USDA / Rural Development March / April 2012

Rural

COOPERATIVES COOPERATIVES

Page 4

More women attain

co-op leadership roles
By Kathleen Merrigan, Deputy Secretary

U.S. Department of Agriculture

Since our first days at USDA, Secretary Tom

Vilsack and I have been crisscrossing the

country talking to farmers and ranchers, food

retailers and wholesalers, and many thousands

of others whose livelihoods depend on

agriculture. Here’s one thing we’ve heard loud and clear:

Americans are interested in buying more food from local

producers and knowing that their food dollar supports the

local economy. 

The numbers bear out the local trend: In 2011, more than

85 percent of customers polled by the National Grocers

Association said that they chose a grocery store based in part

on whether it stocked food from producers in their region.

Today, we have more than 2,000 farm-to-school initiatives

nationwide, up from only 400 in 2004.

The groundswell of interest in local foods in turn creates

opportunities for new jobs, revenue and economic

development. America’s rural cooperatives have a key role to

play in developing strong local and regional food systems.

Cooperatives owned by producers from a specific region

can aggregate, store and market members’ products to a

variety of local buyers. They are well-positioned to share

information about their producer-members and help

consumers learn more about who produces their food. Retail

cooperatives, which are owned by consumer members, are a

model that has been used to develop “food hubs” that

aggregate local farmers’ products and sell them to members

and others.

USDA is working on myriad fronts to help cooperatives

take greater advantage of these new market opportunities.

Just a few examples: 

• Rural Cooperative Development Grants from USDA Rural

Development have helped the Rocky Mountain Farmers

Union in Colorado to assist the High Plains Food

Cooperative in launching an online farmers’ market, where

consumers can order products for delivery from co-op

member-producers. 

• Producer-members of the Shepherd’s Grain farming

cooperative in Washington and Oregon grow much of their

wheat for export. But between 15 and 30 percent of their

crop is high-quality hard red spring wheat that is processed

and sold regionally, offering the farmers a better return

while local bakeries use it to produce popular products.

With support from USDA’s Sustainable Agriculture

Research and Education program, the cooperative was able

to train its producers in the use of no-till farming to

preserve the soil and reduce fuel use — and then convey

that information to its customers.

USDA is eager to help cutting-edge businesses like this

grow, develop and succeed — and we have a lot to offer.

Until recently, however, it has been daunting for producers

and others in the agricultural community to navigate USDA

resources. 

That’s why USDA launched the Know Your Farmer,

Know Your Food Initiative in 2009. It’s a tool to coordinate

the department’s work on local and regional food systems and

leverage existing resources to strengthen them. The initiative

developed a website that serves as a “one-stop shop” for local

food tools and resources from USDA: www.usda.gov/know

yourfarmer. Most recently we launched the Know Your

Farmer, Know Your Food Compass, an online map and

compendium of stories, photos, videos and resources available

from USDA: www.usda.gov/kyfcompass. 

Stay tuned to the next issue of this magazine for more

articles and resources — and let us know how your

cooperative is strengthening local food systems by

commenting on the USDA blog, by sending us a tweet at

#KYF2, or by e-mailing us at: knowyourfarmer@usda.gov. n

U.S. Agriculture Deputy Secretary Kathleen Merrigan discusses

the Know Your Farmer, Know Your Food initiative with Alex Gyori,

general manager of Brattleboro Food Co-op in Vermont. USDA

photo

2 March/April 2012 / Rural Cooperatives

Commentary 

Local food is a cooperative venture 
Features

Rural Cooperatives / March/April 2012 3

Volume 79, Number 2

March/April 2012

Rural Cooperatives (1088-8845) is

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Tom Vilsack, Secretary of Agriculture

Dallas Tonsager, Under Secretary,

USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?

Call (202) 720-6483, or email:

coopinfo@wdc.usda.gov

This publication was printed with vegetable oil-based ink.

p.7

04 She’s taking care of business

Montana producer Mary Fritz paves a trail for women leaders in Farm Credit System

By Dan Campbell

07 Some like it hot

Mary Alice Garay continues family tradition of growing and processing chile peppers 

By Dan Campbell

10 From workers to owners 

LEDC helps Latino immigrants launch wide variety of businesses in Minnesota 

By Anne Todd

16 Largest 100 ag co-ops post near-record sales, margins 

By Sarah Ali and David Chesnick

26 Co-ops of all types benefit from USDA’s value-added grants

By Stephen Thompson

32 Dairy co-ops in the 21st century: the first decade

By Carolyn B. Liebrand

36 Co-ops respond to consolidation, global volatility

By Lynn Pitman

Departments

02 COMMENTARY

15 UTILITY CONNECTION

30 CO-OPS & COMMUNITY

38 NEWSLINE

p. 10 p. 32

ON THE COVER: Posters of “Rosie the Riveter,” as she came to be

known, were used during World War II to encourage women to perform

jobs in heavy industry that had traditionally been done by men. Assistant

Editor Stephen Thompson tweaked the art just a little — adding “Co-op”

to her head scarf and changing the button on her collar to a Farm Credit

logo — to kick off a pair of features about women who have attained

leadership positions in the Farm Credit System. They share their stories

in the hope of encouraging more women to run for co-op boards. See

page 4.

p. 26
By Dan Campbell, Editor

dan.campbell@wdc.usda.gov

oes it ever feel like the bar sometimes gets set

a few notches higher for a woman looking to

fill an agricultural leadership position

traditionally held by a man? Mary Fritz, a

Montana grain and cattle producer, needs

only about one second to ponder this question before

answering: “Oh yeah!”

In 18 years of serving in leadership positions in the Farm

Credit System, Fritz has had to contend with some who

thought a woman wasn’t capable of the job. But it hasn’t

stopped her from attaining leadership positions in the Farm

Credit System that no woman had held before her, and in

which she has proven to be more than capable of taking care

of business. Any vestiges of sexism encountered along the

way have been viewed as obstacles to be dealt with and

overcome, never as a stopping point.

“Mary has definitely been a great leader for women in the

Farm Credit System (FCS),” says Everett Dobrinski,

chairman of the CoBank board. In 1994, Fritz became the

first woman ever elected to her local Farm Credit advisory

board in Montana. While she found that some of the board

members readily accepted her presence, others “were from

the old school. I had to prove myself over and over.” Her

business skills and knowledge gradually won them over, and

she was elected board vice-chair in 2000 and board chair in

2002. 

Fritz went on to become the first woman elected to the

board of Northwest Farm Credit Services, which oversees

FCS operations in five states. She then became the first

elected woman board member at CoBank and the first

woman on the Farm Credit Council (FCC) board, Farm

Credit’s policy organization. She was elected vice-chair of the

FCC board in 2011.

“If my husband had been in my position, and walked into

some of those board rooms, no one would have questioned

his ability the way some did with me,” Fritz recalls. 

“For example, in the old days, candidates for the

Northwest Farm Credit board would go from state to state,

and each candidate would make a presentation before the

ballots were mailed out. In Oregon, a nice elderly man who

reminded me of my grandpa, sat me down, patted my hand

and told me: ‘Honey, you did a really nice job, but this is a

man’s world.’ It was like spitting in your eye!” she recalls,

although able to laugh at it now. 

“With some guys on the board, it took a year or two for

them to come around, but they usually did.”

Stepping up 

Fritz’s role at Farm Credit is part of a larger trend with an

increasing number of women taking on leadership roles in

agriculture. According to the most recent farm census,

4 March/April 2012 / Rural Cooperatives

D

She’s taking care of business

Montana producer Mary Fritz paves a trail

for women leaders in Farm Credit System
women are the principal operators of more than 14 percent

of the nation’s farms, a 22 percent increase since 1997.

But those numbers don’t reflect the fact that a typical U.S.

family farm is run as a partnership by a farm couple, Fritz

says. On her Quarter Circle JF Ranch, near Chester, Mont.,

Fritz is basically the business office manager for the

operation. She shares marketing work with her husband and

handles virtually all of the bookkeeping. She is also more

than capable of hopping on a combine or tractor when the

farming workload requires. 

When a farm couple such as the Fritzes walks into a Farm

Credit office to renew a loan, it is often the wife — in her

role as bookkeeper — who provides most of the financial

data, she notes. Serving on a Farm Credit board thus seemed

to be a natural fit, once it was suggested to her. 

“My husband, John, and I have always been partners, so I

saw no reason not to give it a shot when it was suggested I

run for the advisory board, although I never expected to win

that first race,” Fritz recalls. But she did, proving that, for

everyone who thought a woman wasn’t suited for the job,

there were plenty of others who didn’t see it as a problem. 

It didn’t hurt that the Fritzes are well regarded in their

area for running an efficient farming and ranching operation

and are strong supporters of their Farm Credit cooperative.

The Fritz’s main crops are hard red winter and spring wheat,

malt barley, forage peas (mixed with barley, for use on their

own farm) and dry peas that are processed in the area and

exported, usually to India or Pakistan. They own an irrigated

hay farm (currently being leased out) 150 miles away from

the home farm and also raise all-natural Black Angus beef

cattle. 

“To get the all-natural label, we can’t use any growth

hormones or antibiotics,” Fritz explains. “That’s easy for us,

because we get our growth through genetics. We have lots of

space for calving, so we rarely get sick calves. If we do, and it

needs treatment, we keep meticulous records and that animal

will not be sold as all-natural.”

The farm is in an area called the Golden Triangle of

Montana that is well suited for growing high-protein red

wheat without much need for inputs. “We do need some

fertilizer and nitrogen, but because of the good soil

conditions, you don’t have to break the bank putting nitrogen

on it.”

The area is also well known for its malt barley production.

“There are several companies in the area that buy it, so the

competition is great,” Fritz says. 

Transportation costs and related issues are always a big

economic factor for producers, but the Fritz farm is

benefitting from two new 110-car shuttle loaders in the area.

Adding new perspective

After so many years serving on boards and running the

farm with her husband, Fritz has concluded that there are

subtle differences in the ways men and women typically go

about decision-making and addressing a problem. That’s a

good thing, she believes.

“I see many things differently than my husband does, and

differently than do many of the guys on the board. When you

have a combination of men and women on a board, I think

you get a broader view — a 360-degree view of things.” For

example, she thinks women have a tendency to be more adept

at reaching consensus and tend to be more careful listeners.

What personal traits have served her best as a co-op

director? “We do a peer evaluation every year, and I am often

described as a willing listener who strives to see all aspects of

a situation — and as a person who looks for opportunities to

find compromise. I’ve also been told I have good

communications skills.”

John Fritz isn’t shy about doing his own, less scientific

analysis of his wife. “He says I am way too analytical and a

little on the conservative side — which I don’t agree with, of

course,” she says with a laugh. 

Fritz recently attended a Northwest Farm Credit meeting

and was pleased to see that there were more women on local

advisory boards than she had seen previously. “The numbers

of women serving on co-op and association boards across the

country seems to be increasing. At national meetings, I

definitely see more lady members.”

Co-ops — with their history of democratic governance

and their role of “equalizer” in the marketplace — should be

especially cognizant of the need to get more women active in

leadership positions, Fritz feels. “Co-ops need to realize that

women have a lot to offer. Many of them know their

businesses inside and out, and they have just as much to offer

on the board as their husbands do. We just have to break out

of this traditional mindset that agriculture is a man’s world.”

Technology helpful for women farmers

Keeping abreast of all the evolving technology used on

farm machinery can be a challenge, Fritz says. “Luckily, my

husband is a tech nut.” She “fought tooth and nail” with him

when he wanted to get auto-steer on their new combine. “I

was used to our old machine and being able to hear every

little nuance of it.” But when the new combine arrived with

auto-steer, he said “‘Come on and try it, you will like it.’ And

darned if I don’t.”

She enjoys driving combines and feels that a lot of the new

technology makes it easier for women to do more hands-on

farming. “For example, it used to be hard for me to unload

grain because you had to manually haul a big auger into

position; it was especially hard under hopper-bottom trailers.

Now, everything is hydraulic; it moves itself.

Rural Cooperatives / March/April 2012 5

“Serving on these boards has been

such an enriching and educational process

for me. I can’t even put a value on it.” 
“We have GPS guidance systems on the combines and

tractors now for spraying and seeding. It is amazing, but

everything has gotten bigger and more expensive. Up where

we are [near the Canadian border with Montana], labor is

difficult to come by. We do have hired help, but have to

compensate with machinery.” 

Merger puts demands on directors 

The time commitment for serving on a co-op board is

usually greater than anticipated, especially in the early years,

Frtiz says. “There is an education process you go through.

You may have great business sense for your own operation,

but when you get on a board like Northwest Farm Credit or

CoBank, many businesses that you are dealing with are very

different from your own.” 

The last couple of years serving on the CoBank board has

involved an “exceptionally heavy workload” because of the

recently completed merger with U.S. AgBank, she says.

“That required a lot of director involvement, due to the

stockholder issues and the need to monitor all the financials.”

Moving from the Northwest Farm Credit to the CoBank

board was a big switch, she found. “There are similarities

when moving from an association to a bank board, but also

differences.” At both Northwest and CoBank, a director’s

most important job, she says, is to hire skilled management

and set policy for the CEO to carry out. “From a proper

distance, you watch to see that policy is being carried out; but

you don’t get your nose or fingers into running the business.” 

The scope and scale of the two operations, however, is

quite different. “Northwest is a regional association with a

five-state footprint that delivers credit services to members.

CoBank is its wholesale parent and also has a retail arm; it

has a national footprint and even does some international

business.” 

One of the driving forces behind the merger with U.S.

AgBank (also a producer-owned co-op), Fritz says, was a

desire to spread the risk that comes from having a

concentrated loan portfolio. With this merger, the bank has a

more balanced portfolio consisting of roughly 50 percent

wholesale business and 50 percent retail business, she notes.

Adding California to CoBank’s trade area via the merger

should be especially helpful in spreading risk both

geographically and over a larger mix of commodities. 

“I have no doubt that this will make for a stronger, more

resilient bank,” she says. 

Her CoBank term expires in 2015, and at this point, Fritz

says she is leaning toward retiring from the board after that.

“I wanted to see this merger through, which I’ve done; now I

am leaning toward allowing someone with younger, fresher

ideas to come on when my term expires.” 

She hopes that more women will continue to pursue

leadership roles in Farm Credit and the larger co-op world.

Step forward, she urges women producers, if you think you

have something to bring to the board room that can help

your co-op. 

Fear of failure probably prevents many good people, men

and women, from running for co-op boards, she says.

“They don’t want take a risk of failure. But the rewards far

outweigh the risk of failure. Serving on these boards has been

such an enriching and educational process for me. I can’t

even put a value on it. 

“I have learned so many things that increased my business

skills — we’ve changed some of our business and farming

practices as result of what I have learned doing this. I would

strongly encourage any woman who thinks she can do the job

to try it.” n

6 March/April 2012 / Rural Cooperatives

Rose Holste has run a row crop and hay operation in

Iowa with her husband since 1968. Even with decades of

experience, she still wanted to learn more about the

business side of farming. Several

years ago, she found out about

Annie’s Project, a national

program designed to help

women in agriculture.

“It was so worth the time,”

Holste says. “The sessions were

all well planned and presented

and gave me a new perspective.

We’ve definitely applied the

information to our lives and our operation.” 

Annie’s Project (short for “Annie’s National Network

Initiative for Educational Success”) is a six-week course

that teaches risk-management, problem-solving,

recordkeeping and decision-making skills. Classes are

designed around specific regional needs and help

participants develop local support networks. 

Since its inception in 2009, Annie’s Project has served

more than 6,500 women in 25 states. Farm Credit’s

national sponsorship is helping to support Annie’s

Project.

This program has something for every age group and

every situation,” Holste says. “The group that attended

with me was diversified, which made the discussions

interesting. I felt that everyone who attended walked

away with new knowledge.”

For more information, visit: www.extension.iastate.

edu/annie/index.html. n

— Courtesy Farm Credit System

Annie’s Project helps women farmers 
Rural Cooperatives / March/April 2012 7

By Dan Campbell, Editor 

he chile pepper is not just a top crop in the

Hatch Valley of southwest New Mexico, it is

a key part of the regional culture. All things

“chile” are even celebrated each autumn with

a festival that attracts 30,000 people and

media that has included the Food Network and the British

Broadcasting Corporation. 

While the region has ideal soil and climate conditions for

growing top-quality chile peppers, acreage devoted to the

crop has been declining in recent years, due in large part to

soaring prices for cotton and alfalfa, resulting in an acreage

shift away from peppers.

That’s meant even stronger demand, however, for the chile

products processed by M.A. & Sons of Arrey, N.M., where

not only are the food products spicy, but the business is also

hot. 

“We have well-established markets, and they are buying

everything we can produce,” says Mary Alice Garay, the head

of the family business and the “M.A.” of the company name.

The Garay family grows about 15 percent of the chile

peppers it processes, contracting with about 14 other farmers

for the rest of their crop needs. 

“We have growers who we have worked with for many

years, and we are loyal to each other. So we have not

experienced a drop in our supply,” she says.

The “Sons” part of the company name refers to Frank,

Randy and Patrick Garay, Mary Alice’s three sons, all whom

are active in the business. “My dad had a small processing

plant, and I was always involved in it,” Garay says. “When he

retired, I took it over and my sons came into the business.”

Each family member has an area of specialty. Mary Alice

does the bookwork and handles most financial aspects of

running the family business. Patrick takes care of all the

plant-related billing and helps in plant operations. Frank runs

the field and farming operations. All of them also have their

own farms.

Garay says it does seems as if more women are assuming

leadership positions on farms and related businesses in New

Mexico, which she thinks will continue to grow as more

women become heads of farming households. She does not

Some like it hot

Mary Alice Garay continues family tradition

of growing and processing chile peppers

T

Mary Alice Garay and her three sons all play an active role in the family chile pepper processing

and farming operation. Photo courtesy Garay family
8 March/April 2012 / Rural Cooperatives

feel she has

encountered any

resentment about

being a woman on the

board – which has

perhaps been helped,

in part, by the fact that

at least one woman

served on the board

before her.

With her agribusiness background,

Garay didn’t feel there

was any reason she

couldn’t do the job of

co-op director just as

well as a man could.

The gender of a

director shouldn’t be a

factor, it should just be

about whether they

have the skills and

commitment to the

association, she feels.

A chile puree for

purists

The Garay’s flagship

product is their New

Mexico Homestyle Red

Chile Puree. “We go

an extra step beyond

what most others do, taking out

all the stems, skins and seeds. This

avoids the bitter taste you can get

with some chile purees. That is

our edge,” Garay explains. 

M.A.& Sons market the puree

in 14- and 56-ounce containers, as

well as in three-gallon buckets.

“There is a lot of potential for

growing the size of our puree

business,” she says. 

Whole chile pods are sold to

wholesalers who re-pack and

market them to the retail trade,

where consumers buy them for

their own sauces. 

“The bulk of what we sell goes

to big spice companies,” Garay

says. These companies

further process the

crushed chile they buy

from M.A. & Sons.

“We also produce

paprikas that are used

for food coloring and

as a mild spice that is

popular when sprinkled

on deviled eggs and

other dishes.” 

Some products are

sold direct to the

public at the plant.

The company’s annual

sales average in the $3

million to $3.5 million

range. 

“In the past five or

six years, we have also

branched out into

frozen enchilada sauce.

Schools are our biggest

customer there, but we

also sell to major

grocery chains.” 

Elected to Farm

Credit board

Even with the long

family tradition in the

business, securing

loans from commercial banks for

farming and agricultural

operations isn’t always easy, Garay

says. So she is thankful for the

presence of Ag New Mexico, a

Farm Credit System association

co-op whose sole mission is to

serve the credit needs of producermembers like her. “Dealing with

Farm Credit has certainly made

my life a lot easier,” she says. 

When her loan officer

asked Garay to consider running

for the Ag New Mexico board

about three years ago, she agreed

to toss her hat in the ring. Garay’s

extensive knowledge of vegetable

farming, processing and marketing

A field of ripe chile peppers just prior to harvest and in

crates at the M.A. & Sons processing facility. Facing page:

Hatch, N.M., is known as the Chile Capital of the World and

holds an annual festival to celebrate its favorite spicy

vegetable. Racks of chile peppers being dehydrated. Photos

courtesy Tom McConnell and Garay family
made her well qualified, according

to Warren Russell, her Ag New

Mexico lender. 

Russell says the family’s products

are worth standing behind. As a

consumer, he says he knows their

products are unrivaled. “As their

loan officer, I know that for these

reasons their growth potential is

huge.”

Any possible feelings that a

woman might not be up for the

job of co-op director were more

than offset by the respect she has

earned among other producers,

who elected Garay to the board in

2009. 

Part of her motivation in

running was to give back to a

financial cooperative that has

meant so much to her operation,

Garay says. “I want to help

preserve financial co-ops like Farm

Credit so that they will be there to

continue to make loans to

producers — not only of my

generation, but my sons’

generation, and to their children.” 

The association’s board is

strong because the directors each

have their own unique skill set.

“We all have different

backgrounds and areas of

expertise. I am a vegetable farmer;

others are ranchers or grain

growers and so forth. The more

perspectives you get on a board,

the better.” 

It does take dedication to serve

on a co-op board when your own

business is so demanding, she continues. “I am six hours away

from Clovis, where our board meetings are held. Luckily it is

a very peaceful drive — there is not a lot of traffic.”

Now in the third year of her term, Garay says she has

enjoyed the experience enough to run again at the end of this

year. “I have learned a lot, and we’ve been able to get the

organization back on a solid footing after going through a

rough time.” 

The downturn in the dairy industry a few years ago

resulted in some challenging loans for the association and

caused much concern for its future.

With a lot of hard work and dedication, the staff and board turned the

situation around, and the association

is now strong. 

Automating with

high-tech sorter

The chile processing plant is a

seasonal operation, usually

running four to five months each

year. The peak seasonal workforce

is about 80 to 90, with about 14

year-round workers. 

But labor needs should soon be

about cut in half, thanks to the

recent purchase of a mechanical

sorter, which the family hopes to

have installed this spring. This

machine uses electric-eye

technology to do much of the

laborious sorting work currently

done by hand. 

“We are very hopeful we will

increase production with less labor

while getting better quality,”

Garay says. “The machine won’t

get tired in the afternoon like the

hand sorters do.” 

But the machine is not cheap,

costing in the $350,000 range.

Farm Credit is supplying the

financing. 

Once sorted, chile peppers have

to be dried. This is done by

loading the peppers onto flat racks

which are, in turn, loaded onto

rolling carts placed inside wind

tunnels. Natural gas heats the air,

which blowers circulate all around

the racks of peppers. In a continuous cycle, racks of

dehydrated chile peppers are rolled out and replaced with

racks of fresh peppers.

Even though Garay has greatly expanded the dehydrating

capacity of the plant in the years she has been at the helm —

expanding from 3 to 16 wind tunnels — demand is such that

“we are at our capacity for dehydrating now.” 

For future expansion, Garay says she won’t have to look

far to find a lender who understands the needs of farmers. It’s

her own co-op. n

Rural Cooperatives / March/April 2012 9

“I want to help preserve

financial co-ops like Farm Credit

so that they will be there to continue

to make loans to producers —

not only of my generation,

but my sons’ generation,

and to their children.” 
10 March/April 2012 / Rural Cooperatives

From workers to owners

LEDC helps Latino immigrants launch

wide variety of businesses in Minnesota

Cooperative Mercado Central is a thriving Latin American

marketplace of some 45 businesses in Minneapolis. It includes

restaurants, apparel shops and personal services, among others.

Pictured here are: Dona Enriqueta Cruz (second photo from top)

in the La Reina de los Jugos (Queen of Juices) snack shop and

Alfonso Zendejas in the Deportes Azteca sports apparel shop.

Marisela Onofre shoulders a load of breads and pastries on a

busy day at Panaderia El Mexicano. Photos courtesy Mercado

Central 
By Anne Todd, Contributing Editor

e-mail: anne.todd@wdc.usda.gov 

he Latino Economic Development Center

(LEDC) is a cooperative of Hispanic

immigrant business owners that has created

an authentic Latin American marketplace in

Minneapolis, Minn. The co-op emerged

from a small immigrant Latino church congregation in 1994

in south Minneapolis. That congregation, Sagrado Corazón

de Jesus (Sacred Heart of Jesus), took on a social action

dimension in addition to its spiritual one. These recent

Mexican immigrants worked in teams on educational, legal

and economic issues, overcoming many barriers to reach

their goals.

Over time, the group realized that economic progress was

essential to strengthen their community. LEDC was

incorporated in 2003, with assistance from several local

business development organizations. It then began working

to improve technical and leadership skills, which in turn led

to projects that are now known as the Cooperative Mercado

Central, Plaza Latina and Global Market.

Mercado Central is a marketplace of 45 businesses at the

corner of Lake Street and Bloomington Ave. in Minneapolis.

The owners of this group of businesses are the ones who

expanded their horizons through creation of LEDC.

The Global Market is housed in the former Sears

building, a key property on East Lake Street. An $18 million

project, Global Market opened in 2006. It was spearheaded

by LEDC, along with the help of other local and community

development centers. About one-third of the Global Market’s

tenants are startups, coming from graduates of training

classes offered by LEDC and other neighborhood partners.

About half the vendors are “second level” entrepreneurs, who

have three to five years of experience in business. 

Plaza Latina opened in 2001, before LEDC was

incorporated. Plaza Latina was established

on Payne Avenue by members of the

Mercado Central development team,

collaborating with the East Side

Neighborhood Development Center.

It is a smaller version of the

Mercado Central, with 10 tenants.

These businesses, along with

several others that opened

between 2000 and 2002, were

the initial Latino businesses to

open on the east side of St.

Paul, Minn., leading to the

development of about 50 new businesses in

the area.

LEDC’s goals are to establish, stabilize and expand

businesses through orientations, classes, development

consulting, technical assistance and by providing access to

capital for new and existing entrepreneurs. It also strives to

revitalize or develop community public markets and

commercial corridors in the Twin Cities and rural Minnesota

that allow for Latino businesses to fully participate in the

business community. It works to create a process and

structure through which the Latino business community may

access other institutions (such as banks, foundations and

elected officials) and to create a membership base that

actively shapes the agenda of LEDC. 

Rural Cooperatives interviewed Yolanda Cotterall, Greater

Minnesota rural program manager for the Latino Economic

Development Center, to learn more about LEDC’s work.

Q: How important has the co-op business structure been to

the long-lasting success of businesses affiliated with LEDC?

What do you consider to be the greatest strength and

weakness of the co-op business model?

Yolanda Cotterall: LEDC has a long history of business

development in the Twin Cities as well as in rural regions of

Minnesota. Our first co-op development project, the

Mercado Central, was a success in many ways. The co-op

model in this instance was critical to bringing a large group

of aspiring entrepreneurs together, making decisions,

accessing funding and accomplishing a complex development

project with a variety of partner collaborators. I think the

greatest strength and weakness is the shared governance and

collaboration needed to pull off the birth of the co-op. 

Q: Do you plan any major new projects or initiatives for

LEDC in 2012?

Cotterall: We have a number of projects that we are involved

in and which will evolve within the next year:

• We are expanding pro-bono legal services to rural

communities;

• A staff member and an emerging “leader” client, who

resides in one of the rural regions where we believe a

producer co-op will begin, are attending training together

through Land Stewardship’s “Beginner Farmer Training”

program as a starting place for the co-op;

• We are collaborating with partners — a local agency and

the Association for Latinas in Action (ALA) — to expand

opportunities in Willmar, Minn., where there is a

commercial kitchen incubator program. We are helping to

T

Rural Cooperatives / March/April 2012 11
12 March/April 2012 / Rural Cooperatives

provide Spanishlanguage technical

assistance and training

for a food managers

certification class and

for food business

operations,

including

QuickBooks

training. Another

project in Willmar involves a

client who is seeking assistance to develop his

existing property to accommodate a privately owned public

market; 

• We are collaborating with the Minnesota Department of

Agriculture and other important stakeholders to coordinate

existing resources to respond to the needs of immigrant

farmers;

• We are in the exploration and organization phase of efforts

to help birth our first worker-owned co-op. We’ve had an

initial exploratory meeting with a retiring wholesaler of

landscaping plant materials who employs about 28 folks.

There is solid interest from the owner and the workers to

develop a plan and identify funding so that the employees

can buy and operate the business when the owner retires;

• In collaboration with Centro Campesino in Austin, Minn.,

we are working to establish a public market that will create

opportunities for approximately 25 Latino-owned

businesses. Centro owns the building but has little

experience with economic development or cooperative

projects. We will provide technical assistance in fundraising

for the project as well as guidance to aspiring entrepreneurs

who wish to participate in a cooperative public market

project, such as we did with the Mercado Central project in

Minneapolis.

Q: How many member businesses does LEDC have? How do

you handle communications with members?

Cotterall: LEDC has approximately 350 member businesses

with about 225 at what we would consider active at some

level. Of these, about 20 percent are actively in the process of

start-up or involved with expansion activities which require

technical assistance or loans; the other 80 percent are availing

themselves of membership benefits, such as ongoing technical

assistance and guidance as they navigate learning to operate

and manage their businesses. 

Q: Is LEDC planning to help members

expand into new markets in 2012?

Cotterall: LEDC’s rural team,

through funding from USDA’s Rural

Cooperative Development Grant program, is working on

development of agricultural opportunities. We understand

that producers involved in small production have a critical

need for improved access to markets. Our work will seek to

accomplish this improved access via building cooperative

institutional and wholesale buyers groups and a cooperative

retail operation. 

Q: Tell us about how LEDC is helping Latinos in Minnesota

address barriers, such as language, and to learn to use new

technologies to improve their business prospects. 

Cotterall: We have come to understand that simply speaking

Spanish is not what has developed relationships with the folks

who seek us out for support and guidance as they develop

their business concept. Our work begins with establishing

communication that is directed by our clients and will

respond to and take advantage of their strengths. As we begin

the journey with them, we help to identify the resources that

will improve their chances of success. Advocacy, training for

acquiring information and increasing their technology skills

are some of the opportunities we find important to them.

LEDC’s “Practical Guide to Business Start Up” is an

The Latino Economic Development Center

has a solid track record of business development in the Twin Cities area (including

Mercado Central, pictured here) and in rural

parts of the state. In the bottom photo (facing

page), Dorain Olade styles the hair of Claudia

Jimenez, owner of the Electra Beauty Salon.

Photos courtesy Mercado Central
Rural Cooperatives / March/April 2012 13

eight-week course to introduce development of clients’

business plans, as well as development of their first financial

projections and financial goals. We also offer a class in

business recordkeeping that provides, in many cases, their

first introduction to the concept of keeping important

financial information...and information on filing taxes,

understanding the health of their cash-flow situation, and

determining if they are making money. 

We offer QuickBooks training for those who are ready to

take that step in their business. We are also offering training

so immigrants can gain knowledge about co-ops — what they

are, how they are structured, what the benefits are and the

initial first steps in trying to organize a co-op.

Q: How has LEDC used funds it received from USDA Rural

Development?

Cotterall: Last year was the first year that LEDC was a

recipient of USDA Rural

Cooperative Development Grant funding. This

funding was extremely essential as we sought to explore

opportunities for immigrant Latino and Hmong rural

agricultural entrepreneurs. The funding provided the

resources to lay the groundwork and explore agricultural

opportunities for immigrants.

In 2007, LEDC assigned a full-time staff person to our

rural work and we carried the economic development

strategies we used in our successful Twin Cities development

efforts to out-of-state development efforts. We gained

recognition from immigrants who sought us out as virtually

the only resource for economic development available to

them that understood their barriers, spoke their language and

brought solutions. In 2009, we began to understand the

tremendous opportunities that also existed for Latinos who

had experience in agriculture.

Latinos in Minnesota have been an important labor force

in the industry. It was a natural conclusion that Latino

immigrants could participate not just as workers, but also as

grower- and meat-producing entrepreneurs.

Today, we have identified over 40 immigrant (Latino and

Hmong) agricultural entrepreneurs in four geographic

regions who want to participate in the program offerings we

have been able to envision and develop. These offerings are

not ours alone; we have sought information and training

through other organizations, such as the Land Stewardship

Project, CooperationWorks!, Centro Campesino, the

Willmar Multicultural Business Center, Minnesota

Department of Agriculture and the University of Minnesota,

to name a few. 

However, we are leaders in the development of strategies

and programming that have opened doors for immigrants to

be able to become contributors to the economic engine of

our state. We are the glue that makes it possible for the

resource they represent to be incorporated in positive and

potentially profitable endeavors. The mission of LEDC is

“To transform our community by creating economic

opportunity for Latinos.” 

Q: How much overall impact do LEDC member businesses

have on the local economy? 

Cotterall: Over the last 14 years, LEDC has been involved

in the development of economic opportunities for Latino

immigrants. Our organization is actually only eight years old

(we received our nonprofit designation in 2003). But our

vision and mission began before that, in 1996, when the

dream of a few aspiring entrepreneurs led us to identify and

bring the resources that would eventually open the Mercado

Central. There were many who understood the importance

of this dream and they brought support and resources so that

the opening of the Mercado was achieved in 1999. 

From that time to the present, there has been much

written about the success of the project and the positive

economic impact it has had on the Twin Cities community.

We have seen revitalization of at least four commercial

corridors and the creation of economic prosperity for many

aspiring Latino entrepreneurs. Well over 1,000 jobs have

been created. Not all of these jobs can be attributed to

LEDC members, but LEDC members and the Mercado

Central project showed the way and provided hope that

Latino immigrants could open businesses in the United

States. 
14 March/April 2012 / Rural Cooperatives

As a result, Latino families have experienced economic

empowerment, which in turn has created educational

opportunities for their children, made home ownership

possible and has spurred civic involvement. These are just

some of the very visible results that LEDC members have

been able to effect in not just the Twin Cities, but also in

rural Minnesota. n

Enrique Garcia, owner of La Loma Tamales at Mercado

Central in Minneapolis, is one of the Latino Economic

Development Center’s (LEDC) members and serves on its

board of directors.

Q: How far back with LEDC does your business go, and what

do you like best about belonging to LEDC?

Enrique Garcia: My wife, Noelia, and I are the owners of La

Loma Tamales [a Mexican food restaurant, catering business

and wholesale foods business] in Minneapolis. Our

involvement with LEDC goes all the way back to the

beginning of our business in 1999. Actually, if it wasn’t for

LEDC, we would not be in business. The process of start-up

began for us in 1998. We got one of the last slots for

participation in the development of the Mercado Central

project. 

What was great about the opportunity was that the folks

involved in the project understood the various barriers we

faced in being able to start a business. We have had

tremendous success and today have gross sales of almost $3

million annually and employ 35 full-time employees. Our

business is an important part of the Latino community and

this makes us very proud. 

Q: Has your business been impacted by the recession? If so,

how has LEDC helped you in this down economy?

Garcia: We must give credit to LEDC’s efforts in teaching us

to build a strong business. This support has been critical for

us; and because of it, we had strategies in place to be able to

withstand the difficult times that most others have been

experiencing. LEDC’s advice enabled us to understand sales

data and maintain an eye on the factors impacting our ability

to make a profit. We have experienced an approximate 10-

percent drop in sales, but we saw it coming and were ready

to make the necessary adjustments. Fortunately, we did not

have to lay off any employees. 

Q: How do you participate in LEDC activities? Do you sit on

any committees, or go to meetings? 

Garcia: As a board member, I am very involved with LEDC

and it programs. I have learned a lot about the operation and

importance of nonprofit organizations. I am also very proud to

say that I am one of the founding members of the Latino

Scholarship Fund that provides money for Latino youth who

might not be able to attend higher education if not for the

opportunity to get a scholarship. I am active in my community

in many other ways because of what I have learned through

my participation and connections via LEDC.

Q: Are you satisfied with the communications you get from

LEDC, and that your voice is heard on important issues?

Garcia: Yes, I feel that all of my opinions are heard and have

good communication with the organization and other

members.

Q: What are your plans for the future of your business?

Garcia: We have been working with LEDC to open our fourth

retail store. A very important next step for us is to get our

FDA [Food and Drug Administration] license so that we can

enter markets nationally.

To learn more about the activities of the Latino Economic

Development Center, visit www.ledc-mn.org, e-mail

info@ledc-mn.org, or call (612) 724-5332. n

Business owner

benefited from LEDC

Enrique and Noelia Garcia
By Anne Mayberry

Rural Utilities Program staff

USDA Rural Development 

e-mail: anne.mayberry@wdc.usda.gov

biomass generation

project currently under

construction by the

Northern Virginia

Electric Cooperative

(NOVEC) in Halifax County will not

only increase the use of renewable

energy to provide electricity, but it is

expected to create several hundred jobs

in a portion of the state grappling with

high unemployment. NOVEC Energy

Production, Halifax County Biomass is

expected to generate up to 6.5 percent

of the cooperative’s electrical output by

2014, enough to meet the needs of

about 16,000 residential customers.

“Investment in infrastructure is an

investment in American workers,” says

Jonathan Adelstein, administrator of the

Rural Utilities Program of USDA Rural

Development, which helped finance the

plant. “This project shows how

financing utility projects pays off, both

now and in the future.”

Plant to generate 50 megawatts

The NOVEC biomass project, on

the site of a former Georgia-Pacific

manufacturing facility, will burn waste

wood to generate nearly 50 megawatts

of electricity. The waste will come from

regional logging operations and the

forest products industry near South

Boston in Halifax County, along

Virginia’s North Carolina border. 

Halifax County reached its peak

population of more than 41,000 in

1950. Today’s population of just over

36,000 is about the same as it was in

1900. 

Stan Feuerberg, NOVEC president

and CEO, says the construction has

already brought more than 100 jobs to

the economically hard-hit region. He

estimates that the project will bring

250 construction jobs to the Southside

Virginia area during a two-year period.

Once the system becomes commercially

operable, the plant will require about 26

permanent jobs and 40 indirect jobs in

forestry, logging and transportation. 

“We expect to see an increasing

number of indirect jobs harvesting

waste wood,” Feuerberg said. “As much

as 30 percent of the tree is left after it is

used for construction or furniture.

Harvesting, chipping and trucking

industries will likely grow.” 

The biomass plant will be cooled

with “grey” water from a nearby

wastewater treatment facility to help

conserve the amount of potable water

needed for plant operations. Biomass —

such as agriculture and forest residues,

energy crops and algae — are

considered renewable energy sources. 

According to data from the U.S.

Department of Energy’s Energy

Information Administration, over onehalf of renewable energy consumed in

the United States in 2007 was

generated by biomass. Many rural

electric cooperative utilities use a

variety of fuel sources to provide

electric power. This diversity helps

maintain a reliable and affordable

electric supply by utilizing regional

resources. 

“This project is a win-win for all

parties,” says Feuerberg. “It will provide

NOVEC with a renewable source of

electricity and increase logging and

trucking jobs for residents.

Furthermore, it will improve the tax

base for the community.” 

Carbon-neutral plant 

There is an abundance of wood

waste within a 75-mile radius of the

Rural Cooperatives / March/April 2012 15

Utility Co-op Connection 

Virginia co-op’s biomass project creating

jobs, along with renewable energy

A

continued on page 43

An artist’s depiction of a new biomass power facility being developed by the Northern

Virginia Electric Cooperative.
By Sarah Ali and David Chesnick

Editor’s note: The authors are

agricultural economists with USDA Rural

Development, Cooperative Programs. This

marks the first time that USDA has

included the actual list of the top 100 ag coops (table 1). Eight co-ops requested that

they not be included on the list by name.

These co-ops ranked 37, 38, 48, 70, 76,

86, 92 and 100.

he nation’s 100 largest

agriculture cooperatives reported nearrecord revenue of $118

billion in 2010, an

increase of 4 percent over 2009, when

revenue totaled $114. Net income for

the 100 top co-ops also increased in

2010, reaching $2.39 billion, up from

$2.16 billion in 2009. 

Leading the revenue increase were

dairy cooperatives, which saw 2010

revenue climb more than 14.5 percent

from the previous year, to $29.45

billion. Dairy cooperatives accounted

for more than half of the revenue

increase recorded by the top 100 ag coops in 2010. However, nearly half of

the top 100 cooperatives (47 percent)

had lower revenue in 2010 compared to

the prior year.

Gross margins, as a percent of total

sales, were up slightly, from 9 percent

to 9.2 percent. The increase in gross

margins partially covered higher

expenses. Gross margins plus service

Largest

100

ag co-ops post

near-record sales,

margins

A summary of the Top 100

ag co-op sales for 2010 shows that: 

n The No. 1 ranked co-op had sales of $25 billion.

n The 100th ranked co-op had sales of $276 million.

n Sales of more than $1 billion were reported by 23 co-ops.

n Sales of $506 million to $1 billion were reported by 47 co-ops.

n Sales of $276 million to $500 million were reported by 30 co-ops.

16 March/April 2012 / Rural Cooperatives

T

Photo courtesy CHS Inc. 
Rural Cooperatives / March/April 2012 17

revenue climbed to $684 million. 

Total expenses for the top 100 ag coops were up $575 million in 2010. The

largest cost increase was for labor,

where expenses climbed by 7 percent,

to $4.6 billion. On the other hand,

lower interest rates and less debt caused

interest expense to drop 11 percent. 

Net margin, as a percent of total

sales, was up slightly, from 2 percent in

2009 to 2.1 percent in 2010. Net

margins for the largest 100 ag

cooperatives were $2.3 billion. The

largest increase in net margins occurred

among mixed cooperatives. As a group,

these co-ops saw net margins increase

$223 million. Dairy and farm supply

cooperatives had lower net margins in

2010, with a combined decrease of $102

million.

The asset base for the top 100 grew

by $2.3 billion between 2009 and 2010.

Current assets accounted for nearly

two-thirds of that increase. Fixed assets

also showed an increase of $600 million. 

Current liabilities increased by more

than $1 billion for the largest 100 ag

co-ops. However, they used less longterm debt, which declined by $143

million. Total liabilities thus increased

by $871 million. 

Equity allocated to members jumped

10 percent in 2010, to nearly $11

billion. Retained earnings also showed a

substantial increase of 12 percent,

ending the year at $386 million.

Throughout the recession, cooperatives

have relied more heavily on member

financing than borrowed funding.

About the tables and figures 

In table 1, the rank, name, revenue

and assets are given for the nation’s

largest agricultural cooperatives.

Comparing 2010 to 2009 shows that the

first six cooperatives ranked in the same

order both years. The rest of the list

reflects many changes in rankings

between the two years.

Information for the largest

cooperatives has been segmented into

seven functional areas as defined in

table 2 (see page 23). The functional

areas (and the number of cooperatives

in each segment) are: supply co-ops

(13); mixed co-ops (24); grain co-ops

(16); dairy co-ops (23); sugar co-ops (6);

fruit and vegetable co-ops (10); and

other marketing co-ops (8). 

Historical comparison

Comparing total gross business

volume of the same 100 cooperatives

from 2006 to 2010 shows that there was

a small increase from 2006 to 2007.

The record year for business volume

was 2008, when higher energy costs and

large increases in the price of grains and

oilseeds boosted the total. 

Total gross business volume fell

dramatically, by 15.02 percent, between

2008 and 2009. Increases in gross

business volume of $100 million or

more from 2009 to 2010 were achieved

by 17 cooperatives as illustrated in

Figure 1. 

Patronage income (income from

other cooperatives) decreased by $41

Figure 3—Revenue of Cooperatives by Function, 2010

Mixed

39.7%

Supply

14.9%

Other

5.6%

Fruit & Vegetable

5.1%

Sugar 4.1%

Dairy

29.9%

Grain

5.7%

($ billions)

140

120

100

80

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

($ billions)

2.5

2.3

2.1

1.9

1.7

1.5

Figure 1—Total Business Volume, Top 100 Ag Co-ops Figure 2—Net Income, Top 100 Ag Co-ops
18 March/April 2012 / Rural Cooperatives

million in 2010, or 26.3 percent. Net income (after taxes)

grew almost 12 percent, or $249 million. Net income after

taxes for these same 100 cooperatives grew from $1.95 billion

in 2006 to $2.4 billion in 2010, trailing only the 2008 record

of $2.42 billion (figure 2).

Figure 3 shows that mixed cooperatives account for 40

percent of the revenue of the top 100 while comprising only

24 percent of the number of cooperatives on the list (the

largest group). The mixed-marketing group also accounted

for 40 percent of the revenue and 43 percent of the assets of

the top 100 ag co-ops. 

Dairy (23 cooperatives) accounted for 25 percent of the

revenue and 17 percent of the assets (figure 4). 

The two charts in figure 5, show changes in the size of the

functional groups between 2001 and 2010. Mixed

cooperatives were also the most numerous (26 percent) in

2001. The number of co-ops in each functional group shows

only small fluctuations during the 10-year period, the

exception being for fruit and vegetable cooperatives, which

declined from 15 co-ops in 2001 to 100 co-ops in 2010.

Thirty cooperatives that were in the top 100 in 2001 fell

off the 2010 list, for various reasons (figure 6). The biggest

reason is that 19 co-ops simply didn’t have the revenue

needed to make the list in 2010. Of those 19 co-ops, 11 still

ranked fairly high, from 101 to 130, in 2010. Three of the 19

went out of business in the interim; each had been highly

ranked in 2001 (1, 12, and 13). Another five of these 19 coops were purchased by, or converted to, an investor-oriented

firm. The remaining three cooperatives were purchased by or

merged with another cooperative. n

Figure 4—Assets of Cooperatives by Function, 2010

Mixed

43.4%

Supply

15.6% Other

3.9%

Fruit & Vegetable

8.5%

Sugar

5.7%

Dairy

16.9%

Grain

6.0%

Figure 5—Distribution of Cooperative by Function for Top 100, 2001 and 2010

Mixed

24%

Supply

13%

Other

8%

Fruit & Vegetable

10%

Sugar

6%

Dairy

23%

Grain

16%

2001

Mixed

26%

Supply

14%

Other

9%

Fruit & Vegetable

15%

Sugar

4%

Dairy

22%

Grain

16%

2010

Figure 6—Reason No Longer In Top 100, 2001 vs. 2010 Rankings

Purchased by another

cooperative: 2

Merged with another

cooperative: 1

Purchased by an IOF*: 1

Converted to an IOF: 4

Out of business: 3

Out of top 100: 19

*IOF = Investor owned firm.
Rural Cooperatives / March/April 2012 19

2010

RANK

2009

RANK

Table 1—100 Largest Agriculture Cooperatives, 2010

Note: Co-op names and data withheld, by request, for co-ops ranking: 37, 38, 48, 70, 76, 86, 92 and 100.

NAME

CHS Inc.,

Saint Paul, Minn.

Land O’Lakes Inc.,

Saint Paul, Minn.

Dairy Farmers of America,

Kansas City, Mo.

GROWMARK Inc.,

Bloomington, Ill.

Ag Processing Inc.,

Omaha, Neb.

California Dairies Inc.,

Artesia, Calif.

Associated Milk Producers Inc.,

New Ulm, Minn.

United Sugars Corporation,

Bloomington, Minn.

Southern States Cooperative Inc., 

Richmond, Va.

Northwest Dairy Association, 

Seattle, Wash.

Ocean Spray Cranberries Inc.,

Lakeville-Middleboro, Mass.

Prairie Farms Dairy Inc.,

Carlinville, Ill.

United Suppliers Inc.,

Eldora, Iowa

Foremost Farms USA, Cooperative, 

Baraboo, Wis.

Maryland & Virginia Milk Producers 

Co-op Association,

Reston, Va.

United Producers Inc.,

Columbus, Ohio

American Crystal Sugar Company,

Moorhead, Minn.

Riceland Foods Inc.,

Stuttgart, Ark.

Countrymark Cooperative Inc.,

Indianapolis, Ind.

Dairylea Cooperative Inc.,

Syracuse, N.Y.

Mixed (Energy,

Supply, Food, Grain)

Mixed (Supply,

Dairy, Food)

Dairy 

Supply

Supply

Dairy

Dairy

Sugar

Supply

Dairy 

Fruit & Vegetable

Dairy

Supply 

Dairy 

Dairy

Other (Livestock)

Sugar

Other (Rice)

Supply

Dairy

2009

ASSETS

2010

ASSETS

2009

REVENUE

2010

REVENUE

TYPE

$ millions

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

2

3

4

5

6

11

7

9

8

10

12

13

18

25

20

17

14

24

16

25,315

11,146

9,872

6,132

3,302

2,987

1,709

1,700

1,695

1,650

1,582

1,518

1,387

1,374

1,221

1,204

1,197

1,132

1,130

1,068

25,749

10,409

8,149

6,092

3,402

2,405

1,383

2,200

1,890

1,998

1,538

1,371

1,352

1,146

867

1,001

1,196

1,270

870

1,203

8,666

4,885

2,165

1,876

1,187

678

288

131

500

496

1,201

684

662

398

158

38

788

480

417

156

7,870

4,924

2,198

1,837

1,084

676

300

144

477

489

1,168

670

526

305

157

33

761

560

399

139
20 March/April 2012 / Rural Cooperatives

2010

RANK

2009

RANK

Table 1—100 Largest Agriculture Cooperatives, 2010

Note: Co-op names and data withheld, by request, for co-ops ranking: 37, 38, 48, 70, 76, 86, 92 and 100.

NAME

MFA Incorporated,

Columbia, Mo.

MFA Oil Company,

Columbia, Mo.

South Dakota Wheat Growers Assoc.,

Aberdeen, S.D.

Sunkist Growers Inc.,

Sherman Oaks, Calif.

Plains Cotton Cooperative

Association,

Lubbock, Texas

Producers Livestock Marketing

Association,

Omaha, Neb.

Farmers Cooperative Company, 

Ames, Iowa

Snake River Sugar Company,

Boise, Idaho

Southeast Milk Inc.,

Belleview, Fla.

Agri-Mark Inc.,

Methuen, Mass.

Blue Diamond Growers,

Sacramento, Calif.

Co-Alliance, LLP,

Avon, Ind.

Select Milk Producers Inc.,

Artesia, N.M.

Heartland Co-op,

West Des Moines, Iowa

Michigan Milk Producers

Association,

Novi, Mch.

Lone Star Milk Producers,

Windthorst, Texas

Cooperative Producers, Inc,

Hastings, Neb.

Cooperative Regions of Organic

Producer Pools (CROPP),

La Farge, Wis.

Upstate Niagara Cooperative Inc., 

Buffalo, N.Y.

Mixed (Supply,

Grain)

Supply

Mixed (Grain,

Supply)

Fruit & Vegetable

Other (Cotton)

Other (Livestock)

Mixed (Grain,

Supply)

Sugar

Dairy 

Dairy 

Other (Nut)

Supply

Dairy

Grain

Dairy

Dairy

Grain

Dairy

Dairy 

2009

ASSETS

2010

ASSETS

2009

REVENUE

2010

REVENUE

TYPE

$ millions

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

39

40

41

19

23

15

27

30

31

22

38

28

39

33

26

34

21

45

50

59

48

51

1,051

1,047

1,047

1,013

1,008

908

842

827

794

782

775

767

727

710

699

688

643

620

619

1,050

937

1,210

860

765

724

963

661

809

657

709

862

704

987

557

520

448

523

519

358

338

473

190

187

122

330

673

105

268

276

255

91

199

161

64

241

160

203

381

296

440

215

188

73

299

640

107

245

258

236

82

235

96

62

252

121

191
Rural Cooperatives / March/April 2012 21

2010

RANK

2009

RANK

Table 1—100 Largest Agriculture Cooperatives, 2010

Note: Co-op names and data withheld, by request, for co-ops ranking: 37, 38, 48, 70, 76, 86, 92 and 100.

NAME

United Dairymen of Arizona,

Tempe, Az.

Aurora Cooperative Elevator

Company,

Aurora, Neb.

Innovative Ag Services Co.,

Monticello, Iowa

Farmers Cooperative,

Dorchester, Neb.

Tennessee Farmers Cooperative, 

La Vergne, Tenn.

Citrus World Inc. (Florida Natural

Growers), 

Lake Wales, Fla.

West Central Cooperative,

Ralston, Iowa

Pacific Coast Producers,

Lodi, Calif.

Trupointe Cooperative,

Piqua, Ohio

Equity Cooperative Livestock Sales

Association, 

Baraboo, Wis.

Central Valley Ag Cooperative, 

O’Neill, Neb.

NEW Cooperative Inc.,

Fort Dodge, Iowa

NFO Inc.,

Ames, Iowa

Producers Rice Mill Inc.,

Stuttgart, Ark.

United Farmers Cooperative,

York, Neb.

Michigan Sugar Company,

Bay City, Mich.

Heritage Cooperative Inc., 

W. Mansfield, Ohio

North Central Farmers Elevator,

Ipswich, S.D.

Southern Minnesota Beet Sugar

Cooperative,

Renville, Minn.

Dairy 

Mixed (Grain,

Supply) 

Grain 

Mixed (Grain,

Supply)

Supply 

Fruit & Vegetable 

Mixed (Grain,

Supply)

Fruit & Vegetable

Mixed (Grain,

Supply) 

Other (Livestock) 

Mixed (Supply,

Grain)

Grain

Dairy

Other (Rice)

Grain

Sugar 

Grain 

Mixed (Grain,

Supply)

Sugar

2009

ASSETS

2010

ASSETS

2009

REVENUE

2010

REVENUE

TYPE

$ millions

42

43

44

45

46

47

49

50

51

52

53

54

55

56

57

58

59

60

61

47

35

40

32

43

42

37

57

86

64

49

41

56

52

54

61

92

97

68

615

614

610

602

581

577

520

516

512

510

506

498

492

479

450

448

443

442

440

537

686

623

719

569

572

663

471

295

412

520

615

474

511

506

438

251

228

374

110

325

117

192

211

296

250

301

168

29

167

173

32

172

156

255

114

137

319

90

251

82

150

183

284

211

258

82

23

150

169

29

176

157

266

131

139

276
22 March/April 2012 / Rural Cooperatives

2010

RANK

2009

RANK

Table 1—100 Largest Agriculture Cooperatives, 2010

Note: Co-op names and data withheld, by request, for co-ops ranking: 37, 38, 48, 70, 76, 86, 92 and 100.

NAME

Sunrise Cooperative Inc.,

Fremont, Ohio

Tillamook County Creamery Assoc.,

Tillamook, Ore.

Frenchman Valley Farmers

Cooperative Inc.,

Imperial, Neb.

Alabama Farmers Cooperative Inc.,

Decatur, Ala.

Farmway Co-op Inc.,

Beloit, Kan.

First District Association,

Litchfield, Minn.

Watonwan Farm Service Company,

Truman, Minn.

Tree Top Inc.,

Selah, Wash.

Meadowland Farmers Cooperative, 

Lamberton, Minn.

Mid-Kansas Cooperative Assoc.

Moundridge, Kan.

Key Cooperative,

Roland, Iowa

Swiss Valley Farms Cooperative,

Davenport, Iowa

River Valley Cooperative,

Eldridge, Iowa

Western Consolidated Cooperatives,

Holloway, Minn.

Harvest Land Co-op,

Richmond, Ind.

Ray-Carroll County Grain Growers Inc.,

Richmond, Mo.

Sun-Maid Growers of California,

Kingsburg, Calif.

Sunsweet Growers Inc.,

Yuba City, Calif.

Westland Co-op Inc.,

Crawfordsville, Ind.

Premier Cooperative Inc.,

Champaign, Ill.

Mixed (Grain,

Supply)

Dairy

Mixed (Supply,

Grain)

Grain

Supply 

Dairy

Mixed (Grain,

Supply)

Fruit & Vegetable 

Mixed (Grain,

Supply)

Grain

Mixed (Supply,

Grain)

Dairy 

Mixed (Grain,

Supply)

Mixed (Grain,

Supply)

Mixed (Supply,

Grain) 

Grain

Fruit & Vegetable 

Fruit & Vegetable 

Supply 

Grain 

2009

REVENUE

2010

ASSETS

2009

REVENUE

2010

REVENUE

TYPE

$ millions

62

63

64

65

66

67

68

69

71

72

73

74

75

77

78

79

80

81

82

83

72

66

46

65

100

73

53

69

55

58

96

60

67

71

75

94

78

89

70

99

432

426

419

415

412

391

388

365

357

356

350

347

346

343

342

332

323

315

314

308

341

386

545

401

125

327

506

359

504

469

231

441

384

344

322

243

310

293

353

137

151

264

153

198

134

87

92

277

129

154

110

115

84

201

134

90

168

195

121

99

103

242

161

200

69

71

109

292

121

125

57

106

103

175

146

67

175

174

130

31
Rural Cooperatives / March/April 2012 23

2010

RANK

2009

RANK

Table 1—100 Largest Agriculture Cooperatives, 2010

Note: Co-op names and data withheld, by request, for co-ops ranking: 37, 38, 48, 70, 76, 86, 92 and 100.

NAME

Frontier Ag, Inc.,

Oakley, Kan.

Landmark Services Cooperative,

Cottage Grove, Wis.

Universal Cooperatives Inc.,

Eagan, Minn.

Saint Albans Cooperative Creamery Inc., 

Saint Albans, Vt.

Pro Cooperative,

Pocahontas, Iowa

Ag Valley Cooperative Non-Stock, 

Edison, Neb.

Prairie Land Cooperative,

Hubbard, Iowa

The Garden City Co-op Inc.,

Garden City, Kan.

Security Milk Producers Association, 

Chino, Calif.

Knouse Foods Cooperative Inc.,

Peach Glen, Pa.

Gold-Eagle Cooperative,

Goldfield, Iowa

Effingham Equity,

Effingham, Ill.

Hopkinsville Elevator Company Inc., 

Hopkinsville, Ky.

First Cooperative Association,

Cherokee, Iowa

Grain 

Mixed (Supply,

Grain)

Supply

Dairy

Mixed (Grain,

Supply) 

Grain 

Grain

Mixed (Grain,

Supply)

Dairy

Fruit & Vegetable 

Mixed (Supply,

Grain) 

Supply 

Grain

Mixed (Grain,

Supply)

2009

ASSETS

2010

ASSETS

2009

REVENUE

2010

REVENUE

TYPE

$ millions

84

85

87

88

89

90

91

93

94

95

96

97

98

99

79

85

80

98

81

63

77

83

93

84

76

95

88

74

300

295

293

293

289

289

289

285

283

281

281

278

277

276

309

295

308

215

303

416

315

302

244

298

322

243

293

324

123

155

129

31

91

126

134

103

27

176

92

150

110

96

106

113

134

24

91

115

94

76

23

173

65

134

100

81

Table 2 — Criteria used for sorting co-ops by segment

Type of cooperative

Supply 

Mixed 

Grain 

Dairy 

Sugar 

Fruit and Vegetable

Other 

Cooperative defined

Derive at least 75 percent of their total revenues from farm supply sales .

Derive between 25 percent the 75 percent of total revenues from farm supply sales and the remainder 

from marketing.

Derive at least 75 percent of their total revenues from grain marketing.

Market their members’ raw milk, while some also manufacture products, such as cheese and ice cream.

Refine sugar beets and cane into sugar and market sugar and related byproducts.

Generally further process fruits or vegetables and market those products, rather than market raw products.

This segment includes cooperatives that market livestock, rice, cotton and nuts.


26 March/April 2012 / Rural Cooperatives

Co-ops of all types benefit

from USDA’s value-added grants

By Stephen Thompson,

Assistant Editor 

n today’s

competitive

agricultural

markets,

adding value

to agricultural products

before selling them offers

producers a way off of the

“commodity-price treadmill.”

The problem, more often

than not, is obtaining the

capital needed to further

process and differentiate a

farm product.

USDA Rural Development

offers rural businesses,

including cooperatives, help

in moving beyond commodity

production through its ValueAdded Producers Grant

(VAPG) program. VAPG is a

matching grant program

(recipients must put up an

amount of money equal to the

amount of the VAPG) that

can provide a substantial

boost to co-ops and other

rural businesses, regardless of

size. Qualifying entities can

obtain up to $300,000 to

increase the consumer value

of their agricultural

commodities in the

production or processing

stages (they cannot be used to

raise crops or livestock). The

program not only helps coops that are new to the valueadded sphere, it also helps

well-established value-added

co-ops develop new products

or open new markets. 

“These projects will

provide financial returns and

help create jobs for

agricultural producers,

businesses and families across

the country,” Deputy

Agriculture Secretary

Kathleen Merrigan said when

announcing the 2012 VAPG

recipients Feb. 3 at the

Local/Regional Food System

Conference in Chicago. 

Out of 298 total

VAPG recipients, 26 were

cooperatives. They ranged

from large grower co-ops that

market internationally, such as

Blue Diamond Growers

(almonds) and Sunsweet

Growers (dried fruits, plums

and juices), to small co-ops

serving local food markets.

The awards to co-ops ranged

I

Sunsweet is using its VAPG funds to increase

sales of diced dried plums (seen here in a

retail container) to the industrial foods market.

“Without USDA’s support, this project would

have been difficult to fund,” says Jeff

McLemore, the co-op’s marketing director.
Rural Cooperatives / March/April 2012 27

from a low of $17,865 for the

Wisconsin Sheep Dairy

Cooperative to study the

feasibility of renovating the

co-op’s creamery, to the

maximum $300,000 for

Pacific Coast Producers.

“Curd Capital” 

co-op wins VAPG 

Ellsworth Cooperative

Creamery, in Ellsworth, Wis.

— the “Cheese Curd Capital

of Wisconsin” — is one of

the recent VAPG recipients.

With 495 producer-members

in Wisconsin and Minnesota,

the creamery processes about

1.7 million pounds of milk

daily. Founded in 1908, the

co-op has carved out a place

for itself on regional

supermarket shelves with its

leading consumer product:

top-quality white cheddar

cheese curds, a regional

delicacy in the Upper

Midwest and Canada. 

While the co-op does produce some

private-label goods, the majority of its

products are sold under its own

Ellsworth brand.

Ellsworth cheese curds are offered in

five flavors, including: Original, Garlic

and Cajun. Careful processing results in

a product that has a “cleaner taste,”

according to Paul Bauer, the co-op’s

CEO. The curds don’t clump together

in the bag, giving them a kind of

“popcorn” appearance that appeals to

customers. 

The major marketing challenge

facing the co-op is that cheese curds

just aren’t very popular outside

Wisconsin, Minnesota and parts of

Canada. Looking to expand its market,

the cooperative saw an opportunity in

the smaller Blaser Creamery, about 60

miles to the north of Ellsworth, which

began life as the Comstock Cooperative

in 1901. It went “private” about 75

years ago. 

Blaser developed a line of highquality cheeses and cheese spreads,

including specialty cheeses, such as

asiago and flavored Muenster, Colby,

Cheddar and Jack cheeses. Ellsworth

was already supplying milk to the

smaller firm and, like Ellsworth, Blaser

Creamery had established a good

market for its products in nearby

communities, especially in the

Minneapolis-St. Paul metropolitan area. 

Together the two product lines

offered a broader selection of highquality products that was less limited

geographically in appeal.

“It’s a good fit,” Bauer says. “They

make some beautiful artisan cheeses,

and they had good sales. But they were

a small operation and needed some

more financial ‘oomph’ to get better

market exposure.” 

Ellsworth bought Blaser in June

2011, and officially renamed it

Comstock Creamery, while keeping the

well-regarded Blaser Premium Cheeses

brand. Bauer says the proximity of some

of Ellsworth’s members to

Blaser means that some of its

collection trucks can make

their first daily deliveries

directly to the smaller

facility. 

“Now we need to get our

products known to the

buyers,” he says. That means

sales trips and demonstrations to potential wholesale

buyers, such as supermarket

chains, and marketing

campaigns to establish the

co-op’s brands with the

public. That’s where the

$300,000 Value-Added

Producers Grant from

USDA Rural Development

comes in. The cooperative

will use the funds to expand

its market penetration.

“We want to use the sales

forces of both firms,” says

Bauer, who sees good sales

possibilities on the East

Coast. “We’ve even sent

samples to China,” he says.

Dakota Pride looks 

to expand Asian market

A few hundred miles to the west,

another cooperative is using VAPG

funds to expand into foreign markets.

Like Ellsworth, Dakota Pride, in

Jamestown, N.D., is a 200-member

marketing co-op that seeks to add value

to its growers’ crops by achieving a

high-quality, differentiated product.

The cooperative sells identitypreserved commodities: grain and

oilseeds that meet stringent

specifications tailored to the needs of

each buyer. Participating growers use

high-quality seed supplied by the

cooperative, planted and raised

according to strict requirements

designed to eliminate crosscontamination and assure a highquality, identity-preserved product.

The processing, packaging and

shipping are handled by the cooperative

Ellsworth Creamery cheese curds and fruit make for a tasty, healthful

lunch, as these co-op producer-members can attest.
28 March/April 2012 / Rural Cooperatives

to ensure that quality remains “up to

spec.” The result is a top-quality

product that offers better value to the

customer and a premium price to the

grower.

There are inviting markets for such

products in Asia. South Korean

consumers in particular use large

quantities of high-quality soybeans, but

they demand that the soybeans be

guaranteed to be non-geneticallymodified. Dakota Pride already sells

soybeans in Asia, but wants to break

into the highly lucrative South Korean

market. A $49,000 VAPG, plus the

matching funds supplied by the

cooperative, will be used to carry out

marketing studies and campaigns to

establish trading links in that country.

Grant helping 

aquaculture co-op 

A much smaller cooperative in

Virginia faces a different problem: more

demand than it can meet. Virginia

Aqua-Farmers Network LLC, of

Farmville, is part of the growing local

foods movement. It has 19 members in

southeastern Virginia raising rainbow

trout, striped bass hybrids, catfish, and

freshwater prawns. 

The cooperative was started as the

result of a working group formed in

2006 by the Virginia Aquaculture

Association and Virginia State

University in Ettrick, Va. With the help

of a VAPG, the working group carried

out a feasibility study and set up the

meeting at which the cooperative was

formed in May 2007.

The co-op sells its products through

a wholly-owned subsidiary, the Virginia

Natural Fish Co. It receives technical

support from Virginia State University

(VSU) and the Virginia Tech Cooperative Extension service. It also serves as a

purchasing co-op for fingerlings and

other supplies. Co-op members help

each other with large jobs such as

stocking, harvesting, transport, etc.

The fish and prawns are harvested,

cleaned and frozen, then sold

throughout the year at farmers markets

and through subscription services. The

co-op now sells at markets in

Williamsburg, Lynchburg, Appomattox

and Charlottesville, home of the

University of Virginia, where students

have set up a Community Supported

Fishery to bring aquaculture producers

and customers together. 

Restaurants are another market the

cooperative began supplying recently

on a small scale. One of the co-op’s

selling points is that its producers are

committed to sustainable production

and don’t use pesticides or herbicides

around the ponds and don’t use growth

hormones or antibiotics. 

“We’ve got a good, healthy product,”

says Cathy Belcher, the co-op’s

marketing manager. “But we’re

stretched pretty thin.” 

Part of the problem is the lack of

centralized processing and storage

facilities. Trout are processed at VSU, a

90-minute drive away, while other fish

are handled at the Prince Edward

County Cannery, a small public facility

in Farmville. The prawns are cleaned

and frozen at a seafood processor in

Hampton, Va., 145 miles away. 

The VAPG of $300,000 and

matching funds will be used to support

a production manager’s position, build

the brand and expand production and

markets — hopefully building the

capital for a centralized processing and

storage facility.

Wide variety of uses allowed

The purpose of the Value-Added

Producer Grant program is to help

agricultural producers improve the

value of their products through

processing and/or marketing. Grants

can be used for feasibility studies,

developing business plans, working

capital and for farm-based renewable

energy products. 

Planning grants are available for up

to $100,000; working capital grants for

up to $300,000. The grants are limited

to 50 percent of project costs. The rest

of the funds must be matched by the

recipient or other donors. 

Eligible applicants include

independent producers, agricultural

cooperatives, producer groups and

majority-controlled producer-based

business ventures. However,

cooperatives are given preference in

scoring the applications. More

information is available from USDA

Rural Development State Offices,

which can be found at the following

Web address: http://www.rurdev.usda

.gov/StateOfficeAddresses.html.

A list of all the co-ops that received

VAPG funding in February is on page

29. To see the complete list of

recipients, visit the Newsroom (Feb. 3

press release) at: www.rurdev.usda.gov.

n

Leland “Judge” Barth (far right), executive director of the Dakota Pride Cooperative, leads a tour

of co-op facilities for some visitors. The co-op is using its grant to expand marketing efforts for its

identity-preserved grains and oilseeds. Facing page: the fish ponds of a member of the Virginia

Aqua-Farmers Network. 
Rural Cooperatives / March/April 2012 29

1 Pacific Coast Producers Lodi, Calif.; $300,000; For

marketing effort aimed at attracting younger demographic

to canned fruit and tomato paste products.

2. Blue Diamond Growers Sacramento, Calif.; $300,000; For

introducing a line of flavored snack almonds specifically

formulated for French consumers. 

3. Sunsweet Growers Yuba City, Calif.; $300,000; For

marketing diced, dried plums in industrial and food service

channels.

4. Sweetgrass Cooperative Hillside, Colo.; $226,000; To

develop web-based marketing for co-op’s grass-fed beef

products.

5. Flint River Farmers Cooperative Newton, Ga.; $300,000; For

vegetable processing facility.

6. Hawaii Cattle Producers Cooperative Assoc. Kamuela,

Hawaii; $58,180; To expand marketing by hiring marketing

staff and creating retail point-of-sale materials to increase

demand for locally raised cattle products. 

7. Idaho’s Bounty Ketchum, Idaho; $58,160; For marketing

efforts for wide variety of locally produced foods.

8. Michigan Sugar Company Bay City, Mich.; $300,000; For

effort to expand markets for co-op’s powdered and brown

sugar in consumer-direct polybag packages.

9. Clearbrook Elevator Assoc. Clearbrook, Minn.; $300,000;

For a soybean extruder that adds value to co-op’s organic

soybeans.

10. Soy Inc. Jefferson City, Mo.; $100,000; For economic

planning for export of soy protein to Thailand. 

11. Show Me Energy Cooperative, LLC Centerview, Mo.;

$100,000; For feasibility study for construction of a

biomass powerplant that will turn native grasses into

electrical power. 

12. Indian Springs Farmers Assoc., AAL Petal, Miss.; $24,999;

For developing watermelon juice products. 

13. Dakota Pride Cooperative Jamestown, N.D.; $49,000; For

expanding market reach for identity-preserved, non-GMO

soybeans in South Korea.

14. Bowdon Meat Processing Bowdon, N.D.; $49,500; For

operating a meat processing plant and marketing valueadded product. 

15. Landisville Produce Cooperative Assoc. Landisville, N.J.;

$49,975; For starting small-lot delivery service for

packaged/branded fruits and vegetables; acquisition of

credit card readers; and for local product promotion and

food safety training for members. 

16. New York Beef Farmer’s Cooperative Canostata, N.Y.;

$36,500; For a marketing plan for the co-op’s proposed

value-added beef and pork products, to be sold locally

under the Side Hill Products brand. 

17. Growers Cooperative Grape Juice Co. Inc. Westfield,

N.Y.; $45,000; For collaborating with the newly opened

Grape Discovery Center to increase sales of co-op’s new

local retail product lines. 

18. Mercer Landmark-Louis McIntire Celina, Ohio; $39,800;

For feasibility study of three new soybean product lines.

19. Endless Mountains Farm Fresh Cooperative Hop Bottom,

Pa.; $37,450; For feasibility study for expanding the coop’s market for local farm products into two nearby cities. 

20. Virginia Wineries Association Cooperative Richmond,

Va.; $100,000; For expanding the customer base for

Virginia wines.

21. Virginia Aqua-Farmers Network LLC Farmville, Va.;

$300,000; For product expansion into an emerging market

in Virginia for local fish and prawn. 

22. Wisconsin Sheep Dairy Cooperative Strum, Wis.; $17,865;

For economic planning to determine the technical and

economic feasibility of the co-op’s creamery renovation

project.

23. Wisconsin Cranberry Cooperative Wisconisn Rapids,

Wis.; $300,000; For value-added pocessing and marketing

of cranberry products in East Europe and China. 

24. Community Farmers’ Co-Op (AKA CFC) Osceola, Wis.;

$200,000; For value-added processing to package and jar

co-op’s tomatoes, cabbage, cucumbers and beans.

25. Ellsworth Cooperative Creamery Ellsworth, Wis.;

$300,000; For marketing campaign and to purchase

inventory for cheese products. 

26. Westby Cooperative Westby, Wis.; $300,000; For valueadded processing and marketing of cheeses. n

USDA Value-Added Producer Grants Awarded to Farmer Cooperatives 
Editor’s note: This article is provided

courtesy West Central Cooperative, Ralston,

Iowa. The “Co-ops & Community” page

spotlights the efforts of co-op members and

employees who fulfill the co-op mission of

“commitment to community.” Regardless of

whether these efforts make a co-op’s hometown a better place to live, or — as in this

case — help to feed people on the other side

of the world, co-op people are reaching out

to make a difference. If you know of a co-op

member or employee whose efforts deserve to

be recognized on this page, please contact:

dan.campbell@wdc.usda.gov. Reprint

articles from co-op publications are welcome. 

armers in the West

African nation of

Senegal face severe

disadvantages,

including an arid

climate that is not ideal for most crops,

lack of transportation infrastructure to

reach markets and a lack of access to

investment capital. Undaunted, they are

determined to succeed despite these and

other formidable obstacles. 

Sarah Dorman, communications

manager for West Central Cooperative

— an Iowa grain marketing, soybean

processing and farm supply co-op —

recently completed an assignment as a

Farmer-to-Farmer program volunteer

in Senegal, where she helped farmers

develop new marketing skills. She

returned home impressed by the spirit

and resourcefulness of the subsistencelevel farmers she worked with, who

manage to do so much with so little. 

Nation struggles to end hunger

Senegal is located on the western tip

of Africa and is currently classified as

“serious” on the Global Hunger Index

of the International Food Policy

Research Institute. Plagued by chronic

food insecurity, Senegal imports 70

percent of its food. Current food

production cannot keep pace with

demand from a growing population,

and rising food prices limit the ability

for the Senegalese people to have

diverse and healthy diets.

It took four days for Dorman to

travel from her home in Carroll, Iowa,

to Bakel, Senegal. There, she

immediately went to work on a

marketing assignment with the Bakel

Horticulture Producers Union

(BAKHPU). 

“BAKHPU is essentially a

cooperative, with about 315 produce

farmers in the Bakel region of Sengal,

near the border of Mauritania and

Mali,” explains Dorman. She was

initially told that the farmers in the area

grew onions and hot peppers. But after

arriving in Senegal, Dorman found that

while most farmers did grow these two

Co-ops & Community

30 March/April 2012 / Rural Cooperatives

Iowan shares skills with African farmers

F

“These farmers are feeding their families and trying to make a living on what they can grow on a

farm that’s about half the size of a football field,” says Sarah Dorman, explaining the challenge of

helping farmers in Senegal improve their marketing efforts. Facing page, a farmer slices eggplant

(no longer good for human consumption), which will be packaged in baggies and sold as goat

food. Photos courtesy Sarah Dorman.
crops, there were also a wide variety of

other fruits and vegetables being

produced.

“The important thing to keep in

mind, though, is that this isn’t Iowa

agriculture, or even U.S. agriculture for

that matter,” Dorman says. “These

farmers are feeding their families and

trying to make a living on what they

can grow on a farm that’s about the size

of half of a football field, and in an area

that had only two days of rain last year.” 

NCBA oversees program 

The Farmer-to-Farmer (FTF)

program is operated by the National

Cooperative Business Association’s

(NCBA) CLUSA International

Program. FTF provides short-term

volunteers who provide technical

assistance to farmers, farm groups and

agribusinesses. Through this USAIDfunded program, volunteers provide

assistance and training in processing,

production and marketing to targeted

populations. 

FTF’s goal is to improve the value

chains that impact food security,

increase household revenue and provide

farmers with cash to purchase food.

NCBA’s CLUSA International Program

currently has project offices in 10

countries on three continents.

“Originally, I was asked by FTF

in the spring of 2011 to work with

farmers in Niger, but that trip was

later cancelled. When I got the

second call to work in Senegal

with produce farmers, I was

excited about the opportunity to

participate in this program,”

recalls Dorman.

Although asked to volunteer,

Dorman still had to apply to the

program and be accepted by both

NCBA organizers in Washington,

D.C., as well as by USAID

employees in Senegal. Once her

application was approved, Dorman was

assigned to work as a marketing

volunteer, based on her education and

professional experience. 

In a marketing assignment,

volunteers work directly with

organizations and farmers to develop

improved marketing techniques for

their crops. Other FTF volunteers work

in the areas of production, processing

and cooperative development.

Covering large territory

Dorman spent 11 days in the area

meeting with farmers each day.

Traveling with an interpreter/project

coordinator and a driver, the trio would

travel up to 40 miles daily in any

direction from Bakel to meet with

farmers and offer marketing training.

“The response from the farmers was

great,” Dorman says. “Taking the time

to travel and meet with me was a lot to

ask of these farmers when it’s all they

can do to keep their farms going. We

had in-depth conversations during the

training sessions.” The farmers asked

many pointed questions that showed

their grasp of the marketing challenges

they face. 

“I enjoyed working with them and

will be excited to see the results they’re

able to achieve as an outcome of our

work there,” says Dorman. 

“Translating from English to French

and then into tribal languages was a bit

daunting, and for a minute you’d

wonder if what you were saying was

really going to be understood,” she says.

“But then the farmers would fire back

exacting questions regarding the topic,

and you knew the language barrier had

been broken.”

During the training sessions she

focused on five key areas:

• Understanding supply and demand;

• Storage and processing techniques;

• The need for diversification of

products;

• Budgeting and cost control

fundamentals, and

• Wholesale contracting. 

Follow-up plan compiled

Before leaving Senegal, Dorman met

with in-country USAID officials to

discuss her assignment, hoped-for

outcomes and to put together a followup plan for local administrators to

continue the work she’d started. After

returning to the United States, Dorman

wrote an action report detailing how

U.S. officials can do follow-up work

with BAKHPU. The report was

submitted to the NCBA/CLUSA office

in Washington, D.C.

“Knowing that the work you’re

doing will be implemented and that

follow-up will be done after you’ve left

the country to ensure success makes

you feel confident that your time and

effort was well spent,” notes Dorman.

She was one of three FTF volunteers to

work with the BAKHPU organization.

The first volunteer arrived in

September 2011 to work with the group

on pest management and production. A

second volunteer was with the group in

October and focused on

organizational and cooperative

development, and Dorman arrived

in November. 

As a volunteer, her trip

expenses were covered by USAID

while West Central Cooperative

provided Dorman with the time

away from her position to

participate in the program.

“What’s great about the FTF

program is that you know USAID

will follow through. You know the

work you’re doing will have

consequence. Just a week or so

ago, I received a progress report

from Abibou, the in-country contact,

and Eric Wallace with NCBA in D.C.

There’s still a connection there.”

For more information about the

Farmer-to-Farmer program, visit:

www.usaid.gov/index.html. n

Rural Cooperatives / March/April 2012 31
32 March/April 2012 / Rural Cooperatives

Carolyn B. Liebrand, Ag Economist

Cooperative Programs

USDA Rural Development

e-mail: carolyn.liebrand@wdc.usda.gov

s the 21st century began, cooperatives

continued to be the marketing organizations

of choice for most dairy farmers. Helping to

sustain this standing, dairy farmers made

adjustments in their marketing organizations

through new formations, mergers and even dissolutions over

the past decade. These actions positioned dairy farmers with

organizations better able to serve their marketing needs. 

Between 2000 and 2010, 23 new dairy cooperatives were

formed. Conversely, 30 dairy cooperatives merged with

another dairy co-op, while 49 dissolved. Another four

cooperatives stopped handling producer milk (table 1). As a

result, the number of U.S. dairy cooperatives shrank by 60

cooperatives from 2000-2010. 

The South Atlantic region of the United States was the

only region where there was a net increase in the number of

dairy cooperatives. The North Atlantic had the largest net

decline in dairy co-ops. However, the North Atlantic had the

largest number of cooperatives in both 2000 and 2010.

Despite the decline in co-op numbers, dairy cooperative

producer-members continue to market a large majority of the

nation’s milk supply — about 82 percent of total production

(as measured in 2002 and 2007). The cooperative model

A

Dairy co-ops in the 21st century:

the first decade
Rural Cooperatives / March/April 2012 33

employed by U.S. milk producers is not uniform; rather,

cooperatives range in size (as measured by the amount of

milk the cooperatives handle) and have varied operations (the

activities they undertake to market member milk). 

New co-ops formed

During the past decade, every region of the nation (except

the South Central region) saw one or more new dairy

cooperatives form to operate at the first-handler level,

seeking to secure the most profitable outlets for their

members’ milk and provide producers a say in the market.

These 17 new cooperatives may negotiate prices and terms of

trade, as well as secure a buyer(s) for members’ milk. But

these co-ops usually didn’t own plants. 

Dairy cooperatives that operate in this manner are

referred to as “bargaining-only” cooperatives because they

generally do minimal, or no, further processing of the

members’ bulk, raw milk. The new bargaining-only

cooperatives were medium-sized (10 cooperatives handled

between 1 billion and 50 billion pounds of milk annually) or

small (seven of these new co-ops handled less than 50 million

pounds of milk annually).

In addition to the 17 new bargaining-only cooperatives,

five new dairy cooperatives began operations during the past

decade to make and/or market specialty or niche dairy

products. These new “niche marketing” cooperatives were all

small. Three of the five new niche marketing cooperatives

were headquartered in Wisconsin. Several were formed by

Amish dairy farmers. They emphasize the unique milk

production characteristics of their members, such as grassfed, organic and/or local, to market the milk and milk

products. 

Finally, there was one new large (handling more than 1

billion pounds of milk annually) “diversified” cooperative in

the North Atlantic region. It was created through the merger

of several dairy cooperatives. 

Cooperatives that make a variety of dairy products in a

number of plants, in addition to selling bulk/raw milk to

other dairy firms, are referred to as diversified cooperatives.

Cooperatives merged

To address changes in their marketing environments, 30

dairy cooperatives merged into other cooperatives during the

2000-10 period. Co-ops that merged were headquartered in

every region except the South Atlantic. Further, both

bargaining-only and cooperatives with manufacturing and/or

processing operations merged with other cooperatives.

However, no niche marketing co-ops merged with another

co-op during this decade. 

One-half of the cooperatives that merged were small

bargaining-only co-ops in the North Atlantic region (15

cooperatives). Seven of the other nine bargaining-only co-ops

Diversified 14 31 04 151 12 13 22 8

Fluid processing 412 03 030223 -1

Niche marketing 23 08 08 5 13 549 19 -4

Hard-product manufacturing 

and Bargaining-balancing 14 2 2 0 4 10 14 0 0 0 0 -14

Manufacturing/ processing, total 55 6 13 0 19 n/a n/a 6 n/a n/a 44 -11

Bargaining only 156 24 36 4 64 7 71 17 5 22 107 -49

Total 211 30 49 4 83 23 n/a 23 23 n/a 151 -60

Note: Mode of operation was determined from the marketing operations survey data of 1997, 2002 and/or 2007.

1 Cooperatives that merged with another cooperative and were not the surviving entity.

2 Cooperatives that were sold, dissolved, etc.

3 Cooperatives no longer handling member milk

4 Includes cooperatives formed by merger of existing cooperatives when the new entity operated under a new name.

2000

Operating Mode CO-OPS MERGED1

Table 1—Dairy cooperative changes, 2000-10

DISSOLVED2

NO

LONGER

DAIRY3

TOTAL

EXITS

MODE

CHANGES

FROM

EXITS PLUS

MODE

CHANGES ENTRIES4

MODE

CHANGES

TO

TOTAL

ADDITIONS

2010

CO-OPS

NET

CHANGE

2000-10

Number of dairy cooperatives
34 March/April 2012 / Rural Cooperatives

that merged were medium-sized and headquartered in four of

the six U.S. geographic regions (North Atlantic, West North

Central, South Central and Western regions).

Six manufacturing/processing cooperatives merged with

other larger manufacturing/processing cooperatives during

2000-10. All but one were all medium-sized prior to their

mergers and headquartered in the North Atlantic, West

North Central and Western regions.

Changed operations

While cooperatives must continually modernize and make

adjustments in their operations to meet changes in the

market environment, 23 significantly changed the nature of

their operations between 2000 and 2010. Certain modes of

operation that were successful in previous decades gave way

to alternative operating types. 

For example, the cost of inefficient plant utilization led

“bargaining-balancing” cooperatives to merge with other coops, alter their operations or dissolve. Bargaining-balancing

cooperatives are dairy cooperatives that operate at the first

handler level and bargain for their producer-members; they

also have plants that manufacture commodity dairy products

(butter, powder or cheese) for “last-resort” balancing of

surplus milk volume. 

Five of the former bargaining-balancing cooperatives

broadened their product lines to operate as diversified dairy

cooperatives. Conversely, three of the bargaining-balancing

cooperatives closed their under-utilized plants and continued

as bargaining-only cooperatives. 

(Regardless of the disappearance of bargaining-balancing

cooperatives, dairy cooperatives continue to provide a

balancing function in milk markets. The balancing function

now is mostly provided by the diversified cooperatives that

direct varying volumes of milk through their plants to

accommodate the ebb and flow of milk production and

demand.)

Two dairy cooperatives adapted to a changed marketplace

by shifting away from the manufacture of a narrow line of

hard products (butter, powder or cheese). Previously, these

cooperatives used most of their members’ milk in their own

manufacturing plants to make undifferentiated, commodity

dairy products. These cooperatives found it more

advantageous to diversify their product lines to include

products formulated to unique customer specifications. 

Further, seven bargaining-only cooperatives added

manufacturing/processing operations during 2000-10 to

become diversified, fluid processing or niche marketing

cooperatives. Conversely, two niche marketing co-ops ceased

plant operations and continued on with bargaining-only

operations during the decade. 

Three other niche marketing cooperatives broadened their

operations, becoming diversified cooperatives. Finally, one

diversified cooperative became more focused on fluid

processing operations.

Cooperative dissolutions

The 2000-10 decade saw 49 dairy cooperatives dissolve.

Nearly three out of four were bargaining-only cooperatives. 

Most of the manufacturing/processing cooperatives that

dissolved were niche marketing cooperatives (eight co-ops).

In many cases, the members of the dissolved cooperatives

were able to join other dairy cooperatives.

Dairy cooperatives in 2010

At the same time that some dairy cooperatives have

changed to adapt to evolving market conditions, others have

continued operating within a particular marketing mode.

This is not to imply that these cooperatives have not made

adjustments to address changes in the marketplace. These coops have modernized their plants and equipment, acquired

plants, built new plants, expanded product lines, entered joint

ventures and/or broadened member services. But these moves

have been made as they continued in the same general mode

of operation.

Of the 151 dairy cooperatives operating in 2010, almost

three of every four had been in continuous operation since

prior to 1992 (table 2). Further, most of these cooperatives

had been operating since well before the 1990s, and at least a

dozen had been operating for more than 75 years. 

Nineteen of the 110 cooperatives that had been operating

since prior to 1992 changed their operations during 2000-10

enough that they were identified as operating under a

different operational mode than previously. Still, a majority

of the nation’s dairy cooperatives in 2010 had been in

operation since prior to 1992 and had been using the same

mode of operation since at least 2000. These 91 cooperatives

likely expanded, altered and adapted their operations over the

years, but they remained identified with the same mode of

operation.

Further, a majority of each of the operating types had been

in operation since prior to 1992. However, bargaining-only

cooperatives were the only type of dairy cooperative where a

majority had focused solely on bargaining functions since

prior to 1992, not changing to this mode during this past

decade. 

In contrast, only a minority of the manufacturing/

processing cooperatives had been operating within the same

mode of operation since prior to 1992. Among the

manufacturing/processing cooperatives, niche marketing

cooperatives were remarkable because they had the lowest

proportion of cooperatives that had been in operation since

at least 1992 but had the largest proportion that had been

Dairy co-op producer-members continue

to market a large majority of the nation’s

milk supply — about 82 percent

of total production.
Rural Cooperatives / March/April 2012 35

niche marketers since at least 1992 (three cooperatives had

niche operations for 100 years or more).

Finally, a majority of dairy cooperatives in every region

except the Western region had been in operation since prior

to 1992. The West North Central and North Atlantic regions

had the largest proportion of cooperatives that had been in

operation since prior to 1992. In contrast, around one-fourth

of the dairy cooperatives in the Western, East North Central

and South Atlantic regions had entered during 2000-10.

Conclusion: dairy cooperatives 

can be flexible, responsive

Like their dairy-farmer owners, dairy cooperatives

declined in number even as the amount of milk they

marketed continued to grow. Some co-ops continued to

operate as they had for decades, while others halted their

manufacturing-processing operations. Other co-ops added

plant operations , and a number of new dairy cooperatives

formed in this first decade of the 21st century. 

Small cooperatives declined to less than one-half of the

nation’s dairy cooperatives, even as a majority of the North

Atlantic cooperatives continue to be small. Much of the

adjustment in dairy cooperative numbers was in the small

category, where a majority went out of business by

dissolution.

Bargaining-only cooperatives were perhaps the most

flexible operating type, as evidenced by the numerous co-op

entries and exits in this industry sector. This could be due in

part to their having few fixed assets. On the other hand, over

one-half of the niche marketing cooperatives in operation in

2000 went out of business, or ceased niche marketing

operations, by 2010. 

Meanwhile, more than one-fourth of the niche marketing

cooperatives operating in 2010 had begun operations during

the decade. 

All this attests to the viability of the cooperative model in

dairy marketing while at the same time highlighting that

there is no one ideal mode of dairy cooperative operation.

The fact that dairy cooperatives have been able to thrive

using a variety of operating modes and under a broad range

of economic conditions indicates that dairy cooperatives are

likely to continue as the marketing organizations of choice

for many dairy farmers in the years to come. n

Continuous operation1 110 16 3 12 79

Same mode2 91 618 76

Percent of 2010 cooperatives

Continuous operation1 73% 73% 100% 63% 74%

Same mode2 60% 27% 33% 42% 71%

Region

Number of cooperatives

Continuous operation1 43 2 24 32 2 7

Percent of 2010 cooperatives

Continuous operation1 78% 50% 69% 84% 67% 44%

1 Cooperatives operating prior to 1992 and in continuous operation through 2010

2 Cooperatives operating prior to 1992 and in continuous operation through 2010 

with operations categorized as the same mode of operation during 2000-10

ALL DIVERSIFIED

Table 2—Dairy cooperatives in 2010 that had been in operation since 1992, by mode of operation, region

FLUID

PROCESSING

NICHE

MARKETING

BARGAINING

ONLY

Number of cooperatives

Mode of operation

NORTH

ATLANTIC

SOUTH

ATLANTIC

EAST NORTH

CENTRAL

WEST NORTH

CENTRAL SOUTH CENTRAL WESTERN
By Lynn Pitman,

University of Wisconsin Center for

Cooperatives

e-mail: pitman@wisc.edu

olatility in the global

economy and rapid

consolidation in the

agribusiness markets

are placing

unprecedented demands on farmer

cooperatives. How can cooperatives

innovate and grow? 

The 14th Annual Farmer

Cooperatives Conference, held in

Minneapolis in November, provided a

forum for cooperative leaders to assess

their business environment and discuss

new strategies to meet the needs of

their members.

Terry Barr, senior director of

industry research for CoBank, kicked

off the conference with a review of

trends in the global marketplace. The

balance between emerging and

advanced economies will continue to

change as the emerging economies

drive the demand and economic growth

of the future, he said. 

This trend is benefiting the

agribusiness sector, which is

increasingly becoming more exportdependent. Significantly lower levels of

liquidity in the global credit markets,

along with continued volatility and

geopolitical and economic uncertainty,

is expected. Agriculture continues its

strong performance, Barr said, but will

need to explore new marketing

arrangements to manage the risk that is

being passed up and down the supply

chain.

As populations increase, food

sovereignty concerns are driving foreign

economies to seek more control over

their food supplies. Many countries are

now active international agricultural

investors, purchasing land and making

investments across the globe. 

Private equity funds have also

entered the market. Mark Palmquist,

36 March/April 2012 / Rural Cooperatives

V

Speakers, including Bob Fifield of Cooperative Producers Inc.,

reviewed marketplace trends that are impacting co-ops

during the 14th annual Farmer Cooperative Conference in Minneapolis.

Co-ops respond 

to consolidation, global volatility
Rural Cooperatives / March/April 2012 37

CHS executive vice president and chief

operating office for Ag Business,

described how the cooperative is

responding to this focus on asset

acquisition that is driving prices

skyward. The CHS system strategy, he

explained, builds on a strong

cooperative system domestically and is

growing its global origination footprint. 

Palmquist noted that the cooperative

farmer ownership structure provides

CHS a competitive advantage, and he

looked forward to continued growth

opportunities.

Consolidation has local 

and regional impact

As agribusiness operations

consolidate to maintain competitive

advantage, there are impacts for

cooperatives at the local and regional

level. The general managers of three

local and regional cooperatives

described how their cooperatives have

adjusted to meet the changing

marketplace. 

Jeff Nielsen of United Farmers

Cooperative (UFC) in Minnesota

emphasized that strong earnings are

necessary to invest in the infrastructure

needed to compete globally and to

allow the co-op to maintain and

improve its member equity revolvement

program. Partnerships have allowed

UFC to be part of the global

marketplace but keep production and

capital local. 

Frontier FS Cooperative in

Wisconsin merged into Growmark in

2010. Sam Skemp described some of

the advantages and challenges posed by

this significant structural change. 

He noted the need to attract and

retain high-caliber employees who are

necessary to provide the service quality

its customers expect. To help meet

some of these challenges, Frontier has

instituted better employee benefits and

a new equity payout system with a

higher cash/stock ratio.

Sunrise Ag in Illinois is a diversified

co-op with agronomy, grain, transportation, energy and retail divisions. It

has also pursued joint ventures and is

participating in an LLC to strengthen

its competitive position vs. larger

agribusinesses. Rich Vanderpool

described how this diversification has

been complemented by a successful

producer-finance program, which helps

differentiate Sunrise Ag from other

competitors.

Flexible financial structures

Conference speakers also addressed

topics related to the flexible financial

strategies that are necessary for

cooperatives to pursue competitively

driven structural options. Mike

Hechtner, CoBank Central Region

president/Rural Agribusiness Group,

provided an overview of the current

banking environment. CoBank has been

able to respond to commodity volatility

by tailoring its loan programs to the

capitalization and profitability levels

within each company. 

Co-ops will need to keep their focus

on working capital levels to meet bank

requirements, but also should consider

financing strategies that take advantage

of historic low interest rates, Hechtner

said. Counterparty risk continues to be

an issue for lenders. He called for coops to “make some (and) save some”

during these strong economic times in

agriculture.

David Barton, professor emeritus,

Kansas State University, drilled down

into the topic of income distribution

and equity management strategies,

drawing on co-op and business finance

theory and practices. He described

innovative practices that impact

profitability, income distribution, asset

and balance sheet management, and

patron equity investment. 

In acknowledging the trade-offs that

inevitably must be made, Barton

reminded co-ops that while they should

not let “perfect” be the enemy of

“good,” neither should “good enough”

interfere with “continuous

improvement.”

Tax, equity issues 

The impact of tax and accounting

issues on financial strategies was

examined by Teree Castanias, CPA. She

provided a recap of Section 199 of the

IRS Tax Code, which relates to

manufacturing activity for products

made in the United States, and the

choices about patronage dividend

management that cooperatives should

consider when using this deduction. 

Both Barton and Castanias worked

with Bob Fifield, CEO of Cooperative

Producers Inc., to develop a new equity

revolvement plan after the 2007 merger

between Heartland and Midland. Fifield

described how balance sheet management and use of capital drove patronage

equity rules. Section 199 considerations

also affected patron allocation

strategies.

Another view of equity management

was provided by Tom Houser of

CoBank, who described how

cooperative equity in the bank was

dependent on how much the co-op

borrowed. CoBank has used nonqualified allocations to its members,

with no intent to retire it, as a result of

regulatory considerations. Especially in

the Midwest, there has been an increase

in the use of non-qualified allocations

by cooperatives, but with an intent to

revolve it.

Cooperatives also need to

continually adapt their risk

management strategies to respond to a

volatile global marketplace that is

driving risk down the supply chain.

Tom Neher, vice president for

AgriBusiness at AgStar Financial

Services in Minnesota, described the

shift from trading based on market

predictions to a margin management

approach based on cost of production

and financial goals. 

Steve Watrin of Land O’Lakes

discussed hedging practices within a

larger risk management strategy for

producers and the information,

communication and tracking systems

that are needed to make them an

effective tool.

The 15th Annual Farmer

Cooperatives Conference will return to

Minneapolis on November 8-9, 2012.

Visit www.uwcc.wisc.edu for conference

updates as they occur. n
38 March/April 2012 / Rural Cooperatives

Newsline

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

Co-op developments, coast to coast

Land O’ Lakes sets sales record 

Land O’Lakes achieved record net

sales and had its second-highest net

earnings in 2011, co-op leaders told

1,000 delegates and visitors at the dairy

foods and farm supply co-op’s 91st

annual meeting, held in Minneapolis in

February. 

President and CEO Chris Policinski

said 2011 financial highlights included: 

• Net sales of $12.8 billion, up from

$11.1 billion in 2010, with recordhigh sales in the Dairy Foods, Feed

and Crop Inputs divisions; 

• Net earnings of $182 million, up from

$178 million in 2010; 

• $108 million in cash was returned to

members, the third consecutive year

in which cash returned exceeded $100

million. 

“Our 2011 results represent positive

performance and ongoing business

growth in what continues to be an

uncertain economy and volatile

marketplace,” Policinski said. “Despite

these challenges, over the past three

years, Land O’Lakes has achieved our

top three years, in terms of net earnings

and cash returned to members, and two

of our top three years for net sales

totals.”

Land O’Lakes is positioned to

capitalize on the opportunity created by

a growing global population, projected

to expand from about 7 billion people

today to more than 9 billion by 2050.

“Opportunity attracts competition, and

we expect competition — both

domestic and global — to be

aggressive,” he said. “However, we

remain focused on delivering a level of

performance and strategic growth that

enables us to compete and win,

generating enhanced value for members

and customers.” 

Policinski added that Land O’Lakes’

growth initiatives will focus on branded,

value-added market segments; highpotential multi-national customers;

emerging global markets; and

innovation and insights that help

producer-members and membercooperatives grow their businesses. 

Federated Co-op tops 

Canadian co-op list 

Canada’s Rural and Cooperative

Secretariat has reported that the

nation’s top 50 non-financial co-ops

grew in members, revenue and assets in

2010. Federated Co-operatives Ltd.

(FCL) was the top Canadian nonfinancial cooperative (based on revenue)

for the tenth consecutive year. The coop does central wholesaling and

manufacturing and provides administrative services for about 1.5 million

member-owners of about 250 retail

cooperatives across western Canada. 

FCL’s members include co-op food

stores, pharmacies, clothing stores,

general merchandisers, building

material enterprises, crop and feed

suppliers, gas stations, convenience

stores and travel services. FCL provides

access to petroleum products via its

refinery, Consumers’ Co-operative

Refineries Limited (CCRL), and

groceries through a subsidiary, The

Grocery People.

La Coop fédérée ranked second on

the Canadian top 50 co-op list. It is

owned by more than 90,000 members

of 103 cooperatives in several Canadian

provinces. La Coop fédérée 

is involved in animal and crop

production and grain marketing,

hardware and farm machinery, energy

and meat processing. 

For the first time, a telecommunications co-operative — Saskatchewan's

Access Communications — made the

Top 50 list. 

The 2010 Annual Survey of

Canadian Cooperatives also shows that:

• Top 50 co-op revenue grew 3.4 percent from 2009, to $24.8 billion in

2010.

• Top 50 co-op assets grew 6.6 percent,

to $11 billion in 2010. 

• Top 50 co-ops were owned by 4.9

million members in 2010, up 6.7 percent from 2009.

• Top 50 co-ops employ 38,700 people,

81 percent of whom are full-time. 

• Top 50 co-ops returned $640 million

to their members in patronage

refunds in 2010.

More information on the top 50

non-financial cooperatives is available at

http://s.coop/7xbe.

Share your co-op news

To have your co-ops news

appear in Newsline, make sure

you are sending press releases

and announcements to:

dan.campbell@wdc.usda.gov.

Items of interest include new

products and services, business

ventures, honors, annual

financial performance, mergers,

new board chairs and managers/

CEOs, and community service

efforts, among many other

topics. Photos are also welcome,

but should be of print quality

(about 300 dots per inch at four

inches wide).
Rural Cooperatives / March/April 2012 39

The next generation of co-op leaders is taking time to

learn not only the history of cooperatives, but also what

really makes them work in today’s economic and social

environments.

Nearly 100 students from nine states came together

recently in Minneapolis, Minn., to learn about

cooperatives from co-op experts, employees and

members of all ages. The students were participants in

the College Conference on Cooperatives, sponsored by

the CHS Foundation and hosted by the National Farmers

Union (NFU) Foundation.

“The conference provided me the opportunity to gain

a very broad perspective of youth involvement in the U.S.

cooperative moment,” says conference attendee and

speaker Mingwei Huang of Illinois. “I come from a

student housing co-op background – a very small niche of

the co-op movement. I learned a lot about agriculture,

retail, food, rural electric co-ops, credit unions and rural

community economic development.” 

She agreed with others that to foster a vibrant

generation of co-op leaders, it’s necessary for youth to

understand all kinds of co-ops, and to learn from leaders

in the various cooperative businesses.

The three-day event in February included participants

from Minnesota, Wisconsin, South Dakota, Nebraska,

North Dakota, Kansas, Iowa, Illinois and Colorado. Many

of the participants are attending a community college,

working on a bachelor’s degree or pursing a master’s

degree, for which an understanding of the cooperative

business structure is important.

“Don’t limit your learning to your current education,”

William Nelson, president of the CHS Foundation, told the

students on a tour of CHS Inc. headquarters. He

challenged them to “get involved in things that you

cannot complete in your own lifetime” as a way to make

a difference.

The students also visited REI, a sports equipment

consumer cooperative, Mississippi Market Natural Foods

Co-op and 7500 York Cooperative. The latter is a

retirement housing cooperative whose residents voiced

appreciation for having an active role in their living

environment.

Presenters included members, directors, employees

and managers from traditional and value-added

agricultural cooperatives, as well as perspectives from

electric, housing, worker-owned co-ops and consumer

cooperatives, such as credit unions. Representatives

from USDA Rural Development and the Peace Corps

provided perspectives on cooperative development here

and abroad.

“Cooperatives are corporations where people work

together to solve common problems, seize exciting

business opportunities and provide themselves with

goods and services,” said Greg McKee, assistant

professor and director of the Quentin Burdick Center for

Cooperatives on the North Dakota State University

campus. “Co-ops are here to stay.”

Conference coordinator Cathy Statz, education

director for Wisconsin Farmers Union, says Farmers

Union’s activities involve cooperation, education, and

civic activism. “Our own history is closely tied with the

cooperative movement,” says Statz. “Cooperatives were

made possible by legislative activity and brought to life in

communities both rural and urban. Events like these

bring these topics together.” n

Students explore world of co-ops 

CoBank earnings rise

15 percent; patronage

tops $340 million 

CoBank’s 2011 earnings and net

interest income reached record highs,

and loan quality improved throughout

the year, the co-op lender reports. Net

earnings increased 15 percent, to

$706.6 million, and patronage of $340.7

million will be paid to members. Net

interest income rose 13 percent, to $1.1

billion, up from $950.8 million in 2010.

Average loan volume during 2011

was $50.2 billion, up 10 percent from

the prior year. Most of the increase

occurred in the bank’s Agribusiness

operating segment, where higher prices

for corn, soybeans and wheat drove

increased seasonal borrowing by many

cooperatives and other agricultural

businesses. The bank also experienced

higher average loan volume in its Rural

Infrastructure operating segment,

largely due to growth in lending to

rural electric distribution cooperatives

throughout the country.

“Throughout the year, we were able

to effectively meet the borrowing needs

of customers and build the financial

strength of the bank, despite difficult

conditions in the financial markets and

the broader U.S. economy,” says

Robert B. Engel, president and chief

executive officer. 

“In addition, we successfully

executed our merger with U.S. AgBank,

which expanded our customer base,

enhanced the diversification of our loan

portfolio and increased our capital

position.”

Average loan volume increased about

1 percent in CoBank’s Strategic
40 March/April 2012 / Rural Cooperatives

Relationships operating segment, which

includes the bank’s wholesale loans to

affiliated Farm Credit associations and

other Farm Credit System organizations that are primarily focused on

production agriculture. 

“Ironically, the same higher

commodity prices that increased

borrowing by cooperatives last year

helped suppress loan demand from

association customers,” Engel says.

“Many farmers around the country

experienced strong profits in 2011 and

opted to finance their operations with

cash, reducing their need for loans from

associations. While association lending

grew only moderately last year, we’re

pleased that the overall health of the

U.S. farm economy remains so strong.”

Total loan volume for the bank at

Dec. 31, 2011, was $46.3 billion,

compared with $50 billion at the end of

2010. CoBank will pay $340.7 million

in patronage, including $230.7 million

in cash and $110 million in common

stock, in March. At year-end, 1.25

percent of the bank’s loans were

classified as adverse assets, compared to

1.71 percent on Dec. 31, 2010. 

In other CoBank news, it is

contributing $2.5 million to support a

new center for commodities research at

the University of Colorado (CU). The

new center will open in 2012 at the CU

Denver Business School. The gift over

three years is intended to help establish

CU as a global leader in research,

education and training in commodities,

including agricultural and energy

commodities that play an increasingly

vital role in the world economy.

Ocean Spray and PepsiCo

pursue Latin America markets

Ocean Spray Cranberries Inc. and

PepsiCo in January jointly announced

that they have formed a strategic

alliance for Latin America. As part of

the alliance, PepsiCo will have exclusive

rights to manufacture and distribute a

portfolio of cranberry- and blueberrybased beverages through its Latin

America Beverages division. The

companies will share marketing

responsibilities for the products and

collaborate on product innovation.

PepsiCo and Ocean Spray began a

business relationship in 2006, when

Ocean Spray’s single-serve juices and

juice drinks entered the PepsiCo

bottling system. As a result of this

relationship, which uses PepsiCo’s

market leadership and expertise in the

convenience and gas (C&G) channel,

Ocean Spray says it has earned a 5

percent share of the C&G single-serve

juice market, with volume growing by

20 percent in 2011.

“We are eager to continue building

on our successful partnership with

PepsiCo, as it will help us expand

consumer access to Ocean Spray

products in important international

markets like Latin America,” Stewart

Gallagher, Ocean Spray’s chief

operating officer for Global Partner

Operations, says. “We believe this is a

great opportunity to further promote

and deliver the health and nutrition

benefits of the cranberry to consumers

in Latin America.” 

Frank Bragg to lead FRC 

Farmers Rice Cooperative (FRC),

Sacramento, Calif., has named Frank G.

Bragg III as its new president and

CEO. Bragg, who started the new job

Jan. 1, succeeds Mike Sandrock, who

retired Dec. 31 after 28 years of service

with the cooperative. 

“We believe we have found an

outstanding individual to lead this

company into the future,” says FRC

Chairman Herb Holzapfel. “Frank

brings a wealth of experience in

management with both private and

cooperative businesses.”

Bragg previously served as president

and CEO for MBG Marketing, a North

American blueberry marketing

cooperative of 365 members. Prior to

that, he was vice president of the Citrus

Juice and Oils business for Sunkist

Growers. He also served as president

and COO for Mauna Loa Macadamia

Nut Holdings of Irvine, Calif., and

spent 12 years with Blue Diamond

Growers in Sacramento, where he held

executive positions in operations and

business development.

Bragg completed graduate programs

at both the University of Missouri and

Stanford University. 

NCBA videos explore 

thriving food co-ops

The National Cooperative Business

Association (NCBA) is inviting the

public to join a cross-country tour of

the nation’s most vibrant food co-ops,

from California to Vermont, via a new

video series that “highlights the people,

personalities and passion fueling today’s

food co-op renaissance.” 

The program, “Lights, Cameras, Coops,” is hosted by Top Chef finalist

Kevin Gillespie. The video series has

been designed to be fun and fast paced

to get people “fired up about food,

community and the passion we share

for our favorite co-ops,” NCBA says.

Gillespie is an advocate for using locally

sourced, organically grown ingredients

found at neighborhood food co-ops

across the nation. To view the program,

visit: http://strongertogether.coop/

premiere/index.html. 
Rural Cooperatives / March/April 2012 41

Co-ops and trade focus of WIIT

Cooperatives and their role in

agriculture trade were in the spotlight

at a recent meeting of the Association

of Women in International Trade

(WIIT) in Washington, D.C. Providing

the organization’s Agriculture

Committee with a “co-op-eye view” of

current trade issues were Julian Heron,

general counsel for Blue Diamond

Growers; Alex Serrano, director of

business development at the National

Cooperative Business

Association/CLUSA International

Program; and Lisa Knight, president

and general counsel for Cooperatives

Business International. 

The speakers discussed successes and

challenges facing co-ops when

exporting their products. Heron

described Blue Diamond’s role in

helping to make almonds one of the

nation’s leading farm exports and

addressed the challenges of dealing with

a large number of trade agreements

when exporting almonds to dozens of

foreign markets. Serrano discussed his

organization’s role in creating

partnerships between small- and

medium-sized U.S. cooperatives and

co-ops in developing nations. The links

being forged are promoting a greater

two-way flow of agricultural products.

The Association of Women in

International Trade is a professional

association of members who share an

interest and expertise in international

trade. Members are engaged in a variety

of international trade careers, including

business, U.S. and foreign governments

and nonprofit organizations. 

OCDC names Hazen 

executive director

The U.S. Overseas Cooperative

Development Council board has named

Paul Hazen as its executive director.

Hazen, who started the job Feb. 1,

brings more than 30 years experience in

international and domestic cooperative

development to the organization. 

“Paul brings to the organization a

wealth of cooperative experience and an

in-depth knowledge of cooperative

international development. This year

will be particularly exciting for OCDC,

its members and Paul as we launch the

International Year of Cooperatives,”

says OCDC Board Chair Tom

Verdoorn of Land O’Lakes Inc. 

Hazen recently stepped down as

president and CEO of the Washington,

D.C.-based National Cooperative

Cherry Central Cooperative Inc., in Traverse City, Mich., has added a new

cooperative member – Norfolk Cherry Co. Ltd, of Simcoe, Ontario – effective

May 1. “The addition of Norfolk Cherry Company Ltd. to the membership will

broaden the cooperative’ geographic representation of tart [sour] cherry

production, thus offering more flexibility in satisfying our customers’ needs,”

says Cherry Central President Richard Bogard.

Ryan Schuyler, spokesperson for Norfolk Cherry, says joining Cherry

Central will enable it to provide better service to its customers. Formed in

1974, Norfolk Cherry is the largest sour cherry processor in Canada.

“We are always looking for the right fit for Cherry Central Cooperative,”

Bogard says. “It is not about growth necessarily, but more about whether it

makes sense to our current producers and customers. If we can clearly see

the value and we see the opportunity for success for both companies, then it

is a natural fit, as is the addition of Norfolk Cherry to the cooperative.”

Cherry Central Cooperative, formed in 1973, is a federated marketing

cooperative representing grower-owned processing plants across North

America. It is a global marketer of frozen, canned, bottled and dried products.

The cooperative was recognized by the Michigan Department of Agriculture

as its 2005 and 2010 Michigan Agriculture Exporter of the Year. n

Cherry Central adds Canadian member

Processing tart cherries at a plant of Cherry Central Cooperative, which has

just expanded by adding a Canadian co-op to its membership.
42 March/April 2012 / Rural Cooperatives

Business Association (NCBA), the

nation’s oldest national cooperative

organization. Under Hazen’s leadership,

NCBA’s international cooperative

development portfolio grew from $8

million annually to more than $30

million. In 2001, he was named CEO

Communicator of the Year by the

Cooperative Communicators

Association.

OCDC brings together

organizations committed to building a

more prosperous world through

cooperatives. Its mission is to

champion, advocate and promote

effective international cooperative

development. OCDC members are

global leaders in cooperative development in Africa, Latin America and Asia.

With projects in more than 70 counties,

OCDC members implement the largest

portfolio of cooperative development

programs in the world.

NMPF supports USDA 

school meal standards

The National Milk Producers

Federation (NMPF) has issued a

statement in support of USDA’s

updated school meal standards that

continue to stress the nutritional

benefits of low-fat and fat-free milk and

dairy products. A final version of those

standards was released by USDA

following more than a year of public

comment and review. 

NMPF submitted comments to

USDA last April focusing on the

nutrient package of milk and dairy

foods, which will continue to be a core

component of school meals, with fluid

milk being offered at all meals. “The

updated nutrition standards require that

low-fat or fat-free milk remain a part of

every school meal,” NMPF President

and CEO Jerry Kozak said. “That’s

essential, given that milk is the single

largest contributor of nutrients in kids’

diets. A single glass of milk delivers a

very affordable package of nine essential

nutrients important to good health,

including calcium, potassium,

phosphorus, protein and vitamins A, D

and B12.”

Wisconsin co-ops 

announce merger plan 

United Cooperative, Beaver Dam,

Wis., has signed a letter of intent to

allow a subsidiary to pursue a merger

with Cooperative Services, Denmark,

Wis. Ballots were mailed to

Cooperative Services’ members in

February. If approved, the merger will

take effect April 1. 

Cooperative Services projects its

revenue for fiscal 2012 will be in excess

of $29 million. The co-op has feed,

grain and agronomy divisions, as well as

a Cenex convenience store and an

automotive shop, all in Denmark. 

United Cooperative, with facilities

throughout Wisconsin, had $525

million in sales in 2011, up $200

million from 2010 due to strong

internal growth. As of Feb. 1, United

Cooperative also merged with Shawano,

Wis.-based Mid-County Cooperative

and Pulaski Chase Cooperative, in

Pulaski, Wis. 

IDEA to help 

African dairy co-ops 

Land O’Lakes International

Development has launched the

International Dairy Enterprise Alliance

(IDEA), a learning network designed to

provide dairy cooperatives in

developing countries with the

information, resources and technology

they need to thrive and be competitive

in national and regional markets.

Created as a core component of Land

O’Lakes Cooperative Development

Program (CDP), which is being funded

by the American people through the

U.S. Agency for International

Development (USAID), the IDEA

network is comprised of cooperatives,

development and research organizations, input suppliers, governments and

nongovernmental organizations and

other private sector partners. 

“Our goal with IDEA is to provide a

mechanism for cooperative managers

and leaders to network with dairy

stakeholders around the globe. A key

feature of the cooperative model is

learning and sharing,” explains Rebecca

Savoie, Land O’Lakes International

Development’s practice manager for

Enterprise, Cooperative and Association

Development. “Instead of competition,

we want to create an environment of

collaboration where members can share

unique best practices, technology and

innovative solutions to shared dairy

industry and cooperative issues.”

Learning and networking are central

to IDEA, so Land O’Lakes has planned

a Cooperative-to-Cooperative Learning

Series, which will bring together

industry thought leaders, cooperative

managers and board members to share

their experiences and knowledge. The

inaugural Cooperative-to-Cooperative

Learning Series took place Feb. 28-

March 1 in Nairobi, Kenya. It was cosponsored by Cooperative Resources

International (CRI), a cooperative

focused on animal breeding that also

receives CDP funding through USAID.

The event included more than 40

participants representing 25

cooperatives from nine countries. 

In addition to the Cooperative-toCooperative Learning Series, which will

also host an event in India in 2013,

IDEA will develop a “knowledgemanagement portal.” The portal will

provide a forum for IDEA members to

collaborate and share strategies and

tools.

Mark Ventry to lead 

Ontario Co-op Assoc. 

Mark Ventry has been selected as

executive director of the Ontario Cooperative (On Co-op) Association.

Ventry, who assumed his new duties

March 2, had been acting executive

director. 

“The hiring committee was impressed with Mark’s strong cooperative

and credit union background and his

commitment to continuing On Co-op’s

leadership role in the Ontario cooperative sector,” On Co-op Board

Chair Barry Hannah says. “Cooperatives are riding the wave of the

United Nations International Year of

Cooperatives, and we have ensured that

On Co-op has a strong team in place to

continue that momentum well into the

future.” n
facility. Feuerberg says that as wood

decomposes, one of the byproducts is

methane, which is “24 to 25 times

worse for the environment than carbon

dioxide. One of the major attributes of

this facility is that it will be carbon

neutral — it will not add more carbon

dioxide to the environment than what is

released naturally.” 

Ash, another byproduct of the plant,

can be returned to the forests as

fertilizer, he said. 

Construction of the plant, which is

expected to cost $178 million, is on

schedule. Funding includes a $90

million loan from USDA’s Rural

Utilities Program, equity funds and

state and federal grants. NOVEC will

begin testing the plant in 2013, and by

September the plant is expected to

begin commercial operation.

“The sun doesn’t always shine and

the wind doesn’t always blow,” notes

Feuerberg. “The relative economies of

wood biomass are less expensive than

solar and wind energy.” 

Feuerberg says that reliability was a

key factor in selecting biomass as a

renewable fuel source. “If you’re

operating near peak capacity on a hot,

humid summer afternoon, you cannot

be certain of meeting system demand

with wind or solar as the source.

Virginia does not yet have renewableenergy mandates, but we’re anticipating

a federal renewable standard. Our goal

is to be ahead of the curve. Trying to

catch up to a standard can be costly.

This is another way to diversify our

resource mix.”

Response by NOVEC members,

many of whom have encouraged greater

use of renewable energy, has been

positive. 

Did being a cooperative facilitate

approval of the project? “Our board

members recognized this was an easy

decision to make after hearing from our

members through our survey process,”

Feuerberg says. “The feedback

indicated that many members link

environmental stewardship with good

corporate citizenship.” 

Feuerberg contends that further

evidence of the project’s popularity was

when they held regulatory hearings, no

opponents testified. 

“There are so many favorable

attributes associated with this project

that it was a simple decision,”

Feuerberg explains. “We have satisfied

our customers’ expectations, added

renewables to our portfolio and

diversified our resource mix in the

process. We’ve become more

competitive, provided jobs and helped

improve the local economy.” n

Rural Cooperatives / March/April 2012 43

Utility Co-op Connection

continued from page 15
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