5.6

Gross margins 1,421,051 1,476,042 3.9

Service and other income 513,805 554,966 8.0

Gross revenue 1,934,856 2,031,008 5.0

Expenses

Salaries and wages 1/ 834,406 901,973 8.1

Administrative 2/ 77,367 84,365 9.0

General 3/ 484,678 513,351 5.9

Depreciation 226,496 251,734 11.1

Interest 108,690 105,251 -3.2

Bad debts 17,581 20,005 13.8

Total expenses 1,749,218 1,876,774 7.3

Local savings 185,638 154,234 -16.9

Patronage refunds received 244,331 237,406 -2.8

Savings before income tax 429,969 391,640 -8.9

Less income taxes 31,532 28,921 -8.3

Net savings 398,437 362,719 -9.0

1/ Salaries and wages include payroll taxes, employee insurance, unemployment compensation, and pension expense.

2/ Administrative costs include professional services, office supplies, telephone, meetings and travel, donations, dues and subscriptions, directors’ fees and expenses, and annual meetings.

3/ General expenses include advertising and promotion, delivery (auto and truck), insurance, property, business and other taxes

and licenses, rent and lease expenses, plant supplies and repairs, repairs and maintenance, utilities, miscellaneous, and other.
8 November/December 1999 / Rural Cooperatives

Handling grain also generated storage

and services revenues. Service and

other income went up by eight percent

in the two-year period. Services would

include items such as grain handling

and storage, trucking, drying, fertilizer

and crop protection application, soil

analysis, and feed blending.

Net savings before income taxes

were down by nine percent. Local

savings hit their highest levels in 1997

and fell 17 percent in 1998. The gap

between local savings and net income

continued to widen. As expected, with

net savings losing some ground, income

taxes were also down for the period.

Expenses, as a whole, rose seven

percent in 1998 with bad debt expenses

rising the most (table 2). Administrative

and salaries/wages also increased over

the two-year period. Interest expenses

went down 3.2 percent. Patronage

refunds declined three percent. Local

cooperatives rely heavily on patronage

refunds from regional cooperatives as 

a source of income. These refunds

averaged $237,406 and comprised 61

percent of local net savings. 

Total assets grew to almost seven

percent. The increases were mainly

due to the increase in “other current

assets” (other receivables) and “other

assets” (investments, goodwill, notes

receivable). Property, plant, and

equipment investments increased by 12

percent (table 3). The fall in grain

inventories affected seasonal debt,

which also fell four percent. Farm

supply inventories increased while

grains and oilseeds inventories decreased. 

Total liabilities rose four percent from

the previous year. Both long-term debt

and owner equities increased. Owner

equities financed 56 percent of total assets. 

Several ratios measure the operational impact and performance levels of

cooperative operations. Most ratios

should be looked at in conjunction

with one another, over a period of

time, and with similar sales and functions of other companies/cooperatives

in the geographical area to get a true

picture. These ratios include: 1) liquidity, 2) leverage, 3) activity, and 4) profitability.

“Current” and “quick” are liquidity

ratios. From 1997 to 1998, these two

ratios changed slightly. Elements of

both ratios included current assets,

current liabilities, and inventory.

Current assets and liabilities were up

slightly, while total inventories were

down. Total inventories included farm

supply, which was up at 6.6 percent and

grain, which was down at 5.1 percent.

The gain from current assets and liabilities and the loss from total inventories

almost cancelled out each other. A

further look at items making up

current assets shows that four of the

seven declined. For current liabilities,

three of the seven declined. To improve

these ratios, a cooperative could borrow additional long-term debt, dispose

of unproductive fixed assets, or retain

greater portions of allocated savings.

Although the debt-to-total-equity

rebounded from lows in 1995 and

1996, the upward movement from

1997 to 1998 was small. It went from

0.21 to 0.24. Long-term debt increased

12.4 percent, and short-term debt

decreased 4.3 percent. Equity financing

remained strong for local cooperatives,

with equity growing nine percent

between 1997 and 1998. Improvements

in this ratio could be achieved by

reducing long-term debt, disposing of

unproductive assets, liquidating debt,

increasing local equity, slowing equity

retirement programs, or retaining

Table 3—Comparable abbreviated income statement, 1997 and 1998

Item Total average Total average Percent 1997 1998 Change

Dollars Percent

ASSETS

Current Assets

Cash and cash equivalents 424,748 399,187 -6.0

Accounts receivable 714,890 662,245 -7.4

Inventories—total 1,466,575 1,496,999 2.1

—grain 569,736 540,887 -5.1

—farm supplies 896,838 956,112 6.6

Prepaid expenses 63,796 57,599 -9.7

Other current assets 1/ 304,760 403,167 32.3

Total current assets 2,974,768 3,019,197 1.5

Investments and other assets

Investments 1,311,239 1,466,813 11.9

Other assets 2/ 99,299 113,567 14.4

Total investments and other assets 1,410,538 1,580,379 12.0 

Property, plant, and equipment

At cost 3,950,876 4,419,016 11.8

Less: Accumulated depreciation 2,368,020 2,643,176 11.6

Net, property, plant, and equipment 1,582,856 1,775,840 6.8

Total assets 5,968,162 6,375,416 6.8

LIABILITIES AND OWNER EQUITIES

Current liabilities

Current portion of long-term debt 96,940 142,907 47.4

Notes payable-seasonal 505,870 483,866 -4.3

Accounts payable 388,485 427,927 10.2

Patrons credit balances and other liabilities 909,056 899,294 -1.1

Accrued taxes 34,595 34,623 0.1

Accrued expenses 101,178 105,141 3.9

Patronage refunds (cash) 93,298 87,346 -6.4

Total current liabilities 2,129,421 2,181,102 2.4

Long-term debt 509,792 573,077 12.4

Total liabilities 2,639,213 2,754,179 4.4

Owners’ equities

Allocated equity 2,474,728 2,672,075 8.0

Unallocated equity 854,222 949,162 11.1

Total owner equities 3,328,950 3,621,237 8.8

Total liabilities and owner equity 5,968,162 6,375,416 6.8

1/ “Other” current assets include prepaid expenses and other receivables.

2/ “Other” assets include investments, goodwill, notes receivables, etc. 

Story continued on page 34
Rural Cooperatives / November/December 1999 9

Co-op service: Highland Exchange

Service Cooperative is an operating

supplies procurement cooperative

conducting business in the southeastern

United States. All operations are

performed from the Florida office

located outside Winter Haven and near

Cypress Gardens.

Co-op’s history and changes: Formed

through the consolidation in 1972

between the Highland Crate

Cooperative and the Exchange Supply

and Service Cooperative, HESCO

operated primarily as a corrugated

container broker in Tampa for its

member organizations. Since then,

HESCO’s product offering has

diversified from fresh fruit and poultry

packaging into an array of items,

including mesh and poly bags, safety

equipment, apparel, tires, batteries,

fuel, lubricants, maintenance and repair

parts, citrus chemicals, production and

harvesting equipment, janitorial

supplies, gift fruit cartons and supplies,

and agricultural chemicals.

Services members expect: As a supply

cooperative, it’s the cooperative’s job to

identify members’ critical operating

supply requirements, negotiate

favorable purchasing arrangements,

and then order, receive, store and

redistribute those supplies as needed.

The pricing of HESCO’s products

originates through negotiations with

vendors for volume discounts and

appropriate distributorships. These

negotiations—generally with more

than one vendor for like items—allow

HESCO to establish competitive prices

to its patrons on a year-round basis and

also provide a patronage refund at the

close of each fiscal year.

The cooperative constantly investigates new products and services, which

will generate greater savings for members. Strengths lie in the co-op’s financial integrity, in member allegiance,

and in staff expertise and enthusiasm.

How does the co-op operate? Most of

HESCO’s members are now serviced by

38 staff members from a 75,000-squarefoot warehouse and a 6,000-square-foot

office. Shipments from the warehouse

represent about 20 percent of total

sales, handled by a fleet of seven trucks

on regular schedule to member sites in

Florida. While the majority of

HESCO’s current members operate

citrus packinghouses or processing

plants, its membership also includes

other agri-businesses in the

southeastern United States.

Who are members? Membership is

accomplished only through 1)

application by the interested entity; 2)

management screening to determine

eligibility; and 3) review and approval

by the board of directors. HESCO

policy provides for a two-year

provisional membership period. Either

party may terminate the membership

during this period, but HESCO’s

services and supplies are made available

to the member with all privileges of

membership, except the right to vote.

Upon successful completion of the two

years, and on presentation to and

approval by the board, the member is

accorded voting privileges. Qualified

affiliates of the member (i.e., members

of the member and majority-owned

subsidiaries) are also entitled to

HESCO’s supplies and services, but

without voting rights. 

Members include Albritton Fruit

Company, Blue Ribbon Citrus Packers,

Davis Citrus Management, Dundee

Citrus Growers, Florida Select Citrus,

Gene’s Citrus Ranch, Golden Harvest

Packing Company, Gracewood Fruit

Company, Gustafson’s Dairy Farms,

Hale Indian River Groves, Harvey’s

Groves, Heartland Citrus, Hilliard

Groves, Holly Hill Fruit Products,

Hunt Bros. Co-op, Indian River

Exchange Packers, Lake Placid Citrus

Growers, Lake Region Packing, Lake

Wales Citrus Growers, Minton Sun,

Mixon Fruit Farms, Ocean Spray

Cranberries, Orange-co of Florida,

Oslo Citrus Growers, Peace River

Packing, Riverfront Groves, Sebring

Packing, Silver Springs Citrus Co-op,

Sun Brite Citrus, Texas Citrus

Exchange, The Packers of Indian River,

Tuxedo Fruit, Vero Beach Citrus Packers, Waverly Growers Co-op, Winter

Garden Citrus Growers and Winter

Haven Citrus Growers.

How does the business operate?

Most of the administrative and policymaking functions are coordinated by

HESCO management, with an

executive committee comprised of nine

directors elected by the full board for

three-year rotating terms, and with the

president presiding as an ex-officio

member. Recommendations from the

executive committee are presented to

the full board for its consideration. ■

A CLOSER

LOOK AT...

Highland Exchange Service

Cooperative - HESCO

Waverly, Florida

Hesco’s fleet of trucks service members

throughout Florida. Photo courtesy HESCO
Bridging the gap

USDA spotlights DLT

technology to mark 

50th anniversary of 

telecommunications program 

By Pamela J. Karg, 

Field Editor

hile most Americans

have enjoyed a period

of unrivaled economic expansion during

the past decade, some rural communities are still struggling with doubledigit unemployment and per-capita

incomes that lag far below the national

average. That’s the case in many of the

Appalachian Mountain communities of

southwest Virginia, which is also home

to some of the most medically underserved towns in the nation. Until the

advent of distance learning and

telemedicine (DLT) technology, rural

communities such as Vansant, Va., 

were not good places to live for those

needing the regular care of a medical

specialist. 

That was the situation facing

Alexandra Bartley, who, at age 18

months, underwent surgery at the

University of Virginia Medical Center

in Charlottesville to repair a cleft palate

and tumor on her face. Following the

surgery, she needed regular postoperative checkups and treatment at

the medical center, more than 200 miles

away from her home. Fortunately,

Alexandra and her parents were spared

the travel ordeal thanks to the universitysponsored Southwest Alliance for

Telemedicine, which established a fiber

optic cable link between a health clinic

in Vansant and the Medical Center in

Charlottesville. The link enabled a pediatric plastic surgeon in Charlottesville to

examine Alexandra with video equipment and to direct treatments as she

recovered from surgery.

Alexandra’s mother, Lisa Hubbard,

said each trip to Charlottesville not

only would have required her to miss a

day of work, but also cost her dearly for

gas, food and lodging — not to mention how traumatic the long journey

would have been for a little girl trying

to recuperate from extensive surgery. 

The result? Alexandra’s beautiful

little face beamed out at the crowd that

gathered at U.S. Department of Agriculture headquarters in Washington,

D.C. in October to celebrate the 50th

anniversary of USDA’s rural telecommunications program. Agriculture

Secretary Dan Glickman said there

could be no better anniversary present

than this real-life testimony to the value of telecommunications technology

in rural areas. On behalf of the university, Alexandra and her mother accepted a $230,000 USDA grant which will

be used to expand telemedicine service

to two additional rural communities in

southwest Virginia, part of $13 million

in USDA grants awarded that day to

projects in 34 states and Puerto Rico.

Saving lives on the High Plains

Further demonstrating the value of

telemedicine, a live video-link was

established between USDA headquarters and a rural health clinic in

Haxtun, Colo., a small farming

community about 120 miles northeast

of Denver. There, Bryan Nation of the

High Plains Rural Health Network

(HPRHN) spoke about the tremendous

impact telemedicine has had on public

health service in rural communities of

the High Plains.

The High Plains network began 10

years ago, and now provides vital services

and economies of scale to 19 rural healthcare facilities in western Kansas, eastern

10 November/December 1999 / Rural Cooperatives

W

Fiber optic cable allows a baby in Hays, Kan., to

be examined by medical specialists 250 miles

away at the University of Kansas Medical

Center in Kansas City, Kan. The ability to per-
Rural Cooperatives / November/December 1999 11

Colorado, western Nebraska and southern

Wyoming. These healthcare facilities —

in towns ranging in population from a few

hundred people to as many as 10,000 —

are connected via telecommunications to

two urban hospitals. 

In addition to providing direct

healthcare services for patients, the

network helps local clinics with recruitment and retention of physicians and

nurses, insurance claims, collections

and purchasing. Professional healthcare

staff, local paramedics and others in 

the healthcare field routinely use the

network for distance learning in

required continuing education seminars.

Dr. Greg Holst, family practitioner

in Haxtun, credited telemedicine for

enabling him to keep abreast of

advances in medical technology and for

improving direct patient care in his

community. He introduced Phyllis

Ash, who told how her husband, Dick,

had nearly lost his leg to a staph infection. It was saved, thanks to an early

diagnosis and treatment made possible

through telemedicine. “In another 24

hours, he probably would have lost his

leg,” she recalled.

DLT increasingly affordable

Telemedicine technology is becoming increasingly affordable. By one

industry estimate, a typical telemedicine

set-up cost nearly $300,000 five years

ago. With improvements in technology,

innovations in data compression and

reductions in computing costs, the

expense of the equipment can be less

than $5,000 today. For remote patient

monitoring, the cost of some monitors

is now less than $300 each.

The real costs today are not in purchasing hardware but for telecommunications transmission, training health

professionals in its use and integrating

telemedicine into

existing healthcare

systems. HPRHN’s

Nation related how,

during the first few

years of the organization’s operations,

irrigated corn in

rural areas grew so

high and gave off

enough vapor that it

would knock out

local telephone service. When a telephone company

finally laid fiber

optic cable, a farmer

accidentally severed

the cables when he

went out to plow.

Gophers ate

through other

cables.

“We’re talking

about very rural

areas where there’s

one telephone company that doesn’t

necessarily install a

lot of new technology because of the

low density,” Nation explained. That

low density also creates high costs for

rural distance learning and telemedicine projects.

Another challenge HPRHN has

experienced results from users who

want “easier technology.” Some rural

hospitals may only use their system

once a month. Even if one person is

designated the “technology guru” in

the healthcare office, it takes time to

remember exactly how to operate the

equipment. Distance learning and

telemedicine practitioners also warn

that programs need to be established

with the end-user in mind.

“It’s one thing to think of a really

great service you can finally provide to

rural America over the Internet or via

satellite,” said Nation. “It’s quite

another thing to actually match your

idea to what your target audience is

willing to use.” 

form rapid diagnosis locally is sometimes proving

to be a life-saving technology. Photo by Charlie Riedel

Telemedicine equipment links this small rural health clinic in

Ransom, Kan., to larger clinics and hospitals located many hours

away, saving this young patient the need for a long journey for

medical diagnostic work. Photo by Charlie Riedel
12 November/December 1999 / Rural Cooperatives

Currently, a doctor must accompany

a patient during a teleconsultation with

another doctor. In some rural areas,

though, physician’s assistants, registered

nurses or other certified health professionals staff clinics. On-site doctors are

not always available, and some insurance companies do not want to pay any

reimbursements for the telemedicine

consultation without doctors at both

ends of the fiber optic cable.

Saving rural schools

Delbert Wilson, manager of the

Central Texas Telephone Cooperative

Inc., in Goldthwaite said his co-op

received one of USDA’s first telephone

loans back in 1951, when an average of 12

to 16 customers had to share every party

line. In those days, farmers had to do

double duty as linemen, maintaining the

telephone lines that crossed their land.

Just two years earlier, in 1949,

President Harry Truman had signed

the amendment to the Rural Electrification Act that enabled USDA to begin

loaning money to rural telephone

cooperatives and companies. At that

time, only 39 percent of farms had any

phone service. Twenty years later, that

figure had risen to 83 percent, and

today it is more than 95 percent.

Wilson’s co-op is a perfect example

of that progress. From humble beginnings, the co-op has leapt into the

future, and now offers state-of-the-art

digital telecommunications service to

6,500 customers scattered across 3,300

square miles in 14 central Texas counties. The co-op offers modern telecommunications service to rival that found

in any urban area, from caller I.D. to

being a local Internet service provider. 

Wilson said distance learning technology may be the biggest boon yet that

the co-op has offered its customers.

This technology has helped many rural

towns in the co-op’s service area

improve and save their schools — a life

or death issue in many small towns.

“Rural schools are the heart and soul —

as well as the largest employer — in

most small rural towns,” he noted.

“When a community loses its school,

we often lose the community as well.” 

Many rural communities in central

Texas have been trying everything to

save their schools. While some consolidations have been inevitable, many

districts now offer courses taught in

distant locations, vastly expanding educational opportunities and future career

options. By boosting the quality of the

curriculum, more families are willing to

remain in — or move to — rural towns,

without the fear that they are sacrificing

the future of their children because of

inferior education. Better schools also

help attract new businesses.

This point was also underscored

during a video link between USDA

headquarters and the Towanda School

district in a rural area of northeastern

Pennsylvania. Dr. Dan Paul, project

director for Partners in Distance

Learning and the former Towanda

school superintendent, said this distance

learning project started with just six

schools in 1993. “We saw the grant from

USDA not only as a means to improve

education in our rural schools in northeast Pennsylvania, but as a chance to

demonstrate a better way for all rural

schools to use technology to open

opportunities for their students,” he said.

This distance learning program has

been so successful that is has now been

expanded to 300 schools in seven states.

Last year, 30,000 students and 5,000

teachers participated in distance learning classes. “We are not aware of any

other approach to distance learning in

our country that involves more

students and more teachers on a daily

Improved rural telecommunications is becoming an essiential tool for farmers to compete in a

global economy. USDA Photo by Ken Hammond

Agriculture Secretary Dan Glickman issued

“a call to action” to ensure that rural people are included in the digital telecommunications revolution.
Rural Cooperatives / November/December 1999 13

basis,” Dr. Paul added. 

Students also participated in the

event, relating what distance learning

meant to them. One high school girl

said the technology made it possible for

her to take college preparatory math

classes and German — classes her rural

school doesn’t offer. Other students

told of taking virtual field trips via

distance learning to places such as a

NASA training center and the

Philadelphia Museum of Art, all without leaving their desks. 

“Indians finally victorious!”

Velasquez Sneezy, vice chairman of

the San Carlos Apache Telecommunications Utility Inc., in San Carlos,

Ariz., said telephone lines are truly the

tribe’s lifelines to the outside world.

Before the tribal-owned telephone

cooperative received a $14.1 million

USDA loan in 1997 to expand its

system, only about a quarter of the

homes had telephones across the 2,854-

square-mile reservation. By comparison,

93.7 percent of all American households had telephone service; the rate

was just 50 percent among rural Native

Americans. 

In San Carlos, population just

under 3,000, there was only one pay

telephone. “People would start lining

up at 6 a.m. to use the phone, and the

line didn’t go away until after midnight,” Sneezy said. 

Thanks to financial and technical

assistance from USDA Rural Development, “we now have the best telecommunication equipment to be found in

the country,” he said. Law enforcement

has benefited greatly from improved

telecommunications. Sneezy told of an

incident when a tribe member, living in

an isolated part of the reservation without phone service, was threatened by a

gun-wielding assailant. The victim had

no way to summon police. That type of

terror is less likely now that most tribe

members have telephones.

Healthcare has also improved on the

reservation. Parents can now call a

doctor when a child is sick to discuss

symptoms and determine if a long trip

into town for a checkup is really necesThe Regional Alliance for Information Networking (RAIN) was originally

established to serve the California

counties of San Luis Obispo, Santa

Barbara and Ventura. The recipient of

two USDA telecommunications grants,

RAIN is a public Internet and telecomputer service that focuses on

distance learning and telemedicine by

linking students, their families and

communities. It delivers innovative

neighborhood-level, public library,

classroom and medical clinic network

development and training assistance. 

In addition, it operates an on-line

broadcasting service. In fact, RAIN is

pioneering the field of public Internet

broadcasting. Functioning in a similar

fashion as traditional radio or TV,

RAIN serves as a broadcast facility.

Locally developed and produced

programs air onto the Internet 

through RAIN’s distance learning 

and telemedicine channels. 

Part of the RAIN project includes

Camp Internet, which makes it possible

today for elementary students at

schools across seven counties to

explore the Internet in a protected,

exciting environment, reports Susan

Barkdoll, a teacher at North Verdemont

School in San Bernardino.

Camp Internet was developed so

students, teachers and parents could

gain a balanced view of natural and

human history by exploring thematic

science and humanities subjects via

online technology. Through Internet

research, e-mail, chats with paleontologists and classroom activities, people

can explore Southern California’s back

country and its Pacific Ocean Channel

Islands. 

North Verdemont students are

working together on-site, and with

classrooms on other campuses, to

bridge previous barriers to learning.

The camp brings all types of students

— including at-risk, gifted, urban and

rural, grades 3-10, and at all levels of

English literacy — together to study the

history and science behind the area in

which they live, Barkdoll says. “And,

through the students’ fascination with

the subject matter, they are being

drawn in to explore many other facets

of Internet-based education,” she

explains.

Like the eight-year-old students in

her class, Barkdoll is also a distance

education user. She recently completed

work on her doctorate degree at Curtin

University in Perth, Australia, while

living in Southern California and working

full time. Barkdoll spent only a month 

in Australia, where she needed to

complete residency requirements.

Last year, Steven Jobs of Apple

Computer nominated North Verdemont

Elementary School and Camp Internet

for the Computerworld Smithsonian

Award for education and academia.

The award honors men and women

whose visionary use of information

technology produces positive social,

economic and educational change. As

a nominee, North Verdemont School’s

innovative project about the Channel

Islands will be permanently recorded in

history at the Smithsonian Institution’s

National Museum of American History.

Camp Internet is just one of four

target areas found at the RAIN website

(www.rain.org). Telemedicine is another

service that links nine communities in a

project aimed at expanding the range

of available health services. Through

interactive audio, visual and data

communications, the telemedicine sites

are enhancing healthcare delivery,

diagnostic and consultative services,

treatment, medical data transfer and

professional education. The telemedicine network also facilitates the

exchange of information and data for

use in health promotion, disease

prevention and other public health

activities. ■

California RAIN project wins 

Smithsonian honors
14 November/December 1999 / Rural Cooperatives

sary, Sneezy said. 

“Now, unlike in the movies, we can

say that the Indians are finally victorious! I’ll probably be talking to you

again sometime in the future over a TV

screen to ask for another loan to

improve the system,” he added. 

Glickman issues call to action

Agriculture Secretary Glickman said

the purpose of the celebration for the

50th anniversary on USDA’s telecommunications program was not only to

recognize the accomplishments of

USDA partnerships with rural

telecommunications providers, “but 

to issue a call to action for the next 50

years!” Glickman noted that up to 60

percent of all new jobs created in the

next century will be high-tech jobs.

“The Internet already accounts for 6.5

percent of America’s gross national

product,” he noted, “and 10 years ago

nobody had even heard of it!” 

Development of the Information

Superhighway means even more to rural

America than to urban areas, Glickman

said. An urban location is no longer necessary to start a new business with a

regional, national or even international

scope. “The talent and brainpower

needed to fuel the nation’s high-tech

industry in the 21st century can now be

found, and remain, in rural communities,” Glickman said. “And telemedicine

projects are bringing better healthcare

service to remote communities, saving

time, money and even lives.”

John Podesta, President Clinton’s

chief of staff, echoed those sentiments,

saying USDA will continue to play a

role to ensure that the rising tide of

high technology does not leave rural

America stranded. “We cannot allow

information technology to drive a

greater wedge between the haves and

have-nots, between urban and rural, or

between young and old,” he said.

“Technology must be a force for both

prosperity and social progress.”

USDA offers record amount for DLT 

To help spread DLT technology to

even more rural communities, USDA

Some scenes from the not-so-good old days of rural telecommunications: (Left) a farmer uses an outdoor crank telephone to make a call;

(Above) Even one small pole downed by a storm could knock out service

to an entire rural area. (Right) Phone lines converge on an obviously

over-loaded circuit.
Rural Cooperatives / November/December 1999 15

will make a record $220 million in

loans and grants available to rural

communities in fiscal year 2000.

Applications for DLT loans and combination loan/grant applications will

be accepted until Sept. 30, 2000. 

Applications are processed on a

first-come, first-serve basis. Applications for grants must be postmarked

no later than March 17, 2000.

Jill Long Thompson, USDA under

secretary for rural development, said

the DLT program’s success has helped

garner support from President Clinton

and Congress.

“The DLT program is giving us a

clear view to a better future for rural

education and healthcare service,” she

said. “With $81 million in USDA

funds already invested in more than

304 projects since 1993, this program

has improved the educational opportunities for thousands of students and

provided better quality healthcare to

rural citizens served by more than 800

hospitals and rural healthcare clinics.”

Eyeing future DLT growth 

Jon Linkous, executive director 

of the American Telemedicine

Association, says the rapid growth of

telemedicine is a worldwide phenomenon, but measuring it is tricky for

several reasons. Telemedicine products and services are often part of a

larger investment by healthcare

When Arkansas Rural Medlink (ARM)

received a $497,000 USDA grant in 1994,

ARM officials reported 27 percent of the

population within the 20 counties that

comprise the Arkansas Delta region lived

in poverty. Only 57 percent graduated

from high school, contributing to the

region’s unemployment rate of 9.2

percent. The need to expand pediatric,

cardiology, radiology and trauma services was critical to these rural residents.

By developing a consortium of five

hospitals that serve some 311,000

residents, ARM could improve the quality

of, and access to, medical services as

well as provide healthcare education

programs through the use of advanced

telecommunications technologies. The

USDA grant was used to purchase interactive digital video equipment to link the

five rural hospitals with the University of

Arkansas for Medical Sciences.

Telemedicine programs can also help

patients overcome barriers such as

language and need for confidentiality. In

a New York telemedicine network, nonEnglish-speaking Vietnamese patients

can now talk to a Vietnamese-speaking

mental health provider. Previously, a

patient and his or her interpreter would

go to the nearest mental health professional — who only spoke English —

rather than drive to see the Vietnamesespeaking professional.

American Samoa has also used this

technology to good effect. The seven

South Pacific islands are more than

2,300 miles from Hawaii. Using USDA

grant funds awarded in 1996, the American Samoa Power Authority created a

satellite link between the LBJ Tropical

Medical Center and the PEACE SAT Network, in Hawaii, that provides access to

numerous telemedicine and medical

information resources. Voice, data and

video capabilities allow medical personnel to do consultations and diagnostics

with Hawaiian and U.S. mainland hospitals. Distance learning classes are

provided to healthcare professionals.■

Patients win when

rural hospitals unite
16 November/December 1999 / Rural Cooperatives

Shaq, Microsoft

donate technology

centers

High-tech equipment will benefit

Wisconsin Empowerment Zone

By Pamela J. Karg, 

Field Editor

In every discussion about the Internet,

distance learning and telemedicine,

there comes a point when people need

to face the financial hardware hurdle.

Even after fiber optics are installed

and T-3 lines are running, users need

monitors, keyboards and cameras. In

northern Wisconsin, hardware isn’t an

issue anymore because of a grant made

possible by two private sector giants:

NBA Superstar Shaquille “Shaq”

O’Neal and Microsoft Corp. The

donations were part of a string of positive events — including a zero-interest

loan by a local electric cooperative —

that are spurring positive changes on

rural Wisconsin reservations.

Reaching an exciting milestone in

youth development, the Boys and

Girls Clubs of Lac Courte Oreilles

received a $50,000 grant to build a

state-of-the-art technology center

through funding provided by

Microsoft and O’Neal. The computer

software giant and O’Neal are funding

15 centers in Boys

and Girls Clubs

across the country.

The Boys and

Girls Clubs of

Lac Courte

Oreilles was the

only rural site,

and the only site

located on an

Indian reservation. Lac Courte

Oreilles is a

USDA Enterprise

Community

located in the

northern lakes

and woodlands

region of Wisconsin, approximately

150 miles northeast of Minneapolis and 80 miles

southeast of

Duluth, Minn. It’s

home to the Lac

Courte Oreilles

Ojibwa Community College where the curriculum

reflects Ojibwa culture and tribal selfdetermination, and provides students

with opportunities for individual selfimprovement in a rapidly changing

technological world, while maintaining their cultural integrity. The new

center will offer both the club and the

college greater access.

Located in the club, the technology

center provides the resources for

young people to work collaboratively

to discover, pursue and create projects

related to science, math, literature, art,

telecommunications, engineering, and

a variety of other disciplines. In addiinstitutions. Telemedicine is not a

separate specialty and is often integrated with the overall delivery of

health. Second, telemedicine is a very

new investment for many institutions

and there is little history from which

to draw projections.

“Finally, there is no commonly recognized definition or set of services and

devices that constitute telemedicine.

Different healthcare institutions and

consulting firms define telemedicine in

quite different ways,” Linkous adds.

Business Communications Co.

(BCC), a Connecticut consulting firm,

estimates that the current U.S. market

for telemedicine is $65 million and will

reach $3 billion by the year 2002. BCC

also predicts a 42-percent increase in

public sector investments and an 89-

percent growth in telemedicine sites by

2002. The report predicts a 28-percent

increase in prison telemedicine sites

over five years and a doubling of

military investment over seven years. 

In its ninth annual survey of senior

healthcare executives, the Healthcare

Information and Systems Society

reports 34 percent of its 1,754 respondents currently use telemedicine.

Another 10 percent plan on using it in

2000 and 28 percent are investigating its

use in the future. And the Telemedicine

and Telehealth Networks magazine

recently completed a survey of selected

telemedicine program managers.

Ninety-three percent reported that

they expect to expand their operations

in the next five years.

NBA superstar Shaquille O’Neal is scoring some points on behalf of

underprivileged rural Wisconsin children through his support for

new rural technology centers. Photo courtesy Shaquille O’Neal
Rural Cooperatives / November/December 1999 17

tion, the center includes laser printers,

a high-resolution scanner, digital and

video camera, high-speed Internet

access, and educational software.

“The great thing about what we

have now is our increased ability to

open doors for learning. The kids can

now be exposed to possibilities for

developing education and careers in a

very special way,” said Renfro Carley,

director of technology and education

at the Trepania Road Boys and Girls

Club site.

Members of the New Post Club

(an extension site across the reservation) can also take advantage of all the

new resources. Carley said youth will

be encouraged to create their own

projects that expose them to special

interests such as space exploration,

aeronautics, scientific investigation,

and careers in science, technology and

computer programming. Supervised,

high- speed Internet access will create

a window to an encyclopedia of

opportunity.

This collaborative effort between

Microsoft Corp. and O’Neal provides

at least one sector with the hardware

solutions they need. Microsoft donated $1.1 million in cash and $400,000

in software (estimated retail value) to

fund the centers. O’Neal also donated

$1 million.

“As someone who often struggled

with getting excited about learning as

a youngster, I think technology is critical to capturing the minds of today’s

young people,” said O’Neal following

news coverage of the center’s opening.

“My personal interest in technology

and belief in 

its importance to the success of our

young people is why I decided to help

build these centers instead of basketball courts.”

Other Boys and Girls Clubs to

receive funding for technology centers

are located in High Point, N.C.;

Richmond, Va.; Denver, Colo.;

Houston Texas; Los Angeles, Calif.;

Sacramento, Calif.; Seattle, Wash.;

Philadelphia, Pa. (two Clubs);

Newark, N.J.; Taunton, Mass.;

Cleveland, Ohio; Hayward, Wis.;

Milwaukee, Wis.; and Laredo, Texas.

“This award means a giant leap

forward because of the positive

difference we can make in the lives of

the young people in this community,”

said Karen Harden, executive director

for the Boys and Girls Clubs of Lac

Courte Oreilles. “When writing this

grant application, I felt we had a

chance to get it, even though most

believed it was a long shot. I am 

really elated that we can offer such a

valuable program to our youth.”

Just days after the donation, USDA

Rural Development and Jump River

Electric Cooperative joined with Lac

Courte Oreilles officials to complete

financing for a business incubator on

the reservation. Jump River received a

$166,000 zero-interest-rate loan,

reported Bryce Luchterhand, USDA

state director. The co-op is loaning

the money to the tribe to finance a

land purchase and construction of a

5,000-square-foot business incubator

facility. Jump River is supplementing

the loan with $34,000 from its general

account.

Tribe officials are buying a 2.5-acre

parcel on which to build the facility

which will provide Lac Courte

Oreilles, Sawyer County and northwest Wisconsin with commercial and

industrial space for start-up and

emerging businesses. The tribe’s

wholly owned, non-profit community

development corporation will provide

technical assistance to tenants. Six tenants have already been approved.

Eighteen jobs will be created initially.

USDA’s Luchterhand said the Jump

River loan is part of an ongoing effort

by Rural Development to assist Wisconsin tribes with job creation, housing and infrastructure improvements.

“The demographics clearly show

that some of Wisconsin’s poorest

communities are located on Indian

reservations,” Luchterhand said. 

“By providing economic assistance,

we can help tribes help themselves.

This is not only good for them, it is

beneficial to surrounding communities and the state, in general, and

everybody wins.” ■

According to the 1998 Report on

U.S. Telemedicine Activity produced

by the Association of Telemedicine

Service Providers, certain specialty

areas continue to dominate use of

telemedicine, such as mental health,

cardiology, orthopedics, radiology and

dermatology. Yet the types of facilities,

programs, organizations, technologies

and applications used to deliver these

services have expanded and diversified

in the last two years.

The ATSP survey found that

California, New York, Texas and North

Carolina are leading the way in the

number of their programs and teleconsultations.

That rural America is sharing in the

digital revolution is in large part the

result of the partnerships USDA Rural

Development has forged with rural

telecommunications cooperatives 

and companies during the past half

century, said Wally Beyer, who retired

in October after six years as administrator for USDA’s Rural Utilities

Service. “USDA has been building the

foundation for the Information Superhighway in rural America for 50 years.

It is the foundation that will keep our

nation’s rural communities thriving

during the next century.”

Editor’s note: For more information on

USDA telecommunications and DLT

programs, visit the USDA Rural Development website: www.rurdev.usda.gov. ■
18 November/December 1999 / Rural Cooperatives

By Bill Tarpenning, 

Director of Photography

USDA

hen the market

doesn’t come to the

farmer, then it’s time

to bring the farmer to

the market. At least that’s how the

members of Browntown Cooperative

see it. And the strategy is in the process

of paying off for its 40 small farmermembers.

Located in south central Alabama,

Browntown Cooperative members

banded together to share technology,

improve productivity and augment

their individual marketing activities.

Unlike most small farmers in the rural

South who supplement their farm

incomes with full-or part-time jobs,

members of Browntown Cooperative

are mostly full-time farmers.

The community lies in the center of

Autauga County, which is part of what

is known as the Black Belt. The Black

Belt is unique in terms of its soil type.

The predominantly heavy prairie clay is

particularly good for growing forage to

supplement livestock operations, as

well as for timber production.

However, in the Browntown area, the

land is gently rolling and is characterized

by sandy to loamy soils, ideal for the

production of fruit, vegetable and greenhouse nursery products. The farmers of

the area have produced and marketed a

variety of fruit, vegetable and specialty

crops for 30 years or longer.

Over the last 5 to 10 years, these

farmers experienced problems with

limited market outlets and declining

profit margins. Finding ways to tackle

these problems led to the organization

of Browntown Cooperative in September 1997.

The membership potential of around

100 growers lives in the communities of

Autauga, Perry, Dallas, Lowndes,

Chilton, Montgomery, Elmore and

Bibb. Eventually, 40 farm families in

the Browntown area joined the cooperative after several organizational meetings were held over the course of three

to four months. About 70 percent of

the members are black, the rest are

white. Members are unified behind the

idea of developing greater returns on

their farm investments by producing

food just the way today’s consumers

want to buy it.

A survey of farmers who own and

operate on their land showed they grew

a variety of produce, including crops

such as watermelons, peas (pink eye

and crowders), butter beans, sweet

corn, squash, snap beans, cucumbers,

sweet potatoes, and leafy greens. These

fruits and vegetables allowed for doubleand, occasionally, triple-cropping on 

the same acreage. With this type of

information in hand, the cooperative

focused on assisting its members 

with the production, marketing and

processing of fruits and vegetables.

A packing and processing facility is

being planned. It will contain all the

equipment needed for members to

grade, shell, clean, package, store, cool,

perform limited processing, market,

and ship produce. Longer-range planning calls for a state-of-the-art facility

designed to further process 

the produce and specialty crops into

quality, value-added packages.

Meanwhile, the cooperative will build

on current contracts in the fresh market

trade at both retail and wholesale levels,

on a regional basis. Eventually, the

cooperative plans to develop markets

throughout the country so its members

can produce large quantities of highquality crops for year-round marketing.

Assistance has been provided by

various federal, state and local agencies.

Organizing for the future

Browntown: small co-op with big plans

Odell Brown says his drip irrigation system not only is increasing his per-acre yields through

more efficient use of water and fertilizer, it is also allowing him to double- and triple-crop each

year. USDA Photos by Bill Tarpenning

W
Rural Cooperatives / November/December 1999 19

Members of the Browntown Cooperative acknowledge assistance from: the

Alabama Department of Agriculture and

Industries, Marketing and Economics

Division; Mid-South Resource Conservation and Development Council of the

Natural Resource Conservation Service, USDA; the Alabama Cooperative

Extension System; Alabama Agriculture

Experiment Stations; Farm Service

Agency, USDA. The Federation of

Southern Cooperatives/Land Assistance Fund provides coordination and

liaison by assigning a staff person to

work with and aid in the development

of the cooperative. ■

Odell Brown (center) inspects a drip irrigation/fertilization line with George Paris of the

Alabama Department of Agriculture and Industries and Bill Steele of the Federation of

Southern Cooperatives/Land Assistance Fund. 

Bobby Smitherton and Elijah Jones 

show their new drip irrigation/fertilization

system. 

Jones/Smitherman family farm

Elijah Jones and his son-in-law, 

Bobby Smitherman, farm 135 acres near

Clanton, Ala. Last year, they installed a

well to provide irrigation for 25 acres of

vegetables, many of which were triplecropped with the aid of plastic mulch 

and drip irrigation. In addition to their

vegetable crops, they maintain substantial peach and pecan orchards and a

small beef cattle herd.

Most of their produce is sold at the

family’s booth at the Montgomery State

Farmer’s Market. The family looks

forward to the day when they can market

value-added products through the

Browntown Cooperative while maintaining and expanding their business at the

farmer’s market. The Jones/Smitherman

family intends to expand its irrigated production and to purchase equipment for

custom installation of plastic mulch and

drip irrigation systems for other co-op

members.

Odell Brown family farm

Odell Brown and his wife, Johnie Mae,

farm 220 acres, 140 of which they rent

near the Old Kingston Community outside

Pratville, Ala. The Browns farm with the

aid of an extended family and concentrate on watermelon and southern peas,

with a variety of other produce crops.

Over the years, Odell has developed

markets for his crops with the major retail

grocery chains operating in the area.

Johnie Mae operates the family’s retail

booth at the Montgomery State Farmer’s

Market. The Jefferson County Truck

Growers Association in Birmingham,

Alabama, is also a wholesale outlet for

the Browns’ production.

Increased demand and changes in

consumer buying habits have caused the

Browns to install plastic mulch and drip

irrigation as a means of increasing production on 10 acres of land. According to

Odell, the new system can quadruple

production on that land, and get his

product into the market three weeks

earlier. In dry, hot years the irrigated 

land will produce a crop when dry land

produces only dust. ■

How Browntown Co-op benefits members
By Laura Moser

ust as the U.S. political

and economic climates

were ripe for the development of cooperatives

80 years ago, so too is the time right

now to take another look at cooperatives.

“New-wave” or “new-generation”

cooperatives offer a new set of opportunities and advantages for their memberowners and the idea is catching on.

With depressed commodity prices and

changing government policies, farmers

are looking for ways to take more

control of their businesses. One of the

latest states to embrace new-generation

cooperatives is Michigan. What started

as one county’s attempt to bolster its

agricultural community has grown into

a statewide effort.

Three years ago, Michigan State

University extension agent Jim

LeCureux received a grant from the

W.K. Kellogg Foundation to study

ways to enhance the rural community

through sustainable agriculture. A

steering committee was formed to

explore different options. 

“We were looking for ways to keep

farmers farming,” LeCureux explains.

“We looked closely at the various crops

grown in this area and the opportunities they might present.”

LeCureux and the committee

worked in three Michigan counties–

Huron, Tuscola and Sanilac–located in

the “Thumb” region of the state. They

visited other states and Canada to see

new, value-added processing facilities

and new-generation cooperatives

working. It was in Ontario where the

committee literally stumbled on 

the idea they would take home to

Michigan: Soybean processing.

“Based on the comments by the

owner in Canada, we saw a great

opportunity for a soybean extruder in

the Thumb,” LeCureux says. “Soybeans grown in the Thumb are hauled

to northern Indiana, northern Ohio or

western Michigan [to be processed].

Soybean meal is then brought back to

feed to livestock.”

The three-county area produces

over 8 million bushels of soybeans per

year. Livestock in this tri-county area

consume over 70,000 tons of soybean

meal. Examining these figures, farmers

saw a way to add value to their weakening commodity prices.

By late 1996, the committee was

evaluating the feasibility of a soybean

processing plant in the Thumb. A series

of meetings held throughout the winter

months helped educate area producers

and determine their interest level.

“We needed a core group of people

committed to the cooperative and the

ideas to move the business forward,”

LeCureux says.

Oilseed Co-op launched 

In early 1997, feasibility and business

plans outlined the goals and objectives

of the new cooperative. The steering

committee also selected a name: Thumb

Oilseed Producers Cooperative

(TOPC). The initial stock offering was

held in the spring of 1998. Becoming a

member required accepting new ideas

about cooperatives. Members had to

provide more than spirited loyalty. They

needed to put up money and guarantee

delivery of a set amount of product. Two

policies distinguish this and other newgeneration cooperatives from traditional

marketing cooperatives: shares and

delivery rights.

“Shares in a new-generation cooperative do not simply assign membership,

they allocate delivery rights,” explains

Bob Cropp at the University of

Wisconsin Center for Cooperatives.

“Each share entitles a member to deliver

one unit of product to the cooperative.

This represents a ‘dual contract’ — the

farmer must deliver a unit for each

share purchased, and the cooperative

must accept and compensate the farmer

Thumbs Up

Michigan soybean farmers keeping value 

at home with new-generation cooperative

20 November/December 1999 / Rural Cooperatives

J
Rural Cooperatives / November/December 1999 21

for each unit delivered.”

The original stock offering was

$1,250 a share. Each share gave a

producer the right and obligation to

deliver 500 bushels of soybeans to 

the plant. By the time the offering

closed, 198 people from 10 Michigan

counties had invested and joined the

new cooperative.

The individuals investing in Thumb

Oilseed Producers Cooperative are not

typical cooperative members. While

the average age of farmers in Michigan

is 57, the average member of this co-op

is between 30 and 40. The youngest

members were only 13 and 14 when

they joined.

“Our membership profile highlights

the key point of this entire effort: we

can’t continue farming under the existing system. We have to have more

direct control of our product. These

younger members know that they won’t

be doing business the way their fathers

and grandfathers did business,”

LeCureux explains.

In exchange, the cooperative projects that it will add value worth 40

cents per bushel more for growers than

they would otherwise earn. A portion

of the added value is due to “basis,” or

transportation, gain because soybeans

will no longer be shipped out of the

area. And soybean meal will not be

shipped back as feed.

One of the biggest differences

Thumb Oilseed Producers Cooperative, a Michigan new-generation co-op, projects a 15-percent return on investments to farmers who bought

shares to deliver soybeans to the new processing plant in Ubly. USDA photo
22 November/December 1999 / Rural Cooperatives

between the new cooperative and

traditional ones is that this is a closed

cooperative. Until demand increases,

the cooperative will not accept new

members or additional raw product.

Only those farmers who have purchased

delivery shares will supply product to

the plant.

“The market will dictate the need

for more members and more product,”

LeCureux explains. “The market will

dictate where the cooperative goes

from here.”

Commitment is key

The key to success, LeCureux

believes, will be the growers’ commitment. “The farmers have to view the

cooperative as an extension of their

farm, like another 80 acres to take care

of,” LeCureux says.

In return, the cooperative projects a

return of 15 percent on investment to

its members, and the co-op plans to

return 80 to 100 percent of its earnings

to members each year.

Like other cooperatives, TOPC is

member driven and governed. The

seven-person board of directors is

President John Knoerr, Sandusky; Vice

President Vern Reinbold, Caro; SecretaryTreasurer Scott Krohn, Bad Axe; Scott

Bernia, Akron; Rob Gerstenberger,

Sandusky; Don Schulkebier, Bridgeport;

and Ron McCrea, Bad Axe. The plant

manager is Bruce Knudson, and

LeCureux serves as consultant and

part-time chief executive officer.

Cropp lists four advantages to the

delivery-share policy:

• Adequate equity capital is raised at

the outset of the business.

• The burden of capitalization is

distributed equitably, in proportion to

the future use each member will make

of the cooperative.

• Because each member is substantially invested in the business, they all

have an interest in seeing it succeed.

• By selling their membership

shares, exiting members may redeem

their invested equity immediately — at

a value that reflects the performance of

the cooperative.

When members deliver beans to the

plant, they receive the market price.

Likewise, when they buy back soybean

meal for cattle, members pay the

market price. The member advantage

comes in the form of value-added

checks received at the end of the year.

As the success of the plant and cooperative grow, the member’s equity and

membership should also gain in value.

The community benefit is great,

too. The new plant will employ up to

seven people and become a major customer for the area electric utility. The

added income generated for the farmers will also return to the community.

“Money generated as a result of

increased income for farmers and new

employment will benefit the entire

community and its residents,”

LeCureux says.

Vertical integration

Adding value to commodities after

they leave the farm makes thousands of

dollars. Unfortunately, farmers rarely

see the extra income. LeCureux’s study

found that getting producers involved

in processing their product is essential

to increasing farm profitability.

“The trend in agriculture is vertical

integration, to capture more of the

money from the processing side of the

business,” LeCureux says. “By moving

up the vertical ladder, we even out

some of the peaks and valleys of

commodity prices.”

Having a market before processing

is critical to new-generation cooperatives, and is the essence of being

market driven rather than supply

driven. 

“When the producer also becomes

the processor, he gains more of the

control and more of the value of his

product,” LeCureux states. “Vertical

integration lets the farmer become

more active in moving the product

from the field to the plate.”

Depressed commodity prices 

and dwindling government support

programs make cooperatives such as

Thumb Oilseed Producers Cooperative

appealing to farmers. If commodity

prices were strong, enthusiasm would

not be as great, some say.

“If we were seeing $8 beans and 

$3 corn, we would not have as many

people interested in new co-ops. But

with commodity prices the way they

are, the farmers want a way to generate

more money from their crops,”

LeCureux says.

In the long run, farmers must do

something to take back more control,

LeCureux says. “Government support

for agricultural commodities is declining, global markets are changing, the

percentage of raw agricultural products

being shipped abroad is dwindling —

with more being shipped as processed

The new plant — owned by soybean and canola farmers — is producing sustainable, nontoxic and biodegradable crankcase oil and lubricants. USDA Photo by Bobbie Morrison
Rural Cooperatives / November/December 1999 23

food — all of which are increasing risks

to farmers.

“Against this picture, we’ve decided

to do something that moves us higher

up the food chain to capture more of

the end-product dollar,” he says. “It

will also give more income stability

than we can derive from fluctuating

markets and provides opportunity for

increased equity.”

A declaration of independence 

Through the exploratory process,

the TOPC group connected with a

Colorado-based company that was

developing a new line of vegetablebased motor oils. Agro Management

Group works to develop new products

while enhancing rural communities. It

connects local groups and government

agencies to bring in new business to

rural areas. Agro Management’s use of

agricultural commodities also develops

new uses for old crops.

The idea and enthusiasm for the

Thumb processing plant grew. Soon

several local and state agencies showed

interest, including USDA Rural

Development. In August 1998, a declaration of support and commitment to

the “Michigan Rural Development and

Community Enhancement Model” was

signed by leaders of private, state and

federal government agencies on the

campus of Michigan State University.

With the signing of this declaration,

Michigan became the first state to

participate in a commercialization

project to produce an initial core

product of sustainable, non-toxic 

and biodegradable crankcase oil and

lubricants being derived from Michigangrown soybeans and canola.

“We have a very non-conventional

product to introduce to a conventional

market,” said Jim Lambert, partner of

Agro Management Inc. “We were looking for a non-conventional approach

that met our goals and objectives.”

Donald L. Hare, state director for

USDA Rural Development programs

in Michigan, said the project has broad

ramifications for agriculture.

“What we are signing here today

will be our own declaration of independence from the strong reliance on

foreign petroleum products,” Hare said

at a groundbreaking ceremony for the

facility. “It is also our declaration of independence from non-environmentally

friendly products and a declaration 

of financial independence for our

Michigan soybean and canola producers

and their local communities. 

“The Michigan model speaks to the

heart of USDA Rural Development’s

belief that we must find ways to assist

agricultural producers in developing

value-added products,” Hare added.

LLC formed

Part of the Michigan model is the

formation of a limited liability company

with stockholders. TOPC and Agro are

50/50 shareholders in the motor oil project. Economic development corporations from Tuscola, Huron and Sanilac

counties are also equity shareholders.

Bringing the economic development

corporations into the LLC fit well with

the rural communities’ goals to enhance

the farm economy and to support rural

development. Many of the rural economic development corporations were

becoming discouraged with traditional

programs of bringing outside firms into

the area that would, in turn, offer lowwage incomes to the residents while

returning profits to stockholders far

removed from the community. The

counties’ shares of the profits will go

into a venture capital fund to help 

spur more agricultural business

development. 

Huron County EDC Director Carl

Osentoski liked what LeCureux and the

group of innovative farmers were

doing, and he got involved. 

“Recruiting business to invest in

your area is OK,” Osentoski says, “but

growing local business is better. It

builds a local knowledge base and

Since startup, plant production has been concentrated on meal and oil. But other soy products,

including a soy-based drink, are being considered for the future. USDA Photos by Bobbie Morrison
24 November/December 1999 / Rural Cooperatives

changes the local mindset, so further

economic development happens.”

Osentoski works closely with James

McLoskey from Tuscola County and

Richard Lessner from Sanilac County.

Together, they formed the Tri-County

Coalition, an equity shareholder and a

financial supporter of the Michigan

model. 

Offering preferred shares in the

new-generation cooperative allows the

community to support the project.

When the cooperative is successful, 

it captures jobs and wealth that are

shared by the community, says

Wisconsin’s Cropp.

“At a bare minimum, each of the 

three communities can net $34,000

annually to reinvest into the community,”

says Jim Lambert of Agro Management.

“Each member farmer could net $1,850

annually.”

The numbers were based on the use

of the new lubricant — AMG2000 —

in only 1 percent of the registered

vehicles in Michigan.

“The potential is huge,” Lambert

stresses. “The bare minimum numbers

don’t include small engine applications

of the oil or other projects.”

The Michigan coalition is revolutionary in terms of sustainable agriculture and rural development. The vested

financial resources by communities and

individual farmers to produce a valueadded product are a new approach to

enhancing rural communities. Even

President Clinton is aware of the potential generated by such a partnership. On

August 12, he issued an executive order

to states to find a way to use biomass

engineering to empower farmers and

their communities. The people in

Michigan were already working in that

direction.

The Michigan Model is doing just

what the President is encouraging

others to do: invest in communities

and local farmers. The Agro Management and TOPC partnership also

includes agreements to use the co-op

to process any new products developed.

The U.S. Postal Service is using

AMG2000 in its Michigan fleet to

evaluate the product’s effectiveness.

The lubricant is also used in other

state-owned vehicles at Michigan State

University, the Michigan Department

of Agriculture (MDA) and USDA.

Lambert expects to go public with it 

in early 2000.

USDA’s commitment to co-ops 

USDA strengthened its commitment to new cooperatives and farmerowned enterprises that help generate

more income for farmers. The Rural

Business-Cooperative Service of USDA

worked closely with LeCureux and the

farmers to establish the cooperative.

“We are working with several 

groups of producers in the state who are

looking to start their own processing

cooperative,” says Jason Church,

cooperative development specialist for

USDA in Lansing. “We offer financial

and technical resources to producers

who are looking for ways to become

more involved in the processing of

their commodities.”

TOPC received a grant from USDA

to hold meetings and conduct feasibility

studies. USDA also offers co-ops help

in securing loans and educational

training for members.

Since the successful TOPC startup,

farmers in Michigan’s Thumb have created another cooperative — Michigan

Alfalfa Processors Cooperative. In

June, 8,855 shares of stock were sold to

178 producers. They purchased shares

giving them the rights and obligations to

deliver product to a new alfalfa cubing

business.

“Shares in the cooperative sold for

$150 per acre the first 30 days they

were offered. The price increased $10

after the first 30 days,” says Jim

LeCureux, MSU value-added extension

agent. “We sold 90 percent of the

shares in the first 30 days.”

If there was one lesson LeCureux

learned from the formation of TOPC, it’s

that stock prices should increase over

time. By increasing after 30 days, producers have an incentive to buy stock

sooner. When the stock offerings were

open with the oilseed cooperative, the

last half of the share sold in the last four

days, creating a nervous situation for

the steering committee.

The alfalfa processing plant, located

in Akron, Mich., is expected to begin

operations in 2000. The business

expects to employ 20 people with an

annual payroll over $550,000. In addition, discussions have started with individuals and businesses interested in

doing the custom harvesting and trucking. Another 10 to 15 people will be

employed in this phase of the project.

“While cubing is the first step, we

are currently investigating additional

technology which may allow us to move

into other industrial, human and animal

nutritional products that will add extra

value to our product,” says Chris

Grekowicz, chair of the alfalfa cooperative’s steering committee.

Members are in the process of

electing a board of directors and hiring

a plant manger. Many of the members

of the alfalfa cooperative are also members of the oilseed cooperative.

“The joke around here is that for

about half the cost of a good pick-up

you can get involved in a cooperative,”

says LeCureux. “A lot of farmers think

that’s a good deal.”.■

Alfalfa growers form cooperative

Washington D.C. media covered the end of a

cross-country trip by a car using AMG 2000

soy-based lubricant, which Michigan farmers have a stake in producing. Photo courtesy

Agro Management
November/December 1999 / Rural Cooperatives 25

“The 1996 Farm Bill began the

phase-out of farm subsidies. The alternative solution to subsidies is helping

producers to be self-sufficient and selfreliant — to rely on their own efforts

rather than farm subsidies,” Church

explains.

The MDA also committed to the

new cooperative and the development

of more value-added processing

facilities by opening the Office of

Agricultural Development.

“The soybean oil production facility

represents the coming together of the

‘new wave,’ farmer-owned cooperatives

and value-added agriculture in

Michigan,” says Dan Wyant, Michigan

agriculture director.

Up and running

After three-and-a-half-years of planning, study and research, the TOPC

processing plant extruded its first batch

of soybeans.

The 900,000-gallon-capacity plant is

small in comparison to others, but will

meet the needs of its 198 members.

The $2.2 million plant, located in Ubly,

will provide a local market for about

20,000 acres of soybeans. The plant is

expected to generate a high-quality

food oil and a high-energy soybean

meal in addition to the lubricant.

The facility is extruding beans

through heat and pressure. The natural

process creates opportunity to fill a

niche market in European countries

where non-genetically modified organisms generate a premium. This natural

process does not use hexane to separate

the meal and oil. Because the natural

process does not extract all the oil from

the meal, livestock producers who use

the meal will have to adjust their animal

feed rations for its higher energy and

lower protein levels.

In its start-up phase, the facility is

concentrating on making meal and oil.

In addition to its efforts with Agro

Management, though, TOPC is working with the MSU food science department to develop a flavored, soy-based

drink. The cooperative is willing to

take a look at other soy-based products.

In contrast to traditional cooperatives,

TOPC will remain focused on processing soybeans. It has no interest in

broadening out to other commodities

or services.

That does not mean there is not an

opportunity for other commodities to

join the new cooperative movement. On

the contrary, LeCureux is already working with some alfalfa growers who want

to build an alfalfa-processing facility.

Around the state, several other newgeneration cooperatives are in their

preliminary stages of development.

“This type of cooperative will work

for any commodity. There may even be

more than one fit for the commodity,”

LeCureux states. 

He has taken his new-generation

cooperative mission throughout the

state. The Innovative Farmers of

Huron County has changed its name to

the Innovative Farmers of Michigan.

LeCureux’s position at MSU Extension

was changed to reflect his new efforts.

He is now the value-added agent for

the state, working with groups around

Michigan that want to start new cooperatives and value-added processing

facilities.

LeCureux and Church have worked

with other commodity groups, conducting feasibility studies and producer

surveys. Some the groups exploring

their options include turkey growers,

who recently lost their processing

facility when the company left the

state; beef cattle producers; apple

growers; blueberry growers; and maple

syrup producers.

Editor’s note: Laura Moser is an

agricultural writer based in Williamston,

Michigan. ■

George Sinner, former governor 

of North Dakota and a long-time organizer of new-generation cooperatives,

offers the following recommendations

for developing a successful new

cooperative:

1. Farmers need to make significant

investments in order to secure an

appropriately sized plant and the

proper equipment.

2. A dual contract must commit the

farmer to specific deliveries and the

co-op must accept those deliveries.

This offers stability to both the

members and the cooperative.

3. Professionalism is required on the

part of farmer-members, directors

and the hired management team.

4. The cooperative must be knowledgeable about its customers and about

the marketplace in general. The

value-added product chosen and the

facilities needed to produce it must

be based on accurate measurements of demand for that product,

and the cooperative must be willing

to adjust quickly to changes in the

marketplace.

5. A new-generation cooperative must

be large enough to meet the needs

of its buyers and to match or beat

the prices and the quality of its

competitors’ products. In a small

niche market, the cooperative may

be on a small or moderate scale, as

long as it’s large enough to compete

effectively within that niche.

6. Most, if not all, of the profits from

the cooperative must be returned to

its members as cash at the end of

each fiscal year. This is necessary

to keep members interested in and

committed to the cooperative. If

capital is needed for expansion, the

board and management must make

the case for expansion and offer

new shares to pay for it. ■

Factors for 

co-op success
26 November/December 1999 / Rural Cooperatives

Bottom line continued to rise in ‘98 for large 

corn-soybean and wheat-barley co-ops

By David Cummins, 

Agricultural Economist

USDA Rural Development

et savings averaged

higher in 1998 than a

year earlier for large

local grain co-ops in

the Corn Belt and Pacific Northwest,

despite substantially lower prices

received and higher operating expenses.

Major income boosters included

increased farm supply sales and margins, service revenue and non-operating

income. The latter two income sources

were particularly important in the

Pacific Northwest (where wheat-barley

co-ops predominate). Significantly

larger grain volumes marketed by these

large grain locals in 1998 more than

offset 21-percent lower grain prices.

This was not the situation for large

grain locals in the Corn Belt, where

corn-soybean co-ops are most common. In the Corn Belt, grain dollar

sales were slightly lower, even though

marketings averaged 15 percent higher. 

For medium-sized grain locals, the

bottom line was about 8 percent lower

in the Corn Belt, still respectable, but

plummeted nearly 80 percent in the

Pacific Northwest. Grain marketings

were up in both areas, but not nearly

enough to compensate for lower prices.

This was particularly the case for the

medium-sized wheat-barley co-ops,

where grain sales and grain margins

were off 8 percent and 13 percent,

respectively.

Loss rates for the medium-sized 

co-ops in 1998 were about double 1997’s

rates, from 6 percent to 12 percent in

the Corn Belt and from 12 percent to

29 percent in the Pacific Northwest. In

contrast, comparable loss rates for the

large locals were 7 percent to 3 percent

and 6 percent to zero, respectively.

Total assets and member equity

averages were higher across the board.

Except for the large wheat-barley co-ops,

member equity was a larger percentage of

total assets in 1998 than in 1997.

Benchmarking your co-op

Benchmarks are common in business

management to measure how well your

cooperative is performing. However,

such figures don’t reveal how your

cooperative compares with others. 

If your cooperative is primarily a

first-handler of wheat and barley or of

corn and soybeans, comparative data

for 1998 are now available. Tables 1

and 2 contain average financial and

structural data compiled from a survey

of Pacific Northwest and Corn Belt

cooperatives marketing wheat and barley

and corn and soybeans, respectively. 

Most cooperatives in the study were

diversified, also handling farm supplies

and providing related services. Fill in the

blanks and see how yours measures up. ■

N

MANAGEMENT TIP

Net savings were generally higher for large corn-soybean co-ops in the Corn Belt in 1998. USDA photo
Rural Cooperatives / November/December 1999 27

Table 2 - Compare your wheat-barley cooperative with averages for similar cooperative operations

Total sales group (million dollars)

Group/Item Unit 5-14.9 15 or more 5-14.9 15 or more Your

(1997 Data) (1997 Data) (1998 Data) (1998 Data) Cooperative

Storage capacity Million Bu. 3.322 7.776 4.344 8.932 ________

Grain marketed Million Bu. 2.422 7.734 3.036 9.945 ________

Turnover rate Times .73 .99 .70 1.11 ________

Proportion grain Percent 96.3 85.9 93.0 81.9 ________

Total assets Million $ 2.496 9.150 2.702 12.732 ________

Long-term debt1/ Percent 5.7 6.5 1.1 6.2 ________

Member equity1/ Percent 77.5 63.8 89.6 58.7 ________

Total sales Million $ 10.878 38.211 10.381 40.813 ________

Margins on sales Million $ .261 1.481 .226 1.972 ________

Total expenses Million $ .693 2.842 .784 3.994 ________

Net savings (losses) Million $ .108 .662 .022 .849 ________

Labor of total expenses Percent 48.6 46.4 45.9 44.6 ________

Net savings paid in cash2/ Percent 50.5 29.5 --- 40.3 ________

Current ratio Number 2.29 1.69 4.46 1.42 ________

Debt/assets Ratio .16 .16 .04 .16 ________

Net savings(loss)/tot. sales Percent 1.0 1.7 0.2 2.1 ________

Gross margins/total sales Percent 2.4 3.9 2.2 4.8 ________

1/ Of total liabilities and member equity. 

2/ Of total patronage allocation.

Table 1 - Compare your corn-soybean cooperative with averages for similar cooperative operations 

Total sales group (million dollars)

Group/Item Unit 5-14.9 15 or more 5-14.9 15 or more Your

(1997 Data) (1997 Data) (1998 Data) (1998 Data) Cooperative

Storage capacity Million Bu. 1.121 4.690 1.288 5.471 __________

Grain marketed Million Bu. 1.804 7.899 2.013 9.079 __________

Turnover rate Times 1.61 1.68 1.56 1.66 __________

Proportion grain Percent 74.8 73.3 75.9 71.0 __________

Total assets Million $ 3.078 14.208 3.448 16.086 __________

Long-term debt 1/ Percent 6.2 11.3 6.7 12.5 __________

Member equity 1/ Percent 59.0 45.4 60.1 47.3 __________

Total sales Million $ 10.186 43.774 9.712 44.633 __________

Margins on sales Million $ .565 2.784 .573 3.206 __________

Total expenses Million $ .812 3.702 .859 4.364 __________

Net savings (losses) Million $ .188 .807 .174 .909 __________

Labor of total expenses Percent 45.5 44.9 44.7 46.2 __________

Net savings paid in cash 2/ Percent 34.2 32.4 34.5 33.7 __________

Current ratio Number 1.51 1.21 1.48 1.24 __________

Debt/assets Ratio .14 .24 .15 .20 __________

Net savings(loss)/tot. sales Percent 1.8 1.8 1.8 2.0 __________

Gross margins/total sales Percent 5.5 6.4 5.9 7.2 __________

1/ Of total liabilities and member equity. 

2/ Of total patronage allocation.
28 November/December 1999 / Rural Cooperatives

By David Cummins,

Agricultural Economist

USDA Rural Development

ecord-high sales levels

set in 1997 slipped in

1998 for first-handlers

of grain in the Northern

Plains, where wheat-barley-oats co-ops

are prevalent. Grain volumes were up,

but prices continued their downward

slide, resulting in lower grain revenue.

Farm supply sales also were lower,

particularly for large grain co-ops.

Once again, large grain co-ops in

the Northern Plains fared better in

1998 than did medium-sized co-ops.

Despite declines in net savings of 17

percent and 27 percent, respectively,

net savings in 1998 averaged 91 percent

of the most recent five-year average for

the large co-ops compared with 51 percent for the medium-sized co-ops. For

the large grain co-ops, gross income

was about the same in both years, but

total operating expenses averaged about

5 percent higher. Increases in grain

margins and non-operating income

essentially offset decreases in farm 

supply margins and service income.

For medium-sized co-ops, gross

income averaged over 7 percent higher

in 1998, but total operating expenses

were up nearly 14 percent. Increases in

grain margins (31 percent), service

revenue (15 percent) and non-operating income (6 percent) more than offset

the 23-percent-lower supply margins. 

Eleven percent of the large grain 

co-ops reported small losses for 1998,

while 17 percent would have incurred 

a loss (averaging nearly $60,000 per 

co-op) if it hadn’t been for patronage

income received from other co-ops.

Nearly 23 percent of the medium-sized

co-ops had losses, averaging over

$114,000 per co-op. Another 23

percent would have had losses (averaging about $89,000 per co-op) if it 

hadn’t been for patronage income.

Southern Plains co-ops

The Southern Plains wheatsorghum co-ops set record-highs in

1998. Net savings for the large grain

co-ops averaged $842,467, nearly 28

percent higher than a year-earlier. Net

savings for the medium-sized co-ops

averaged $262,269, over 37 percent

higher than in 1997. Increases in

service revenue and grain margins were

key factors for both large-and mediumsized co-ops. Despite substantially

lower grain prices in 1998, grain

volumes marketed were up 11 to 12

percent. That resulted in grain sales

averaging about three percent lower 

for large co-ops and about two percent

higher for medium-sized co-ops. 

The incidence of losses among

wheat-sorghum co-ops was low (about

2 percent) compared with that in the

Northern Plains (18 percent). No losses

were reported by the large co-ops.

Overall, fewer than 5 percent of the 

co-ops would have had losses if it had

not been for patronage income

received from other co-ops.

Adjustments by producers to weather

conditions and changing relative prices

in 1998 were reflected in the proportion of grains marketed by their co-ops.

There was a general shift from grain

sorghum to wheat by the medium-sized

and large co-ops in the Southern

Plains, and also to corn by the large 

co-ops. The major shift for the Northern

Plains wheat-barley-oats co-ops was by

the large ones, away from wheat and

towards “other crops” (mainly oats,

sunflowers and rye), a trend that began

in the mid-1990s.

How does your co-op measure up?

Benchmarks are common in business

management to measure how well your

cooperative is performing. However,

such figures don’t reveal how your

cooperative compares with others.

If your cooperative is primarily a

first-handler of wheat and sorghum or

of wheat, barley and oats as its major

function, comparative data for 1998 are

now available. Tables 3 and 4 contain

average financial and structural data

compiled from a survey of Southern

Plains and Northern Plains cooperatives marketing wheat and grain

sorghum and wheat, barley and oats,

respectively. Most cooperatives in the

study were diversified, also handling

farm supplies and providing related

services. Fill in the blanks for your

cooperative and see how it measures

up. ■

Plains co-ops experience ups and downs in 1998

R

MANAGEMENT TIP
Rural Cooperatives / November/December 1999 29

Table 3 - Compare your wheat-barley-oats cooperative with averages for similar cooperative operations 

Total sales group (million dollars)

Group/Item Unit 5-14.9 15 or more 5-14.9 15 or more Your

(1997 Data) (1997 Data) (1998 Data) (1998 Data Cooperative

Storage capacity Million Bu. .613 1.772 .661 1.843 ________

Grain marketed Million Bu. 1.814 6.423 1.888 6.768 ________

Turnover rate Times 2.96 3.62 2.86 3.67 ________

Proportion grain Percent 79.4 82.1 79.0 84.6 ________

Total assets Million $ 2.776 11.941 3.068 12.611 ________

Long-term debt1/ Percent 4.4 6.5 7.5 6.9 ________

Member equity1/ Percent 49.1 40.4 46.5 41.6 ________

Total sales Million $ 8.704 28.798 8.430 26.573 ________

Margins on sales Million $ .415 1.690 .436 1.740 ________

Total expenses Million $ .522 1.850 .593 1.940 ________

Net savings (losses) Million $ .097 .555 .070 .462 ________

Labor of total expenses Percent 43.8 45.4 43.7 45.3 ________

Net savings paid in cash2/ Percent 34.5 28.3 36.9 29.0 ________

Current ratio Number 1.35 1.18 1.33 1.17 ________

Debt/assets Ratio .09 .13 .11 .11 ________

Net savings(loss)/tot. sales Percent 1.1 1.9 0.8 1.7 ________

Gross margins/total sales Percent 4.8 5.9 5.2 6.5 ________

1/ Of total liabilities and member equity. 

2/ Of total patronage allocation.

Table 4 - Compare your wheat-sorghum cooperative with averages for similar cooperative operations 

Total sales group (million dollars)

Group/Item Unit 5-14.9 15 or more 5-14.9 15 or more Your

(1997 Data) (1997 Data) (1998 Data) (1998 Data) Cooperative

Storage capacity Million Bu. 1.691 4.019 1.782 4.478 ________

Grain marketed Million Bu. 1.883 5.972 2.098 6.672 ________

Turnover rate Times 1.11 1.49 1.18 1.49 ________

Proportion grain Percent 67.9 68.8 67.6 67.3 ________

Total assets Million $ 3.355 9.837 3.585 11.225 ________

Long-term debt 1/ Percent 6.3 6.2 6.6 8.0 ________

Member equity 1/ Percent 64.3 53.3 63.0 54.8 ________

Total sales Million $ 9.207 30.199 9.385 30.018 ________

Margins on sales Million $ .763 2.306 .847 2.634 ________

Total expenses Million $ .994 3.064 1.151 3.401 ________

Net savings (losses) Million $ .191 .661 .262 .842 ________

Labor of total expenses Percent 47.0 46.5 47.8 46.8 ________

Net savings paid in cash 2/ Percent 37.1 32.6 38.4 34.5 ________

Current ratio Number 1.69 1.31 1.60 1.41 ________

Debt/assets Ratio .19 .24 .17 .24 ________

Net savings(loss)/tot. sales Percent 2.1 2.2 2.8 2.8 ________

Gross margins/total sales Percent 8.3 7.6 9.0 8.8 ________

1/ Of total liabilities and member equity. 

2/ Of total patronage allocation.
30 November/December 1999 / Rural Cooperatives

By David S. Chesnick, 

Agricultural Economist

USDA Rural Development

ergers and consolidations

continue to dominate the

cooperative landscape.

The reasons behind

each are varied; however, cooperative

leaders are continually searching for

ways in which their organizations can

serve a changing membership through

cost-effective services. And while some

of the mergers paid dividends this past

year, others have not yet reached their

potential. Let’s review the statistics

behind the performance of this

changing cooperative landscape.

The largest cooperatives posted a

2.4-percent increase in sales. Sales

revenue for the largest 100 agriculture

cooperatives ranged from $68 million

to $8.8 billion. The top five cooperatives contributed 48 percent of total

sales in 1998, up from 46 percent in

1997. Combined sales for all 100 of the

largest cooperatives totaled $67.9

billion (table 1). However, not all cooperatives experienced higher sales in

1998. Only 45 out of the top 100

cooperatives had an increase in sales,

and 58 percent of that increase was

attributed to a single cooperative.

Higher sales show promise

Figure 1 illustrates the source for

the combined revenues of the largest

agricultural cooperatives. Marketing

revenue jumped 8.6 percent to $51.1

billion. Yet this increase should be

taken with a grain of salt. Most of it was

due to the push of one industry — dairy

(table 2). After showing tremendous

growth throughout the mid-1990s,

farm supply sales fell dramatically in

1998. Combined farm supply sales for

all cooperatives fell $2.4 billion to end

the year at $16.8 billion. Leading the

decline was petroleum, which accounted

for more than half of the total drop 

in sales of farm supplies. Declines in

fertilizer and feed sales were other

major contributors. Only seed sales

showed increases.

Dairy cooperatives were heavily

involved in consolidation activities

these past few years. These consolidations proved beneficial, with total sales

jumping 29 percent to $18.1 billion in

1998. This was the only industry with

significant gains in sales.

Grain cooperatives, on the other

hand, experienced higher volumes of

grain that put downward pressure on

prices. Yet the increase in volume was

not enough to offset the decline in

prices, pushing sales down seven

percent from 1997 to $4.1 billion in

1998. Farm supply sales for grain

cooperatives fell three percent to $2.3

billion, dropping total sales to $6.3

billion, a 6- percent decrease.

Poultry and livestock cooperatives

also felt the pressure of lower prices.

Sales of these commodities dropped by

19 percent to $499 million. Rice cooperatives saw mixed results. Strong

prices early for some varieties of rice

showed promise. However, later in the

year, rice cooperatives ended up with

heavy stocks pushing down prices for

other varieties. Over all, rice cooperatives ended the year with total marketing

sales of $1.2 billion, down four percent

from 1997.

Sales for cotton, sugar and fruit &

vegetable cooperatives held relatively

steady during 1998. Cotton prices were

down slightly while quantity sold

increased, leaving sales up 0.1 percent

at $2.6 billion. Fruit & vegetable sales

were mixed with fruit prices up and

vegetable prices down. The net result

brought total sales for fruit & vegetable

cooperatives down 0.4 percent, ending

1998 with $6.4 billion in sales. Sugar

sales were up one percent to $1.1 billion.

Diversified cooperatives increased

their marketing sales, but a decline in

their farm supply sales pulled total sales

revenue down one percent to $17.2

billion. Total sales for the farm supply

commodity group followed the overall

trend of farm supply sales and dropped

11 percent to $14.6 billion. 

Other operating income for the

largest agriculture cooperatives was

down 3.7 percent to $620 million. Other

operating income usually consists of

services associated with storage, hauling,

and handling member’s products, and

spraying, spreading, and scouting

members’ fields. Most commodity

groups had declining service revenue.

The exceptions were farm supply and

sugar cooperatives; these two groups

had a combined increase in service

revenues of $25 million.

Cost of goods sold for the largest agriculture cooperatives was $62.2 billion in

1998, an increase of 2.4 percent. The

change in cost of goods sold closely

followed the change in sales for each

commodity group. Yet the net effect on

gross margins was an increase of three

percent. Cost of goods sold increased

by $1.4 billion compared to an increase

of $1.6 billion for total operating

revenues. Gross margins for all of the

largest cooperatives increased $181

million to end 1998 at $6.3 billion.

Gross margins for cotton, dairy, fruit

Sales rebound for largest farmer

co-ops, but net margins decline

M
Rural Cooperatives / November/December 1999 31

& vegetable, grain, and sugar cooperatives all increased. The surprising group

was grain cooperatives. Despite lower

sales revenue, gross margins were up 20

percent, reaching $486 million — the

highest gross margin in five years.

Gross margins for sugar cooperatives

also hit a five-year high, ending 1998

up five percent at $262 million. Dairy

cooperatives had the second highest

percentage increase of 19 percent, ending the year at $1.1 billion. The cotton

and fruit & vegetable co-ops each

increased, at 10 percent and 4 percent,

respectively, to end the year with gross

margins of $183 million and $1.7 billion. 

Conversely, farm supply and diversified cooperatives hit their lowest gross

margins in the five-year period. Farm

supply cooperatives’ gross margins

dropped nine percent to $909 million,

while diversified cooperatives fell five

percent to $1.3 billion. The poultry

and livestock and rice co-ops also had

lower gross margins. Poultry and livestock margins fell 10 percent, to $15

million, while rice margins dropped 1

percent, to $328 million.

Expenses jump

Operational efficiencies gained in

1997 did not carry over to 1998.

Operating expenses for all the largest

agricultural cooperatives jumped 7.2

percent to $5.3 billion in 1998. The

increase more than offset any gains

made in gross margins, and the net

effect pushed down net operating

margins by $176 million — a 15-percent

drop. Wages were not the same driving

factor in increased operating expenses as

they were in 1997. In 1998, labor

expenses increased only 3 percent. 

All commodity groups experienced

at least some increase in expenses

relating to operations. However, some

groups overcame the increases. Cotton,

dairy, and grain cooperatives had

enough gain in their gross margins to

absorb increases in expenses. These

cooperatives ended the year with higher

net operating margins, reversing the

Table 1—Consolidated Statement of Operations,

1997-98, Top 100 Cooperatives

Operating Statement 1998 1997

Thousand Dollars Difference % Change

Change Revenues

Marketing 51,135,466 47,077,126 4,058,340 8.62 

Farm Supply 16,760,654 19,175,428 (2,414,774) (12.59)

Total Sales 67,896,120 66,252,554 1,643,566 2.48 

Other Operating Revenues 620,499 644,696 (24,197) (3.75)

Total Operating Revenues 68,516,619 66,897,250 1,619,369 2.42 

Cost of Goods Sold 62,232,480 60,794,107 1,438,373 2.37 

Gross Margin 6,284,139 6,103,143 180,996 2.97 

Expenses

Operating Expenses 5,299,150 4,942,304 356,846 7.22 

Net Operating Margins 984,989 1,160,839 (175,850) (15.15)

Other Revenues (Expenses) 

Interest Expense (594,458) (527,142) (67,316) 12.77 

Interest Revenue 103,771 119,415 (15,644) (13.10)

Other Income 342,517 181,499 161,018 88.72 

Other Expenses (68,555) (35,218) (33,337) 94.66 

Patronage Revenue 96,057 282,511 (186,454) (66.00)

Net Margins from Operations 864,321 1,181,904 (317,583) (26.87)

Non-Operating Revenue (Expenses) (12,066) 10,331 (22,397) (216.79)

Net Margins 852,255 1,192,235 (339,980) (28.52)

Distribution of Net Margins

Cash Patronage Dividends 278,491 371,889 (93,398) (25.11)

Retain Patronage Dividends 379,280 514,252 (134,972) (26.25)

Nonqualified Noncash Patronage 20,115 31,083 (10,968) (35.29)

Dividends 38,486 27,310 11,176 40.92 

Unallocated Equity 56,974 112,465 (55,491) (49.34)

Income Tax 78,909 135,236 (56,327) (41.65)

Total Distribution 852,255 1,192,235 (339,980) (28.52)

Figure 1—Sources of Operating Revenue

80

70

60

50

40

30

20

10

0

1994 95 96 97 98

marketing Farm supply other operating income

Prior years restated
32 November/December 1999 / Rural Cooperatives

decline witnessed in the past few years.

Net operating margins for grain cooperatives increased a healthy 108 percent,

$90 million at the end of 1998. Cotton

cooperatives net operating margins

increased five percent to $78 million,

while dairy cooperatives jumped 28

percent to $216 million during the

same period.

Diversified, farm supply and rice

cooperatives compounded their

problems with both lower gross

margins and higher operating expenses.

The five-percent increase in operating

expenses, along with a decrease in gross

margins, produced a 46-percent decline

in net operating margins for diversified

cooperatives. These cooperatives ended

the year with net operating margins of

$146 million, the lowest amount in five

years. Farm supply cooperatives also

ended the period with five-year lows

in net operating margins. Higher labor

expenses for farm supply cooperatives

pushed operating expenses to their

highest levels in the five-year period.

As a result, net operating margins

dropped 35 percent to $230 million.

Meanwhile, net operating margins

for rice cooperatives fell 14 percent

to $32 million. 

Poultry and livestock cooperatives

were the only groups that lowered their

operating expenses. These cooperatives

lowered operating expenses 0.2 percent

from their highest level in 1997. However, as a group, poultry and livestock

cooperatives still had operating losses

of nearly $3 million.

Other income and expenses lower

net margins

Income and expenses indirectly

related to the day-to-day operations fall

into the category of “other income and

expenses.” These include interest

income and expense, gains/losses on

the sale of equipment, patronage

refunds from other cooperatives, and

any other income/expense not related

directly to operations. These other

incomes and expenses often relate to

financing and investing activities of the

cooperative.

After abating in 1997, total debt levels

jumped six percent in 1998. This increase

in debt caused interest expenses to jump

13 percent to $594 million, the highest

level in five years. Most of the increases

in interest expenses occurred in the

dairy, diversified and farm supply cooperatives. Grain, poultry and livestock,

and fruit & vegetable cooperatives also

paid more for interest in 1998, but

those expenses did not increase by the

magnitude of the aforementioned

cooperatives. On the other hand, cotton,

rice and sugar cooperatives lowered

their interest expenses. 

Interest earned on member accounts

and earnings from finance subsidiaries

are generally accounted for as interest

income. Interest income decreased 13

percent from 1997 to $104 million.

This decline was due mostly to a single

cooperative, which substantially lowered

its investment balances. The excess

cash generated from the sale was used

for capital expenditures. Excluding that

one cooperative, the total balance of

interest income remained fairly constant

in all cooperative categories.

Other income/expenses represents

earnings or losses associated with the

operations of joint ventures or unconsolidated subsidiaries. This income is

usually indirectly related to operations.

Along with increased merger activities,

joint ventures with other cooperatives

and investor-oriented firms are more

popular among the largest cooperatives.

This is evident by increases in revenues

in this area. Income from these other

activities jumped 87 percent to end the

year at $274 million, up from $146 

million in 1997. Most of this increase,

however, was the result of two cooperatives, which accounted for 81 percent

of the overall change. 

With net margins as a percent of

total revenues running at 1.2 percent,

patronage refunds from other cooperatives can play a crucial role in determining whether a cooperative shows a

gain or a loss. Seven cooperatives

would have had a loss without patronage

refunds, up from six in 1997. Generally,

cooperatives cannot influence the amount

of patronage they receive each year and

they should rely on their own operations

and not others to generate margins.

Patronage refunds from other cooperatives fell to their lowest level in the

past five years. They dropped 66 percent

to $96 million. The diversified and farm

supply cooperatives were the hardest

hit and accounted for nearly 95 percent

of the $186 million decline. All the other

commodity groups changed little from

1997. On a bright note, none of the

diversified and farm supply cooperatives needed the patronage refund to

salvage a loss on their operations.

The net result of all these changes

lowered net margins from operations.

Net margins from operations fell 27

percent to reach a five-year low of $864

million. While nearly half of the top

agriculture cooperatives showed a

decline, most of the drop was attributed

to a few cooperatives in the diversified

and farm supply sectors. 

Overall, the revenues generated

from sales increased for the combined

top 100 cooperatives. However, cost of

goods sold and operating expenses more

than offset any gains in sales revenues.

Higher interest expenses coupled with

lower patronage refunds eliminated the

gains made from joint ventures and

unconsolidated subsidiaries. The summation of all these operations, along

with a drop of $22 million in nonoperating revenues, produced a $340-

million drop in net margins. The

largest cooperatives ended the year

with net margins totaling $864 million.

This is the lowest amount in the past

five years.

Distribution of net margins

The top 100 cooperatives have long

maintained a tradition of strong

patronage refund practices. Despite

lower net margins in 1998, the largest

cooperatives allocated a higher percent

of their earnings to members in the

form of cash, qualified non-cash, and

non-qualified non-cash patronage

refunds. In 1998, cooperatives allocated

80 percent ($678 million) of their net

margins, compared to 77 percent ($917
million) in 1997. Members received

$278 million in cash payments in 1998.

This represented 42 percent of allocated

equity, the same percentage as in 1997,

which saw $372 million paid out in

cash. Non-qualified non-cash patronage

refunds fell 35 percent to $20 million

in 1998. Only four cooperatives used

non-qualified refunds in 1998, down

from seven in 1997. 

A small number of cooperatives also

distributed cash dividends on stock

issued to members. Cooperatives paid

out a record amount of these dividends

in 1998. The dividends amounted to

$38 million and represented five percent

of total distributions in 1998. In 1997,

$27 million was paid out in these dividends, which represented two percent

of total distributions. 

Most cooperatives retain a portion

of their net margins as unallocated

reserves. These reserves provide a source

of growth capital for the cooperatives, a

cushion for members’ allocated equities

in the event of a loss and a bonus to

members from non-member business.

The amount of unallocated equity fell

49 percent to $57 million. Distributions

to unallocated equity represented seven

percent of net margins. This was the

lowest amount in the last five years.

Interestingly, 11 cooperatives allocated

more net margins to their members than

they generated. These margins were

taken out of the unallocated account.

The largest cooperatives paid $79

million in federal, state, and local

income taxes in 1998, down 42 percent.

This was the lowest amount paid in the

last five years. However, excluding the

qualified allocated equity, cooperatives

paid an average tax rate of 41 percent

on their taxable income. This was down

from 44 percent in 1997. 

Industry Summary

Cotton cooperatives had an 11-

percent increase in their net margins

(table 3). The increase was not fueled by

any major change. Rather, it was the

cumulative effect of small changes in

revenues and expenses which produced a

$6 million increase in their bottom lines.

Dairy cooperatives were able to

enjoy the fruits of their consolidations,

which pushed up revenues tremendously

while keeping costs in line with the

added revenues. Yet, what really helped

were the joint ventures and unconsolidated businesses. The $91 million

increase in these facets of the dairy

business played a big part in the $110

million increase in net margins. 

Diversified cooperatives took a

major hit to their bottom lines. The

decline in revenues was greater than

the decline in the cost of goods sold.

Combining that with a jump in operating and interest expenses, provides the

setting for an 84-percent drop in net

margins. At $44 million, net margins

reached the lowest level in five years.

Fruit & vegetable cooperatives did

not have any major changes to their

operations. However, the cumulative

effect of a small decrease in sales and

slightly higher operating expenses

pushed their net margins down 20

percent to $77 million.

Farm supply cooperatives also took

a major hit to their bottom lines.

Declining sales, higher expenses, and

lower patronage refunds received from

other cooperatives pushed down net

margins 51 percent to $248 million.

This is the lowest amount in five years.

Grain cooperatives lowered their

cost of goods sold in order to cover

rising expenses. Unconsolidated businesses and joint ventures also proved to

be helpful in fortifying their bottom

lines. Their combined operations

pushed up net margins $45 million,

an increase of 104 percent from the

five-year low in 1997.

Poultry and livestock cooperatives

typically operate on low margins.

Rural Cooperatives / November/December 1999 33

Table 2—Total Operating Revenue by Commodity Group,

1997-98, Top 100 Cooperatives

Total Revenues Percent

1998 1997 Difference Change

cotton 2,576,090 2,570,431 5,659 0.2

dairy 18,112,007 14,067,370 4,044,637 28.8

diversified 17,453,481 17,581,079 (127,598) (0.7)

fruit & vegetable 6,459,822 6,500,802 (40,980) (0.6)

farm supply 14,653,090 16,372,659 (1,719,569) (10.5)

grain 6,466,435 6,859,572 (393,137) (5.7)

poultry & livestock 504,064 619,533 (115,469) (18.6)

rice 1,173,017 1,229,844 (56,827) (4.6)

sugar 1,118,613 1,095,960 22,653 2.1

In $1,000

Table 3—Net Margins by Commodity Group, 1997-98, Top 100 Cooperatives

Net Margins Percent

1998 1997 Difference Change

cotton 63,380 57,105 6,275 11.0

dairy 318,309 207,889 110,420 53.1

diversified 43,981 273,665 (229,684) (83.9)

fruit & vegetable 77,002 95,966 (18,964) (19.8)

farm supply 248,420 505,690 (257,270) (50.9)

grain 87,562 42,863 44,699 104.3

poultry & livestock 45 1,333 (1,288) (96.6)

rice 21,042 19,422 1,620 8.3

sugar (7,486) (11,698) 4,212 (36.0)

In $1,000
34 November/December 1999 / Rural Cooperatives

However, 1998 margins proved to be

even slimmer than usual. Operations

lost nearly $3 million. Interest income

and patronage refunds were enough to

overcome operating losses so this sector

could end the year with $45,000 in net

margins. This was down 97 percent

from the 1997 five-year high of $1 million.

Rice cooperatives reached their

highest net margins in five years. While

sales and operating margins were lower

in 1998, rice cooperatives lowered interest payments by decreasing debt levels.

The result was an eight-percent

increase in net margins to $21 million.

Finally, the sugar cooperative sector

ended the year with a net loss. However, much of the loss was the result 

of non-member business. Interest

expenses continued to eat up operating

margins. Net losses for 1998 stood at

$7 million. ■

more allocated savings. 

The debt ratio has a slight downward turn, one-tenth of a percentage

point. Total assets increased 6.8

percent and short-term debt decreased

4.3 percent. Reducing debt, increasing

savings, or financing a greater portion

of assets with working capital could

improve this ratio.

Times interest earned rebounded in

1997 after a deep slide from 1993 to

1996. In 1993, this ratio reached an

all-time high. In 1996, it was at an alltime low. The ratio went from 4.96 in

1997 to 4.72 in 1998. When this ratio

is more than one, it indicates the ability of current earnings to pay current

interest expenses. Lending institutions

are more apt to lend money to cooperatives in such cases. Subsequently, a

bank may lend funds for capital

improvements more readily at lower

interest rates. This ratio could be

improved by collecting old receivables,

improving inventory turnover, disposing of assets and using proceeds to

reduce debt, or reducing debt with

working capital. 

Activity ratios are used to reflect a

cooperative’s condition. A high ratio

usually indicates aging and nearly

depreciated fixed assets, or the leasing

of property and equipment. The fixed

asset turnover was 9.01 in 1997 and

7.66 in 1998. Net investments in fixed

assets and total sales are the two main

factors in this ratio. Fixed assets investments were up by 12.2 percent and

total sales were down by 4.7 percent. 

The total asset turnover ratio also

took a slight downturn in 1998. In

1997, the ratio was 2.39. In 1998, it slid

slightly to 2.13. This ratio is similar to

the fixed asset turnover ratio. One element of this ratio increased (total assets)

and the other decreased (total sales).

Gross profit margins is a profitability ratio. In 1998, the ratio was 10.12

percent, and in 1997, it was 10.99 percent. Both total sales (-4.7 percent) and

cost of goods sold (-5.6 percent) were

down for the two-year period. As a

proportion, cost of goods represented

89 percent in 1998. This is only one

percentage point away from 1997’s

ratio.

Another profitability ratio is returnon-total-asset, which measures cooperative performance and is not sensitive

to the leverage position of the cooperative. This ratio includes net savings

before interest and income tax and

total assets. Return-on-total-asset took

a sharp turn in 1998. Although total

assets increased 6.8 percent, net savings

were down 9.0 percent. In the previous

two-year period, 1997 total assets were

up 2.3 percent over 1996 levels. Net

savings during this period were up 7.3

percent. Within the last 10 years, this

ratio was highest in 1997. 

Return-on-total-equity was also

down to 10.02 in 1998. Elements of

this ratio are net savings and total

equity. As stated before, net savings

were down nine percent while total

equity was up 8.8 percent. This ratio

measures profitability and is an important measure of the amount of debt

capital. Return-on-total-equity and

return-on-total-assets are best examined together because they could move

positively as a decrease in financial

leverage or negatively as a symptom of

low-investment adequacy. ■

Farm Supply Cooperatives from page 8
Rural Cooperatives / November/December 1999 35

Farmland/Cenex merger fails

Members of Farmland Industries,

Kansas City, Mo., and Cenex Harvest

States Cooperatives, Inver Grove

Heights, Minn., voted November 23

on the unification of the two cooperatives into United Country Brands.

Farmland members approved the consolidation, with 89 percent voting in

favor. The Cenex Harvest States vote

fell just short of the two-thirds needed,

at 64 percent. Leaders of the cooperatives said the results do indicate, however, that the majority of members

want the organizations to work more

closely together. Cenex Harvest States

CEO Noel Estenson said his organization would take time to analyze the

concerns raised by members before

determining how to proceed.

In a ruling right after the failed

consolidation vote, Farmland Industries won its 16-year battle with the

IRS when the U.S. Tax Court rejected

the agency's claim that the cooperative owed approximately $1 billion in

back taxes. Some Cenex Harvest

States members had reported concerns over the pending litigation at

the time they were asked to vote on

the consolidation. Since the failed

vote and subsequent court ruling in

favor of Farmland, both Estenson and

Farmland CEO H.D. "Harry" Cleberg have reported to members and

the media that a second consolidation vote was still being considered

by both organizations' boards of

directors.

Heartland Co-op returns 

100 percent patronage refund

Heartland Cooperative, West Des

Moines, Iowa, handed out 1,600 checks

totaling $950,000 in patronage refunds

this fall. The average check was about

$625. CEO Larry Petersen said the coop’s directors decided to return all

patronage to members because of the

poor farm economy. “We hope the

extra cash can be used by our memberowners to ease the financial stress in

farming today,” he explained. The 100

percent cash payment is a one-year

deal. Future decisions by the directors

will depend on the agricultural economy. Heartland offers grain marketing,

agronomy, feed, petroleum and precision farming products and services for

farmers.

Agri-Mark invests in whey project

Agri-Mark Inc. directors approved

an $18.7 million whey processing addition to its Middlebury, Vt., Cheddar

plant. The new process will allow the

cooperative to manufacture by-products from its Middlebury and Cabot,

Vt., plants into protein concentrates,

whole whey, whey permeate and condensed whey. The new project will not

interfere with a lactoferrin (iron-binding whey protein) system already in

place at Middlebury. 

Dairy leaders honored at Expo

Cooperative leaders were among the

honorees at World Dairy Expo, the

industry’s premier event held in Madison, Wis. Dairy Woman of the Year

was Deanna Stamp, Marlette, Mich.,

and a member of Michigan Milk Producers Association. Roger L. Ripley,

CEO of Accelerated Genetics, Baraboo, Wis., was Industry Person of the

Year. Other honorees included Niles

and Elmo Wendorf Jr., Ixonia, Wis.,

Dairymen of the Year; and Holger

Moritz Hansen, Pilegarden, Denmark,

International Person of the Year. The

awards go to dedicated individuals in

the global dairy industry, paying tribute

to cattle marketers, breeders and leaders.

Co-op Month recognition

During the Congressional Cooperative Observance and Awards Ceremony

at the U.S. Capitol in October, House

and Senate members joined the cooperative community for the presentation

of two awards. The first was the Statesman Award presented to Sen. Thad

Cochran (R-Miss.) and Rep. David

Obey (D-Wis.) for contributions in

public policy leadership in support of

cooperatives. The second award was

the Economic Freedom Award presented to Carl Terry Frederickson, AgriBank, and Allen Thurgood, 1st Rochdale

Cooperative, for political and social

advocacy leadership. (In addition,

Thurgood was recently appointed to

the Consumer Federation of America’s

Utility Restructuring Committee.)

National Cooperative Month is

organized, funded, and conducted by

17 organizations. David Graves, president, National Council of Farmer

Cooperatives, chaired the 1999 planning

committee. Others involved were

ACDI/VOCA, Cooperative Housing

Foundation, Cooperative Development

Foundation, Credit Union National

Association, Farm Credit Council,

National Association of Federal Credit

Unions, National Association of Housing Cooperatives, National Cooperative

Bank, National Cooperative Business

Association, National Council of Farmer

Cooperatives, National Milk Producers

Federation, National Rural Electric

Cooperative Association, National

Rural Telecommunications Cooperative, National Rural Utilities Cooperative Finance Corporation, National

NEWSLINE
36 November/December 1999 / Rural Cooperatives

Telephone Cooperative Association,

Overseas Cooperative Development

Council, USDA Rural Business Cooperative Services.

Five named to 2000 Co-op Hall of Fame

Five leaders will receive the cooperative sector’s highest honor, induction

into the Cooperative Hall of Fame in

April 2000. The five include Dave and

Erma Angevine, Edgar F. Callahan,

Richard H. Magnuson and O. Glenn

Webb. The awards ceremony is April

26 at the National Press Club in Washington, D.C. The Cooperative Hall of

Fame was established in 1974 by the

National Cooperative Business Association and today is administered by the

Cooperative Development Foundation.

NICE YC, youth leaders selected

The National Council of Farmer

Cooperatives named Tim and Lori

Hughes, Woodburn, Ky., Young Cooperator Ambassadors for 1999-00 at the

71st National Institute on Cooperative

Education in Snowbird, Utah. Chad

Endsley, Coshocton, Ohio, and Alyssa

Ford, Lebanon, Mo., were named Youth

Ambassadors. The four travel across

the country, speaking on behalf of

agriculture and cooperatives. They

also help plan next year’s NICE in

Nashville, Tenn.

Sponsored by Farmland Industries,

the Hugheses farm 918 acres of corn,

soybeans, wheat, and barley and raise 81

beef cattle. They are members of Hopkinsville Elevator Co-op. Endsley was

sponsored by the Ohio Council of

Cooperatives and he is a freshman at

The Ohio State University. The Association of Missouri Electric Cooperatives

sponsored Ford. She is a senior at

Lebanon High School. More information can be found at www.ncfc.org.

DFA ventures include Dairylea, Suiza

Dairylea Cooperative, Syracuse,

N.Y., and Dairy Farmers of America,

Kansas City, Mo., have formed a joint

venture. Dairy Marketing Services,

based in Syracuse, began operations

October 1 and will annually market

about 10 billion pounds of milk. Both

Dairylea and DFA have milk trucks

traveling the same roads and serve many

of the same customers. The joint venture

will coordinate milk movement and

save farmers an estimated $5 million

annually in transportation costs. The

two cooperatives already operate a limited liability company with a joint

investment in Dietrich’s Milk Products

in Pennsylvania.

Meanwhile, DFA and Suiza Foods

Corp. have a new joint venture that

encompasses all the domestic fluid milk

processing activities of Suiza Foods and

Southern Foods Group LP, a Dallas

dairy firm known for the Meadow Gold,

Borden and Elsie brands. The new joint

venture, which was expected to close by

year’s end, will initially be known as the

Suiza Fluid Dairy Group. Pete Schenkel,

a 41-year dairy industry veteran and

president and chief executive officer of

Southern Foods, will be president of the

new operation. He will be vice chairman

of Suiza’s board of directors.

And this past fall, Valley of Virginia

Cooperative Milk Producers Association, one the nation’s few fluid milk

processing cooperatives, was acquired

by Suiza Foods. Valley of Virginia

operated two fluid plants in Springfield

and Mount Crawford, Va., that packaged products under the Shenandoah’s

Pride brand name. The deal was

expected to be closed by year’s end.

Dairyland returns $3.6 million

Dairyland Power Cooperative,

LaCrosse, Wis., returned nearly $3.6

million in margins to members based

on how much money each membercooperative spent for purchased power

in 1979, reported Bill Berg, president

and CEO. Patronage capital is retained

by Dairyland for 20 years to meet

working capital needs and then returned

to member-cooperatives. During the

cooperative’s series of district meetings

with distribution cooperative directors

and management staff in October, Berg

focused on the key strategic activities

and direction of Dairyland and its

members, specifically highlighting their

three areas of focus: generation, transmission and corporate services.

PCCA makes record cash distribution

The Plains Cotton Cooperative

Association, Lubbock, Texas, finished

fiscal 1999 with margins of $33.2 million and, for the third time in the last

four years, the board authorized record

cash distribution to members. This

year’s distribution, including cash dividends, stock retirements and retirements of per unit capital retains, totals

almost $40.4 million. Van May, president and CEO, and Jackie Mull, PCCA

chairman, reported to members that

the cooperative also made its final debt

payment on the $82.5 million term

loan made in 1987 when PCCA and

American Cotton Growers combined.

The PCCA divisions include ACG,

Oklahoma Cooperative Association

Compress; Telmark, Inc.; Rolling

Plains Cooperative Compress; and

Mission Valley Fabrics.

REAs blaze new trails 

with microturbines

Electric cooperatives are poised to

enter the era of microturbine generation. A Cooperative Research Network

project, initiated with the Electric Power

Research Institute, is set to begin delivery of the industry’s hottest new product: microturbines. They can run on a

variety of fuels, including propane, fuel

oil and natural gas.

CRN worked with EPRI to purchase,

test and demonstrate the product for the

cooperative sector. With the introduction of the first microturbines, literally

just off the production line this fall, coops will be part of a trail-blazing transformation. Enthusiasts believe the

microturbine — with its promise of low

cost, low emissions and reliable dispersed

generation — could change the energy

industry the same way microprocessors

re-shaped the computer industry.

The National Rural Utilities Cooperative Finance Corporation, Herndon,

Va., is installing a 75kilowatt microturbine from Allied Signal.

Tri Valley Growers forms alliances

Tri Valley Growers, San Ramon,

Calif., signed a strategic alliance with

Bell-Carter Foods, Inc. Bell-Carter will
Rural Cooperatives / November/December 1999 37

supply canned black ripe olives to TVG

for distribution under its Oberti and

S&W brands. Bell-Carter will use

TVG’s national network to distribute

private label and foodservice olives.

Founded in 1932, TVG is responsible

for more than half the canned peaches,

pears and apricots, and 10 percent of

the canned tomato products sold in the

United States. Its brands include S&W

Fine Foods, Libby’s and Libby’s Lite,

Tuttorosso, Redpack, Sacramento

Tomato Juice, Sun Vista, and Oberti

Olives. TVG expected to record a loss

of about $65 million for the current

fiscal year. The cooperative continues

to take measures to restore profits by

2001.

Meanwhile, TVG’s S&W rice business will transfer certain assets to

Riviana Foods Inc., Houston, Texas.

Riviana will license the S&W trademark for use on retail packaged rice

products. Riviana is the number one or

two rice marketer in 19 of the top 20

U.S. rice markets. Its principle brands

include Mahatma, Carolina and Success. The company has additional

food operations in Central America

and Europe.

Short prune crop reduces 

grower profitability

Despite improved 1999 prices, California prune growers have seen their

hopes for renewed profitability dashed

by an unexpected crop shortfall and rising production costs. Even though the

Prune Bargaining Association successfully negotiated a 1999 prune price

aimed at returning profitability to

orchard operations, an unusually heavy

fruit drop resulted in a 15-percent crop

loss, reported PBA General Manager

Greg Thompson. Preliminary postharvest figures showed that dried production will fall under 165,000 tons

compared to the estimated 180,000

tons. On a statewide average, the PBA

estimates that this reduction, in light of

increasing costs, will leave growers

$171 per acre short of covering typical

production and harvest costs.

California Tomato Growers 

announce MTA

California Tomato Growers Association, Stockton, announced a price

offering to the industry that includes a

multiple-year term agreement (MTA).

The MTA is an integral part of the

price proposal and is consistent with

CTGA’s goal to achieve an increasing

degree of stability in the industry.

CTGA members feel an MTA will

address certain risks and build efficiencies through favorable financing, stable

tonnage contracts and matched capitalization. Processors already use a large

amount of term supply arrangements,

and are likely to support contract tomatoes on a similar basis.

Sunsweet Growers increases

international presence

Sunsweet Growers, Inc., a Yuba

City, Calif., dried fruit marketing cooperative, has formed an alliance to

strengthen its international presence.

The cooperative signed an agreement

with the Turkish company Sundora-K,

wholly owned by Britain’s Harrington

Foods Group. Sundora-K will pack

Turkish tree fruits exclusively for

Sunsweet to distribute worldwide.

In turn, Sunsweet will purchase all its

Turkish fruit requirements from Sundora-K. The alliance will allow

Sunsweet to increase its market leadership worldwide in the dried fruit and

produce industry, and use its globally

recognized Sunsweet brand to better

organize and grow worldwide demand

for dried apricots.

Agrilink sells canned vegetable

business to Seneca Foods

Agrilink Foods, the Rochester, N.Y.,

subsidiary of Pro-Fac Cooperative,

announced that Seneca Foods Corp.,

has agreed in principle to purchase its

Midwest private label canned vegetable

business. Included in the transaction are

Agrilink’s Cambria, Wis., and Arlington, Minn., facilities. Agrilink will

retain its Fond du Lac and Hortonville,

Wis., facilities. The transaction does

not include Agrilink’s branded Veg-All

and Freshlike canned vegetables. In

addition, Seneca and 

Agrilink expect to enter into reciprocal

co-packing agreements.

New Englanders launch 

co-op housing website

A number of New England organizations have developed a website with

comprehensive information on co-ops

and other types of resident-owned and

-controlled housing. Located at

www.weown.net , the site has information on ownership structures and a

developer’s guide. Organizations

involved include Association for Resident Control of Housing, Institute for

Community Economics, Community

Builders, Chicago Mutual Housing

Network and Burlington Community

Land Trust.

USDA finds western computer use up

Agriculture has involved cuttingedge technology for generations, but

according to a recent USDA National

Agricultural Statistics report, the computer use continues to lead the way.

The report found that 41 percent of

farms in the 10-state western region

have Internet access, up from just 19

percent in 1997. Nationally, however,

only 29 percent of farms have Internet

access. Each June, the USDA surveys

33,000 agricultural operations regarding

acreage, crops planted and land values.

In 1997 and 1999, questions regarding

computer usage were added.

Federal Reserve 

to study rural America

The Federal Reserve Bank of Kansas

City has opened a new Center for the

Study of Rural America to look at all

businesses affecting the rural economy,

not just agriculture. One farm loan

official pointed out that prices for farm

commodities are the same as they were

20 to 30 years ago, but prices for everything else are not level. He said the

change has led to vertical integration

where farms produce for major food

companies yet some people are concerned whether this is where America

wants the rural economy to be.
38 November/December 1999 / Rural Cooperatives

ANNUAL INDEX

TITLE FEATURES ................................................Issue—Page

A Crisis unfolds ..................................................................................................May/June 11

A Fight for Survival

Co-op members hope extra profits will help preserve a way

of life they see rapidly disappearing on the prairie ....................................May/June 22

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

Adding a Web site to your cooperative business toolbox..............................March/April 17

AGP expands global presence ............................................................September/October 18

AGP’s Lindsay Discusses Co-op’s Growth, Management ..................September/October 16

Alfalfa growers form cooperative....................................................November/December 24

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

At Your Disposal

Smaller livestock operations can reduce pollution and large capital

expenditures by forming a waste management cooperative ..................March/April 12

Big Steps in the plains:

Kansas grain producers create new venture ..............................................July/August 6

Boosting Rural New Mexico

Farmer co-ops key element in effort to help Hispanics and 

Pueblo Indians build sustainable communities ........................................July/August 14

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

Calcot’s Tim Smith, Other Outstanding Communicators Win

CCA Honors ..................................................................................September/October 25

California RAIN project wins Smithsonian honors ..........................November/December 13

The Changing Role of Trade Groups and Dairy Co-ops ......................September/October 19

Co-op Member Education Needed in 21st Century ........................................July/August 22

Cooperatives Online

Co-ops are staking their claim in the boomtown 

called the Internet ....................................................................................March/April 14

Cooperatives’ Response Needed for 1999 Survey ........................................July/August 27

Co-ops Remain Major Players in Dairy Industry ............................................July/August 28

Factors for co-op success ................................................................November/December 25

Farm Supply cooperatives’ income slides downward ......................November/December 7

Farmland, Cenex Harvests States move closer to merger ................September/October 23

Farmland, Cenex-Harvest States Top NCB’s list ................................September/October 28

Getting Involved: What Makes Co-op Members Join In?

USDA study of North Central dairy farmers indicates several

characteristics, from board satisfaction to farm size, contribute

to participation ..........................................................................................March/April 29

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

Honey’s healthy image helps marketing ............................................September/October 10

How Browntown co-op benefits members ......................................November/December 19

Improving Their Worth

Farmer co-ops’ 1997 value-added activities rise to $10.1 billion ................May/June 4

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Kansas Honors First Co-op Hall of Fame Inductees ..........................................May/June 29

Kansas Wheat Goes White:

Betty is ready to produce better bread, noodles and tortillas ..................July/August 10

Large Cooperatives Unifying: A Strategic Trend To Monitor..............September/October 21

Magazine Overview

For 65 years, USDA’s magazine has helped guide 

co-op movement ..........................................................................November/December 2

Microbrewers have a taste for honey ................................................September/October 12

Minnesota Governor Jesse Ventura salutes Prairie Farmers Cooperative ........May/June 9

Net Business Volume, Net Income for Farmer Co-ops Decline

in 1998 ..........................................................................................September/October 27

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Number of U.S. dairy farms plunges..................................................................May/June 24

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Patients win when rural hospitals unite..........................................November/December 15

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

RECs on track for Y2K ........................................................................September/October 20

Restocking the Breadbasket

Cooperative development efforts in Ukraine are helping farmers

rebuild their agricultural system ..............................................................March/April 19

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

Rural Cooperatives wins editorial honors ..........................................September/October 26

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Shaq, Microsoft Donate Technology Centers ..................................November/December 16

65-Year Anniversary Issue:

The 1930s

Cooperatives help farmers survive the Great Depression and

position themselves for new marketing opportunities ................November/December 4

The 1940s

Co-ops help supply U.S. war effort; modernize operations rapidly

during post-war era....................................................................November/December 10

The 1950s

Co-op brands gain market share; livestock, tobacco,

cotton co-ops expand ................................................................November/December 18

The 1960s

Trend toward fewer, larger farms means major changes

for co-ops....................................................................................November/December 26

The 1970s

Co-ops embrace new technologies and structures to maintain

owner control ............................................................................November/December 36

The 1980s

Mergers, consolidations change look of U.S. cooperatives ......November/December 46

The 1990s

Hallmarks of the 1990s: Merger-mania and co-op fever ..........November/December 54

Strong Co-op Themes Emerge at Conference ..................................................March/April 6

1999 Article Index

Information appearing in Rural Cooperatives magazine during calendar year 1999 has been indexed to help you relocate past articles.

The information is categorized by title, State, subject, foreign country, and author. Articles are indexed by month and page.
Rural Cooperatives / November/December 1999 39

Subsidiaries and joint ventures ........................................................................May/June 17

Supply cooperatives’ income slides downward ................................November/December 7

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Transworld Traders

With 1997’s record exports, U.S. farm cooperatives prove their ability

in the global marketplace ............................................................................May/June 19

Visitor’s Guide ................................................................................................March/April 14

Y2K Resources Available ................................................................................July/August 31

Magazine Departments

A Closer Look At...

Calcot, Ltd.

Bakersfield, Calif ............................................................................................May/June 7

FernTrust Inc.

Seville, Florida ..........................................................................................March/April 11

Highland Exchange Service Cooperative - HESCO

Waverly, Florida............................................................................November/December 9

Commentary/Editorial

Catching the Wave .......................................................................................... July/August 2

The 11th Hour for Structural Change ..................................................................May/June 2

Exercising Vigilance Over State Laws Important Role of

State Councils ............................................................................................March/April 2

Magazine Time Capsules Reveal Progress of Co-op Movement ......November/December ii

Next Generation Cooperatives ..........................................................November/December 2

Solving Rural Problems Through Cooperatives ....................................September/October 2

In the Spotlight

Pete Penner: Chairman of the Board

Sun-Maid Growers of California ..................................................September/October 13

Randy G. Harmson: General Manager, Michigan Agricultural Cooperative 

Marketing Assn, Inc ..................................................................................March/April 25

Ron Lienemann: President & Chief Executive Officer, RushShelby

Energy Rural Electric Cooperative ............................................................July/August 11

Stanley W. Dreyer: Cooperative Statesman ......................................................May/June 14

Legal Corner

Supply Co-op Faces Robinson-Patman Act and

Antitrust Liability..........................................................................................May/June 18

Management Tip

Bottom line continued to rise in ‘98 for large corn-soybean and

wheat-barley co-ops ..................................................................November/December 26

Plains co-ops experience ups and downs in 1998 ..........................November/December 28

Newsline

Tri Valley Growers appoints new president and CEO ....................................March/April 26

Two California fruit co-ops form alliance

Sunkist revenues top $1 billion

NCFC chairman highlights association’s achievements

Farmland, Cenex Harvest States win communications honors

California dairy co-ops explore merger

Prairie Farms Dairy reports record earnings for 1998

Tree Top finalizes Seneca acquisition

CoBank reports ‘98 net income of $150 million

International cooperative book available

USDA streamlines DLT loan and grant program

Agway expands into retail store

Honse picked for Farmland leadership positions

Farmland enters alliances with MFA, Cenex Harvest States

Cenex, Farmland exploring grain venture

Next century will see new wave of electric co-ops as consumers seek

protection from deregulation ......................................................................May/June 24

Dairy Farmers of America celebrates first annual meeting in Kansas City

Two eastern dairy co-ops merge

Foremost Farms USA earns $27.4 million

NICE conference set for July 26-29 in Utah

AMPI sets operational records in 1998

DFA forms joint venture with Madison Dairy

CoBank board re-elects officers and adopts new director election bylaws

Michigan Milk Producers votes to remain on its own

NCBA members inaugurate a new NCBA at 1999 Cooperative Conference

Most electric utilities will be ready ahead of schedule for Year 2000 data roll-over

Cenex/Land O’Lakes Agronomy Company to purchase Terra distribution business

Isom named Co-op Farmer of the Year

Agway anounces unification of its agriculture and retail businesses

Cattle marketing joint venture becomes reality: Blue Grass Marketing Systems of Kentucky and Southern States

Michigan producers receive USDA grants......................................................July/August 29

Small Farm Conference Oct. 12-15

St. Paul Bank and CoBank merge

Michigan FCS may consolidate

Cleberg on U.S. Treasury’s IMF Committee

Diamond Walnut forms German subsidiary

California growers fight Greek peaches

Chiquita to buy Agripac Division

Dakota Dairy Specialties files for bankruptcy

FCA purchases LCCA’s Oskaloosa assets

Golden Oval Eggs to expand

American Growers offers chemial-free food

Plains, Yazoo Valley oil mills merge

Gerry represents U.S. in Ireland

Bison Co-op members to promote

ECLSA elects three to board

NSAC recognizes Duft

EPA Offers Sustainable Development Challenge Grants

Y2K Resources Available

Wisconsin’s Karg new field editor......................................................September/October 29

Gold Kist, Cotton States Insurance founder dies

Three California cooperatives merge

Glencoe, AMPI consider merger

Land O’Lakes, Swiss Valley partners

Carey named UDA executive director

MMPA pays equity capital retains

LOL Answer Farm celebrates 25 years

USWP now Spring Wheat Bakers

Wentworth ethanol plant planned

Tree Top acquires Watermill Foods

California Custom Foods dissolved

Seald-Sweet celebrates 90th

Bullock to step down in 2000

PLA, IPLA discuss consolidation

USDA Rural Utilities Service received Hammer Award

DariGold now Northwest Dairy

SWEPCO, Committee, WST withdraw Cajun Bankruptcy settlement

Chugach to install world’s largest assured-power fuel cell

Agriculture Outlook 2000 To Focus on Emerging Trends ................November/December 35

Heartland Co-op returns 100 percent patronage refund

Agri-Mark invests in whey project

Dairy leaders honored at Expo

Co-op Month recognition

Five named to 2000 Co-op Hall of Fame

NICE YC, youth leaders selected

DFA announces deals with Dairylea, Suiza

Dairyland returns $3.6 million

PCCA makes record cash distribution

REAs blaze new trails with microturbines

Tri Valley Growers forms alliances

Short prune crop cuts grower profitability

California Tomato Growers announce MTA

Sunsweet Growers increases international presence

Agrilink sells canned veggie business

New Englanders launch co-op housing website

USDA finds Western computer use up

Federal Reserve to study rural America

Page From the Past

From Corporation to Cooperative

One man’s dream becomes Welch’s legacy ................................................May/June 30

What Is Leadership?

A leader must be an original, not a carbon copy ......................................March/April 31
40 November/December 1999 / Rural Cooperatives

SUBJECTS:

Bargaining

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Randy G. Harmson: General Manager, Michigan Agricultural Cooperative 

Marketing Assn., Inc. ................................................................................March/April 25

Citrus

Highland Exchange Service Cooperative - HESCO

Waverly, Florida............................................................................November/December 9

Communications

Adding a web site to your cooperative business toolbox ..............................March/April 17

Calcot’s Tim Smith, Other Outstanding Communicators Win

CCA Honors ..................................................................................September/October 25

Cooperatives Online

Co-ops are staking their claim in the boomtown called the Internet ......March/April 14

Rural Cooperatives wins editorial honors ..........................................September/October 26

Team Talk

With his emphasis on communication, Walt Payne helped strengthen

Blue Diamond Growers’ standing in California’s almond industry ..............May/June 22

Co-op Development

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

At Your Disposal

Smaller livestock operations can reduce pollution and large capital

expenditures by forming a waste management cooperative ..................March/April 12

Boosting Rural New Mexico

Farmer co-ops key element in effort to help Hispanics and 

Pueblo Indians build sustainable communities ........................................July/August 14

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

How Browntown co-op benefits members ......................................November/December 19

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Restocking the Breadbasket

Cooperative development efforts in Ukraine are helping farmers

rebuild their agricultural system ..............................................................March/April 19

Cotton

A Better Offer

From a system of “appalling” injustices to

farmers, U.S. cotton marketing co-ops were born ......................................May/June 29

Calcot, Ltd.

Bakersfield, Calif ............................................................................................May/June 7

Calcot’s Tim Smith, Other Outstanding Communicators Win

CCA Honors ..................................................................................September/October 25

Dairy

At Your Disposal

Smaller livestock operations can reduce pollution and large capital

expenditures by forming a waste management cooperative ..................March/April 12

The Changing Role of Trade Groups and Dairy Co-ops ......................September/October 19

Co-ops Remain Major Players in Dairy Industry ............................................July/August 28

Getting Involved: What Makes Co-op Members Join In?

USDA study of North Central dairy farmers indicates several

characteristics, from board satisfaction to farm size, contribute

to participation ..........................................................................................March/April 29

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

Subsidiaries and joint ventures ........................................................................May/June 17

Education and Training

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

Bringing Light to Rural America......................................................................March/April 33

California RAIN project wins Smithsonian honors ..........................November/December 13

Co-op Member Education Needed in 21st Century ........................................July/August 22

Factors for co-op success ................................................................November/December 25

Shaq, Microsoft Donate Technology Centers ..................................November/December 16

Environment

At Your Disposal

Smaller livestock operations can reduce pollution and large capital

expenditures by forming a waste management cooperative ..................March/April 12

The Changing Role of Trade Groups and Dairy Co-ops ......................September/October 19

Farm Supply & Agronomy Services

Farm Supply cooperatives’ income slides downward ......................November/December 7

Farmland, Cenex Harvests States move closer to merger ................September/October 23

Highland Exchange Service Cooperative - HESCO

Waverly, Florida............................................................................November/December 9

Net Business Volume, Net Income for Farmer Co-ops Decline

in 1998 ..........................................................................................September/October 27

Restocking the Breadbasket

Cooperative development efforts in Ukraine are helping farmers

rebuild their agricultural system ..............................................................March/April 19

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Supply Co-op Faces Robinson-Patman Act and

Antitrust Liability..........................................................................................May/June 18

Finance

Farm Supply cooperatives’ income slides downward ......................November/December 7

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Stanley W. Dreyer: Cooperative Statesman ......................................................May/June 14

Fishery and Aquaculture

Freshwater Farms: Generating more jobs from Mississippi catfish..................May/June 13

Forestry

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Fruit & Vegetables (Cherries/Grapes)

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

From Corporation to Cooperative

One man’s dream becomes Welch’s legacy ................................................May/June 30

Randy G. Harmson: General Manager, Michigan Agricultural Cooperative 

Marketing Assn, Inc. ................................................................................March/April 25

Grains & Oil Seed

AGP expands global presence ............................................................September/October 18

AGP’s Lindsay Discusses Co-op’s Growth, Management ..................September/October 16

Alfalfa growers form cooperative....................................................November/December 24

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

Big Steps in the plains:

Kansas grain producers create new venture ..............................................July/August 6

Bottom line continued to rise in ‘98 for large corn-soybean and

wheat-barley co-ops ..................................................................November/December 26

Farmland, Cenex Harvests States move closer to merger ................September/October 23

Kansas Wheat Goes White:

Betty is ready to produce better bread, noodles and tortillas . . . . . . .July/August 10

Plains co-ops experience ups and downs in 1998 . . . . . . . . . . . .November/December 28

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Honey

Honey’s healthy image helps marketing ............................................September/October 10

Microbrewers have a taste for honey ................................................September/October 12

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Legislative and Legal Matters

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

Supply Co-op Faces Robinson-Patman Act and

Antitrust Liability..........................................................................................May/June 18

Livestock (Hogs)

A Crisis unfolds ..................................................................................................May/June 11
Rural Cooperatives / November/December 1999 41

A Fight for Survival

Co-op members hope extra profits will help preserve a way

of life they see rapidly disappearing on the prairie ....................................May/June 22

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

Minnesota Governor Jesse Ventura salutes Prairie Farmers Cooperative ........May/June 9

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

Management

AGP’s Lindsay Discusses Co-op’s Growth, Management ..................September/October 16

Amy Hempstead: ‘Moving our Co-op forward ................................................March/April 11

Bottom line continued to rise in ‘98 for large corn-soybean and

wheat-barley co-ops ..................................................................November/December 26

Factors for co-op success ................................................................November/December 25

Pete Penner: Chairman of the Board

Sun-Maid Growers of California ..................................................September/October 13

Plains co-ops experience ups and downs in 1998 ..........................November/December 28

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

Ron Lienemann: President & Chief Executive Officer, RushShelby

Energy Rural Electric Cooperative ............................................................July/August 11

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Stanley W. Dreyer: Cooperative Statesman ......................................................May/June 14

Strong Co-op Themes Emerge at Conference ..................................................March/April 6

What Is Leadership?

A leader must be an original, not a carbon copy ......................................March/April 31

Marketing and Foreign Trade

A Crisis unfolds ..................................................................................................May/June 11

Adding a web site to your cooperative business toolbox ..............................March/April 17

AGP expands global presence ............................................................September/October 18

AGP’s Lindsay Discusses Co-op’s Growth, Management ..................September/October 16

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

Calcot, Ltd.

Bakersfield, Calif. ..........................................................................................May/June 7

Cooperatives Online

Co-ops are staking their claim in the boomtown called the Internet ......March/April 14

Co-ops Remain Major Players in Dairy Industry ............................................July/August 28

FernTrust Inc.

Seville, Florida ..........................................................................................March/April 11

From Corporation to Cooperative

One man’s dream becomes Welch’s legacy ................................................May/June 30

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

Honey’s healthy image helps marketing ............................................September/October 10

Microbrewers have a taste for honey ................................................September/October 12

Net Business Volume, Net Income for Farmer Co-ops Decline

in 1998 ..........................................................................................September/October 27

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Transworld Traders

With 1997’s record exports, U.S. farm cooperatives prove their ability

in the global marktplace ..............................................................................May/June 19

Member and Public Relations

Adding a web site to your cooperative business toolbox ..............................March/April 17

Bringing Light to Rural America......................................................................March/April 33

Cooperatives Online

Co-ops are staking their claim in the boomtown called the Internet ......March/April 14

Getting Involved: What Makes Co-op Members Join In?

USDA study of North Central dairy farmers indicates several

characteristics, from board satisfaction to farm size, contribute

to participation ..........................................................................................March/April 29

Highland Exchange Service Cooperative - HESCO

Waverly, Florida............................................................................November/December 9

How Browntown co-op benefits members ......................................November/December 19

Mergers/Alliances

A Local Solution

As agriculture industrializes, local supply and grain co-ops in Colorado

remain profitable through joint ventures and alliances ..............................May/June 19

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

Big Steps in the plains:

Kansas grain producers create new venture ..............................................July/August 6

Co-ops Remain Major Players in Dairy Industry ............................................July/August 28

Farmland, Cenex Harvests States move closer to merger ................September/October 23

Large Cooperatives Unifying: A Strategic Trend To Monitor..............September/October 21

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members....................May/June 15

Organizations (National Cooperative Bank)

Stanley W. Dreyer: Cooperative Statesman ......................................................May/June 14

Organizations (National Pork Producers Council)

A Crisis unfolds ..................................................................................................May/June 11

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Organizations (University of Wisconsin Center for Co-ops)

Strong Co-op Themes Emerge at Conference ..................................................March/April 6

Raisins

Pete Penner: Chairman of the Board

Sun-Maid Growers of California ..................................................September/October 13

Rural Development

A Fight for Survival

Co-op members hope extra profits will help preserve a way

of life they see rapidly disappearing on the prairie ....................................May/June 22

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

Boosting Rural New Mexico

Farmer co-ops key element in effort to help Hispanics and 

Pueblo Indians build sustainable communities ........................................July/August 14

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

California RAIN project wins Smithsonian honors ..........................November/December 13

Freshwater Farms: Generating more jobs from Mississippi catfish..................May/June 13

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Patients win when rural hospitals unite..........................................November/December 15

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

Shaq, Microsoft Donate Technology Centers ..................................November/December 16
42 November/December 1999 / Rural Cooperatives

Specialty Crops

FernTrust Inc.

Seville, Florida ..........................................................................................March/April 11

Honey’s healthy image helps marketing ............................................September/October 10

Microbrewers have a taste for honey ................................................September/October 12

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Team Talk

With his emphasis on communication, Walt Payne helped strengthen

Blue Diamond Growers’ standing in California’s almond industry ..............May/June 22

Statistics

Bottom line continued to rise in ‘98 for large corn-soybean and

wheat-barley co-ops ..................................................................November/December 26

Cooperatives’ Response Needed for 1999 Survey ........................................July/August 27

Farm Supply cooperatives’ income slides downward ......................November/December 7

Farmland, Cenex-Harvest States Top NCB’s list ................................September/October 28

Improving Their Worth 

Farmer co-ops’ 1997 value-added activities rise to $10.1 billion..................May/June 4

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Net Business Volume, Net Income for Farmer Co-ops Decline

in 1998 ..........................................................................................September/October 27

Plains co-ops experience ups and downs in 1998 ..........................November/December 28

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Transworld Traders

With 1997’s record exports, U.S. farm cooperatives prove their ability

in the global marktplace ..............................................................................May/June 19

Strategic Planning

Large Cooperatives Unifying: A Strategic Trend To Monitor..............September/October 21

Strong Co-op Themes Emerge at Conference ..................................................March/April 6

Utility Co-ops

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

California RAIN project wins Smithsonian honors ..........................November/December 13

Patients win when rural hospitals unite..........................................November/December 15

RECs on track for Y2K ........................................................................September/October 20

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

Ron Lienemann: President & Chief Executive Officer, RushShelby

Energy Rural Electric Cooperative ............................................................July/August 11

Shaq, Microsoft Donate Technology Centers ..................................November/December 16

Value Added

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

Alfalfa growers form cooperative....................................................November/December 24

From Corporation to Cooperative

One man’s dream becomes Welch’s legacy ................................................May/June 30

Improving Their Worth

Farmer co-ops’ 1997 value-added activities rise to $10.1 billion..................May/June 4

Kansas Wheat Goes White:

Betty is ready to produce better bread, noodles and tortillas ..................July/August 10

Microbrewers have a taste for honey ..............................................September/October 12

Minnesota Governor Jesse Ventura salutes Prairie Farmers Cooperative ........May/June 9

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Vegetable Co-ops

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

AUTHORS

Abernathy, Donna F.

A Legacy Lives On

Cooperative approach help black growers succeed ......................................May/June 4

Becker, C.H.

What Is Leadership?

A leader must be an original, not a carbon copy ......................................March/April 31

Berton, Valerie

A Fight for Survival

Co-op members hope extra profits will help preserve a way

of life they see rapidly disappearing on the prairie ....................................May/June 22

Binion, R. Wade

At Your Disposal

Smaller livestock operations can reduce pollution and large capital

expenditures by forming a waste management cooperative ..................March/April 12

Borst, Alan

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Brockhouse, Bill

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

Chesnick, David S.

Sales rebound for largest farmer co-ops, but net 

margins decline ..........................................................................November/December 30

Cummins, David

Bottom line continued to rise in ‘98 for large corn-soybean and

wheat-barley co-ops ..................................................................November/December 26

Plains co-ops experience ups and downs in 1998 ....................November/December 28

Duffey, Patrick

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

65-Year Anniversary Issue: ................................................................November/December 4

Frederick, Donald A.

Supply Co-op Faces Robinson-Patman Act and

Antitrust Liability..........................................................................................May/June 18

Gehrke, Brad

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

Karg, Pamela J.

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

Bridging the Gap

USDA spotlights DLT technology during event marking 50th 

anniversary of telecommunications program ............................November/December 10

President Clinton Hails Co-ops as Engine for Rural Progress 

Arkansas tomato co-op breathes new life into dying

rural town ....................................................................................November/December 4

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Kelleher, Kristen

Boosting Rural New Mexico

Farmer co-ops key element in effort to help Hispanics and 

Pueblo Indians build sustainable communities ........................................July/August 14

Kennedy, Tracey L.

Transworld Traders

With 1997’s record exports, U.S. farm cooperatives prove their ability

in the global marktplace ..............................................................................May/June 19

Kozak, Jerry

The Changing Role of Trade Groups and Dairy Co-ops ......................September/October 19

Kraenzle, Charles A.

Getting Involved: What Makes Co-op Members Join In?

USDA study of North Central dairy farmers indicates several
Rural Cooperatives / November/December 1999 43

characteristics, from board satisfaction to farm size, contribute

to participation ..........................................................................................March/April 29

Improving Their Worth

Farmer co-ops’ 1997 value-added activities rise to $10.1 billion..................May/June 4

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Ling, Charles K.

Co-ops Remain Major Players in Dairy Industry ............................................July/August 28

Matson, James

Planning to Prosper:

Recalling lessons learned from livestock slaughter

and meat packing co-ops ..........................................................................July/August 24

Merlo, Catherine

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

Miller, Patricia

Cooperatives Online

Co-ops are staking their claim in the boomtown called the Internet ......March/April 14

Moser, Laura

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Namken, Jerry C.

Restocking the Breadbasket

Cooperative development efforts in Ukraine are helping farmers

rebuild their agricultural system ..............................................................March/April 19

Nelson, William J.

Co-op Member Education Needed in 21st Century ........................................July/August 22

Rotan, Beverly L.

Farm Supply cooperatives’ income slides downward ......................November/December 7

Tarpenning, Bill

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Thompson, Jill Long

Catching the Wave............................................................................................July/August 2

Next Generation Cooperatives ..........................................................November/December 2

Solving Rural Problems Through Cooperatives ....................................September/October 2

The 11th Hour for Structural Change ..................................................................May/June 2

Torgerson, Randall

Exercising’ Vigilance Over State Laws Important Role of

State Councils ............................................................................................March/April 2

Magazine Time Capsules Reveal Progress of Co-op Movement ............January/February ii

Wadsworth, Jim

Large Cooperatives Unifying: A Strategic Trend To Monitor..............September/October 21

STATES

Alabama

How Browntown co-op benefits members ......................................November/December 19

Organizing for the Future

Browntown: small co-op with big plans ....................................November/December 18

Arkansas

Patients win when rural hospitals unite..........................................November/December 15

President Clinton hails co-ops as engine for rural progress............Novenber/December 10

Arizona

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

California

Calcot, Ltd.

Bakersfield, Calif. ..........................................................................................May/June 7

California RAIN project wins Smithsonian honors ..........................November/December 13

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Colorado

A Local Solution

As agriculture industrializes, local supply and grain co-ops in Colorado

remain profitable through joint ventures and alliances ..............................May/June 19

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

Florida

A Sea of Greens

Low-income farmers use vegetable processing, marketing co-op 

to create new opportunity in north Florida ..............................................July/August 16

FernTrust Inc.

Seville, Florida ..........................................................................................March/April 11

Highland Exchange Service Cooperative - HESCO

Waverly, Florida............................................................................November/December 9

Georgia

Network Difficulties

Termination of Georgia wood co-op provides lessons for

export co-op development ..............................................................September/October 4

Illinois

The Prime of Prairie Farms Dairy

Midwest dairy co-op has producers asking to become members ..............May/June 15

Iowa

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Taking Flight

Sioux Honey cooperative finds sweet success in

new products ..................................................................................September/October 8

Kansas

A Fight for Survival

Co-op members hope extra profits will help preserve a way

of life they see rapidly disappearing on the prairie ....................................May/June 22

Amber Waves of Change

Kansas grain cooperatives adapting to global marketplace ......................July/August 4

Big Steps in the plains:

Kansas grain producers create new venture ..............................................July/August 6

Kansas Honors First Co-op Hall of Fame Inductees ..........................................May/June 29

Kansas Wheat Goes White:

Betty is ready to produce better bread, noodles and tortillas ..................July/August 10

Kentucky

Hog-tied in Kentucky?

No, thanks to a co-op helping small-scale hog producers survive 

in a depressed market ..............................................................................July/August 12

Michigan

Alfalfa growers form cooperative....................................................November/December 24

Randy G. Harmson: General Manager, Michigan Agricultural Cooperative 

Marketing Assn, Inc. ................................................................................March/April 25

Thumbs Up

Michigan soybean farmers keeping value at home with 

new-generation cooperative ......................................................November/December 20

Minnesota

Farmland, Cenex Harvests States move closer to merger . . . . . . . September/October 23

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Iowa Cooperatives Lead Nation in Business Volume

USDA’s 1997 statistics show Minnesota in second place,

longtime leader California in third ..............................................................March/April 4

Minnesota Governor Jesse Ventura salutes Prairie Farmers Cooperative ........May/June 9

Strong Co-op Themes Emerge at Conference ..................................................March/April 6

Missouri

Farmland, Cenex Harvests States move closer to merger ................September/October 23

Nebraska

The Price Is Right

AGP sets pace for soybean industry with new pricing

program ........................................................................................September/October 14

New Mexico

Boosting Rural New Mexico

Farmer co-ops key element in effort to help Hispanics and 

Pueblo Indians build sustainable communities ........................................July/August 14

New York

From Corporation to Cooperative

One man’s dream becomes Welch’s legacy ................................................May/June 30

North Carolina

Hogging the Market

How co-ops are responding to hog price crisis..............................................May/June 8

Roanoke Electric Breaks Through Barriers

This small North Carolina co-op makes history as it opens the doors

of leadership to blacks ................................................................................March/April 7

Virginia

Bridging the Gap

USDA spotlights DLT technology to mark 50th anniversary of

telecommunications program ....................................................November/December 10

Wisconsin

Shaq, Microsoft Donate Technology Centers November/December 16

FOREIGN COUNTRIES

Ukraine

Restocking the Breadbasket

Cooperative development efforts in Ukraine are helping farmers

rebuild their agricultural system ..............................................................March/April 19
Rural

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