R

u

ral COOPE

May / June 2014

RATIVES

Building Success on Service

Page 4
2 May/June 2014 / Rural Cooperatives

By Doug O’Brien 

Acting Under Secretary 

USDA Rural Development 

The Farm Credit System — a financial

cooperative owned by the farmers and

ranchers who use its services — has long

been a prime source of financial services that

support food and fiber production. It also

often works in tandem with USDA to build a stronger rural

America. In this column, I would like to cite two recent

examples of this cooperation between Farm Credit and

USDA. 

One example is Farm Credit’s support for the Obama

administration’s “Made in Rural America” effort. This

initiative is designed to help innovative small businesses,

including cooperatives, throughout rural America access the

capital they need to grow and create jobs. The other example

involves Farm Credit System institutions working with

USDA to support expansion of a rural hospital that delivers

critical healthcare services in Minnesota. 

Equity investments in rural business

“Made in Rural America” is an export and investment

initiative that will help propel the growth of small businesses

across rural America. The new Rural Business Investment

Company (RBIC) will now allow USDA to facilitate privateequity investments in agriculture-related businesses and

cooperatives. Currently, USDA programs exist to help

provide loans or loan guarantees to help rural businesses

grow, but many small cutting-edge businesses also need

equity support in addition to, or instead of, borrowed funds. 

Advantage Capital Partners, which will manage the new

fund, and its partners from eight Farm Credit institutions

have pledged to invest nearly $150 million into the new

effort. The Farm Credit System’s nationwide network of

banks and lending associations is specifically chartered to

serve agriculture and the U.S. rural economy. 

“One of USDA’s top priorities is to help reenergize the

rural economy, and we now have a powerful new tool

available to help achieve that goal,” Agriculture Secretary

Tom Vilsack said in announcing the fund. “This new

partnership will allow us to facilitate private investment in

businesses working in bio-manufacturing, advanced energy

production, local and regional food systems, improved

farming technologies and other cutting-edge fields.” 

The fund is being formed under USDA’s Rural Business

Investment Program (RBIP). USDA utilizes RBIP to license

funds to invest in enterprises that will create growth and job

opportunities in rural areas, with an emphasis on smaller

enterprises. Working through the USDA program enables

licensed funds to raise capital from Farm Credit System

banks and associations. 

This new partnership between Farm Credit institutions

and Advantage Capital, a leading growth capital and smallbusiness finance firm, brings together resources and people

that are focused on providing more private capital, small

business investment and quality jobs to rural America. This

public-private partnership will have a tangible positive impact

on our rural economy and is a model of how government can

serve as a catalyst for private investment in rural America. 

Eight Farm Credit institutions providing initial

investments in the RBIC fund are: AgStar Financial Services

(Mankato, Minn.); AgriBank (St. Paul, Minn.); Capital Farm

Credit (Bryan, Texas); CoBank (Denver, Colo.); Farm Credit

Bank of Texas (Austin, Texas); Farm Credit Services of

America (Omaha, Neb.); Farm Credit Mid-America

(Louisville, Ky.); and United Farm Credit Service (Willmar,

Minn.). 

USDA will be accepting applications for other new Rural

Business Investment Companies. Interested applicants have

until July 29 to submit their applications for review in fiscal

2014. Any application accepted after this deadline will be

held for consideration next year. USDA intends to accept

RBIC applications through 2016. Detailed information

including application materials and instructions can be found

at: www.rurdev.usda.gov/BCP_RBIP.html. 

In addition, the White House Rural Council, as part of

the Made in Rural America initiative, will convene the Rural

Opportunity Investment Conference later this year to attract

additional investments to rural America by connecting major

investors with rural business leaders, government officials,

economic development experts and other partners. To learn

more about the conference, visit:

Commentary 

Farm Credit partners with USDA 

to strengthen rural America

continued on page 44
Features

Rural Cooperatives / May/June 2014 3

Volume 81, Number 3

May/June 2014

Rural Cooperatives (1088-8845) is

published bimonthly by USDA Rural

Development, 1400 Independence Ave.

SW, Stop 0705, Washington, DC. 20250-

0705.

The Secretary of Agriculture has

determined that publication of this

periodical is necessary in the transaction

of public business required by law of the

Department. Periodicals postage paid at

Washington, DC. and additional mailing

offices. Copies may be obtained from the

Superintendent of Documents,

Government Printing Office, Washington,

DC, 20402, at $23 per year. Postmaster:

send address change to: Rural

Cooperatives, USDA/RBS, Stop 3255,

Wash., DC 20250-3255.

Mention in Rural Cooperatives of

company and brand names does not

signify endorsement over other

companies’ products and services.

Unless otherwise stated, articles in this

publication are not copyrighted and may

be reprinted freely. Any opinions expressed are those of the writers, and do not

necessarily reflect those of USDA or its

employees.

The U.S. Department of Agriculture

(USDA) prohibits discrimination in all its

programs and activities on the basis of

race, color, national origin, age, disability, and where applicable, sex, marital

status, familial status, parental status,

religion, sexual orientation, genetic

information, political beliefs, reprisal, or

because all or part of an individual’s

income is derived from any public

assistance program. (Not all prohibited

bases apply to all programs.) Persons

with disabilities who require alternative

means for communication of program

information (Braille, large print, audiotape,

etc.) should contact USDA’s TARGET

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

To file a complaint of discrimination, write

to USDA, Director, Office of Civil Rights,

1400 Independence Avenue, S.W.,

Washington, D.C. 20250-9410, or call (800)

795-3272 (voice), or (202) 720-6382 (TDD).

USDA is an equal opportunity provider

and employer.

Tom Vilsack, Secretary of Agriculture

Doug O’Brien, Acting Under Secretary,

USDA Rural Development

Dan Campbell, Editor

Stephen A. Thompson, Assitant Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?

Call (202) 720-6483, or email:

coopinfo@wdc.usda.gov

This publication was printed with vegetable oil-based ink.

p. 4

04 Building Success on Service 

Expanded agronomy service enhances value of Texas co-op for cotton and grain producers

By Dan Campbell 

12 The Right Blend 

Fifth Season’s vegetable mixes help scale-up Wisconsin farm-to-school marketing program

By: Lihlani Skipper and Alfonso Morales

18 The Long Run

Number of ag co-ops celebrating 100th anniversaries on the rise 

By E. Eldon Eversull

24 A ‘Human Soul on Fire with Great Cause’

William Hirth’s iron-forged will and vision were essential to the formation of MFA 

By Chuck Lay

30 Remembering the ‘Badlands’ Report

By Bill Patrie

35 Your Guide to the New Farm Bill

Departments

02 COMMENTARY

28 CO-OPS & COMMUNITY

36 NEWSLINE 

p. 12

ON THE COVER: “The thing I value most about my membership

in United Ag Cooperative is the knowledge and service the co-op

provides in the areas of marketing, agronomy and the handling of

our crops,” says Texas cotton grower Michael Popp, seen here

with son Hayden. “Because of the co-op and the people who

work there, the farmers and the community benefit

tremendously.” For more about the members and employees of

United Ag, see page 4. USDA photo by Lance Cheung 

p. 24
4 May/June 2014 / Rural Cooperatives

Building Success 

on Service

Expanded agronomy service enhances value of

Texas co-op for cotton and grain producers

By Dan Campbell, Editor

Looking out over a field of cotton prior to

harvest, one can picture those puffy white

balls being spun into sturdy blue jeans,

billowy blouses and soft pillowcases. But

there is nothing soft or easy about growing cotton. It

is, in a word, “temperamental,” according to Lisa

Morcom, an agronomist with United Agricultural

Cooperative Inc., in El Campo, Texas, about 90 miles

west of Houston. 

“There are many crops where you plant them, they

Editor’s note: This article is based on interviews conducted by USDA photographer

Lance Cheung, who also took the photos. 
Rural Cooperatives / May/June 2014 5

United Ag Co-op agronomist Lisa Morcom

(far left) says that in just four years, United’s

cotton agronomy program has climbed from

5,000 to 35,000 acres of cotton enrolled.

Welder James McKeon (middle photo) at

work in the co-op’s shop in El Campo. “Our

advantage is in service,” says Manager

Jimmy Roppolo (left), seen in a warehouse

filled with bales of cotton. Below: Philip

Merek says a USDA loan program that helps

beginning farmers enabled him to buy farm

equipment, such as this combine, which he

needed to start his own farm. USDA Photos

by Lance Cheung
6 May/June 2014 / Rural Cooperatives

grow happily, you harvest them at the

end of season and are done,” Morcom

says. Cotton is not one of those crops. 

“Cotton is of a more indeterminate

nature; when a cotton plant is born, it

wants to grow into a tree,” she says.

“My job is to help members manage

their crop – to nurture it, slow it down

and speed it up to get the balance

needed to maximize the yield,” she

continues. “Cotton always keeps you

guessing – no two seasons are ever

alike. But I love working with cotton.” 

Morcom grew up in the farming

town of Dubbo,Australia, 260 miles

northwest of Sydney. It was during a

trip to her grandmother’s house when

she was about 12 years old that she

decided on an ag career. 

There was an agronomist from Texas

who lived next door to her

grandmother for about six months each

year while doing cotton consulting

work. “One day, she asked me if I

wanted to go out into the fields with

her and catch some bugs.” 

Eager for something to do, Morcom

agreed to tag along. Turns out she had a

blast while sweeping for bugs and doing

related tests. The inner plant scientist

in her had awoken!

“That experience triggered my

interest — from that moment, I knew I

wanted to be an agronomist.” As an

agronomist, Morcom says, “you help

farmers decide what they are going to

plant, when they will plant and how

they will plant.”

Morcom earned a BA in agronomy

from the University of New England in

Armidale, Australia. Like her early

mentor, she was soon following an

“endless summer” work routine,

splitting each year between the cotton

fields of Texas and Australia, which have

opposite growing seasons. 

Texas calling

It was about five years ago, while

back home working in Australia, that

Morcom got a call from Jimmy

Roppolo, general manager of United

Agricultural Cooperative. He told her

that United Ag wanted to become more

than a source of quality farm supplies

and ginning services for its cotton

farmers, and was thus launching a crop

consulting service and was looking to

hire agronomists; he offered her a job. 

“Within a month, I had packed up

everything and moved to America.” She

hit the ground running and is now

starting her fifth growing season with

United Ag. 

The first year, just 5,000 acres of

cotton were signed up for the new

agronomy program. “A few farmers

tentatively held up their hands and

agreed to be the guinea pigs,” Morcom

recalls with a smile. They were glad

they did, because they soon learned that

the co-op was quite serious about

having expert agronomists in the field

to help them, 24/7. 

“By the end of that first season, we

had 20,000 acres signed up for the

following year,” she says. This summer,

the co-op will have about 35,000 acres

signed up, which will be overseen by a

staff of seven agronomists working out

of El Campo and two other locations. 

In addition to cotton, the

agronomists also advise the co-op’s

grain/oilseed farmers, whose primary

crops are corn, milo and soybeans,

although wheat acreage is starting to

expand.

“What differentiated our program

was our constant presence in the field

— farmers put us on speed dial; they

knew that what they asked us to do

would get done,” Morcom says. She

recalls getting a call from a farmer who

was having a problem with his crop.

After showing her the situation, he

simply told her: “fix it,” and left the rest

up to her. 

“That really hit me — the fact that

he was putting this incredible amount

“Floor manager” is Joe Vasquez’s (left) job title, but “problem solver” would be just as apt a title

for a man who loves helping customers find parts and solutions for needed repairs. Opposite

page: Manager Jimmy Roppolo (lower right) is nearly lost in the enormity of one of the co-op’s

empty grain silos, one of the largest in southeast Texas.
Rural Cooperatives / May/June 2014 7
Make hay while the sun shines. Few know the wisdom of that

old farming adage better than do producers in Southeast Texas.

Farming relatively close to the Gulf Coast means they are often

subject to drastic, sudden changes in weather. 

“You never know when a hurricane could come your way,

packing the power to turn something very pretty into something

very ugly in a hurry,” says Josh Marek. Severe storms blowing

up from the Gulf can turn a field of grain or cotton into a field of

mud, all in a snap.

Terence Marek, Josh’s uncle, recalls a few years ago having

to salvage what he could of a field of milo while contending with

foot-and-a-half deep mud. “Terrible weather — raining every

single day,” he says. 

When severe weather is approaching, a farmer may only have

a few precious hours to finish harvesting a field. That is when it

is most crucial that farm equipment be mechanically sound and

ready to roll.

Most farmers with many years in the business have

experienced a critical breakdown at the worst possible time. To

reduce the odds of that happening, the Marek family works

closely with United Agricultural Cooperative.

“I’m really glad we live near a town with a strong ag co-op,”

Josh says. “A good co-op can help a farmer in so many ways.” 

“We average about 50 inches of rainfall per year, maybe two

or three freezes annually and snow maybe once every five years

or so,” says Terence. The red silt soil of his land near the

Colorado River [not the same river that runs through the Grand

Canyon] is “some of the best farmland in Texas,” he says.

Wharton County, he adds, is the state’s top corn-producing

county.

“This area has traditionally been primarily cotton and rice

country; but now we have corn varieties that can withstand the

heat,” says Josh. 

The advent of smart phones that enable a farmer to monitor

the approach of a storm front while driving a combine or cotton

harvester is also a big help. “Broadband wireless has become

very important to us,” says Josh, who credits the Wharton

County Electric Cooperative in El Campo for offering the kind of

telecommunications services he needs. 

“It [broadband service] is vital in the field for updates on the

weather,” adds Philip Marek, Terence’s son, who operates his

own farm. His smart phone also helps him keep up on commodity

markets. “This morning, I looked at my phone and could see the

price of corn going down 5 to 10 cents,” Philip says. “So, I called

my broker and sold 5,000 bushels.” 

Philip says United Ag is helping him with the technical support

he needs to adopt a precision farming strategy. “In the past, we

would plant 25,000 corn seeds per acre across an entire field.

Now we apply it based on the yield potential of the area. We do

the same with nitrogen and lime. It’s all about improved efficiency.”

“We have two or three years of yield maps, which we use in

planning application rates,” adds Terence. “The goal is to invest

more money for inputs on your best land, with the greatest yield

potential.” 

8 May/June 2014 / Rural Cooperatives

of trust in me. The decisions we make

have such a huge impact on their

livelihood. These farmers really are like

family to us, so we do everything we

can to keep the relationship strong.” 

The co-op’s Agronomy Division is

also promoting greater use of precision

agriculture practices to help farmers

more accurately tailor applications of

fertilizer, crop protectants and seeds to

the actual needs of their soil. By not

over-applying expensive crop inputs, it

saves the farmer money and reduces

problems with chemical runoff into

streams or ground water supplies. 

“Our job is to help members

succeed, and this includes putting the

right amount of crop inputs on the

right acres,” Roppolo says. The co-op is

also heavily involved in pest monitoring

“to help keep disaster away,” he notes. 

Manager as talent scout

Whether recruiting a worker from

the opposite side of the world, as was

the case with Morcom, or just the other

side of the street, Roppolo says United

Ag Co-op’s success is based on the

ability to hire the best and brightest

staff members. 

Rain or shine, farmers depend on co-op
There are expenses, of course, for new gear needed to get

started in precision farming. Josh says he started the process six

years ago with the installation of a yield monitor on his cotton

harvester, and has been “slowly moving forward from there.” He

made his first variable-rate fertilizer application several years

ago. 

These are just a few examples of how the co-op helps

producer-members. 

“Our co-op is progressive in everything it does,” Terence

says. “It is putting in a natural gas pump for cars, which will be

the only one between Houston and Corpus Christi. United is an

innovator, not just for farmers with row crops, but for cattle

producers as well.” 

Grower field days sponsored by United Ag are another big

help to members, says Philip. “The research the co-op supports

is geared to address the conditions we grow in here, showing

how we can be more

productive.”

“When the co-op

sponsors an agronomy

field day, it is more about

helping producers learn

than about selling more

products,” adds Josh.

He appreciates that the

co-op is not bent on

promoting a certain

brand of inputs. 

Terence recalls the

hard work of “chopping

cotton as a kid — I

always said I’d never be

a cotton farmer when I grew up. So what did I wind up as? A

cotton farmer!” he says with a laugh. But farming has been a

good life, and he was happy to help Josh and Philip get started

with their own farms, mostly by sharing his experience and

knowledge with them. “I think that is so important for a young

farmer — to learn from experienced farmers.” 

Josh, who grows 700 acres of corn and cotton, agrees with

his uncle, and says that advice has helped him avoid making

mistakes. After seven years running his own farm, he has no

regrets. “It is exciting and fun — every day is something new.

Ever since I was a kid, I never wanted any other job but this.”

Philip and Josh both say USDA loan programs for beginning

farmers were a big help in starting their own farms. 

“USDA’s Beginning Farmer Loan Program helped Josh and me

get started,” says Philip. “It is a guaranteed loan program,

offered through the USDA Farm Service Agency. We used it to

buy equipment and for the other financing necessary to get

started. It was crucial because it is hard for guys our age to find

the financing to get started.”

—By Dan Campbell; Interviews conducted by Lance Cheung 

“United Ag is an innovator, not just for farmers with row crops, but for

cattle producers as well,” says Terrence Merek (left). His nephew, Josh

Merek, says “A good co-op can help a farmer in so many ways.”

Rural Cooperatives / May/June 2014 9

You can find talent all around. For

example, Roppolo recalls the time he

was impressed by the superior customer

service of a woman working at his local

dry cleaners. She asked him how long

he had been waiting in line, and —

feeling that he had been delayed too

long — she insisted that he return to

his truck, then brought his dry cleaning

out to him to get him on his way

quicker. He suggested she apply for an

open job at the co-op, which she did

and where she has continued to excel. 

Other workers come knocking at the

co-op. Like welder Juan Arranda, who

came in looking for work, but was told

there were no jobs at that time. He

nonetheless insisted on hanging around

the shop, offering his help for nearly

two weeks without pay. Roppolo

couldn’t let that kind of determination

and work ethic slip through his fingers,

so he told one of his managers to “put

him on the payroll. He’s been one of

our best workers ever since.” 

Then there’s Joe Vasquez, a floor

manager in the large hardware/farm

supply store in El Campo. He had been

working on a ranch, where, Ropollo was

told, “Joe tended to start a job like a hot
10 May/June 2014 / Rural Cooperatives

spur, but would then fizzle out.” 

Roppolo, however, got the

impression that “maybe Joe wasn’t

being treated right. So I told one of our

managers to give him a try and to make

sure we treated him with the respect we

give to all of our employees.” This

strategy worked.

“Joe is one of our best and most

outgoing employees. He searches for

things he can do and does them right. I

like to think that this co-op helps

workers develop hidden skills. The

most important factor is that they have

the right attitude toward work.” 

“I have learned so much on this job,”

Vasquez says. He sees his most valuable

trait as “being a problem solver for

customers.” One minute he will be

helping a customer find the correct

fittings for a plumbing job, and then he

is off locating a hydraulic hose or a ball

bearing needed for a farm machine repair.

“I was born and raised in El Campo,

and I love helping the people I’ve

known all my life,” Vasquez says. 

A successful co-op manager needs to

possess a wide skill set. Being a talent

scout is one skill that doesn’t always get

adequate notice. “As a manager, you are

only as successful as the people you

have working around you,” Roppolo

stresses. 

Co-op’s rapid growth 

As a rapidly growing, highly

diversified co-op with $121 million in

sales in 2013, United Ag needs a lot of

talent to keep all the wheels turning

smoothly. The co-op has 88 full-time

workers, 15 part-time workers and from

30 to 60 seasonal workers (mostly at its

elevators). 

The co-op operates: two cotton gins,

four farm supply/feed/hardware stores,

one of the largest capacity grain

elevators in southeast Texas, a retail and

bulk fuel delivery business, a loading

facility and railcar switching yard at the

Port of Victoria, a major liquid fertilizer

mixing plant, a full-service agronomy

department and a cotton warehouse

division. 

The predecessors of today’s United

Agricultural Cooperative were the

Farmers Cooperative of El Campo

(FCEC) (founded in 1929) and Modern

Farmers Cooperative Society (founded

in 1928), which merged 1982. There

was another merger in 2012, with

Danevang Farmers Cooperative Society

Inc., Danevang, Texas, after which the

name was changed to United

Agricultural Cooperative Inc. 

Roppolo says the two co-ops had

been fighting for market share for many

years prior to the merger, but at times

they had also worked together. Many

producers belonged to both co-ops, “so

we were offering duplicate services.”

The two boards eventually got together

and hammered out a merger plan that

was adopted by both memberships. The

new name was picked to better reflect

the co-op’s larger, more regional

footprint.

“It is hard to imagine how much this

co-op has grown in just the last three

years,” Roppolo says. But there is still

plenty of competition. 

“Our competitors also have good

products and prices; our advantage is in

service,” Roppolo says. “We will do

things others won’t — like opening a

store early to help out a good customer

who is in a jam. Any time staff can’t

answer a question, they know they can

call me.”

Grain leverage means 

market clout for growers 

United Co-op works closely with

Texas A&M University and has a

number of its graduates on staff, such as

Lindsey Bowers, a grain merchandiser.

“We work with producers to market

current crop and plan for future crops,”

Bowers says. “Through our marketing

and purchasing pool program, we are

able to market large volumes of grain

for a good average price. This is

important for our growers, because

many of them do not have large grain

acreage — a 5,000-bushel contract

could be the majority of their crop.” 

Pooling gives them guaranteed

storage, allowing their grain to be

marketed throughout the year, she says.

“They can get a loan through the co-op

at harvest to generate cash flow, but

they can then hold grain for later sale to

get a better price and realize a basis

appreciation. We are the only co-op in

this area that still operates a grain

marketing pool like this.”

“Our large volume gives us market

leverage, and by marketing for the

members, it is one less thing on a

farmer’s always full plate.” 

“I love working here,” adds Bowers,

who is married to a catfish and crops

farmer. “Most of us here are tied to ag

in some way, through our own families

or by marriage. To work here, you have

to be passionate about agriculture and

the co-op — and to always keep the

farmers’ best interest at heart.” 

In the tight-knit rural communities

around El Campo, people pull together

when facing challenges, she says. “It is

also a great place to raise a family, says

this mother of “two little boys proudly

being brought up in agriculture.” 

Cotton gins set record

Cotton is United Ag’s biggest

division, and last year was the busiest

season ever for the two gins it operates.

The co-op processed 150,000 bales,

“What differentiated our program was our constant presence in the

field — farmers put us on speed dial; they knew what they asked us

to do would get done.” 
Rural Cooperatives / May/June 2014 11

says April Graves, United Ag’s

controller. The average “turnout” was

41 percent — “a tremendous average.”

It means that for every pound of trash,

seed or moisture, the gin produced 41

percent lint — well above the standard

for Texas, based on USDA data, she says.

Thanks to a warehouse it purchased

in 1992, United Ag can store more than

30,000 bales. This gives it increased

marketing flexibility and allows it to

ship directly to the port of Houston. 

Being diversified is critical to the coop’s success, Graves says. Not only does

the co-op offer a wide variety of goods

and services to members and the

general public, but diversification also

gives the co-op economic resiliency. 

“If one division has a hard year, it

can be offset by another division having

a strong year,” Graves says. “A small

grain crop can be offset by an awesome

cotton crop, or vice versa. A drought

year will hurt crops, but we will sell

more cattle feed. 

A couple of years ago, she says the

co-op “got upside down on fertilizer

inventory, but other divisions helped

offset that. Diversification helps ensure

cash flow,” she says.

The co-op is further diversified by

trading with “town people” (i.e., nonfarmers) through its stores. They come

in to buy pet food and supplies, lawn

and garden items, hardware and many

other types of items for home and yard.

This trade has room to grow, because

“some people still don’t realize we are

open to the general public,” Graves

says.

To be a voting co-op member, one

must produce some type of ag

commodity and pay a $50 membership

fee. Board members are elected on a

one-member, one-vote basis. 

“We’ve undergone a lot of growth in

recent years, and that has required the

use of capital assets,” she says. “It is

always a balancing act for our 12-

member board as to how the working

capital will be allocated.”

Leadership makes 

the difference

Graves says the co-op’s biggest ace is

“tremendous leadership,” both in the

general manager’s office and in the

board room. “We wouldn’t be in this

strong position without excellent

leadership,” she stresses. 

United Ag’s directors all bring

lifetimes of diverse farming experience

to the board room, Gaves says. One

common trait they share is that “they

always make decisions based on what is

best for the overall co-op,” even if

sometimes another decision would be

best for their own operation. 

Tommy Engelke, executive vice

president of the Texas Agricultural

Cooperative Assoc., says Roppolo is the

personification of a “multi-tasker.”

United Ag Co-op is to be saluted, he

says, for its support of Texas A&M ag

programs that play a crucial role in

keeping Texas agriculture strong.

United Ag helped start a cotton

engineering chair in the ag engineering

department at Texas A&M, and

Roppolo is past chairman of the

university’s Agriculture Leadership

Development Council, he notes. 

If that’s not enough, Roppolo is also

past chairman of the state agency that

regulates the feed and fertilizer

businesses in the state, and he was on

the executive committees of the Texas

Ag Co-op Council, Texas Grain and

Feed Association and the Texas Cotton

Ginners Association. 

Roppolo, Engelke continues, is a coop manager who respects the traditions

of the past, but is always open to trying

new things. “More often than not, the

new things he tries work.” ■

Clockwise from top: Philip Merek checks on his corn crop; co-op grain merchandiser Lindsey

Bowers says marketing jointly through the co-op’s grain pool gives producers added leverage; a

water tower in El Campo, the location of United Ag’s headquarters.
In 2011, about 25 percent of Wisconsin high school

students were overweight or obese (according to the

Centers for Disease Control and Prevention’s (CDC)

2011 Youth Risk Behavior Surveillance System findings).

Furthermore, 22.6 percent of Wisconsin children are

considered food insecure, meaning there is uncertainty of

access to adequate amounts and varieties of healthful foods.

One approach to addressing these growing nutritional

and diet related concerns involves increasing access to

healthy fruits and vegetables in schools. Nascent

partnerships between federal, state and local public

health officials and agriculturalists address these issues by

stimulating the development of local food systems that

increase the production of, and access to, fresh and

nutritious foods. 

Farm-to-school programs are built on such

partnerships and have the potential to bring fresh, local

produce into the lunchroom while providing a new

market, or the ability to expand markets, for farmers. 

Pairing local food system efforts with current work on

farm-to-school programs is not only needed, but timely.

In 2010, the federal Child Nutrition Reauthorization Act

(also called the Healthy, Hunger-Free Kids Act) passed,

issuing the strictest nutritional guidelines in U.S. history. 

Schools had to comply with this new law by

September 2012. Key provisions in the law include

requirements that school lunch programs ensure a

significant increase in students’ access to fresh fruits and

vegetables. It requires that schools offer at least 3 3⁄4 cups

of vegetables each week and 3⁄4 cup per day for grades K8, and 5 cups of vegetables per week and 1 cup per day

for grades 9-12. Specifically for the “red/orange

vegetable” subgroup, schools must offer 3⁄4 cup per week

for grades K-8 and 11⁄4 cup for grades 9-12. 

Nationally and in Wisconsin, this impacts the need

and potential to produce more of these vegetable crops,

as Wisconsin schools involved in the National School

Lunch Program feed about 500,000 children every day. 

Using global supply chains with low prices is one

approach to increasing such food access. But

transportation and storage can affect nutritional qualities

(Edwards-Jones et al., 2008). From the moment of

harvest, nutritional loss can occur without proper

transportation and storage (Goldberg, 2003; Hinsch,

Slaughter, Craig & Thompson, 1993).

Local/regional solutions 

Local and regional production and enhanced supply

chains are needed to produce and procure more of these

crops to bring higher quality vegetables to

schools. For Wisconsin vegetables growers,

the increased demand for carrots, sweet

potatoes, squash and other red/orange

vegetables presents an opportunity to

increase production and to access new

markets. 

The new requirements to serve more

vegetables pose other challenges besides

supply and shipping. The costs of fresh and

local fruits and vegetables, the skilled labor

required for on-site processing and

preparation, and student food preferences all

raise concerns in school districts that are

seeking to comply with these new nutritional

guidelines. 

When purchasing directly from farmers,

schools face challenges involving distribution,

coordination and consistency of product.

According to the 2013 Wisconsin Farm to

School Food Service Director Survey, of

those not currently purchasing local produce,

77 percent said that they would prefer to

purchase local foods through either a

produce distributor or their prime vendor. 

As school nutrition directors are faced

with tighter budgets and more restrictions,

the need for affordable, healthful and locally

grown produce available through existing

distribution networks is evident. 

Small and mid-sized vegetable growers are

interested in diversifying their markets to

include schools and other institutions, but the

typical industrial supply chain infrastructure

does not currently provide that connection. 

The article on the following pages describes how staff

at the Center for Integrated Agricultural Systems at the

University of Wisconsin–Madison worked with the Fifth

Season Cooperative to address this missing connection.

The article describes how partners coordinated and

cooperated to create new supply chain opportunities.

Together, they created markets for cosmetically imperfect

seconds to create affordable, healthful and locally grown

school food options. 

The story of this multi-stakeholder cooperative in

Wisconsin achieving these goals illustrates the potential

of cooperatives to play a significant role in successful

supply chain partnerships. 

12 May/June 2014 / Rural Cooperatives

Partners in Health

Co-ops have role to play in improving student nutrition

— By Lihlani Skipper and Alfonso Morales
The Fifth Season

Cooperative in Viroqua,

Wis., provides crucial

connections across the

food supply chain as it

strives to help build a stronger

local/regional food system. As a multistakeholder cooperative, Fifth Season

has members who represent all of the

key players in the food system at the

local level. Co-op members include

farmers, processors, distributors,

producer groups, buyers and workers. 

Fifth Season operates regionally

within a 150-mile radius of Viroqua,

Wis., which includes south-central and

southwest Wisconsin, southeast

Minnesota and northwest Iowa. 

The co-op requires that its produce

be grown within the Fifth Season

region. Many of the producer-members

employ conservation growing practices

that emphasize preservation of land,

water and air, and that follow bioRural Cooperatives / May/June 2014 13

The Right Blend

By Lihlani Skipper and Alfonso Morales

USDA Photos by Lance Cheung

Editor’s note: Skipper was a staff member with the University of Wisconsin-Madison Department of Urban and Regional Planning and

the Center for Integrated Agricultural Systems; Morales is associate professor of urban and regional planning at the university. Morales

gratefully acknowledges the U.S. Department of Agriculture, National Institute of Food and Agriculture, for its support of this study. Also

see Sept./Oct. 2013 Rural Cooperatives, page 21, for more on Fifth Season Co-op.

Fifth Season’s vegetable mixes help scale-up Wisconsin farm-to-school marketing program 
14 May/June 2014 / Rural Cooperatives

diverse production models, with

minimal, or no, use of chemical

pesticides. 

The co-op produces and distributes

locally grown produce, meats, dairy and

value-added food products to

institutional and foodservice buyers

through its distribution member,

Reinhart FoodService. The relationship

with Reinhart is at the core of the Fifth

Season’s success because it has allowed

the co-op to use existing distribution

infrastructure, rather than investing in

its own. 

This innovative model of a multistakeholder cooperative, working with a

broad-line food distributor (which is

represented on the co-op board of

directors) provides producers another

critical set of services: warehousing,

transportation, sales representatives and

a developed customer base, while

simultaneously providing hundreds of

foodservice buyers access to locally and

sustainably grown products. 

The co-op also works with

businesses and organizations to provide

education on, and increased exposure

to, locally produced foods for their

customers. This helps to build

knowledge of the farmers and their

practices, as well as the greater value of

a regional and community food system.

Fifth Season provides services that

significantly benefit its growers. The

large volumes that are demanded by

institutional markets are often more

than single farmers can supply. The coop aggregates crops from multiple

farms, allowing small producers to meet

the needed volume. It also provides

third-party GAP (good agricultural

practices) auditing, liability insurance,

fair pricing and food safety education

and training for the co-op’s growers.

These services make it possible for

small- and mid-sized growers to sell to

larger markers that are typically out of

reach for them. 

Fifth Season’s multi-stakeholder

cooperative structure ensures that

working relationships exist between key

supply chain entities. Such positive

working relationships are hard to find

in mainstream supply chains that are

often marked by the volatility of

contracts and aggressive competition. 

In contrast, the co-op brings

everyone to the table to make decisions

together for the benefit of all. In so

doing, it redistributes power across the

supply chain. The mission to create a

sustainable local and regional food

system, with fair pricing to farmers, is

prioritized in their decisionmaking,

which contrasts starkly with the marketdriven, mainstream food supply chain. 

For example, independent small- and

medium-sized local growers selling to

institutional markets might not receive

fair pricing because the processor and

the distributor have higher margins for

their customers and are not willing to

compromise, since they may procure

cheaper product elsewhere. However,

producer-members of Fifth Season

Cooperative have negotiating power

and the ability to receive fair pricing
Rural Cooperatives / May/June 2014 15

due, in large part, to a model in which

producers sit at the same table as the

processors, distributors and buyers.

New market for 

‘cosmetic seconds’

Many producers and producer

groups are looking for markets for

cosmetically imperfect seconds — good,

healthy food that otherwise usually goes

to waste due to slight blemishes.

Schools and other institutions are also

looking for affordable, minimally

processed vegetable products that are

locally grown. 

Recent reports from Minnesota

indicate that crop loss can be as high as

40 percent for carrots and 30 percent

for hard squash (Berkenkamp, 2014)

due to cosmetic appearance. Thus, the

potential benefit to farmers who can

market these products is significant

Sweet potatoes (below) and yellow squash and zucchini (facing page) are in demand by

many school districts that are seeking to expand their lunchroom offerings of fresh produce.

Schools across the nation are offering more fresh vegetables and fruit to students, trying to

encourage them to adopt a healthier diet, a demand which producer co-ops can help meet. 
16 May/June 2014 / Rural Cooperatives

(Berkenkamp, 2014). Using these

“seconds” in minimally processed

vegetable blends could provide profit

potential to small- and mid-sized

farmers, while also providing an

affordable healthful product to schools. 

Such an effort may seem relatively

straightforward at first — i.e., take the

seconds that are being wasted in the

field and use them to make fresh-cut

vegetable products for schools. In

reality, however, the task is challenging

when working in the mainstream food

supply chain. 

Cosmetically imperfect seconds are

not currently available through most

existing school supply chains, as USDA

grading standards largely dictate the

decisions of the produce industry;

product that is not Grade A is often

disregarded entirely (Berkenkamp,

2014). In addition, the unpredictability

of the price and supply of seconds

makes it difficult for large distributors

and processors, who typically

coordinate with brokers instead of

directly with producers. 

To provide the enormous volume of

product demanded by large-scale

processors in the form of seconds,

supply chain partners would need to

actively coordinate to identify and

market cosmetically imperfect seconds.

Seconds that are over-sized or oddly

shaped can create compatibility issues

with existing processing equipment, and

thus they have the potential to pose

significant challenges to processors. It

may not be economically viable for

those who do not see the potential

benefit of using seconds to attempt this. 

Existing contracts and relationships

can limit the potential for using

cosmetically imperfect seconds for

minimally processed vegetable products

sold to schools and other institutions. 

Generally, the supply chain process

works like this: the raw product, in this

case seconds, is transported from the

farm (or first aggregated from multiple

smaller farms) to a processing facility

and is then stored for later distribution

to the school buyers (see Day

Farnsworth and Morales, 2011, for a

more general discussion of

local/regional food supply chains). The

typical broadline distributors that

usually source from large-scale

conventional farms are often unfamiliar

with how to source from, and

coordinate with, small- and mid-sized

local farms. Smaller producers differ in

scale and transportation capabilities. 

Small- and mid-sized producers who

sell to commodity or institutional

markets are typically “price-takers,” in

that they end up being forced to submit

to terminal market pricing. This is true

even if those prices do not cover their

cost of production (Day-Farnsworth &

Morales, 2011). Thus, they may have

difficulty in earning profits that help

them remain viable, especially in the

case of a minimally processed product

that involves the additional cost of

processing. 

Direct-to-consumer sales only

involve the farmer, while institutional

sales often involve other supply chain

actors — such as aggregators,

processors and distributors — to move

product from the farm to the consumer.

While the profit for the farmer from

direct-to-consumer sales is not shared

with these other supply chain actors,

the farmer is often faced with extra

labor for direct marketing. As supply

chains include more players that each

require a piece of the pie, fair pricing

for the farmer becomes more difficult

to reach. 

For example, the supply chain for

raw, whole sweet potatoes consists only

of the farmer, while for fresh-cut, diced

sweet potatoes, the supply chain

involves two or three intermediaries. A

farmer can sell whole sweet potatoes by

the pound at a farmers’ market. But for

diced sweet potatoes, the farmer must

sell and deliver the raw product to a

processor, who then sells it in the diced

form to a distributor, who in turn sells

it to foodservice buyers. 

In the second supply chain, the

farmer, processor and distributor are all

looking to make a profit, while in the

first supply chain, only the farmer is

trying to turn a profit. Thus, it is

important when creating value-added

supply chains to be aware of the

position of the farmer relative to the

larger, and often more powerful,

processors and distributors. 

Extending the season 

with vegetable blends

In 2012, Fifth Season Cooperative

began working with staff at the Center

for Integrated Agricultural Systems at

UW-Madison on a project funded by a

Specialty Crop Block Grant

(Wisconsin’s Harvest Medley: Healthy

Blends for Wisconsin Schools) to

develop and promote locally grown,

root vegetable blends for schools across

Wisconsin. The goals included creating

two frozen vegetable blends that utilize

cosmetically imperfect seconds for sale

to schools and other institutions.

Distribution was to be conducted

through Reinhart Food Service. 

Some 40,000 pounds of each of these

blends were processed in November

Purchasing directly from farmers can pose

challenges for schools in the areas of

distribution, coordination and product

consistency. Co-ops and food hubs can make

these tasks easier.
Rural Cooperatives / May/June 2014 17

2013 and sold to institutional buyers,

many of which were schools, from

December 2013-March 2014. The root

vegetable blends were created using 90

percent cosmetically imperfect seconds.

The products were a success for the co-op. 

Diane Chapeta, operations manager

of Fifth Season Cooperative,

successfully led this project by working

with existing co-op member farmers,

processors, distributors and institutional

buyers. She previously served as the

school nutrition director for Chilton

Public Schools in Wisconsin, where she

increased breakfast and lunch program

participation and founded and managed

the Northeast Wisconsin Farm to

School Initiative. 

Chapeta’s experience as a school

nutrition director made it easy for her

to understand the position of schools

and their unique concerns. Her

experience helped her develop two

successful blends of minimally

processed produce seconds and create

recipes that other schools could use in

preparing and serving them.

Starting from scratch, Chapeta

developed the two vegetable blends,

testing different combinations of

potatoes, beets, turnips, squash, carrots

and parsnips. The trial batches were

created at a small, shared-use incubator

kitchen (Sharing Spaces Kitchen) in

Prairie du Chien, Wis., paving the way

for that kitchen to delve into frozen

processing of local vegetables. 

After trials and taste tests were

completed in two schools, the blends

were approved for production and the

Wisconsin Potato Fusion and Winter

Moon Blend became a reality. The

Wisconsin Potato Fusion consists of

three, skin-on potato varieties, all of

which are seconds from Coloma Farms

in Coloma, Wis. The Winter Moon

Blend contains carrots, butternut

squash, gold potatoes and red and

golden beets. 

The beets and butternut squash were

sourced through co-op member

Organic Valley/CROPP Cooperative.

Coloma Farms provided the gold

potatoes, and Sno Pac Foods in

Caledonia, Minn., provided the carrots

for the Winter Moon Blend. 

Organic Valley Cooperative has been

working since 1988 to offer sustainable

markets to family-sized organic farms.

It is a farmer-owned cooperative and

currently involves 140 produce farmers

in the Driftless area of Wisconsin. For

Organic Valley, a family farm is defined

as one where the family members

provide the primary workforce and the

farm is their livelihood. 

Organic Valley aggregates crops

from farmers to provide large volumes

of product to the Fifth Season

Cooperative. 

Cooperation among co-ops 

For many years, Organic Valley has

been looking for markets for produce

considered cosmetically imperfect, such

as butternut squash with scarring on the

skin. Fifth Season Co-op provided

Organic Valley with a new market for

these products by using them in the

value-added frozen vegetable blends.

This cooperative relationship

exemplifies Cooperative Principal No.

6: Cooperation among cooperatives,

and shows the power of cooperatives

working together to achieve mutually

beneficial goals. 

After the recipe trials, Fifth Season

Cooperative approached Sno Pac Foods

and contracted for the first product

runs. Sno Pac Foods is a family-owned

business that uses an IQF (Individual

Quick Frozen) freezing process for

certified organic, frozen vegetables. Sno

Pac, like many mid- to large-size

processors, requires minimum product

runs to ensure profitable operations. In

this case, a 40,000-pound minimum of

raw product is the smallest viable run

for the facility. 

However, the co-op needed proof of

the viability of sales for the two 40,000-

pound-minimum runs. An online preorder system was set up to quantify

demand for the product. Fifth Seasons’

unique multi-stakeholder structure

encourages checks and balances across

the supply chain, thus the pre-order

process was the obvious next step. 

The chief difficulty here was

convincing school personnel to modify

existing organizational habits. For

example, school nutrition directors were

familiar with existing supply chain

relationships, the existing economic

structures and the standard ordering

system. The pre-ordering process was

entirely unfamiliar to them, but it was

needed by Fifth Season to prove that

the demand for the products existed. 

Once schools and other institutional

buyers realized how convenient these

locally grown and affordable products

would be to order through Reinhart,

they were eager to pre-order the frozen

blends.

Because pre-orders exposed a high

level of interest, the co-op moved

forward with the processing of both

Producer-members of Fifth Season Co-op have negotiating power and

the ability to receive fair pricing due to a model in which producers sit

at the same table as the processors, distributors and buyers. 

continued on page 45

Photo courtesy Fifth Season Co-op
Long Run

18 May/June 2014 / Rural Cooperatives

By E. Eldon Eversull,

Senior Agricultural Economist

USDA Cooperative Programs 

For a

cooperative —

or any business,

for that matter

— to operate

for a century is an amazing

accomplishment. Given the

intense levels of competition in

a capitalistic economy such as

ours, only a small percentage of

businesses reach their 100th

birthday. But the number of

cooperatives reaching the

important “century milestone”

is steadily increasing and

currently stands at 134.

By comparison, Standard and

Poor’s “Capital IQ” lists 488

publicly traded companies that

are 100 years old, as of 2009.

Vicki TenHaken, a professor at

Hope College in Michigan,

maintains a list of 540 U.S.

firms more than 100 years old.

There were nearly 5.7 million

firms listed by the 2011 U.S.

census. So, if there were even

1,000 companies that are 100

years old, that would be only

about two one-hundredths

percent (0.02 percent) of all

U.S. firms. It thus appears that

the longevity of so many

agricultural cooperatives is

something of an anomaly in the

business world. 

Starting a cooperative 100

years ago required — as it still

does today — the convergence

of a committed group of

producers who were willing to

work together and pool

resources to achieve a critical

mission. This most often was to

market, store and/or process

their crops and livestock or to

attain quality farm production

supplies and related services at a

reasonable cost. 

NUMBER OF

AG CO-OPS

CELEBRATING

ANNIVERSARIES

ON THE RISE

The
Rural Cooperatives / May/June 2014 19

Clockwise from upper left:

Horsepower still prevailed for milk

deliveries during the early days of the

Nelson Creamery Co-op in

Minnesota; a vintage ad for Dairylea

milk (now part of DFA); employees of

Forbes Equity Union gather in Forbes,

N.D.; nice wheels: an Elmdale

Creamery (Minnesota) co-op delivery

truck; board members of Fruit

Growers Supply in California tour

forest land the co-op purchased to

supply wood for crates; on the citrus

packing line at Sunkist in California;

celebrating the first delivery of

phosphate fertilizer from a Wisconsin

plant at Aurora Cooperative in

Nebraska. Photos courtesy pictured

cooperatives.
Staying in business for

100 years requires that a coop:

• Offers members quality

products or services;

• Has members who are

committed to doing

business with the co-op

and who participate in its

democratic governance by

voting in elections and by

serving on the board and

co-op committees; 

• Hires skilled management

to run the business and has

knowledgeable directors to

govern the co-op;

• Is committed to delivering

superior customer service; 

• Operates with a strategic

business plan based on

present and future needs

and goals;

• Has a viable leadership

succession plan in place;

• Has a solid financial plan

that includes sufficient

investments in the future

of the co-op and its

facilities while returning

fair levels of equity to

members;

• Hires skilled, motivated

employees and rewards

them with competitive pay

and benefits; 

• Is an active supporter of

the communities where it

does business and where its

members and employees

live and work.

While there are also many

other factors that have an

impact on the longevity of a

co-op, one over-riding factor

is this: to remain in business

for 100 years, a co-op needs

to evolve with changing

clientele tastes and

preferences and adapt to new

challenges.

As part of its annual

survey of U.S. farmer,

rancher and fishery

cooperatives, the

Cooperative Programs of

USDA Rural Development

in 1999 asked what year a

co-op had been organized in.

About 33 percent of the

3,466 co-ops surveyed that

year responded to the

question. Based on that data,

the largest number of

cooperatives in USDA’s

database (205 cooperatives)

that are still in operation

were organized between

1931 and 1940 (figure 1). 

20 May/June 2014 / Rural Cooperatives

Table 1 — U.S. Century Cooperatives, by state, type, and date organized

Cooperative name, city, and state Type Organized

Sunkist Growers Inc., Sherman Oaks, CA Fruit and vegetable 1893

Fillmore-Piru Citrus Association, Piru, CA Fruit and vegetable 1897

Fruit Growers Supply Company, Sherman Oaks, CA Supply 1907

Blue Diamond Growers, Sacramento, CA Nut 1910

Butte County Rice Growers Association, Richvale, CA Supply 1914

Agfinity, Inc., Eaton, CO Supply 1905

Haines City Citrus Growers Association, Haines City, FL Fruit and vegetable 1909

Lake Region Packing Association, Tavares, FL Supply 1909

Winter Haven Citrus Growers Association, Dundee, FL Fruit and vegetable 1909

Waverly Growers Cooperative, Waverly, FL Fruit and vegetable 1914

First Cooperative Association, Cherokee, IA Grain and oilseed 1887

Calhoun Cooperative Creamery Company, Lansing, IA Dairy 1896

Farmers Lumber Company, Rock Valley, IA Supply 1904

River Valley Cooperative, Eldridge, IA Grain and oilseed 1906

Cooperative Elevator Association, Ocheyedan, IA Grain and oilseed 1906

Archer Cooperative Grain Company, Archer, IA Grain and oilseed 1907

North Central Cooperative, Clarion, IA Grain and oilseed 1907

Farmers Coop Elevator Company, Kingsley, IA Grain and oilseed 1907

Farmers Cooperative Society, Sioux Center, IA Grain and oilseed 1907

Hull Cooperative Association, Hull, IA Supply 1908

Farmers Cooperative Company, Remsen, IA Grain and oilseed 1910

Farmers Cooperative Company, Hinton, IA Supply 1912

Pacific Northwest Farmers Cooperative, Inc., Genesee, ID Grain and oilseed 1909

Goodwine Cooperative Grain Company, Goodwine, IL Grain and oilseed 1889

Stanford Grain Company, Stanford, IL Grain and oilseed 1895

Farmers' Grain & Coal Company, Mason City, IL Grain and oilseed 1899

Grainland Cooperative, Eureka, IL Grain and oilseed 1903

Graymont Cooperative Association, Graymont, IL Grain and oilseed 1903

Ludlow Cooperative Elevator Company, Ludlow, IL Grain and oilseed 1904

Danvers Farmers Elevator Company, Danvers, IL Grain and oilseed 1904

Earlville Farmers Cooperative Elevator Co., Earlville, IL Grain and oilseed 1905

Minier Cooperative Grain Company, Minier, IL Grain and oilseed 1907

Cissna Park Cooperative Inc., Cissna Park, IL Grain and oilseed 1908

Donovan Farmers Co-operative Elevator, Inc., Donovan, IL Grain and oilseed 1908

Northern Partners Cooperative, Mendota, IL Grain and oilseed 1908

Chapin Farmers Elevator Company, Chapin, IL Grain and oilseed 1908

Burtonview Cooperative, Lincoln, IL Grain and oilseed 1909

Milledgeville Farmers Elevator Company, Milledgeville, IL Grain and oilseed 1911
There were also waves of

ag co-op formations in other

decades, with many of those

co-ops still in business today.

Of the ag co-ops formed

from 1911 to 1920, 123

remain in business; of ag coops formed from 1921-1930,

171 are still in business; of ag

co-ops formed from 1941 to

1950, 177 are still serving

members. 

USDA Cooperative

Programs’ list of

cooperatives has evolved over

time as new co-ops are

launched, go out of business

or combine with other

cooperatives or investorowned firms. Comparing the

1999 database with the

current one reveals that 49

cooperatives that provided

their organization date in

USDA’s 1999 survey are no

longer on the list, due either

to merger, consolidation or

business failure. 

Looking at the entire

1999 co-op list, however, we

can see many more changes;

1,191 other cooperatives are

no longer in the 2013

database, due to the same

three reasons listed above. 

“Century Co-ops”

Century Cooperatives in

USDA’s database are

comprised of co-ops that

were started between 1887

and 1914. The vast majority

(77 percent) of these 134

cooperatives were started

between 1905 and 1914.

From a historical

perspective, consider that the

majority of these

cooperatives were formed

just after the Wright

brother’s first powered air

flight and before World War

1. 

These 100-year-old

cooperatives first catered to

farmers, ranchers and

fishermen whose main form

of transportation was via

horse and sailboat. Co-op

product lines and services

evolved from those horseand mule-powered days

through the industrialization

of farming and the

changeover to tractorpowered farming; these coops then evolved again to

embrace the technology

revolution, with more

Rural Cooperatives / May/June 2014 21

Tremont Cooperative Grain Company, Tremont, IL Grain and oilseed 1911

Kasbeer Farmers Elevator Company Cooperative, Kasbeer, IL Grain and oilseed 1912

McNabb Grain Company Inc., Mc Nabb, IL Grain and oilseed 1913

Andres & Wilton Farmers Grain & Supply Co., Peotone, IL Grain and oilseed 1913

Rees Farmers Elevator, Franklin, IL Grain and oilseed 1913

Ag Plus Inc., South Whitley, IN Grain and oilseed 1912

Delphos Cooperative Association, Delphos, KS Supply 1901

Southern Plains Coop, Lewis, KS Grain and oilseed 1902

Golden Belt Cooperative Association Inc., Ellis, KS Grain and oilseed 1903

Midway Co-op Association, Osborne, KS Grain and oilseed 1908

Central Plains Co-op, Smith Center, KS Grain and oilseed 1908

Offerle Co-op Grain & Supply Company, Offerle, KS Grain and oilseed 1910

Farmway Co-op Inc., Beloit, KS Supply 1911

Farmers Cooperative Elevator Company, Nickerson, KS Supply 1911

Farmers Union Mercantile & Shipping Association, Stockton, KS Grain and oilseed 1911

Minneola Coop, Inc., Minneola, KS Grain and oilseed 1912

Saint Francis Mercantile Equity Exchange, Saint Francis, KS Grain and oilseed 1913

Fowler Equity Exchange, Fowler, KS Grain and oilseed 1914

Beardsley Equity Co-op Association, Inc., Atwood, KS Grain and oilseed 1914

Thornwell Warehouse Association, Lake Arthur, LA Supply 1913

Hardwick Farmers Cooperative Exchange, Hardwick, MA Supply 1914

Farmers Cooperative Grain Company, Kinde, MI Supply 1914

Rock Dell Cooperative Creamery Company, Byron, MN Dairy 1889

River Region Cooperative, Sleepy Eye, MN Grain and oilseed 1890

Dassel Cooperative Dairy Association, Dassel, MN Supply 1894

Nelson Creamery Association, Nelson, MN Dairy 1894

Nelson & Albin Co-op Mercantile Association, Saint James, MN Supply 1894

Nassau Farmers Elevator Company, Nassau, MN Grain and oilseed 1899

Plainview Milk Products Cooperative, Plainview, MN Dairy 1899

Elba Cooperative Creamery Association, Elba, MN Dairy 1902

Farmers Cooperative Elevator Company, Rushford, MN Supply 1903

Harvest Land Cooperative, Morgan, MN Grain and oilseed 1904

Rose Cooperative Creamery Association, Eagle Bend, MN Supply 1905

Farmers Cooperative Ag Service, Greenbush, MN Supply 1905

Farmers Elevator Company, Pelican Rapids, MN Supply 1905

Meadowland Farmers Cooperative, Lamberton, MN Grain and oilseed 1905

Rothsay Farmers Cooperative, Rothsay, MN Grain and oilseed 1905

Wheaton-Dumont Cooperative Elevator, Wheaton, MN Grain and oilseed 1905

Cooperative name, city, and state Type Organized

Table continued on page 22
producers increasingly using

Global Positioning System

(GPS) gear to guide their

seed and fertilizer

applications and who track

market trends and

threatening weather fronts

with their smart phones. 

Century Cooperatives are

still fairly rare, accounting

for about 6 percent of

USDA’s entire list of ag

cooperatives. Four types of

cooperatives make up over

97 percent of all Century

Cooperatives. Grain/oilseed

and farm supply cooperatives

comprise more than 78

percent of the Century

Cooperatives; they comprise

62 percent of the list of all

ag co-ops. Dairy

cooperatives make up about

13 percent of Century Coops, while fruit and vegetable

cooperatives comprise 7

percent. 

By state, the nation’s 134

oldest cooperatives are most

likely to be located in

Minnesota (35), Illinois (20)

or Iowa and Kansas (both

with 13). 

An old business adage is:

“you have to grow to

survive.” But growth is not

an all-determining factor for

Century Cooperatives.

Fourteen percent of these

cooperatives have less than

$5 million in sales (Figure 2).

Eight percent have from

$500 million to more than a

$1 billion in sales. But the

largest group of Century

Cooperatives has from $25

million to less than $50

million in sales (19 percent,

or 26 cooperatives).

The Century List

All 134 Century

Cooperatives were asked for

their agreement to be listed

in Table 1. (USDA gathers

22 May/June 2014 / Rural Cooperatives

Valley Creamery Association, Garfield, MN Dairy 1905

Hadley Farmers Elevator, Hadley, MN Grain and oilseed 1906

Swanville Cooperative Creamery Association, Swanville, MN Dairy 1907

Fosston Cooperative Association, Fosston, MN Supply 1907

Bongards Creameries, Bongards, MN Dairy 1908

Elm Dale Creamery Association, Bowlus, MN Dairy 1908

Farmers Cooperative Creamery Association, Goodridge, MN Supply 1908

Farmers Cooperative Creamery, Foreston, MN Dairy 1908

Farmers Elevator of Fergus Falls, Fergus Falls, MN Grain and oilseed 1909

FCA Co-op, Jackson, MN Grain and oilseed 1909

Osakis Creamery Association, Osakis, MN Dairy 1909

Kragnes Farmers Elevator Company, Glyndon, MN Grain and oilseed 1911

Co-op Service Inc. of New York Mills, New York Mills, MN Supply 1911

Farmers Cooperative Elevator Company, Hanley Falls, MN Grain and oilseed 1912

Newfolden Cooperative Elevator Association, Newfolden, MN Grain and oilseed 1912

Lakes Area Cooperative, Perham, MN Dairy 1912

Equity Elevator & Trading Company, Wood Lake, MN Grain and oilseed 1912

Hastings Cooperative Creamery Company, Hastings, MN Dairy 1913

Sobieski Cooperative Creamery Association, Little Falls, MN Dairy 1913

Farmers Cooperative Company, Windsor, MO Supply 1914

MFA Incorporated, Columbia, MO Supply 1914

Edinburg Farmers Elevator Company, Edinburg, ND Grain and oilseed 1909

Brocket Equity Elevator Company, Brocket, ND Grain and oilseed 1911

Max Farmers Elevator, Max, ND Grain and oilseed 1911

Forbes Equity Exchange, Forbes, ND Grain and oilseed 1913

Scranton Equity Exchange, Scranton, ND Grain and oilseed 1914

Farmers Cooperative, Dorchester, NE Grain and oilseed 1903

Farmers Cooperative Association, Eustis, NE Grain and oilseed 1903

Cooperative Producers, Inc., Hastings, NE Grain and oilseed 1906

Aurora Cooperative Elevator Company, Aurora, NE Grain and oilseed 1908

Farmers Cooperative Company, Tallmadge, NE Grain and oilseed 1914

Landisville Produce Cooperative Association Inc., Landisville, NJ Fruit and vegetable 1913

Jewell Grain Company, Jewell, OH Grain and oilseed 1911

Gerald Grain Center Inc., Napoleon, OH Grain and oilseed 1912

Farmers Elevator Grain & Supply Association, New Bavaria, OH Grain and oilseed 1912

The Hicksville Grain Company, Hicksville, OH Grain and oilseed 1914

Carrier Mill and Elevator Company, Carrier, OK Grain and oilseed 1907

Farmers Exchange of Goltry, Goltry, OK Grain and oilseed 1913

Tillamook County Creamery Association, Tillamook, OR Dairy 1909

Diamond Fruit Growers Inc., Odell, OR Fruit and vegetable 1913

Lawrence County Co-op Wool Growers Association, Pulaski, PA Wool 1891

Clark County Farmers Elevator, Clark, SD Grain and oilseed 1904

Menno Lumber Company, Menno, SD Supply 1905

Colton Farmers Elevator, Colton, SD Grain and oilseed 1910

Fulton Farmers Elevator Company, Fulton, SD Grain and oilseed 1912

AgFirst Farmers Cooperative, Brookings, SD Grain and oilseed 1913

Farmers Cooperative Elevator Company, Rosholt, SD Grain and oilseed 1914

Rule Co-op Gin & Elevator Company, Rule, TX Cotton ginning 1913

Blue Star Growers Inc., Cashmere, WA Fruit and vegetable 1907

Davenport Union Warehouse Company, Davenport, WA Grain and oilseed 1909

Odessa Union Warehouse Cooperative, Odessa, WA Grain and oilseed 1909

Blue Bird Inc., Peshastin, WA Fruit 1913

Westby Cooperative Creamery, Westby, WI Dairy 1903

Garden Valley Cooperative, Waumandee, WI Supply 1904

Ellsworth Cooperative Creamery, Ellsworth, WI Dairy 1910

Medford Cooperative Inc., Medford, WI Supply 1911 

Cooperative name, city, and state Type Organized

Table 1 — continued
Rural Cooperatives / May/June 2014 23

co-op data on condition that

it be used only for composite

numbers for all co-ops or coop sectors; we do not reveal

survey data about a specific

co-op unless the co-op

provides its permission — as

occurs with our annual Top

100 Co-op list each fall).

Two of the Century

Cooperatives chose not to be

included on table 1 (more

information on these

Century Cooperatives can be

found in the Directory of

Rural-Farmer, Rancher, and

Fishery Cooperatives on our

website, www.rurdev.usda.

gov/BCP_Coop_DirectoryA

ndData.html).

In the next six years, this

list will almost certainly

double, as it appears likely

that 125 more cooperatives

will be added to it, although

some will doubtless “fall

from the ranks” due to

mergers, acquisitions and

business failures.

Author’s note: If your

cooperative should have been

included, or would like to be

included on this list in the

future, please e-mail the author

with your basic co-op

information at: eldon.eversull@

wdc.usda.gov, and/or at

coopinfo@ wdc.usda.gov. Please

include the year your co-op was

formally organized. ■

The growing list of ag co-ops that

have been in business for at least

100 years includes, from left: the

Alta Grain Co-op in Iowa, now

called First Cooperative Assoc.;

Westby Cooperative Creamery in

Wisconsin and Sun Maid Raisins

in California. Photos courtesy

pictured co-ops

1900 & Before 1901-1910 1911-1920 1921-1930 1931-1940 1941-1950 1951-1960 1961-1970 1971-1980 1981-1990 1991-2000 2001-2013

Figure 1 — U.S. cooperatives that are still in operation, organizational dates

300

250

200

150

100

50

0

Number

Years

Less than 5 5 – 9.9 10 – 14.9 15 – 24.9 25 – 49.9 50 – 99.9 100 – 199.9 200 – 499.9 500 – 999.9 1 Billion +

Figure 2 — U.S. Century Cooperatives, number by sales size

300

50

40

30

20

10

0

Number

Million $ in Sales
24 May/June 2014 / Rural Cooperatives

A ‘HUMAN SOUL ON FIRE

WITH GREAT CAUSE’

William Hirth’s iron-forged will and vision

were essential to the formation of MFA 
Rural Cooperatives / May/June 2014 25

By Chuck Lay

Director of Communications

MFA Incorporated 

Hirth the organizer

William Hirth burned brightly. A

first-class orator, a genius of

organization and a national political

leader, Hirth bent the world to his will.

It was a capacity that brought him

acolytes as well as critics, both in his

time and since. Alternately, he was

vilified as domineering, utterly without

humility and bellicose by his critics,

especially those in academia. 

Yet to his supporters, Hirth — the

farm boy who rose from obscurity on a

Rush Hill farm in central Missouri to

become a national farm leader who

dined with presidents and senators —

was a dynamo of leadership, a man

obsessed with changing the lives of

farmers for the better. Hirth’s vision?

The creation of the farm organization

which became MFA — a battle he

refused to lose.

Hirth created the Missouri Farmers

Association, one of the 20th century’s

most successful and dynamic

cooperatives and one still thriving in

the 21st century. Seven farmers from

the Newcomer Schoolhouse Farm Club

near Brunswick, Mo., are rightly praised

as the genesis of the organization. But

make no mistake, they followed the

template Hirth forged. Hirth wrought

that template (even to the extent of

conceiving the famous shield logo

himself) through passion, persuasion,

skill and no small amount of luck. 

Born March 23, 1875, Hirth was

raised on the family farm in Audrain

County, Mo. His experience of the

soul-dampening drudgery of 1800s farm

life was acquired firsthand. He left

college after several years, nearly

penniless, to sell insurance. He

prospered. By 1900, he and his new

wife, Lillian Vincent, moved to

Columbia, Mo., where he read law and

was admitted to the bar.

In 1906, he purchased the Columbia

Statesman newspaper. But agriculture

continued to hold his interest. By 1908,

he realized his dream of developing a

statewide agricultural publication when

he purchased The Missouri Farmer and

Breeder, now Today’s Farmer. The first

issue was published Oct. 15, 1908. In

February 1912, he shortened the name

to The Missouri Farmer. 

By 1914, The Missouri Farmer, widely

popular in state agricultural circles, was

the official publication for the Missouri

Farm Management Association, the

Missouri Cattle Feeders Association,

In the century since the MFA Inc. cooperative was formed, much

about agriculture has changed. Those 100 years represent great

technological progress. That timespan has literally brought us from

horse power to computer-driven machines and satellites as common

tools. Even with such technological advances, the initial reasons for

forming MFA remain as the underpinning for the business today.

MFA Incorporated is a regional farm supply and grain marketing cooperative serving

45,000 members. MFA has about $1.5 billion in annual sales.

When farmers joined to start MFA, they did so because they needed a presence in the

market — both in buying and selling. They needed ways to finance their operations.

They needed bargaining power.

MFA remains, as it began, a conduit to help farmers succeed. 

William Hirth is considered the founder of MFA and was a major player in the

cooperative movement in the United States. The following article about Hirth is

excerpted from a new book, Proud Past, Bright Future: MFA’s First 100 Years.

Written by Chuck Lay, the book recounts stories of MFA’s leadership, its business

ventures and the failures and successes that have shaped this business.
26 May/June 2014 / Rural Cooperatives

the Missouri Corn Growers

Association, the Missouri Draft Horse

Breeders Association, the Missouri

Dairy Association and the Missouri

Sheep Breeders Association. Hirth

owned the tabloid magazine until his

death in 1940.

The Missouri Farmer provided Hirth

with a platform to evangelize. Print was

king. The first commercial radio

broadcast was eight years in the future.

Telephones were nonexistent.

Electricity was enjoyed only by select

urban elite. 

The Missouri Farmer hit a rural nerve

and drew instant response. Hirth’s

passion was organization, which he saw

as key to improving farm life. Hirth

preached organized cooperation

repeatedly in its pages. Aaron Bachtel, a

farmer and stockman just north of

Brunswick, was a subscriber who took

Hirth’s ideas seriously. 

“In the February 1914 issue,”

Bachtel said, “there was a short article

wherein it stated that farmers should

organize into school district Farm

Clubs and how they could be benefited

by such organizations. It looked so

simple and at the same time so far

reaching, that it appealed to me very

forcibly.” 

Bachtel wrote Hirth, asking for a

bundle of the papers to distribute to his

neighbors. He asked those same

neighbors to meet at the Newcomer

Schoolhouse the following Tuesday

night. 

A prominent farmer, Bachtel lent his

name and reputation to the cause. He

asked his neighbors to unite in the

purchase of farm supplies and inputs.

By seizing the initiative, Bachtel

overcame local doubt and skepticism to

convince others that Hirth’s idea to

organize farmers around a cooperative

concept was sound. The group pooled

an order for 1,150 pounds of

penitentiary binder twine and sent it to

Hirth in Columbia. The Newcomer

Schoolhouse Farm Club volume buy

netted the men $400 in savings.

That Newcomer Schoolhouse Farm

Club order, the first Hirth received,

counted as the creation of the Missouri

Farmers Association. It marked the

beginning of what grew into a

cooperative devoted to pooling orders

and distributing accumulated savings. 

The farm club idea swept the

countryside, according to historians,

like a prairie fire. Subsequent to that

first order, Hirth contracted with the

West Virginia Coal Co. at a set price

for coal. Bachtel and his neighbors were

on board.

Soon after the order, coal prices

jumped, but the fledgling MFA had a

contract at the cheaper price. Bachtel

received several carloads and proceeded

to instruct area farmers in the value of

the farm clubs. More members quickly

flocked to the club. Throughout the

state, the scene was repeated, time and

again.

1,000 MFA farm clubs formed

For perspective on the “prairie-fire”

metaphor, consider: within five years,

about 1,000 MFA farm clubs were

created, representing every corner of

the state. Just over 10 years later, Hirth

could announce the existence of

hundreds of exchanges, elevators,

central produce plants, creameries,

livestock shipping associations, livestock

commission companies, a grain

commission company, a purchasing

department and produce sales agencies.

All told, these fledgling creations

dedicating themselves to MFA were

generating gross sales of more than

$100 million.

Bachtel would serve as president of

MFA’s first farm club and become the

first farmer to sign MFA’s unique, but

doomed to fail, producer contract.

Bachtel would log 20 years of

distinguished service on MFA’s

corporate board of directors.

Through the pages of The Missouri

Farmer, Hirth chronicled farmer efforts

and savings of farm clubs, urging

continued development of more clubs

where farmers could organize and

socialize in much the same way town

businesspeople joined business, political

and benevolent organizations. Selfinterest, said Hirth, should be a natural

draw for historically independent

farmers.

Yet organizing often isolated farm

families was a steep hill. Hirth,

nevertheless, was wildly successful in

convincing farmers of the benefits of

cooperation, due in main to the force of

his personality and his frenetic, but

strategic, schedule. 

Farm clubs structured meetings,

printed songbooks, formed a women’s

auxiliary organization (Women’s

Progressive Farmers Association or

WPFA in 1921) and scheduled debates.

Hundreds of clubs held debates every

two weeks, organized fishing trips, held

parades several miles long and hosted

barbecues. The spirit of a camp revival

was in the air.

At those meetings, Hirth encouraged

farmers to spread the gospel, noting

that although many farmers were

uncomfortable in the speaker’s role, it

was a mission worth the effort. True

oratory, he intoned, was not faultless

diction or learned phrases. True oratory

“is a human soul on fire with a great

cause.”

Hirth leverages 

farmers’ new power

Demonstrating the effectiveness of

the power of centralized buying, offers

poured in from flour mills, Ford and

Dodge motor companies, tire

manufacturers, seed merchants and new

animal health businesses like Anchor

Serum Company of St. Joseph.

The farm club 

idea swept the

countryside,

according to

historians, like a

prairie fire.

MFA awarded the Home Guard Medal to

members of the Women’s Progressive

Farmers Assoc. for enlisting new members

and organizing clubs.
Rural Cooperatives / May/June 2014 27

In 1919, Hirth listed the farm club

accomplishments to date. Farm clubs,

he wrote, have: (1) placed members in

position to buy farm needs at lowest

wholesale price; (2) financed and taken

over 60 local elevators with plans for

150 before 1920; (3) been first to

introduce a Livestock Shipping

Association in Missouri; (4) financed a

flour mill costing $300,000; (5) secured

regulation changes regarding the

handling of meat under the Food

Administration; (6) met with J. Ogden

Armour as the first organized effort to

work out a solution to packing interest;

and (7) organized farmers to influence

legislation.

By way of explanation of those

accomplishments, Hirth, with the

executive committee and the full board

of directors of the nascent MFA, had

lobbied newspaper editors and

lawmakers for passage of an agricultural

cooperative law allowing patronage

refunds and streamlining cooperative

practices. They also fought for and won

government standardization of weights

and measures for business scales that

had been a bit haphazard before.

MFA sponsored a legislative dinner

in Jefferson City to explain farmers’

intentions in building self-help

cooperatives. MFA’s corporate board

sponsored the law and saw to its passage

by the newly lobbied legislature in

1919. 

Just a year before, Hirth, never one

to think small, took a group of official

MFA representatives to Washington,

D.C., to meet with the Agricultural

Committee of the Senate to explain

MFA’s position on a federal cattle and

hog feeder program. In each case, Hirth

was upfront on intentions. MFA would

be known for putting cards on the table

frankly, in full view. No subterfuge for

the new MFA.

Hirth the politician 

MFA needed more than organizing;

it required political capital, both state

and national. Hirth was uniquely suited

for that job. By the mid-1920s, he was a

member of the executive committee of

the American Council of Agriculture,

representing MFA. More importantly,

on the national scene in 1925, the Corn

Belt Committee was organized with a

membership drawing together the

largest group of influential farm leaders

in the country. 

The Corn Belt Committee

represented 24 farm groups, including

Farm Bureau, Farmers Unions, the

Equity, the Grange and multiple Corn

Growers Association groups, as well as

many others. The group’s purpose was

to speak on agricultural legislation as

one, make agriculture’s positions known

to legislators and the public and

pronounce “upon all matters

concerning agriculture.” 

Hirth was selected president of the

newly formed Corn Belt Committee

and retained that position for several

years. In his capacity as chairman, Hirth

helped make agriculture a national

concern. His speeches and activities also

attracted the attention of national

leaders, including one who would soon

be mulling a presidential bid —

Franklin Delano Roosevelt, then

governor of New York. 

Hirth held that national attention

until his death. And with good cause.

Because of his national leadership

efforts and accomplishments, Hirth’s

name would be formally submitted

unanimously by the entire Missouri

delegation — Democrats and

Republicans — to President Calvin

Coolidge for the position of secretary of

agriculture. Hirth demurred, asking

that his name be withdrawn.

Road builder

But Hirth’s focus was not simply

national. Missouri had plenty of

obstacles for farmers trying to grow and

move products. Country roads were

impassible for large chunks of the year

making it difficult if not impossible to

deliver farm products to towns and

MFA markets. 

Solution? Hirth jumped with both

feet into initiating legislation

authorizing farm-to-market roads and

personally lobbied political leaders and

newspaper editorial boards. Through

his highly influential The Missouri

Farmer, he chronicled his efforts and

urged the membership to lobby

alongside. 

“Many times during recent years, the

farmers of North Missouri were hardly

able to bury their loved ones because of

bad roads,” intoned Hirth in a speech at

the MFA convention, “while their

children are forced to wade ankle deep

through mud in going back and forth to

school, and so bad roads often keep our

few remaining rural churches closed for

weeks at a time.” 

He convinced the organization and

its board to get behind legislation

pulling farmers out of the mud.

Road legislation soon passed at the

state level. In the long term, the

legislation failed to achieve all Hirth

demanded because of what Hirth

described as a politically controlled

Highway Administration. The Missouri

Farmer, he said in 1928, “is unalterably

opposed to any more bond issues for

cross-state highways until something

substantial has been done for the

neglected dirt roads.” 

Hirth carried on his farm-to-market

road campaign until his death in 1940.

His successor would deliver Hirth’s

promised improvements. 

One more revelatory anecdote about

Hirth: After delivering testimony to the

Senate Agriculture Committee in 1940,

Hirth turned on his heel and stalked

out of the room. U.S. Secretary of

Agriculture Henry Wallace, who had

attended, chased after Hirth, finally

catching him in the Senate corridor.

“Mr. Hirth,” he is reported to have said,

“Mr. Hirth,” he repeated when Hirth

stopped and turned to face Wallace.

“You didn’t give that committee some

of the facts.” Hirth scrunched down his

eyebrows, scowled at the U.S. Secretary

of Agriculture and said, “Facts? That

committee didn’t need facts. They

needed their minds changed.”

In his many years of leadership with

MFA, it is safe to say Hirth changed a

great many minds, both in Washington

and on farms all across the nation,

about cooperatives and how they could

contribute to the success of their

farmer-members. ■
28 May/June 2014 / Rural Cooperatives

By Lisa Moorhouse

Editor’s note: This article is reprinted from

“C” magazine, the member publication of

CHS Inc., where Moorhouse is a member of

the communications staff. CHS Inc. is just

one of the many co-ops nationally that

provide good jobs for America’s Armed

Forces veterans after they leave the service.

The “Co-ops & Community” page

spotlights co-op efforts that fulfill the

mission of commitment to community. If

you know of a co-op, a co-op member or coop employee whose efforts deserve to be

recognized on this page, please contact:

dan.campbell @wdc.usda.gov. 

In 2003, Army combat

engineer Mike Tangen found

himself in the Kuwait desert

training for Operation

Enduring Freedom. When the

“go” signal came, in the form of

36 overhead artillery shots, the

troops and Apache helicopters

headed out in long convoys across

the Iraq border.

“The convoy moved so slowly,”

Tangen recalls. “I felt like we were

hundreds of miles from the border and

just crawling. There were some nervewracking parts, especially when we went

through a narrow pass where there was

supposed to be an ambush.” 

Although there was a firefight, they

made it to the border relatively

untouched. They punched through

sand berms surrounding the country

and advanced on Baghdad. 

Tangen’s job in the U.S. Army

focused on designing battlefields. His

skills didn’t seem likely to transfer to a

career back home in central Minnesota.

After returning to the United States in

2003, he purchased a small herd of

cattle and later went to work for an area

farmer, spending much of his time as a

long-haul trucker. With a young family,

though, he was ready to have more time

at home. 

“I came in as the new guy, but not an

unknown guy,” he says about joining

the agronomy team at CHS Prairie

Lakes in Starbuck, Minn. He works in

the location’s energy department and

Co-ops & Community

Coming Home — Skills learned in the military 

often transfer to the rural workforce

Mike Tangen
Rural Cooperatives / May/June 2014 29

delivers propane. 

“There’s a real sense of teamwork

and camaraderie here that is very

similar to my military experience. I

work with guys from different

backgrounds, but we’re all focused on

getting the job done, even if that is

delivering propane at 3 a.m.,” he says. 

Soldier support

Transitioning back to civilian life

isn’t easy. Just ask Colonel Allan

Lanceta, central region director for

U.S. Army Soldier for Life, which helps

reintegrate veterans into civilian life. 

Lanceta is on a dual mission: to help

military veterans find meaningful

employment and to build understanding

of the value of hiring veterans. 

“Military personnel bring special

skill sets to the workplace. Loyalty,

dedication, duty and respect are

ingrained in our soldiers,” says Lanceta.

Each year, about 234,000 soldiers end

their service with the U.S. Army, Air

Force, Coast Guard, Marine Corps and

Navy. In the next 10 years, more than 1

million soldiers will transition from the

Army. 

One focus of Soldier for Life is

ensuring that soldiers leaving the Army

have a job waiting. 

“It can be a challenge to translate

military experience into civilian terms.

That can make it hard to find a job,

even when the skill set might be a

perfect match. We’re helping soldiers

outline skills in non-military terms,”

says Lanceta, who recommends Hero to

Hired (H2H.jobs) for transitioning

military personnel. It offers career

exploration tools, military-to-civilian

skills translation, and education and

training resources. 

“We’re also working with companies

to help them understand what

individuals with military experience

bring to the workplace,” adds Lanceta.

CHS is one of those companies. 

“We look at the ability of individuals

with military backgrounds to solve

problems and work in stressful

situations. We look at how those

military values align with CHS values,

and we see a good fit for CHS and the

cooperative system,” says Cate Sprout,

talent acquisition manager. 

“By focusing on helping military

personnel translate the characteristics

and the skills gained in the military into

civilian language, we can help our

soldiers and companies understand how

military roles translate to the

workforce,” Lanceta says. 

Valuable Experience 

Ken Paulson has always been

fascinated by how things work.

Growing up, he worked alongside his

dad, who owned a body and mechanics

shop. He applied that interest in a sixyear tour in the Navy as part of the

nuclear power program. 

“I had two years of schooling before

going out to the ship. It was rigorous

right from the start,” says Paulson. Of

84 people in his basic training company,

42 were designated for the nuclear

power program. From those 42, only

Paulson and three others completed the

program. 

He describes his responsibilities on

the nuclear-powered aircraft carrier as a

combination plant operator, chemist

and radiological controls technician. 

Paulson was deployed to the Persian

Gulf for six months, providing support

to ensure safe travel of seagoing vessels

and conducting training exercises with

other U.S. military branches and allied

forces. 

After six years in the Navy, he used

the GI Bill to earn a degree in chemical

engineering from Montana State

University. 

Today he’s a process engineer at the

CHS Laurel, Mont., refinery, where he

works on control systems and

automation, ensuring electronics work

correctly. 

“The military is process oriented.

What you do affects 6,000 people in the

middle of the ocean. That gives you the

mindset and framework to build a process and complete a task,” Paulson says. 

He adds that hiring veterans brings

real-world, real-work experience to the

workplace. 

To view a video with Mike Tangen,

visit: www.chsinc.com/c. ■

The pressure tanks and semi tractors

lined up outside the CHS

Transportation shop in Minot, N.D.,

would be dwarfed by the B52

bombers and other support equipment

Ben Tudor maintained during his 22

years in the U.S. Air Force. 

“Our job was to keep planes in the

air. Our unit was very technical,” says

Tudor. Over his military career, he

worked his way up to serving as a

training manager and later a

deployment manager for his

squadron, where he oversaw 400 Air

Force personnel. 

When Tudor retired last year, he

chose to stay near Minot. “Most guys

I know who are retiring out of the

military are looking for stability and

opportunities to grow,” says Tudor,

who saw the opportunity with CHS

Transportation to get back to his roots

and “wrench on equipment.” 

“There’s a lot of predictability in

what you do in the military, but there

are also a lot of challenges and

opportunities. We were always

looking for ways to improve

processes and approach problems

differently. That carries over to any

job,” says Tudor. 

During his military career, Tudor

spent one year in Korea and

completed three four-month tours in

Saudi Arabia. “After more than 20

years, you take a lot from your military

experience. Seeing how people in

other countries live changes your

perspective.” ■

Putting skills to work
30 May/June 2014 / Rural Cooperatives

We met at a bed and breakfast in the Badlands of North

Dakota. This was Teddy Roosevelt country, not far from his

former ranch site. It is rough country where the summer

months are often hot and very dry. Our subject was

cooperative development: where was it headed after the

decade of the 1990s and “co-op fever” which had swept through Minnesota

and North Dakota, with some spin off in South Dakota as well.

Although it was 13 years ago, I still remember the feelings engendered

as we sought to understand what was coming for those of us who make a

living starting cooperatives. In reflection, we were somewhat prophetic. I

Remembering the ‘Badlands’ Report

By Bill Patrie, Executive Director

Common Enterprise Development

Corporation, Mandan, N.D. 

e-mail: bill@cedc.coop
Rural Cooperatives / May/June 2014 31

Preamble

As individuals who work with, study

or write about cooperatives, we report

our thinking about cooperative

enterprises in North America. We met

for two days in the Badlands of North

Dakota. While we make no claims to

unique insights, we did want to share

our reflections and discussions about

the issues that impact cooperatives. We

hope you find our thoughts useful. Lori

Capouch, Susan Davis, Lee Egerstrom,

Wally Goulet, Roger Herman, Julie

Hogeland, Audrey Malan, William Nelson,

Steve Noack, Bill Patrie and Judy Ziewacz

Disclaimer

This report reflects a spectrum of

thoughts from developers, teachers,

researchers, government officials,

media, lawyers and cooperative

employees. None of the ideas presented

here should be attributed to any

individual. We are presenting

statements in this report without the

requirement of unanimous agreement.

These thoughts reflect an emphasis on

President Teddy Roosevelt said the Badlands of North Dakota “restored his soul.” The remarkable

landscape also helped inspire a group of co-op “thinkers” in 2001, when they gathered to discuss

some of the major questions about co-op development. Photo courtesy North Dakota Tourism Office

don’t know if all prophets suggest that bad things are about to happen if

ways aren’t changed — but we certainly felt that way. And some of those

bad things did happen.

We thought that the industrial age would give way to the

information age, but it looks like we now have both. And agriculture is

both getting bigger as a response to the industrial age, and getting way

smaller as a response to the information age. 

In 2001, we thought the environmental ethic would become a much

more powerful force than it is in 2014. The Badlands of North Dakota

have the Bakken and Three Forks oil formation under them. The fault

lines between conservation and oil production are now clearly drawn. 

We thought leadership would emerge in the cooperative community

that would take us cooperators to a better place. Perhaps the change we

were looking for was us — and that didn’t turn out exactly the way we

had hoped either. The inability of leaders to “see over the horizon”

turned out to be as bad as we thought, and we still long for those folks

who can tell us the location of the cooperative promised land. 

Perhaps we need to listen to new voices who are describing the

“cooperative economy” from Jackson, Miss., and the voice of the

cooperative movement’s favorite prophet, Gar Alperovitz, who answers

the question “what then must we do?” 

Teddy Roosevelt said that the Badlands restored his soul, and I have

found that same beneficial effect for myself. There is something so big

and empty about this place that it minimizes personal problems. It is a

good place to go to think about big subjects, and I think it contributed

to the insights that were shared in 2001. 

I hope this reflection on a 13-year-old report can be a stimulus to

new thinking for those of us who care deeply about the cooperative

movement. How do we get together again and answer Gar’s question?

Thoughts About Co-ops in North America
32 May/June 2014 / Rural Cooperatives

rural or agriculturally based existing

traditional cooperatives and new

generation cooperatives, because of the

background familiarity of the

participants.

This report follows the sequence of

the actual dialog that occurred, starting

with opening lamentations and ending

with consoling realities and reasons for

hope.

We lamented

1. Complete vertical integration is

too hard and often fails. Starting a

new generation cooperative — one that

is completely vertically integrated from

the production of the commodity to the

final sale of the finished product — is

very hard. Most of these startups are

not successful. Very few cooperatives

can master all of these essential steps.

Achieving competent management and

adequate capitalization seems

overwhelming. 

2. Some existing cooperatives

seem interested in serving

themselves first. Existing cooperatives

seem to turn a deaf ear to new

cooperatives, appearing to be interested

in achieving what is good for the

cooperative, rather than what is good

for the members.

3. Existing cooperatives are

focused on getting through the day

(no long views). Cooperative leaders

don’t have the luxury of thinking about

the long-term destination of the

movement. Visionary leaders have died

or retired, visionary institutions have

merged or consolidated, member

services positions have been eliminated

to save money and cooperatives are

focused on getting through the day.

4. Losing track of our members.

We realized that we no longer really

know our members. We don’t know

who they are or what they want.

5. We have become reactionary

rather than creative. Instead of

looking for opportunities, we are

fighting off enemies, trying to defend

our territories and markets instead of

looking for new ways to provide

meaningful benefits to existing and new

members.

6. Losing track of social capital.

One of the assets important to

cooperatives is social capital. We

defined social capital as a communityor society-held common understanding,

favorable attitude and/or commitment

to cooperation and cooperative

organizations. We noted that

cooperatives once meant something to

our communities. We were new and

exciting, and we were mainstays in the

community. We built good will and we

acted differently than our competitors.

We don’t have a place on our balance

sheets for social capital, but we feel as if

we are losing it. The loss of social

capital is reflected in decreasing

employee commitment, member loyalty

and community affection. We know it

has real value to a business cooperative,

we are unsure about how to build and

account for it. (See end note (a) for more

sources of information on social capital.)

7. Our member benefits have

become obscure. The reasons to join

our cooperatives used to be clear and

the benefits transparent. Now they are

hard to see. Phone service or electrons

are often purchased only on price; so,

too, with the selling of grain or the

buying of inputs — it’s who has the best

deal. No one worries what the cost

would be if the cooperative were not

there. The existence of the cooperative

is taken for granted. “What have you

done for me lately?” is often asked. 

8. Members are not meeting their

responsibilities. Without a crisis or

extreme door prizes, members don’t

seem interested in their civic and

democratic responsibilities.

Management expects less, and less

commitment from members, and

members respond with less and less

participation. Don’t ask for much from

the members; they will just as likely

patronize a competitor. They for sure

won’t sacrifice for the cooperative.

Have cooperatives become latent

democracies?

9. Speculators, price takers and

builders. Some new generation

cooperatives are experiencing

speculators who buy shares but never

intend to produce the product. They

rely on the cooperative to purchase

commodities on their behalf through a

“pool.” The value of their investment is

only measured in dividends paid since

that most directly influences share

value. Other members only care about

the price they receive at delivery, trying

to force the cooperative to pay higher

and higher prices without consideration

for maintaining operating margins. 

The third category are those

members who raise quality products

and deliver them to the cooperative for

processing and understand that the true

value that will be paid to them is what

the cooperative can sell the finished

product for after deducting the

operating costs. These members will

“build the business” by investing and

wait until final operating margins are

known before demanding dividend

payments. If either the price takers or

the speculators gain operating control

of the cooperative, it may become

impossible to manage and may fail. (See

end note (b) for more discussion on this

subject.)

10. Too small a cadre of principal

advisors. Cooperatives have looked for

advice primarily from agricultural

economists. While this advice is needed

and useful, it has not been adequate to

This meeting room, with its panoramic view

of the Badlands near Medora, N.D., is where

the brain storming sessions occurred for the

Badlands Report. Photo courtesy Eagle Ridge

Lodge. Opposite page: Hiking in the Badlands.

Photo courtesy North Dakota Tourism Office 
Rural Cooperatives / May/June 2014 33

fully utilize the social, spiritual and

psychological value of cooperation. 

11. Aging of members and

leaders. We’re mourning the loss of

visionary co-op leaders. Once the

founders of great cooperatives sacrificed

and struggled to provide services and

start the enterprises. Now some

members have become parasitical,

believing that the cooperative is a good

place to get “perks” if you become a

director. Instead of seeking the office to

lead and “carpe diem” (seize the day),

some members seek to become

directors to “carpe per diem” (seize the

benefits).

12. The world paints all

cooperatives with the same brush.

There is a vast difference in

cooperatives and their operating

strategies. There are important

differences between economic sectors.

All cooperatives are not the same, yet

negative images seem to catch many

good cooperatives in the same net as

the bad ones.

13. Cooperatives too often seek to

fight with their competitors’

weapons. We are often asked to fight

our competitors with their weapons —

such as economies of scale and size, and

requiring more and more benefits at

lower and lower prices. Uncomfortable

in this new armor, we have lost our

swiftness of foot and our ability to

connect with our members in deeply

meaningful ways.

14. We try to define ourselves as

something separate — as the fourth

sector after government, nonprofit

and private business. Our difference is

not in our organizational structure, but

in how we behave. We cooperate, and

we can do that as government, or as a

nonprofit, or as any one of the business

forms available in North America.

Being legally organized as a cooperative

does not ensure our uniqueness. We

want to examine, instead, how the

organization behaves — does it

cooperate?

15. We are not diverse.

Homogenous boards encourage easy

consensus, but they do not create the

high-bred vigor of diverse thought and

input. Our organizations are not selfchallenging, bring narrow perspectives

and are not using the strength of

diverse membership.

16. Agency theory problems seem

to overwhelm us. We all agreed that

cooperatives are “agents” for their

members and are designed to provide

benefits to those who “patronize” the

cooperative. However, numerous

problems continue to plague this form

of business organization. They include:

• “Free riders” who have not made the

sacrifice or the investment continue to

get the benefit of cooperative

enterprises.

• Horizon problems startle us when the

new generation cannot appreciate the

sacrifice of the founding generation and

will leave the cooperative for little or no

reason.

• Portfolio problems, such as trying to

manage hog operations and dairy

operations at the same time, overburden leadership and management,

leading to complaints among the

membership.

• Control by members is lost as the

cooperative becomes so large and so

distant that members no longer know

what the cooperative is or why they

should care.

• Decision-making takes place by

directors and managers who are

unevenly influenced by members. All

members and all directors are not the

same — some members’ and some

directors’ opinions matter more than

others do, usually because they do large

volumes of business with the

cooperative. Do you really want to lose

your largest buyer? (See end note (c) for

more information on agency theory

problems.)

Consoling realities and 

some reasons for hope

We began to enjoy these

lamentations. We had reasons to feel

miserable and unappreciated. Our great

leaders had died or retired, our favorite

cooperatives are operating as uninspired

imitations of competitors and we had

difficulty in naming CEOs who met our

definition of heroes. Even though we

enjoyed this self-pity, participants began

to call us back to a more positive and

accurate vision of reality and created

reasons for hope. We did not attempt to

answer our lamentations on a point-bypoint basis. We agreed that future

meetings could more thoroughly build

antidotes to the problems we identified.

But we knew that the reality was not as

dark as the picture we had just painted.

Those consoling realities included:

1. New leaders: Our old leaders are
34 May/June 2014 / Rural Cooperatives

being replaced, not by well-known

names, but by skilled and visionary

leaders, nonetheless. While having

humble beginnings, these leaders have

fought and won many battles. While

not yet ready for the highest levels of

leadership, they truly understand their

own skills. They will volunteer to lead.

2. Learned lessons: We understood

that we now have a new resource to call

upon. Some in the group called it

maturity, others preferred to call it

wisdom. We have unique knowledge

and experience. We now need to

capture that wisdom and translate it

into our daily work. We need to not

only teach others how successful new

generation cooperatives got started, but

also the lessons they have learned as

operating companies. These

cooperatives have operating history and

can be asked, “What would you do

differently?”

3. The new economy values

cooperation: We understood that the

new economy values cooperation.

Authentic concern for humankind once

again provides cooperatives the

opportunity to make a meaningful

difference in the lives of our members. 

4. Seeing the forest and the trees:

We understood that we are capable of

holding long-range views about the

future of cooperatives and managing to

get through the day, at the same time.

We could cite examples of such

cooperatives.

5. Knowing the force of change:

We realized that the transition from the

old industrial economy to the new

information-based economy creates

forces that will buffet us as human

beings. The desire to stay the same

collides with the demand for change,

and we personally feel the turbulence.

Knowing that there will be turbulence

helps prepare for it.

6. Electronic communication: A

wonderful characteristic of the new

economy and the information age is the

ability to communicate electronically

and understand consumer preference in

new ways. We can get closer to our

members and customers, and we can

know them better because of this

technology. 

7. The courage to break ranks:

Agriculture, we decided, is much like a

column of soldiers marching left/right,

left/right on a weakened bridge. When

all the weight of the column hits at the

same time, it will collapse the bridge.

The wise leader orders, “Break ranks!”

Agriculture needs to break ranks.

Farmers can’t just keep pounding out

commodities in lock step. The lock step

production of commodities is collapsing

the system. Farmers and ranchers can

break ranks, but it takes intelligence to

do so without going broke. The

information age now allows us to gather

and apply that intelligence prior to

leaping into new ventures. 

8. The new model: Uniformity,

conformity and standardization are

parts of the mechanical process of the

industrial age. Many cooperatives still

use these operating strategies. Some

cooperatives are trying to gain

operating efficiencies by mergers. Most

cooperatives are trying to reduce costs

and standardize. While many of these

tactics may be appropriate for

institutional survival, they may not be

adequate to build the organizations we

desire. 

The new economy and the

information age acknowledge that

humans have always been biological

creatures. The biological model of

human behavior encourages diversity

and specialization instead of machinelike standardization. As it is in

agriculture, organizational diversity in

cooperatives is a strength. While the

grip of the old way is strong, the pull of

the new economy toward a new model

is a reason for hope.

9. Surviving the transition: Individuals working for cooperative

organizations need to be aware of the

powerful influence of the industrial age.

Few organizations can instantly

transition to the information age.

North America is not completely in the

new economy. Organizations going

through these changes experience

internal anxieties. Within cooperative

organizations, well-meaning and

forward-looking individuals can be

wrongly perceived as a threat under

these circumstances. We have reason to

hope because we can understand this

type of organizational behavior and can

usually avoid negative consequences.

10. Faith in the future: Even

though many cooperative institutions

are struggling with the change from the

industrial age to the new economy, they

are moving. The direction of that

movement is toward more responsive,

diversified and meaningful

organizations. Cooperatives have the

ability to break ranks more easily than

other forms of business ventures. Many

existing cooperatives were formed

because traditional systems failed to

provide the desired benefits. 

Designing new cooperatives, forging

new alliances and redesigning existing

cooperatives are all possible in the

positive view of the future commonly

held by cooperators. Much has already

been done, and though the road will be

difficult, it is a journey well worth

taking. It is a reason for hope. 

A one-time report

We left the meeting without any

formal plans to meet again. We were

generally satisfied that for these several

days we were able to reflect on issues at

greater depth than possible in our

professional lives. Individuals in the

group expressed willingness to

participate in similar discussions in the

future. ■

End notes

• See Measuring Social Capital in Five Communities

in NSW by Paul Bullen and Jenny Onyx at:

http://www.mapl. com.au/A2.htm.

• See A Cooperative Approach to Local Economic

Development, edited by Christopher D. Merrett

and Norman Walzer, published by Quorum

Books 2001, Chapter 11.

• New Generation Cooperatives in the New

Millennium by Doeke Faber and Lee Egerstrom

(What NGC’s Cannot Do and False Hopes and

Expectations) Pages 179, 180, 181.

• Ibid (Agency Theory Problems) Pages 178 and

179.
Rural Cooperatives / May/June 2014 35
36 May/June 2014 / Rural Cooperatives

Newsline

Send co-op news items to: dan.campbell@wdc.USDA.gov

Co-op developments, coast to coast

Two co-ops share 

wind energy honors

The National Rural Electric

Cooperative Assoc. (NRECA) and U.S.

Department of Energy have awarded

top honors for wind energy production

to Old Dominion Electric Cooperative

of Virginia (ODEC) and the Rural

Electric Convenience Cooperative of

Illinois (RECC). 

The cooperatives were recognized

March 6 as the 2013 Wind

Cooperatives of the Year at

the TechAdvantage 2014 Conference

and Expo in Nashville, Tenn. Co-op

executives said they appreciated the

honor for outstanding leadership in

advancing U.S. wind power and

acknowledged what the award means

for wind energy going forward.

RECC worked with the Illinois

Department of Natural Resources to

install the utility-scale wind turbine on

an elevated section of an abandoned

mine to capture a large amount of wind

to serve its 5,800 member-consumers.

ODEC, a wholesale power supply coop, has added more than 260 megawatts

of capacity to its renewable resource

portfolio since 2008 to serve its 11

member distribution co-ops.

A panel of judges from the wind

industry, utilities, government, national

laboratories and cooperatives picked the

two co-ops based on their corporate

leadership, project innovation, and

benefits to customers. 

AMPI reports 

$1.8 billion in sales

Associated Milk Producers Inc.

(AMPI) had sales of $1.8 billion and

earnings of $7.5 million in 2013, it was

Old Dominion Electric Cooperative in Virginia and Rural Electric Convenience Cooperative

(RECC) in Illinois shared honors as Wind Cooperative of the Year. Top: The GobNob Wind

Farm in central Illinois. Photo courtesy RECC. Below: The Mehoopany Wind Farm in

Wyoming County, Pennsylvania. Photo courtesy BP Wind Energy 
Rural Cooperatives / May/June 2014 37

Agriculture Secretary Tom Vilsack in

late April announced that USDA will be

providing additional support and

resources for America’s small and midsized farmers and ranchers and for coop development. “Small and mid-sized

producers are a vital part of America’s

agricultural future, and we are

dedicated to ensuring their success,”

Vilsack said. “USDA is continually

reviewing our resources, programs and

policies to make sure we are working

for producers of all sizes.” 

Efforts announced by Vilsack

include: 

■ The Rural Cooperative Development

Grant Program (RCDG) will make up to

$5.8 million available to Rural

Cooperative Development Centers

(RCDCs), which, in turn, provide

technical assistance focused on

improving the economic condition of

rural areas by supporting the start-up,

expansion or operational improvement

of rural cooperatives and other

business entities. Cooperatives have

often been the mechanism used by

producers to work together to access

new markets or market value added

products. 

■ In 2013, business and cooperative

funding through the Cooperative

Programs office of USDA Rural

Development helped 17,773 rural

businesses, including 4,200 farmers

and 4,472 small businesses. These

investments created or saved more

than 41,600 jobs. Under the 2014 Farm

Bill, USDA will be creating an

Interagency Working Group to improve

coordination of programs and services

between federal agencies and national

and local cooperatives through the

RCDG program. 

■ $7 million in grants are being

awarded to 10 universities to develop

programs that will help small and

medium-sized farmers grow their

operations, enhance their production

and become economically viable.

These awards, made by USDA’s

National Institute of Food and

Agriculture (NIFA) Agriculture and

Food Research Initiative (AFRI) Small

and Medium-Sized Farms program,

focus on developing models to assist

small farmers develop management

strategies, adopt new technologies and

improve their competitiveness. These

awards prioritize strategies that

enhance access to markets, develop

local and regional food systems,

assess the impact of economic

changes to new and beginning

farmers, and conduct outreach

activities that may enhance small

farmers’ well-being.

■ The Small, Socially Disadvantaged

Producer Grant program (SSDPG) will

make $3 million available to provide

technical assistance to small, socially

disadvantaged agricultural producers

through eligible cooperatives and

cooperative development centers.

Awardees will be able to conduct

market research, product and/or

service improvement, feasibility

studies, and training, and implement

business plans. Applications are being

accepted through June 30, 2014. More

information about how to apply is on

the Rural Development website. 

■ USDA Certification for Small and

Very Small Producers of grass-fed beef

is a new verification program

administered by USDA’s Agricultural

Marketing Service (AMS). It is tailored

to meet the needs of small-scale

livestock producers and the growing

grass-fed beef industry. It allows smalland very small-scale producers to

certify that their animals meet the

requirements of the grass-fed

marketing claim standard, helping them

differentiate themselves and

communicate value to their customers.

AMS is targeting producers that

market 49 cattle or less each year by

designing a less costly application

process for these producers to use the

USDA Certified Grass-Fed claim.

Producers who are certified under the

new program will receive certificates

that allow them to market cattle to

slaughter facilities as USDA certified

grass-fed, increasing their market

value and creating new economic

opportunities throughout the supply

chain. 

For more information on these

programs, visit: www.usda.gov ■

USDA supports co-op development, small- and mid-sized farmers 

USDA photo by Lance Cheung
38 May/June 2014 / Rural Cooperatives

announced in Bloomington, Minn.,

during the annual meeting of the 2,600-

member co-op. “Our manufacturing

capacity and production flexibility made

it possible for AMPI to reap the

benefits of increased demand for our

core product line — cheese, butter and

powdered dairy products,” AMPI

President and CEO Ed Welch told

some 400 members, employees and

guests at the meeting. “Coupled with

plant improvements, the cooperative’s

performance improved and the balance

sheet was strengthened.”

American-style cheese production of

400 million pounds in 2013 remains the

cooperative’s top product category.

AMPI was also a Midwest leader in

milk powder production. Products such

as nonfat dry milk, whey protein

concentrate and lactose were sold to

domestic and global customers as

demand for milk proteins increased

worldwide.

Cheese and butter packaged for

consumers at the cooperative’s

manufacturing plants grew once again.

Cheese sales increased 7 percent, while

butter sales rose for the eighth

consecutive year, posting a 3 percent

gain. Nearly 70 percent of AMPI’s

consumer-packaged business is sold to

foodservice customers.

AMPI Board Chairman Steve

Schlangen reviewed the steps taken in

the past year to position the cooperative

for strategic growth. “Through

carefully considered moves made at

every level of our cow-to-consumer

business, we made great progress in

2013,” he said. “This was done by

focusing on a core product line and

taking an active role in reforming dairy

policy that provides meaningful options

for reducing price risk.”

Additional AMPI 2013 highlights

include:

• 5.8 billion pounds of milk was

marketed through 10 manufacturing

plants;

• 2,600 AMPI dairy farmer-owners

shared $10 million in equity payments;

• Export markets accounted for 23

percent of AMPI powder sales,

primarily to Mexico.

China’s decision to lift its sevenyear ban on poultry imports from

Virginia has the potential to create a

$20 million boost in poultry sales to

the fast-growing Chinese market,

according to Southern States

Cooperative, Richmond, Va. The ban

was prompted in 2007 by an isolated

case of a mild strain of avian flu

discovered at a single Shenandoah

Valley farm. “No one expected the

Chinese action to last as long as it

has,” the co-op said in recent

announcement. 

Poultry production is the single

largest segment of agriculture in the

commonwealth of Virginia, with 2013

exports topping $186 million.

Southern States has more than 3,000

Virginia poultry producer-members.

“We are gratified to see the end

of this ban and the increased market

potential China offers for our

producers,” says Turner Gravitt,

Southern States’ director of

government affairs, adding that the

co-op “greatly appreciates the

efforts” of state government and

federal officials to help end the ban. 

Southern States is a farm supply

and service cooperative, founded in

1923, which now has more than

200,000 farmer-members. ■

Southern States hails lifting of

Chinese ban on Virginia poultry

USDA photo by Lance Cheung
Rural Cooperatives / May/June 2014 39

• A Parmesan cheese wheel produced at

AMPI’s Hoven, S.D., plant was

named best Italian cheese entry at the

2013 National Milk Producers

Federation Championship Cheese

Contest.

Farmer Co-op 

Conference Nov. 6-7

The 2014 Farmer Cooperative

Conference (FCC) will be held Nov. 6-

7 in Minneapolis, Minn. The 17th

annual FCC is being organized by the

University of Wisconsin Center for

Cooperatives to provide a forum for

cooperative directors, managers and

those doing business with agricultural

cooperatives to address issues currently

affecting the agricultural cooperative

community.

This year’s program will focus on

economic trends, policy developments

and what it will take to sustain and lead

your cooperative into the future. For

more information, contact: Anne

Reynolds at: atreynol@wisc.edu

USDA investing $78 million

for local food enterprises

Agriculture Secretary Tom Vilsack

announced May 8 that USDA is making

a historic, $78 million investment in

local and regional food systems,

including food hubs, farmers markets,

aggregation and processing facilities,

distribution services and other local

food business enterprises. 

“The 2014 Farm Bill has given

USDA new tools, resources and

authority to support the rural

economy,” Vilsack said. “Consumer

demand for locally produced food is

strong and growing, and farmers and

ranchers are positioning their

businesses to meet that demand. As this

sector continues to mature, we see

aggregation, processing, and

distribution enterprises across the local

food supply chain growing rapidly.

These historic USDA investments in

support of local food give farmers and

ranchers more market opportunities,

provide consumers with more choices

and create jobs in both rural and urban

communities.”

Vilsack said that $48 million in loan

guarantees for local food projects is

now available through the Business and

Industry Guaranteed Loan Program,

administered by USDA Rural

Development. Another $30 million is

available through competitive grants

from the Agricultural Marketing

Service’s (AMS) Farmers Market and

Local Foods Promotion Program.

The 2014 Farm Bill requires USDA to

set aside at least 5 percent of Business

and Industry (B&I) program loan

guarantees for projects that focus on

local food business enterprises. Details

on how to apply for local food funding

through the B&I program are available

on the Rural Development website:

www.rurdev.usda.gov. 

Applications are accepted on a

rolling basis. The B&I program has the

authority to fund local food

infrastructure in urban areas as long as

the project supports farm and ranch

income and expands healthy food access

in underserved communities.

Rural Development’s B&I program

provides financial backing for rural

business development in partnership

with private-sector lenders. It is one of

several USDA programs that help

finance local foods projects. In 2013,

Rural Development supported more

than 170 local food infrastructure

projects, including food hubs, scaleappropriate processing facilities, cold

storage and distribution networks.

Entities eligible for B&I loan

guarantees include cooperatives,

nonprofit organizations, corporations,

partnerships or other legal entities,

Indian tribes, public bodies or

individuals.

The 2014 Farm Bill tripled funding

for marketing and promotion support

for local food enterprises by creating

the Farmers Market and Local Foods

Promotion Program, administered by

the Agricultural Marketing Service.

This new program makes $30 million

available annually to farmers markets,

other direct producer-to-consumer

venues, and other businesses in the local

food supply chain. Under this program,

$15 million is now available for

marketing and promotional support

specifically for local food businesses,

including food hubs, delivery and

aggregation businesses, and processing

and storage facilities along the local

food supply chain, while $15 million is

for marketing support for farmers

markets and other direct to consumer

outlets. 

Since 2009, AMS, which administers

this program, has provided $27 million

for nearly 450 projects to support direct

marketing efforts for local food. More

information about how to apply is

available on the AMS website:

www.AMS.usda.gov. Applications are

due June 20, 2014.

CDF grant helps 

in typhoon recovery 

The Cooperative Development

Foundation’s (CDF) board has approved

a grant of $20,000 to the International

Cooperative Alliance (ICA) to be used

to help co-ops and members recover

from Typhoon Haiyan in the

Philippines and Southeast Asia. The

National Confederation of

Cooperatives in the Philippines

reported that at least 350,000

cooperative members had been affected

by the typhoon. 

Dame Pauline Green, president of

the International Cooperative Alliance,

issued an appeal for donations for co-op

recovery in the Philippines. Robynn

Shrader, CEO of the National

Cooperative Grocers Association, asked

that CDF accept donations made for

this appeal and forward them to the

ICA. “When tragedies like Haiyan

occur, it is heartening to see the

cooperative community come together

and show the true spirit of our

movement, which is that together we

are stronger and more effective

together than alone,” said Shrader.

“Recovery has been slow in the wake of

Haiyan, and these monies will be a

tremendous help in the re-building

effort.” 

CDF’s Co-op Disaster Recovery

Fund helps co-ops and their members

recover from disasters and promotes coop enterprise in recovering areas. The
grant was made possible by a $10,000

donation from the National Cooperative Grocers Association as well as

contributions from food co-ops and

cooperators around the country. 

USDA supporting 

food hub development 

USDA’s Agricultural Marketing

Service has entered into a cooperative

agreement with FamilyFarmed.org to

develop a national guide on “Building

Successful Food Hubs.” The

announcement was made during the

National Good Food Network’s 2014

Food Hub Collaboration Conference in

Raleigh, N.C. 

The new national planning guide

will include descriptions of key

functions, best practices and proven

strategies for food hubs — all based on

successful models operating across the

United States. The number of food

hubs has risen by 65 percent since

2009, with more than 230 food hubs

now operating around the country. On

average, each food hub supports 20 jobs

and generates nearly $4 million in

annual sales.

The nonprofit FamilyFarmed.org,

based in Chicago, is committed to

expanding the production, marketing

and distribution of locally grown and

responsibly produced food. The guide,

“Building Successful Food Hubs,” will

be one of several valuable tools USDA

has developed to help establish,

enhance or expand food hubs.

“Food hubs are helping producers of

all sizes grow, which in turn supports

the economic health and well-being of

rural communities,” said conference

speaker Doug O’Brien, acting under

secretary for USDA Rural

Development. “USDA is a proud

supporter of food hubs because we

know they help build stronger regional

food systems.”

O’Brien noted that USDA Rural

Development provided support to

more than 150 local food infrastructure

projects in 2013, including food hubs,

scale-appropriate processing facilities,

cold storage and distribution networks.

He said that USDA set new goals this

year to fund local food projects and

help people in the local foods

community work with and access

USDA programs, such as USDA Rural

Development’s Value-Added Producer

Grants, Business and Industry Loan

Guarantees and Community Facilities

Loans and Grants.

The conference brings together

people and resources dedicated to

supporting the diverse aspects of food

hubs and regional food systems. With

increasing demand for fresh, local

foods, food hubs aggregate products

from small and mid-size farms so that

large-volume buyers, such as grocery

stores, can buy local foods from family

farms in the region. 

Additional USDA research,

information and findings about food

hubs is available at:

www.ams.usda.gov/foodhubs.

DFA sales hit $12.8 billion

Dairy Farmers of America ended the

year with strong operating results from

its wholly owned commercial

investments and increased earnings

from affiliates. The cooperative’s

adjusted net income was $61.3 million,

while net sales reached $12.8 billion for

2013, a 6 percent increase compared to

2012.

“At DFA, we’re about making sure

our members can farm successfully and

profitably,” says Rick Smith, president

and chief executive officer. “In 2013, we

had a successful year. Through strong

operational performance and joint

venture returns, we were able to execute

on our strategic plan. We are also

pleased with the improved margins for

members.”

In 2013, DFA directed the marketing

of 60.6 billion pounds of milk for both

members and others through its

consolidated businesses and related

affiliates. This represents about 30

percent of the total milk production in

the United States. Payments to

members for milk marketed were $7.9

billion in 2013, compared to $7.3

billion in 2012. This increase is

primarily a result of the higher U.S.

annual average all-milk price, which

averaged $20.01 per hundredweight. 

Returns to members in 2013 totaled

$41.9 million, with $23.3 million

distributed from the cooperative’s

allocated patronage and $18.6 million

through DFA’s various capital

retirement programs.

DFA continued to grow its

commercial investments in 2013. The

Cooperative’s Fluid Milk and Ice Cream

Division acquired Frederick, Md.-based

Dairy Maid Dairy — a processor of

milk, juice and fruit drinks that markets

to major grocery chains, schools, and

governmental entities such as military

installations.

The Ingredients Division also

continued to expand, with a focus on

export opportunities with global

customers in strategic markets. DFA

exported 222 million pounds of product

in 2013, for a fourth consecutive year of

record export sales.

In 2013, DFA broke ground on two

new plants. On Sept. 20, groundbreaking was conducted in Linwood,

N.Y., for a new cold-process milk

separation plant. The plant, which is

scheduled to be completed later in

2014, will produce cream and skim milk

for a range of regional customers. A

40 May/June 2014 / Rural Cooperatives

Food hubs, such Eastern Market in (Michigan

above), should benefit from a new guide,

“Building Successful Food Hubs,” developed

with support from USDA.
second dairy ingredient plant is

currently under construction in Cass

City, Mich., which will produce highquality condensed whole and skim milk

and cream.

Earnings of affiliates were $72.8

million in 2013 compared to $57.6

million in 2012. Cash distributions

from DFA affiliates totaled $38 million

in 2013 compared to $36.4 million in

2012.

Dakota food co-op

finds strong support

Leaders of the BisMan Community

Food Co-op (BCFC), a start-up retail

food cooperative in Bismarck, N.D.,

recently met with representatives from

Basin Electric Cooperative to discuss

how the organizations could support

each other as cooperatives. 

By the meeting’s end, Basin Electric

had agreed to contribute $50 toward

every membership purchased by a Basin

Electric employee. That means a Basin

employees could invest as a memberowner of BCFC for $150 and Basin will

contribute the rest. Since the program’s

launch in late February 2014, the

BCFC has seen its membership soar

from 350 to nearly 500 in early May.

The initial goal was 600 members,

increasing to 1,000 by the time the

store is ready to open. 

This strong early showing of support

for the co-op proves that “the local

food and cooperative movement is alive

and well in North Dakota!” says co-op

leader Heidi Demars.

Stakeholders from BCFC and Basin

Electric discussed how the food co-op’s

board of directors, founding members,

and volunteers are standing where other

cooperative pioneers in North Dakota

stood many years ago, when co-ops

were the only way electricity could be

brought to the countryside. 

BCFC founding members are

banding together to achieve access to

healthier, fresher, local food and to

support local farmers who make North

Dakota their home, Demars notes.

BCFC founding members want to be

part of a strong local economy and to

empower members to know where their

food comes from, and to support a

democratically controlled business that

is governed by its member-owners. 

MMPA sales nearing $1 billion 

Michigan Milk Producers Assoc.

(MMPA) had $957 million in revenue

for 2013, indicating that the co-op is

“clearly on track to reach the $1 billion

mark for the first time,” General

Manager Clay Galarneau told delegates

at the co-op’s 98th annual meeting in

March. It was the second consecutive

year that MMPA’s milk supply increased

by nearly 5 percent, and Galarneau says

he expects to see another 5-percent

increase in milk volume for 2014.

Members are thus seeing a good

return on the $62 million invested in

2010 for a major expansion of MMPA’s

Ovid processing plant. “In the first four

years of operation, this investment has

realized over $23.7 million, or a return

of 15 cents per hundredweight for our

members,” he said. 

Most of MMPA’s increase milk

volume is going to export markets, such

as China and Mexico, where demand

for infant formula ingredients has been

growing rapidly. Last year, the co-op

saw the export volume of nonfat

powder increase by 427 percent from

the 2012 level, representing 5.7 of its

total production.

Rural Cooperatives / May/June 2014 41

Registrations are now being

accepted for the 2014 ACE Institute

in Austin, Texas, July 13-16. The

gathering of co-op educators and

developers will explore cooperative

education resources and research

and development projects that are

transforming people, cooperatives

and communities across North

America. 

Among the areas of focus will be

a look at communities that are

creating a systematic approach to

cooperative development, as well as

efforts to develop a new co-op

curriculum for youth. Among the

other topics will be: 

• Laying the Foundation for Co-op

Education: Inform, Train, Educate; 

• Living the Cooperative Values

Within Your Organization;

• The State of Co-op Business

Education;

• Collective Courage: A History of

African-American Cooperative

Economic Thought and Practice.

To register and see the

preliminary program agenda, visit:

http://s.coop/ustin. For questions,

contact Sarah Pike at: (763) 432-2032.

■

Transformative power of co-ops

to be focus of ACE in Austin

Heidi Demars waits to sign up another

member for the BisMan Community Food Coop, which is nearing the goal of 600 members

needed to launch the co-op in Bismarck, N.D.

The event here is an annual health fair

sponsored by Basin Electric Cooperative,

which is contributing to the membership fees

paid by employees who join the food co-op.

Photo courtesy Basin Electric
“Butter exports were nearly as

impressive, showing an increase of 176

percent for 2012, or nearly 24 percent

of production,” Galarneau said. “It is

clear that Michigan has been, and

continues to be, a growing dairy state,”

he added, noting that since 2000, the

state has seen its annual milk

production increase from 5.7 billion to

9.1 billion pounds. 

MMPA members received an “allmilk average price of $20.35 per

hundredweight for 2013, above the

national average of $20.01 (as estimated

by USDA),” Galarneau said, adding

that the co-op sees the potential for a

record average price of $23 per

hundredweight for 2014. 

MMPA made cash payments of $3.8

million in equity retirements in April.

These cash payments represent the

retirement of the 2005 equities. This is

in addition to the $2 million in cash

patronage from 2013 earnings paid to

members earlier this year.

“We continue to revolve equity back

to our members on a nine-year cycle,

an impressive accomplishment for any

cooperative,” says Galarneau. During

fiscal year 2013, MMPA members

earned $26 million in total premiums. 

Turkish delegates 

studying U.S. co-ops

In what marked the first official

cooperative-to-cooperative visit

between the United States and Turkey,

representatives from the Ankara-based

Ministry of Customs and Trade General

Directorate of Cooperatives recently

met with NCBA CLUSA officials in

Washington, D.C. The visit

underscored a movement toward

greater collaboration between the

global cooperative community and the

United States as a leader in the

cooperative development sphere. 

“We are here to evaluate the wellestablished U.S. cooperative system,

discuss future collaboration and hear

success stories,” said Ismail Kalender,

general director of Turkey’s Ministry of

Customs and Trade. “Until now, we

have only studied the cooperative

industry in the U.S. on paper.” 

The cooperative movement in

Turkey dates back to the republic’s

founding in 1923. There are currently

84,000 co-ops in Turkey, spanning 30

industries. Construction, agricultural

and transportation co-ops comprise the

top co-op industries, but there are

virtually no consumer co-ops. About 10

percent of the country’s population —

or 8 million people — are members of

co-ops. National laws in Turkey govern

how co-ops are founded and dictate

agricultural credits and sales. 

Tom Decker, director of cooperative

development for NCBA CLUSA, led

the group through an overview of

cooperative development in the United

States, from the birth of agriculture,

finance and electric co-ops in the

1920s-‘30s to a recent upswing in

consumer cooperatives as communities

increasingly value organic, farm-totable food. 

Decker also noted a trend toward

collaboration among co-ops in order to

strengthen their collective impact and

better raise the profile of cooperatives.

Co-ops, Decker said, are “on the cusp

of major growth” in the coming years. 

The Turkish delegation expressed

keen interest in worker co-ops. A

presentation by Leslie Mead, executive

director of the Cooperative

Development Foundation, highlighted

the established benefits of organizing

home healthcare workers into worker

co-ops. 

NCB backing 

solar power projects 

National Cooperative Bank (NCB)

provided $82 million in financing for

solar projects during 2013. The bank

worked with Strata Solar of Chapel

Hill, N.C., on 15 solar projects around

North Carolina, which will generate 94

megawatts of power, enough to support

the energy needs of 11,250 homes.

That power will also offset more than

63,360 tons of carbon dioxide

emissions, equivalent to reducing auto

travel by 120 million miles, reducing

the carbon footprint by 11,700 cars. 

All of the electricity generated will

42 May/June 2014 / Rural Cooperatives

This solar panel array at Fuquay Farms in Wake County, N.C., generates 9,600 megawatt hours of

electricity per year, enough energy for 750 average homes. Photo courtesy National Cooperative

Bank
be purchased by subsidiaries of Duke

Energy. More than half of the solar

projects serve low- to moderate-income

rural communities. 

These projects also have created new

jobs. The co-op bank’s partner, Strata

Solar, is committed to hiring and

training a local workforce for long-term

employment opportunities. In 2013,

Strata Solar tripled its workforce by

creating 1,200 new jobs. “Our strategy

is to build our utility-scale projects in

regional clusters, so that our teams

move from one job to the next creating

sustainable long-term job growth,” says

Markus Wilhelm, CEO of Strata Solar. 

Arkansas ag co-ops 

pursue merger 

Farmers Supply Association (FSA)

and Tri-County Farmers Association

(TCFA) recently announced the

planned merger of their two

cooperatives to create a new limited

liability corporation (LLC). Pending

membership approval, the Arkansas

Farm Partners LLC would equally

merge the two companies to protect,

strengthen and grow members’ equity

investments for the future, the co-ops

said in an announcement. 

The boards of directors of FSA and

TCFA determined that pursuing this

new business structure is in the best

interest of the collective membership,

which values the cooperative system

and its ability to serve their growing

needs. 

“In recent years, we have seen

cooperatives sell to national companies

and eliminate the cooperative from the

local market,” TCFA President Tim

Spector said. “We want to ensure that

our member-producers can continue to

depend on the cooperative system that

they value and trust to provide the

high-quality, competitively priced

products and services that they have

come to expect.”

The merger would also create more

opportunities for growth and position

the new LLC to lead the cooperative

system in the state of Arkansas.

Farmers Supply Association, based in

Harrisburg, is an ag supply cooperative

that has been working with farmers for

more than 52 years in seven counties in

northeast Arkansas.

With headquarters in Brinkley, TriCounty Farmers Association has served

its cooperative members for more than

58 years in nine eastern Arkansas

counties.

Oregon co-op markets 

GMO-free cherries 

A new line of maraschino cherries

that are certified to be free of

genetically modified organisms (GMO)

has been introduced by Oregon Cherry

Growers, a Salem-based cherry

processing cooperative. According to a

report in the Statesman Journal

newspaper, the line of natural

maraschinos has passed an independent

verification process by the Non-GMO

Project, a nonprofit organization that

performs third-party verification and

labeling. 

Oregon Cherry Growers is one of

the largest processors of sweet cherries

Rural Cooperatives / May/June 2014 43

The 2012 Census of Agriculture,

released May 2, shows a nationwide

drop in land devoted to agricultural

production, from 922 million acres in

2007 to less than 915 million acres,

according to an announcement by

American Farmland Trust. This

reduction continues a downward

trend that has resulted in a 72-

million-acre decrease of land in

agriculture since 1982. 

The census counts land devoted

to cropland, woodland, pasture and

rangeland, and farmsteads/farm

buildings, but does not track

changes in rural land use, including

acres lost to development.

“This latest census continues the

steady decline of land in agricultural

use as demand for agricultural

products grows worldwide,” says

Andrew McElwaine, president and

CEO of AFT. “Globally, we face the

challenge of doubling food

production by 2050 to feed the

world’s population.”

States with the largest

percentage declines in land devoted

to agriculture were: Kentucky, 6.7

percent; Alaska, 5.4 percent;

Georgia, 5.2 percent; Mississippi, 4.6

percent; and Wisconsin, 4.1 percent.

Increases in land in farms were

reported in 19 states. The largest

percentage gains were in: Maine, 7.9

percent; Connecticut, 7.6 percent;

Florida, 3.4 percent; Rhode Island, 2.6

percent, and Virginia, 2.4 percent.

But these upticks don’t tell the whole

story. 

“In recent years, we’ve

developed more than 50 acres of

agricultural land every hour,” says

McElwaine. “Since 1982, we’ve

converted 24.1 million acres – an

area the size of Indiana and Rhode

Island combined.” 

Estimates from the latest National

Resources Inventory – a nationwide

survey of non-federal land

conducted by USDA’s Natural

Resources Conservation Service –

also show that every state

developed rural land and lost

cropland soil to erosion between

2007 and 2010. According to an

analysis by American Farmland

Trust, each of the 19 states with

more land in farms in the 2012

census also developed significant

acres of rural land. 

For more analysis of the 2012

Census of Agriculture, visit:

www.farmlandinfo.org/statistics#Cen

sus of Agriculture. ■

Census shows steady decline

in land devoted to farming 
44 May/June 2014 / Rural Cooperatives

www.usda.gov/investmentconference. 

Promoting rural healthcare 

In another indication of how Farm

Credit works with USDA, AgStar

Financial Services and United FCS have

partnered with Renville County

Hospital and Clinics in Olivia, Minn.,

on a renovation and expansion project.

The $24 million project was made

possible through many partnerships,

including investments from AgStar,

United FCS, CoBank and financing

from USDA Rural Development. In

addition, Renville County Hospital and

Clinics has committed a portion of the

project costs from its own cash reserves.

This 62,000-square-foot project

includes a new clinic featuring 15 exam

rooms and one procedure room, 16

inpatient beds, lab radiology and

therapy, outpatient and specialty clinics,

two operating rooms and an education

center.

Marc Knisely, CEO of United FCS,

says the project provides local

communities with improved access to

quality health care today while also

promoting opportunities for future

expansion of services.

Both of these endeavors show that

the cooperative mission of FCS can

manifest in many worthy ways, and

USDA Rural Development looks

forward to more such collaborative

efforts in the future. ■

Commentary

continued from page 2

in the world, supplying fresh,

maraschino, dried and frozen sweet

cherries, as well as blueberries and

other fruits. “Since our line of Royal

Harvest Maraschinos already met all of

the non-GMO criteria, it seemed only

natural that we would pursue the nonGMO certification,” Tim Ramsey, the

co-op’s CEO, told the newspaper. 

Founded in 1932, Oregon Cherry

Growers is a grower-owned cooperative

of family farms cultivating,

manufacturing and marketing fruit

grown in the Willamette Valley and the

Columbia River Gorge. The co-op

employs more than 400 people at its

processing plants in Salem and The

Dalles.

Co-op using USDA loan to

create new jobs in forest

products 

A Wisconsin forest products business

is set to expand with the help of a rural

development loan secured by Barron

Electric Cooperative. The $657,000

loan, issued by USDA Rural

Development under its Rural Economic

Development Loan and Grant

(REDLG) program, will enable TriState Lumber & Land to add as many

as 10 jobs during the next three years,

according to a report on the Electric

Cooperatives Today website. 

The company’s growth plans call for

producing pallet parts from smalldiameter, low-grade timber, which will

maximize production of all harvested

timber. USDA says the loan also will

preserve 20 jobs at the business in

Trego, in northwest Wisconsin.

Founded in 1996, Tri-State Lumber &

Land is a locally owned sawmill that

specializes in high-grade lumber,

paneling, flooring, corner trim and

moldings for wholesale and retail

markets. 

USDA’s REDLG program provides

zero-interest loans for co-ops to relend

for job creation efforts, typically

through revolving economic

development accounts. Co-ops support

the program through prepayment of

their Rural Utilities Service loans.

Trupointe Co-op 

opens Indiana facility

Trupointe Cooperative in April

opened a full-service agronomy hub in

Milford, Ind. Located on a 275-acre

site, the facility will hold 2 million

gallons of liquid fertilizer and 37,000

tons of dry fertilizer. Its automated

handling systems will provide accuracy

and efficiency with load-out times set at

seven minutes for dry fertilizer, 17

minutes for liquid fertilizer

and 15 minutes for

anhydrous ammonia.

Certain products will be

available for loading 24

hours a day, seven days a

week.

Chase Snyder is the

manager of the new

agronomy facility. Snyder

graduated from Ohio State

University with a

bachelor’s degree in crop

science and agricultural

systems management. He

previously worked as a

superintendent at

Consolidated Grain &

Barge in Mount Vernon

and Princeton, where he

managed grain quality,

personnel, logistics and the

preventative maintenance

program. ■

Construction work was nearing completion when this photo

was taken inside the dry fertilizer storage building at the new

Trupointe Cooperative agronomy hub in Milford, Ind. The

facility opened in April. Photo courtesy Trupointe Co-op
Rural Cooperatives / May/June 2014 45

blends — each 40,000 pounds of raw

product — at Sno Pac Foods in the

early winter of 2013. By collecting preorders from enough institutional

buyers, Chapeta was able to justify

moving forward with the project. The

result was a success for Fifth Season

Cooperative, and for farmers and

schools, as well as the other

institutional buyers. 

Historically, tracking food through

conventional supply chains — with the

goal of educating consumers about the

origins of their food — has been

difficult. In typical supply chains, where

procurement decisions are made based

on least expensive available product, the

origin of products can be highly

variable. 

However, Fifth Season provides full

transparency on product origins for all

customers. For the frozen blends, Fifth

Season provided farmer-identified

educational materials, giving the

consumer information about the

farmers and their growing practices. 

The winter availability of these

locally grown products helped

institutions meet the demands of their

customers to extend the season for local

products. The schools ability to order

frozen, locally grown products through

their existing distributor was seen as

highly convenient, while simultaneously

providing the opportunity for smalland mid-sized growers to access new

institutional markets.

Promising markets and 

values-based supply chains

Fifth Season Cooperative used 90

percent cosmetically imperfect seconds

to create its root vegetable blends and

will continue to develop a new product

line of frozen, minimally processed

vegetables and vegetable blends in the

coming years. For the 2014 season, the

co-op has begun the build up to

increase production two-fold of the

proven blends. This is a direct response

to the increased demand for the

products from institutional and

commercial buyers. 

Co-op leaders say it appears likely

that the sales volume of the vegetable

blends will increase in 2015 and 2016

and that new products will be added to

the co-op’s offerings, including carrot

fries, a late-summer vegetable medley

and pureed products. 

Organic Valley benefited greatly

from the success of this project. The

small family farmers in this cooperative,

many of whom are Amish farmers,

produced all of the butternut squash,

red beets and golden beets for the

Winter Moon Blend, most of which

were seconds. Until this project, the

farmers had not found a suitable market

for their cosmetically imperfect

seconds. 

The relationship between Organic

Valley and Fifth Season Cooperative is

reciprocal. Organic Valley provides

locally grown organic vegetables and

Fifth Season provides member-owned

processing infrastructure and a market

for these products through its

distributor-member, Reinhart Food

Service. These relationships have come

full circle within Fifth Season.

Robust, regional food system

Fifth Season Cooperative, as part of

an applied research project, fostered

supply chain relationships that created a

market for under-utilized produce,

enhanced business viability, provided

fair pricing to farmers and supplied

children with healthy food at a

reasonable cost. By developing a robust

regional food system that increases

access for small farmers to institutional

markets, Fifth Season is building a

strong, resilient local economy. 

Fifth Season provides a model of

how cooperatives can contribute to

economically thriving communities by

bringing together groups that typically

do not work closely together, such as

distributors and small organic farmers.

Because these diverse stakeholders are

sitting at the same table to make

decisions, accountability exists where it

otherwise may not. 

This accountability between the

supply chain sectors leads to increase in

communication and trust at the

individual level, which results in

adequate transparency at the individual

and organizational levels. Fifth Season’s

model is changing the culture of doing

business within an otherwise

conventional food supply chain and is

normalizing a new approach, rooted in

accountability and transparency across

sectors. 

The values of environmental, social

and economic health and fairness

motivate the co-op to produce, process

and market healthy, locally grown foods

in its region. As Fifth Season continues

to grow and build a community and

regional food system, the hope is that

the values themselves will transform

relationships that have the potential for

positive social change. 

If the success of Fifth Season is any

sign of the potential of this model, then

there should be great hope and

confidence for building sustainable local

food systems across the country. ■

References

• Berkenkamp, Joanne. (2014). Eating our Peas

and Carrots: Strategies for Expanding K-12.

Access to Fruits and Vegetables Through

Supply Chain Innovation and Investment.

Prepared for School Food Focus a program of

Public Health Solutions

• Centers for Disease Control and Prevention.

(2011).Youth Risk Behavior Survey. Available at:

www.cdc.gov/yrbs. Accessed January 2014.

• Edwards-Jones, G., Milà i Canals, L.,

Hounsome, N., Truninger, M., Koerber, G.,

Hounsome, B., ... and Jones, D. L. (2008).

Testing the assertion that ‘local food is best’: the

challenges of an evidence-based approach.

Trends in Food Science and Technology, 19(5), 265-

274.

• Day-Farnsworth, L., and Morales, A. (2011).

Satiating the Demand: Planning for Alternative

Models of Food Distribution. Journal of

Agriculture, Food Systems and Community

Development, 2, 227-247.

• Goldberg, G. (Ed.). (2008). Plants: diet and

health. The report of a British Nutrition

Foundation Task Force, Blackwell Publicing

Ltd., Oxford, UK John Wiley & Sons.

• Hinsch, R. T., Slaughter, D. C., Craig, W. L.,

and Thompson, J. F. (1993). Vibration of fresh

fruits and vegetables during refrigerated truck

transport. Transactions of the ASAE, 36.

The Right Blend 

continued from page 17
46 January/February 2014 / Rural Cooperatives
Rural Cooperatives / January/February 2014 47
Periodicals Postage Paid

U.S. Department of Agriculture

United States

Department of Agriculture

Washington, DC 20250

OFFICIAL BUSINESS

Penalty for private use, $300

NOTICE:

❑ Check here to stop receiving this publication and mail this

sheet to the address below.

❑ NEW ADDRESS. Send mailing label on this page and changes

to:

USDA/Rural Business—Cooperative Service

Stop 0705

Washington, D. C. 20250-3255

48 May/June 2014 / Rural Cooperatives