Rural COOPERATIVES

80 Years

OF TELLING THE

CO-OP STORY

USDA / Rural Development March/April 2013
2 March/April 2013 / Rural Cooperatives

Commentary 

Co-ops understand and 

enhance power of community

By John Padalino, Administrator

Rural Utilities Service

USDA Rural Development 

Editor’s note: this commentary is based on excerpts from an

address Padalino made at the annual meeting of the National

Rural Electric Cooperative Association in New Orleans in

February. 

ural electric cooperatives understand the

power of community.

As community leaders, rural electric

cooperatives work to improve the quality of

life and understand the need for economic

growth. Rural electric cooperatives understand the

importance of reliability — not just reliable electric power,

but reliable leadership.

Cooperatives have been delivering electricity for over

three-quarters of a century. Today’s co-ops deliver more than

energy; as leaders, they invest in their communities, which

translates into assets not just for the U.S. economy, but for

the world.

Rural electric cooperatives wrote the book on hard work,

long hours and leadership. Cooperatives understand member

service and take their responsibilities seriously. 

In the midst of disasters, rural electric co-ops go above

and beyond the call of duty. 

But their work to keep the service online begins long

before a storm ever shows up on any radar. It begins with the

hiring of qualified staff, training and developing that staff,

planning with long-range forecasts and the development of

an emergency response plan and all the other preparation

required to run a utility. 

Storms such as Hurricanes Katrina and Sandy and other

disasters remind us of how important rural electric

cooperatives are to the communities they serve and to the

people who live in them. 

Cooperatives understand that system investment — just

like system reliability — is not an option. So they invest in:

constructing physical infrastructure, planning and

preparatory activities, training and technical assistance, and in

a qualified workforce. These investments deliver reliable,

affordable electricity.

Cooperatives are equally capable of serving the needs of

rural families and businesses and providing economic

opportunity for rural areas for years to come. 

At USDA Rural Development, we understand this and are

proud to play our part in ensuring that the network of rural

electric systems remains strong. Since 2009, Rural Utilities

Service’s (RUS) nearly $22 billion in investments resulted in

627 electric loans in rural areas nationwide. These electric

projects benefit nearly 9 million rural residents annually. 

RUS has been serving rural America for over 77 years.

During that time, our environment has changed. To continue

to meet critical infrastructure needs of our rural

communities, RUS needs to modernize.

We look to the core values of customer service and

continuous process improvement. These values will guide us

as we work to make delivery of our programs more effective

and efficient. These core values come from the preamble of

the Constitution: “We the people of the United States, in

order to form a more perfect union....” As a federal agency,

we need to always look for ways to improve — to form a

more perfect union.

Our business process review will streamline the way we

work. We are updating our regulations and policies and

taking steps to more effectively manage our portfolio. We are

especially focused on customer service. 

I don’t have to tell you that competition for federal dollars

is high, and federal agencies are being asked to do more with

less. Our electric program staff is now smaller, making it

important to hear your recommendations as to how we can

work better with you. 

Energy efficiency programs are a perfect example of how

co-ops meet community needs. In his State of the Union

message, President Obama focused on energy efficiency as a

means of empowering communities. RUS is in the process of

establishing a new energy efficiency program. With your

help, we will make loans to help reduce electricity

consumption and increase efficiency of electric generation,

transmission and distribution, and encourage the use of

renewable fuels.

This program will expand funding available for energy

efficiency projects for business and residential consumers and

help strengthen rural communities and rural economies.

RUS’s energy efficiency and conservation loan program will

be among the newest in the Rural Development family to

R

continued on page 42
Features

Rural Cooperatives / March/April 2013 3

Volume 80, Number 2

March/April 2013

Rural Cooperatives (1088-8845) is

published bimonthly by USDA Rural

Development, 1400 Independence Ave.

SW, Stop 0705, Washington, DC. 20250-

0705.

The Secretary of Agriculture has

determined that publication of this

periodical is necessary in the transaction

of public business required by law of the

Department. Periodicals postage paid at

Washington, DC. and additional mailing

offices. Copies may be obtained from the

Superintendent of Documents,

Government Printing Office, Washington,

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

send address change to: Rural

Cooperatives, USDA/RBS, Stop 3255,

Wash., DC 20250-3255.

Mention in Rural Cooperatives of

company and brand names does not

signify endorsement over other

companies’ products and services.

Unless otherwise stated, articles in this

publication are not copyrighted and may

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

necessarily reflect those of USDA or its

employees.

The U.S. Department of Agriculture

(USDA) prohibits discrimination in all its

programs and activities on the basis of

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

status, familial status, parental status,

religion, sexual orientation, genetic

information, political beliefs, reprisal, or

because all or part of an individual’s

income is derived from any public

assistance program. (Not all prohibited

bases apply to all programs.) Persons

with disabilities who require alternative

means for communication of program

information (Braille, large print, audiotape,

etc.) should contact USDA’s TARGET

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

To file a complaint of discrimination, write

to USDA, Director, Office of Civil Rights,

1400 Independence Avenue, S.W.,

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

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

USDA is an equal opportunity provider

and employer.

Tom Vilsack, Secretary of Agriculture

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. 10

04 Keeping their co-op alive 

How the Isla Vista Food Co-op used ‘crowd funding’ to pave a new way

By Aja Lawson

07 Survey reveals co-op employee compensation trends

By E. Eldon Eversull

10 Specialty Potato Alliance 

Marketing alliance wins new buyers ‘one tastebud at a time’

By Anne Todd

16 Telling the co-op story

USDA journal marks 80 years of promoting co-ops as powerful, self-help economic tool 

By Dan Campbell

22 Organic Valley turns 25

24 The Need for Speed

Ursa Farmers Co-op works with FCC Services to prevent member profits from heading down river

26 Worker Cooperatives

Another variation on the co-op business model

By Charles Ling

29 Effort launched to assist worker co-ops

By Joe Rinehart

32 Smart Growth

Brattleboro Co-op’s development includes downtown housing

By Molly Lambert

Departments

02 COMMENTARY

14 FOCUS ON

30 CO-OP & COMMUNITY

35 NEWSLINE

p. 32

ON THE COVER: Rural Cooperatives — including the years it was

called News for Farmer Cooperatives and Farmer Cooperatives — is

celebrating its 80th anniversary of helping to increase public understanding and use of the cooperative form of business. We look back at a

few of the key dates and trends in its history in this issue. See page 18. 

p. 22
By Aja Lawson

National Cooperative Bank

he Isla Vista Food Co-op, in Isla

Vista, Calif., has long been a beacon

for community autonomy and

control, providing cutting-edge

innovation to engage the largely

transient, student community it serves. Last

October, the co-op needed to draw on that tradition

of innovation to meet its biggest challenge ever: the

seemingly impossible goal of raising $200,000 in just

40 days to make the downpayment to purchase its

building. Failure meant the likely closure of the coop. 

Project We Own It was launched to meet the goal,

and the Isla Vista Food Co-op soon learned that it

would take a village to raise the funds it needed to

continue serving its community. Adding to the

challenge is the profile of typical co-op

member/shoppers: about 90 percent are students

4 March/April 2013 / Rural Cooperatives

How the Isla Vista Food Co-op

used ‘crowd funding’ to pave 

a new way

T

Keeping their co-op alive
who attend the University of California–Santa Barbara (UCSB);

the average member turnover rate is three to five years. 

Despite this rapid turnover, the membership is committed

to the co-op, not only due to the large supply of fresh, local

and organic products it offers, but also because of the active

role it plays in the community through education and

outreach programs. The co-op also teaches incoming

freshman at UCSB how to have a values-based shopping

experience. 

“The co-op became a mechanism for finding personal

food sovereignty and food activism,” says Melissa Cohen, the

co-op’s general manager, who started working for the co-op

in 2003. Cohen, who became general manager in 2010,

implemented changes to the overall structure of co-op

operations. She made the store a more collaborative

operation, finding fresh ways to convert UCSB students

into co-op members. Success in growing the membership

would prove vital for meeting the challenge. 

Keeping the co-op alive

Upon returning from a vacation, Cohen read an e-mail

from the co-op’s property manager informing her that the

property, which the co-op had occupied for 32 years, was to

be sold. The property manager gave the co-op the first

option to buy, but gave them only 10 days to make a decision

before it would be placed on the market. 

It was imperative to keep the co-op in the community, says

Cohen, who felt that leaving its fate to a buyer with no

invested interest in the co-op was not a viable option for its

survival. 

“What we decided in a very short period of time was that

we didn’t really have a choice [other than to pursue the

purchase],” Cohen recalls. In addition to the negative impact

on members and other shoppers, the co-op’s closure would

have hurt the more than 30 local farmers it buys from, as well

as numerous other local (non-farm) producers, who not only

sell products to the co-op, but who also buy ingredients there

to make products they re-sell back to the co-op. Other losses

would include the field trips for school children who tour the

co-op and the many community groups it helps support with

donations, among others. 

In the cooperative tradition of keeping things local, Cohen

initially sought funding from local banks but felt the

disappointing sting of rejection. “Local banks don’t

understand the co-op model,” she says, particularly the lack

of a loan guarantor.

When it became inevitable that funding from a national

bank would be needed, attention was quickly focused on

National Cooperative Bank (NCB) because it frequently

works with food co-ops. “Being a cooperative itself, NCB

understands the unique banking needs of grocery

cooperatives,” Cohen says. 

“The bank was very excited to work with Isla Vista Food

Co-op and proud to play a part in helping to preserve this

important community-based organization,” says Mike Novak,

NCB senior vice president. 

Cohen says working with NCB helped to relieve some of

the mounting stress of purchasing the building. “Working

with a bank that has knowledge about co-ops makes all the

difference. We are not machines, and NCB made this a very

human transaction.”

NCB provided the Isla Vista Food Co-op with the $1.2

million real estate loan it needed. In addition, NorthCountry

Cooperative Development Fund, based in Minneapolis,

Rural Cooperatives / March/April 2013 5

Facing page: Melissa Cohen (left), Isla Vista Food Co-op general manager,

and Abby Wolff, campaign manager for Project We Own It, celebrate the

co-op’s success in raising $200,000 to buy the store property, ensuring that

it remains in operation as a member-owned co-op. Sharing in the good

news are former co-op employee Emmy Beck (below, left) and Adam

Henry, the co-op’s receiving and special orders manager. Photos by Alex

Hoffman, courtesy Hoffoto.com. 
6 March/April 2013 / Rural Cooperatives

Minn., provided a subordinated loan of $200,000. 

It was then time to determine how to raise the $200,000

required for the downpayment. The traditional method of

raising equity (i.e., through member loans) was not an option

due to the transient nature of the co-ops’ membership. 

Co-op only as strong 

as its community

Since the co-op was built upon the activism of the

community, it was of utmost importance to not only involve

the entire community in the fundraising process, but to let it

decide whether or not the building would be purchased. 

“It was critical to create something inspiring around this

effort in order to create a culture of support,” says Cohen.

“The co-op is only as strong as the community that is around

it.” 

Crowd funding, a relatively new type of fundraising made

popular by companies such as Kickstarter (an online funding

platform for creative projects), was the most favorable option

for drawing community support. While crowd funding has

been very successful for a number of causes, organizations

and individuals, it had rarely — if ever — been used as a

source of real estate funding for a co-op. 

Although the Isla Vista Food Co-op was heading into

somewhat unchartered territory, Cohen never lost faith that

the money would be raised. “This is a very unique type of

business. I look at this co-op as a ripple-effect business. So I

decided we can take ripples of knowledge and make waves. 

“The power of the ripple is insurmountable. We have an

opportunity to make the Isla Vista Food Co-op — and the

Isla Vista community — go down in history as a community

that took a stand for this resource. It’s a crazy idea...crazy

enough to work.”

Project We Own It

Project We Own It was spearheaded by Abby Wolff, the

campaign manager. Wolff — a former UCSB student,

advocate for environmental efficiency and long-time member

of the Isla Vista Food Co-op — jumped at the chance to

design a fundraising campaign.

She viewed Project We Own It as “an opportunity to bring

an entire community together for positive change” and “a

rare opportunity in Isla Vista for a real goal that’s tangible for

our community.” Wolff was soon able to mastermind a

grassroots fundraising campaign plan that would pull from

the entire community. 

She assembled a group of 75 volunteers to execute

“guerilla-style” fundraising tactics during conferences,

campus sports and other events. To keep herself and the

volunteers motivated, Wolff used a doggedly positive

approach. 

“We always kept it positive by never using phrases like

‘Save the Isla Vista Food Co-op,’” Wolff explains. “We

wanted this effort to be fun, exciting and, most of all,

positive. We kept it completely optimistic all the time.” 

The fundraising events were as exuberant and multifaceted as the co-op itself, ranging from a farm-to-table

dinner (which raised $3,000 and had as many volunteers as

dinner guests) to Co-operoo, a music festival held at the Biko

Student Housing Co-op that raised $3,600. The latter event

was so successful that Cohen says she sensed victory was at

hand. “I realized at that moment that this was going to be

successful because this community loves this co-op and this

co-op is perfect for Isla Vista.”

Raising the money was not always easy, and there were

many unexpected challenges along the way. Surprisingly,

finding people to rally for the cause was not one of them.

“Being a part of Project We Own It meant working to save

something bigger than myself,” says Monte-Angel

Richardson, a Project We Own It volunteer. 

Project We DID It

The ripple effect Cohen described became a reality, and in

just 40 days the funds had been raised, turning Project We

Own It into Project We DID It. The residents of Isla Vista and

Santa Barbara had taken ownership of their community once

again, proving that united in a co-op, people can overcome

even the most difficult obstacle to safeguard what matters

most.

The future looks promising for the Isla Vista Food Co-op.

The co-op leaders hope that the success of Project We Own It

will serve as a positive example for other co-ops facing similar

challenges. Cohen and Wolff are currently working to create

a crowd-funding replication plan that would be readily

available as an online resource. 

When asked for the most important advice she could offer

to co-ops facing seemingly insurmountable challenges,

Cohen says, “First you need to find someone who is willing

to work with your vision and do it fearlessly. Confidence in

the process is the next biggest thing. Nothing is impossible.

We are only limited by our own personal limitations. If you

truly believe something is going to happen, it will.”

For more information on financing for grocery

cooperatives, please contact NCB’s Michael Novak at (510)

496-2232, or mnovak@ncb.coop. ■

“Being part of Project We Own It

meant working to save something

bigger than myself.”
E. Eldon Eversull, Ag Economist

USDA Rural Development Cooperative Programs

Editor’s note: This article summarizes the findings of a new

report from the Cooperative Programs office of USDA Rural

Development: Cooperative Employee Compensation (Research

Report 228), soon to be posted at: www.rurdev.usda.gov/

BCP_Coop_RRs.htm.

ooperatives are sometimes reluctant to

divulge much information about employee

compensation, as it is personal to employees

and can be competitive information for other

employers. Still, enough responses were

received during USDA’s most recent survey of cooperatives to

reveal some useful data, highlighted below. This new study

updates similar studies performed by Beverly Rotan (now

retired from USDA) in 1999 and 1993.

The new data shows that employee compensation averages

4 percent of cooperative sales and is almost half of all

expenses for the average cooperative, where total expenses

are 8.6 percent of total sales. 

As a whole, the agricultural economy did not undergo the

general downturn that the overall U.S. economy experienced

during the past several years. Employment has remained

strong, with farm and ranch cooperatives adding 7,000

employees (a growth rate of 5.7 percent) between 2009 and

2010 and almost 2,000 employees between 2010 and 2011

(growth rate of 1.5 percent). 

Even with unemployment rates around 8 percent in the

overall economy, ag cooperatives still need to offer

competitive salaries to retain their workforce and attract new

workers. The compensation they offer must be

commensurate with employees’ skills and experience if they

expect to attract and keep skilled employees. 

Employee compensation is the largest expense item for

most cooperatives. Higher-than-average employee expenses

will have a great impact on profitability and thus are a

constant management concern.

Salaries are a direct form of compensation while indirect

compensation refers to benefits. Cooperatives and all

employers need to offer a compensation package that is a

proper mix of both salaries and benefits. Cooperatives are

competing with other agricultural firms in their market area

and employers in unrelated fields to maintain and grow a

competent work force. 

Internal and external factors need to be considered by

cooperative employers. Internal factors that may influence

salary and benefit packages are directly under the control of a

cooperative. These include, among other factors: the number

of employees; job descriptions/responsibilities;

educational/occupational training; and flexible work hours. 

External factors that influence salary and benefit packages

are largely outside the control of a cooperative. These

include: federal and state government policies and

regulations; the overall economy/unemployment rate; and

competition for employees from other firms. 

C

Survey reveals co-op employee

compensation trends 

Rural Cooperatives / March/April 2013 7
8 March/April 2013 / Rural Cooperatives

Survey results

Information for this report was obtained through the 2011

USDA Rural Development survey of 2,285 farmer, rancher

and fishery cooperatives, which reported employing 130,900

full-time employees. The survey asked questions about

employee compensation that were similar to those used by

Rotan in 1999. 

Respondents returned 553 usable surveys, representing

about 45 percent of respondents to the annual survey. Nine

sales size categories used in the study are shown in Figure 1.

The survey information was also analyzed by number of

cooperative full-time employees using seven employee

ranges. 

Cooperatives were also differentiated using five

cooperative types. Two of the five types, farm supply and

grain/oilseed marketing cooperatives, comprise 76 percent of

respondents. With so many farm supply and grain and oilseed

respondents, they are further divided into 14 different sizes

for closer analysis. In addition, information is presented by

state, where possible; some states are combined. 

Survey highlights

Survey questions covered: hiring practices; employee

education; compensation; factors determining compensation;

bonus or commissions; benefits/perks; retirement plans;

performance measures; director compensation and board size;

and compensation changes over the past five years. 

The survey found that most often management positions

are filled from within the cooperative while lower positions

are filled by ads or recommendations. Performance of chief

executive officers is measured by the board of directors while

net income or profits most often measures the performance

of other workers. 

Other results from the survey include: 

• Average chief executive/general manager pay was $105,576,

with a median pay of $90,000. The maximum was

$511,000, with $10,000 the minimum. This compensation

includes salary and benefits.

• Job responsibilities are the leading factor for determining

compensation for managers, while job performance is the

main factor for lower level employees.

• The same perks or benefits were largely offered in 2011 as

in 1999, but the cost of many of these benefits are now

more often shared between the employee and cooperative.

For instance, retirement benefits were a shared expense for

around 80 percent of the respondents in 2011, compared to

66 percent in 1999.

• Many cooperatives still offer a defined benefit retirement,

but the trend is toward a defined contribution or IRA-based

plan where the cooperative and employee share in funding

the retirement plan. 

• Average board of directors size was eight, with a median

Table 1

Average annual salary for the Chief Executive Officer/President/General Manager 

for different sizes of cooperatives

Average Median Maximum Minimum Respondents

Salary1Salary Salary Salary

.................................................... Dollars.............................................................. Number

Sales of:

More than $500 million 288,444 210,000 511,000 175,000 9

$200 million to ≤ $500 million 234,045 242,000 400,000 100,000 25

$100 million to ≤ $200 167,541 160,000 312,918 30,000 33

$50 million to ≤ $100 million 137,729 130,000 250,000 75,000 55

$25 million to ≤ $50 million 100,266 100,000 210,000 40,000 93

$15 million to ≤ $25 million 89,603 85,000 154,200 40,000 70

$10 million to ≤ $15 million 79,179 75,000 147,000 38,000 42

$5 million to ≤ $10 million 70,944 66,600 186,780 39,150 63

Less than $5 million 59,021 52,000 205,000 10,000 83

1

The overall high and low average salaries were deleted, so this lowered the number of responses in this table from 553 to 551.
Rural Cooperatives / March/April 2013 9

board size of seven.

• Board compensation averaged $15,962 for the entire board,

or about $2,000 per director. Median compensation was

$4,574, or $650 per director. About 85 percent of co-ops

pay board members. 

• Dividing annual median director compensation by 12

meetings per year means directors receive about $55 per

meeting, if compensated on a per-meeting basis.

• Respondents indicated at least six forms of director

compensation, with paid travel and per diem expenses

provided at least 50 percent of the time. About one-third of

the cooperatives paid directors on the basis of

meetings attended. 

• Meals were provided about 30 percent of the

time, while liability insurance was provided by

22 percent of the cooperatives.

Salary and benefit changes

The survey asked if there had been salary and

benefit changes over the past five years. Seventy

co-ops responded to the question. About half of

the respondents said health insurance costs have

been passed on to employees. Others have added

a cap on what the cooperative will pay for health

insurance. Some co-ops have created a Health

Savings Account for employees (in which a pretax portion of their pay can be deposited).

About a third of the comments said the only

major pay changes reflect cost of living

adjustments (COLAs). Others said salaries had been adjusted

to the market, with some pay cuts enacted.

About half of the responses said defined benefit retirement

plans were only being maintained for existing employees,

with newer, full-time employees being switched to a defined

contribution 401K plan. 

Reference

Rotan, Beverly L., Cooperative Employee Compensation, 1999, U.S. Department

of Agriculture, Rural Business-Cooperative Service, RBS Research Report

189, October 2001. ■

Table 2—Board of directors’ size and compensation by size and type of cooperative

Average Average Median Respondents

Board Size Board Compensation Board Compensation

Number .......................................Dollars................................................ Number

Sales of:

More than $500 million 16 202,805 86,588 14

$200 million to ≤ $500 million 11 54,021 32,500 32

$100 million to ≤ $200 9 22,562 22,900 35

$50 million to ≤ $100 million 9 14,066 10,482 63

$25 million to ≤ $50 million 7 7,319 5,929 89

$15 million to ≤ $25 million 7 5,577 4,125 74

$10 million to ≤ $15 million 8 6,164 3,360 42

$5 million to ≤ $10 million 6 3,271 2,700 57

Less than $5 million 7 2,745 990 58

Figure 1 — Distribution of Respondents by Total Business Volume

$15–$25 Million

15.0%

$10–$15 Million

8.1%

$25–$50 Million

17.9%

$50–$100 Million

12.5%

$100–$200 Million

6.5%

$200–$500 Million

6.0%

>$500 Million

2.9%

<$5 Million

18.6%

$5–$10 Million

15.0%
By Anne Todd, Contributing Editor 

anne.todd@wdc.usda.gov

he Specialty Potato

Alliance (SPA) is a

group of fingerling

potato growers and

distributors, located

throughout the United States, who are

committed to growing and packing the

finest potatoes possible. SPA’s specialty

products, proprietary varieties and

ability to offer fingerling potatoes yearround have made SPA a trendsetter in

the potato industry. 

Since its start five years ago, SPA has

grown steadily and today it has offices

on both coasts and growers in

California, Colorado, Florida,

Michigan, Oregon, Pennsylvania and

Washington. Collectively, the SPA

founders have more than 90 years in the

potato business.

Fingerlings, a heirloom crop, are

about one to two inches in diameter

and about one-and-a-quarter to four

inches long. The name comes from

their elongated and slightly knobby

shape, somewhat resembling fingers.

They can be roasted, broiled, boiled,

baked or grilled, just like any other

potato. Although fingerlings are

sometimes confused with new potatoes,

fingerlings have a more complex flavor.

The idea to create SPA was hatched

at the Produce Marketing Association's

(PMA) 2005 trade show in Houston,

Texas, and the alliance became official

the following spring. The goal of the

alliance is to build a foundation based

on sharing the best potato products

possible with customers seeking the

highest quality product. SPA’s primary

customers are domestic U.S. retailers,

wholesalers and terminal markets.

Since its start, the Specialty Potato

Alliance has introduced three new

fingerling varieties to the market: the

Red Rebel, the Rockey Rose and a

purple variety called Merlot. Sales of

these new varieties are steady, and

people who try the Rockey Rose say it

tastes better than the standard “Russian

Banana” fingerling variety, according to

SPA.

10 March/April 2013 / Rural Cooperatives

Marketing alliance wins new buyers

‘one tastebud at a time’

Specialty Potato Alliance 

T
Rural Cooperatives / March/April 2013 11

“We are all about flavor

and we win new buyers

one tastebud at a time,”

says SPA Managing

Director Richard

Leibowitz. Rural

Cooperatives spoke to

Leibowitz to learn more

about the alliance. 

Q:—What sparked the

creation of Specialty

Potato Alliance as a

marketing organization?

“I started this because

I’m a specialty produce

broker and I’ve seen other

specialty items that I have

worked hard to develop become

commodities and pass me by. I was

going into superstores and seeing

fingerlings that were of very, very

mediocre quality. I didn’t want people

to think of fingerlings, which I was

marketing as a premium potato, as

some secondary offshoot of a russet.

“I contacted a nationally known

wholesaler who does a lot of volume

and two of the growers I was working

with. I said, ‘Look, fingerlings are going

to become a big thing. We’ve invested

years in developing these potatoes. So

we don’t want a larger company with

millions in marketing dollars to come in

with its label, put it everywhere and

take the market. Then, suddenly, we’re

out of the game. We’ve seen this

happen before.”

Q:—So, what was your next move? 

“We decided to create a new

marketing entity, the Specialty Potato

Alliance. We had different locations.

The initial challenge was: How were we

going to let our industry know about

SPA? 

“SPA does not sell potatoes; it is a

marketing organization. The four

companies [that are part of SPA] put in

an assessment charge with every pound

of fingerlings. That money pays for

advertising and [to be represented at]

Produce Marketing Association (PMA)

shows. To date, it has worked well.

Through SPA, my company, Culinary

Specialty Produce, now can be

represented as part of a larger concern

and is part of a larger group that makes

us a bit more than a broker. This makes

us stronger. People now look at us as

not just as a specialty produce broker;

we’re now grower-related.

“One of our growers is a certified

seed grower out of Center, Colo. After

years of trials, the company has released

three new fingerling

varieties that are exclusive

to the alliance. This also

gives us an edge for our

growers and our

distributors, as well as a

reason to do the shows,

marketing, advertising and

press releases. We have

something to offer that is

different. Now, SPA can

offer something that not

only is exclusive and tastes

great; we can grow it yearround for you.

“Our initial goal was

to be able to continue to

sell, market and promote

our potatoes when the big boys stepped

in. Large produce corporations have, in

fact, gotten involved in fingerlings, but

we are still in the game. Five years ago,

we were the leader, but the problem

with promoting new specialty produce

items is that you’re also informing the

industry that they are out there. So it’s

important to have a long-term plan so

that when they become a commodity

you still have a market for your product

as a result of your years of exposure.

“This was the idea: To improve the

quality of the product to be able to stay

in the game.”

Q:—How many members are 

in the SPA?

“There are four companies involved:

Culinary Specialty Produce in

Mountainside, N.J.; Coosemans L.A.

Shipping, in Vernon, Calif.; Rockey

Farms of Center, Colo., and Lehr

Fingerling potatoes come in a number of distinct varieties, including

several that are exclusive to the Specialty Potato Alliance (SPA). Photos

courtesy SPA 
12 March/April 2013 / Rural Cooperatives

Brothers in Bakersfield, Calif.

“We still do business with other

specialty potato growers, but these are

the four companies that are the board

of directors, that decide on SPA’s

direction, that put in the assessment

and are represented at our shows and in

our marketing efforts. This in turn

gives them additional exposure with

their existing business along with the

benefits SPA has to offer.

“I’m a buying broker. Coosemans is

a large wholesaler and Rockey Farms

and Lehr Brothers are growers and

shippers.”

Q:—At your board meeting in April

2012, you celebrated five years of

growth for SPA. Tell us about some of

your achievements during this fiveyear period.

“We just got our five-year PMA

[Produce Marketers Association] award.

We got started following a meeting that

I put together five years ago at the

PMA in Houston.

“One of the primary things we’ve

been able to do is put out something

under the SPA label; so it doesn’t say

Coosemans, or Culinary, or Rockey

Farms, or Lehr. That SPA label has

become generic within our group. So,

when we get together and do a show,

our boxes and bags all say SPA,

demonstrating the alliance. 

“We have a new SPA plastic bag that

refracts light so potatoes don’t turn

green. We put out an organic line. We

developed a family of products. When

we go and do a show, we’re coming

from a lot of strength. 

“Working with growers outside the

alliance, we are able to offer products

on a year-round basis and, in many

cases, we can reduce transportation

costs. We are also able to produce

potatoes throughout the country, so we

also work with other growers that aren’t

Every year, SPA’s certified seed grower in Colorado grows hundreds of

plants for cross-breeding and hundreds of sample varieties that are tested

for size, shape, color, flavor and yield. If they pass those tests, the product

is sent to a lab to create identical DNA. It then takes five years, or

generations, to develop the volume of seed to supply the fresh market. 

“In more than 20 years of testing, only three varieties have made it to

the fresh market,” says Richard Leibowitz, SPA’s managing director. 

SPA growers Brendan and Sheldon Rockey recently received a national

award for soil conservation, producing a crop using virtually no chemicals

and with only half the normal amount of water. “In Center, Colo., water use

is a very big issue,” Leibowitz notes. 

“What’s very cool about this is that they went backwards, to pre-World

War II growing procedures,” he adds. “After WWII, excessive amounts of

ammonium nitrate quickly dominated the fertilizer market when it was

proven this chemical could grow vegetables very fast. It also killed the soil,

but that was ignored and the soil ecology was destroyed. 

“The Rockey brothers used pre-WWII-era and modern holistic

techniques to take care of the soil, and the soil took care of the plants. It’s

a wonderful thing,” Leibowitz says. ■

Developing new fingerling varieties
Rural Cooperatives / March/April 2013 13

members and use their crops.

“We are all about flavor. We

approach this somewhat from a

culinary side. We want people to

taste these potatoes and we believe

people will love them. That is why

we cook them at our shows. Taste

is important and is the first step in

developing a new customer. With

our marketing effort, we are looking to

find those venues where the flavor

matters.

“We can also create value with the

potatoes depending on size. The tiny

ones, the potatoes that are, say, 75

potatoes per pound, are going to be

very pricey, and they’re for the highend, white tablecloth restaurants. But

we can also sell you a medium that

involves no peeling and looks great on a

plate, or a jumbo one that can be peeled

and used in a frittata or made into a

soup that is very reasonably priced.

“Our goal is — whether it is a

supermarket, a restaurant chain, or a

wholesaler — to define the kind of

product that will work for [the

customer].”

Q:—Can you share some of the major

strategic decisions the Alliance has

made that has led to this growth?

“We carefully dissect every market

and try and determine how our family

of products will fit in. We work

together to try and achieve that goal.

Our tagline is: ‘Grown by farmers who

care.’ After you hear that story about

the soil [see sidebar], it’s pretty obvious

they do.”

Q:—What options are SPA considering

to increase marketing of your

fingerlings potato products?

“Additional food shows, additional

samplings and cuttings. Additionally,

people really like recipes. At our food

shows, we cook potatoes. Getting the

product out there and developing a

market for it is constant work. Between

the four companies, we probably do

four or five shows a year. It definitely

gives us new customers to reach out to.”

Q:—What is the biggest challenge the

Specialty Potato Alliance faced, and

how did you overcome it?

“Two things come to mind. The first

was how to have an alliance with four

companies in four different areas with

four different concerns and make it

worth it to everybody. And the answer

to that is just listening carefully to

everyone’s personal concerns so you

create an awareness and discussion. Also

to try and look at each business and

what SPA can offer it, and finding ways

to make that fit. We’ve done that,

although things vary from company to

company.

“Second, as far as marketing goes, is

getting people to taste and switch to

our new proprietary products and

maintaining a quality program yearround — which we have achieved by

doing better post-harvest procedures,

using better equipment and storage, and

better growing techniques.”

Q:—SPA member-growers have

introduced three new fingerling

varieties to the market. How are these

new varieties catching on?

“We’re selling what we grow, and I

would say that at a reasonable pace

people are requesting them. The Red

Rebel is a replacement for another

heirloom variety called the French

fingerling. The French fingerling

didn’t fit in well to the package

because it was fat. It’s also a highmoisture potato and mottled with

red inside, making it tasty as well

as stunningly beautiful. But it’s

one of the tastier varieties. 

“The Red Rebel is slimmer. It’s

not quite as rich in flavor but it’s a

much nicer-looking potato. It is often

requested in a mix.

“The Rockey Rose, which is pink on

the outside and glowing yellow inside, I

think is the best tasting potato out there

— even outside of fingerlings. I can put

that in front of somebody and that

person will taste it and think it’s

wonderful. We would love to see the

Rockey Rose replace the most-popular,

standard fingerling (the Russian

Banana) based on flavor. But we’ve

made limited inroads so far.”

Q:—The SPA is converting a building

in Mosca, Colo., into a packing facility

for fingerlings and other specialty

potatoes. Will this reduce members’

processing expenses and help them

increase profits?

“This is a project of one of our

grower-members, Rockey Farms, which

is in the process of merging with

another producer and becoming a new,

combined entity. They have invested in

polishers and sizers, and they’ve just

started doing it. It’s working very well.

They can now process a truckload of

potatoes in a day and a half. Previously,

it used to take three days. The other

thing is that the sizing is a lot more

accurate and it culls out the bad

potatoes better so you get a prettier

product, all in about one-third of the

time.”

To learn more about the Specialty

Potato Alliance and its products, visit:

www.potatoalliance.com, or e-mail

info@potatoalliance.com. ■
14 March/April 2013 / Rural Cooperatives

By Sarah Ali, Ag Economist

Cooperative Programs

USDA Rural Development

ooperatives worldwide

just completed

observing 2012

International Year of

Cooperatives, as

designated by the United Nations. But

for cooperatives such as Farmers’ Rice

Cooperative, which does about half of

its business overseas, every year is an

“international year.” 

The global economy increasingly has

no borders, and the exchange of goods

and services has opened markets for

U.S. agricultural cooperatives, enabling

them to reach more consumers. The

use of electronic and social media has

also facilitated exchange across borders,

significantly lowering transactions costs

of trade.

Marketers at Farmers’ Rice

Cooperative and other U.S. ag

exporters are aware that the world

population size is expected to increase,

with much of the growth occurring in

developing countries, where demand for

food will increase. Furthermore, rising

disposable income among consumers in

countries such as China, Brazil, Russia

and India result in people demanding

more American products. A rising

middle class in these countries

constitutes a significant buying power. 

Entire globe is 

co-op’s marketplace

Farmers’ Rice, headquartered in

Sacramento, Calif., began business in

1944. It currently has about 800 rice

grower-members, 95 percent of whom

farm north of Sacramento. They farm

about 115,000 acres of rice and export

to about 60 countries. Primary markets

are East Asia, Europe and the Middle

East. The co-op’s total sales and

services were $273 million in 2012. 

Farmers’ Rice handles 25 percent of

all the rice produced in California and

is the nation’s largest marketer of

medium-grain rice. Major mediumgrain rice markets include the Middle

East, Japan, South Korea and Taiwan. 

Farmers’ Rice exports to the Middle

East have increased significantly during

the past 10 years, especially to Jordan,

Palestine, Syria, Lebanon, Saudi Arabia

and the United Arab Emirates. Annual

sales to these markets now top 100,000

metric tons. Rice is a staple food in

many export markets, while it is

considered a “luxury” food in others.

Figure 1 shows the top 10 major

export markets for U.S. medium-grain

rice. Japan was the No. 1 market from

January to November 2012. It was

followed by Jordan, Taiwan and South

Korea. 

Crop conditions and regulatory

changes in other producing nations can

also have a marked impact on U.S. farm

exports. 

“We have a few core markets that

tend to be fairly steady, but policy

changes or production issues in other

countries can have a major impact on

where we export and how much we

export in a given year,” notes Debbie

Rubas, rice analyst with USDA’s

Foreign Agricultural Service. “For

example, when one country imposed

restrictions on rice exports and

Australia’s crop was reduced by

drought, it provided opportunities for

U.S. producers to export to new

markets.” 

Farmers’ Rice exports to the Middle

East have risen in the past several years,

due in part to the falling exports from

Egypt and Australia, although both

C

Focus On: Farmers’ Rice Cooperative

International markets key for 

California rice co-op

Farmers’ Rice Cooperative’s (FRC) main facility is in West Sacramento, Calif. The Middle

East is a prime export market for the co-op, where it recently promoted its products in

an advertisement (facing page) that ran in Jordanian magazines during the month of

Ramadan. Photos courtesy FRC
Rural Cooperatives / March/April 2013 15

countries are now “back in the market”

to some degree. Syria has traditionally

been a good export market for the coop, but the conflict and political

instability there has caused a drop in its

purchases of U.S. rice.

Product differentiation

important 

Product differentiation is important

for cooperatives seeking a distinctive

presence in international markets. 

People’s rice tastes and preference

differ greatly around the world. For

example, Jordan is one of the largest

importers of Farmers’ Rice products,

where rice is served with couscous and

other dishes. Many other dishes

popular with Arab people also make

heavy use of medium-grain rice, says

Kirk Messick, senior vice president at

Farmers’ Rice Cooperative.

Understanding the tastes and

cooking preferences in its foreign

markets is vital to the success of

Farmers’ Rice. 

The cooperative advertises in many

Middle Eastern countries, including use

of billboards during the Islamic

religious month of Ramadan. At the

conclusion of Ramadan, people break

their fasts at sunset, often cooking

dishes with rice. 

In addition to localized advertising

campaigns, Farmers’ Rice benefits from

“word of mouth” promotion.

Establishing a reputation and brand

equity has been a key part of the coop’s marketing campaign. 

All Farmers’ Rice products are

packaged in the United States and

shipped overseas in a manner that

ensures the highest quality of the rice is

maintained. This emphasis on quality

bolsters the co-op’s brand equity and

helps it build market share.

California is often among the first

states to adopt new environmental

initiatives and regulations. Although

regulation costs are high there, the final

product is “cleaner,” according to

Messick. 

Figure 1 — Top 10 Export Markets for Medium-Sized Milled

Rice, in Metric Tons, From Jan.–Nov. 2012

Turkey: 30,692.93

Japan: 220,701.6

Canada: 42,414.87

Jordan: 91,535.2

South Korea: 53,389.7

Syria: 11,113.0

Taiwan: 62,059.14

Libya: 26,065.9

Saudia Arabia: 21,715.6

Israel: 18,285.0

continued on page 43
16 March/April 2013 / Rural Cooperatives

Telling the co-op story

USDA journal marks 80 years 

of promoting co-ops as a powerful, 

self-help economic tool

By Dan Campbell, Editor

dan.campbell@wdc.usda.gov

Editor’s note: Portions of this article

are adapted from past issues of Rural

Cooperatives and its predecessor

publications (News for Farmer

Cooperatives and Farmer

Cooperatives).

lack blizzards” they

called them — the

devastating dust storms

that could black out the

sun, bringing midnightlike conditions at noon. These droughtfueled dust storms smothered farms and

grazing lands over vast areas of the

nation’s heartland in the 1930s, turning

once productive farmland into

wasteland. Hundreds of thousands of

farmers and other rural people were

driven from their land during the worst

of the Dust Bowl years in the mid1930s, and everywhere the Great

Depression was in full swing, ravaging

the economy and causing the worst

unemployment in the nation’s history. 

“B

1936
Rural Cooperatives / March/April 2013 17

Farmers and ranchers nationwide

also faced great challenges selling their

products into a marketplace in which

buyers held most of the cards, forcing

producers to compete against each

other in a “race to the bottom.” Many

farmers were trapped in a cycle in

which bare survival was the best

outcome they could hope for. The

situation, compounded by a widespread

lack of rural electrical service, meant

that living conditions in much of rural

America lagged far behind those of

urban areas. 

It was against this grim backdrop

that the Farm Credit Administration

(then an agency of USDA) and its

Cooperative Marketing Division in the

early 1930s decided to launch a new

periodical to promote better

understanding and greater use of

cooperatives. Originally called News for

Farmer Cooperatives, the 8-page,

handbook-sized publication was

produced each month on a mimeograph

machine. Farm Credit Administration

(FCA) leaders and many others at

USDA were convinced that the

formation of more cooperatives by

farmers and ranchers offered a good

way to improve their odds of success,

and they believed that a national co-op

journal could help achieve this goal. 

There were no photos or artwork in

the first editions, only pages of typewritten articles with ideas intended to

help improve the viability of farmer coops and spark interest in the creation of

new co-ops. Within two years, the

journal had been expanded to a

standard magazine size and format, with

the addition of black and white photos

and line art.

Today, 80 years after its founding,

the magazine’s name has changed a

couple of times, but this periodical is

not only still helping to shine a

spotlight on cooperatives and what they

can help achieve for their members, but

it is also spreading the word about

cooperatives around the globe, thanks

to the Internet. Its mission, as ever,

remains to serve as an information

marketplace about the benefits and

challenges of operating a cooperative. 

Co-op Marketing Act 

mandates USDA role

In 1926, Congress passed the

Cooperative Marketing Act. The Act

charges USDA with promoting

understanding and use of cooperatives

through research, education, statistics

and technical services, including co-op

development. Section 3, paragraph 6 of

the Act says USDA should: “promote

the knowledge of cooperative principles

and practices and to cooperate in

promoting such knowledge with

educational and marketing agencies,

cooperative associations and others.”

Congress was overwhelmingly

favorable to the Act, according to a

1956 article in News for Farmer

Cooperatives that reported on a

ceremony held at USDA to mark the

30th anniversary of the Act’s passage.

Charles Holman, retired secretary of

the National Milk Producers

Federation, recalled attending the

drafting conference for the bill in

1926. “Out of my 35 years of

experience on the Hill, I would say

it was one of the easiest bills to get

through Congress. Leaders

recognized the real need for setting

up an educational service

organization [for co-ops],” added

Holman, who also played key

roles in the passage of the

Federal Farm Loan Act of 1916,

which established the Federal

Land Banks, and the formation of the

National Council of Farmer

Cooperatives in 1929.

Responding to crisis

with education 

The Farm Credit Administration had

only been founded in 1933. “It’s

amazing that the FCA could find time

to launch a new educational journal” at

a time of acute crisis, Giff Hoag, a

long-time editor of this journal, recalled

in a book he wrote about the history of

the Farm Credit Administration/Farm

Credit System. 

Hoag tipped his hat to those leaders

who had the foresight to step up co-op

education during a crisis. Many

cooperatives over the years have done

the opposite — cut back on

communications in difficult financial

times to save a few dollars. That is a

pitfall that has contributed to the

demise of many a co-op over the years.

Indeed, a common theme of articles in

this magazine over the decades has been

1951 1966
18 March/April 2013 / Rural Cooperatives

that when the going gets toughest,

cooperative communications and

education efforts are most essential. 

U.S. agriculture has, of course,

undergone monumental changes during

the past 80 years, and the nation’s

farmer cooperatives have changed

simultaneously to meet the evolving

needs of farmers and ranchers. These

changes are well documented in the

pages of this publication. 

Consider that in 1934, the average

dairy cow was producing about 12.5

pounds of milk per day. Today, average

milk production has increased five-fold,

to about 60 pounds per day. In the early

1930s, farmers produced an average of

about 25 bushels of corn per acre.

Today, the average is more than 163

bushels per acre. For wheat, the average

harvest during that time span has

increased from about 15 bushels per

acre to about 45 bushels per acre. 

Continual advances in

mechanization, improved genetics for

seeds and livestock, better fertilizers

and improved cultivation and breeding

strategies and pest management

practices all played vital roles in these

advances. So did farmer cooperatives by

advocating for, and helping to make

available, new technologies and

improved supplies to farmers. Co-ops

were also leaders in establishing

accurate weighing and quality testing of

farm products to ensure farmers

received fair pay and, in doing so,

forced other buyers to raise their

standards. 

USDA’s co-op role

predates magazine 

USDA supported co-ops even earlier

than the founding of this publication,

having first assembled data about

farmer co-ops in 1901. By 1922, the

Division of Agricultural Cooperation,

part of the Bureau of Agriculture

Economics, had been created. It was

renamed the Division of Cooperative

Marketing in 1926, which was

transferred to the Farm Credit

Administration in 1933. 

In 1953, when FCA separated from

USDA, the co-op program remained as

an independent agency — the Farmer

Cooperative Service — within USDA.

In 1980, it was renamed the

Agricultural Cooperative Service and in

1994 it became part of the new Rural

Development mission area of USDA,

where it remains today as Cooperative

Programs. 

The co-op journal’s name was

changed to Rural Cooperatives in 1995 to

better reflect the broader scope of

1970 1972
cooperatives being written about. Also

in the mid-1990s, the magazine was

changed from a monthly publication

that averaged about 24-28 pages per

issue, to a bi-monthly magazine

averaging 36-40 pages.

Rural Cooperatives and its predecessor

publications serve primarily as a

medium for the exchange of ideas about

cooperatives. 

Some of these ideas are conveyed in

articles written by USDA staff while

many other articles and most of the

photos are contributed by the

cooperatives featured in the pages of

the magazine. Other articles are

contributed by university faculty,

Cooperative Extension agents, co-op

associations, co-op and rural

development consultants, co-op

financial institutions and many others

with an interest in helping the

cooperative sector thrive and who view

this magazine as a valuable tool in

achieving that goal. Rural Cooperatives is

thus a cooperative venture, in every

sense of the word, between USDA and

the cooperative community it serves. 

Even a quick sampling of 80 years of

the publication — the bound volumes

of which cover about the same amount

of shelf space as a major encyclopedia

— reveals many continuing areas of

editorial focus, including articles that: 

• Show how innovative farmer co-ops

have been in meeting their members’

needs with new technologies, services

and products;

• Focus on the many roles co-ops play

in building a stronger rural economy;

• Stress the importance of co-ops in

adhering to the principles of

democratic governance to fulfill their

“member-owned, member controlled”

mandate;

• Highlight sound co-op practices for

governance, finance and communications, with an emphasis on quality

products and services as being

essential to delivering member

benefits. 

• Remind co-op directors that their top

responsibility is to hire skilled

management and to then let managers

run the business while the board sets

policy, closely monitors performance

and holds management accountable

for results; 

• Show how farmers can reap benefits

when co-ops perform value-added

processing of their crops and

livestock, even marketing under their

own brand names; 

• Show co-ops as trailblazers in

developing new markets and products. 

1982 1984

Rural Cooperatives / March/April 2013 19
1998

20 March/April 2013 / Rural Cooperatives

In the early 1960s, this magazine ran

a photo of President John F. Kennedy

meeting with co-op leaders in the

White House rose garden. He saluted

co-ops for the profound impact they

had on improving the economy of rural

America. Kennedy also expressed his

appreciation for co-op efforts to help

farmers in developing nations gain new

skills to improve their productivity. A

number of articles every year show that

this commitment to service around the

globe continues today.

Benefits flow to 

rural Main Streets

Many articles and commentaries over

the years have stressed the importance

of the Capper-Volstead Act — the

legislative linchpin that gives farmers

limited exemptions from antitrust law,

thus allowing them to market their

products cooperatively. But there have

been continuing challenges to the Act

over the years, as reported in this

journal. 

In a 1978 magazine, for example, we

see Agriculture Secretary Bob Bergland

— speaking before the National

Commission for the Review of Antitrust

Laws and Procedures — making a

strong defense of farmer cooperatives

and the importance of Capper-Volstead

to their future. “My own view, well

supported by history, experience and

research, is that the Capper-Volstead

Act and our marketing order system are

in no need of modification,” Bergland

said. “Individual farmers acting alone

lack bargaining power in dealing with

those who purchase their product.

Historically and increasingly, farmers

must sell to relatively few buyers that

do their processing and distribution of

raw ag commodities.”

Just two years later, in the August

1980 issue, Lee Kolmer, then dean of

Iowa State University’s College of

Agriculture, said: “The CapperVolstead Act is under siege.” Speaking

at the Graduate Institute of

Cooperative Leadership, he

added: “The intensity of

the battle varies as the

attackers marshal new

allies, or lose old allies,

and as the defenders are

partially or temporarily

successful in fending off

the legal thrusts of the

opponents” who see

farmer co-ops

“becoming

indistinguishable from

their corporate

competitors.” 

Many times in

these pages during

the past 80 years, the

differences between

a producer-owned

co-op and an

investor-owned corporation have been

stressed. Whereas an investor-owned

corporation distributes profits to distant

shareholders with little or no stake in

the rural areas that produce farm

products, co-ops are owned by farmers

and ranchers, with proceeds flowing

back to them and hence into their rural

communities. They are conduits that

funnel capital back to rural Main

Streets, rather than Wall Street. 

Today, at a time when the number of

farmers has declined to only about 2.1

million, 175,000 of whom produce

about 75 percent of the nation’s food

and fiber, co-ops play a large role in

helping to keep more medium- and

small-sized producers in business. 

The sky that didn’t fall

The farm crisis of the 1980s —

brought on largely by a bubble in

farmland prices — crushed many overleveraged famers who had borrowed to

expand in pursuit of high commodity

prices. They saw their dreams go up in

smoke when interest rates spiked and

the bubble deflated. The result was not

only a surge in farm foreclosures, but

also a crisis for the Farm Credit System.

The Ag Credit Act of 1987 resulted in

eight Banks for Cooperatives merging

into the National Bank for

Cooperatives (or CoBank). Ultimately,

FCS passed through the storm and

emerged a stronger entity, one of the

world’s great cooperative financial

institutions.

The new century started with a

major jolt to the ag co-op sector when

three of the nation’s largest farmer

cooperatives all filed for bankruptcy in

the space of about three years. After the

failures of Farmland Industries (then

the nation’s largest co-op), Agway (a

farm supply co-op in the Northeast)
2013

Rural Cooperatives / March/April 2013 21

and Tri Valley Growers (a California

fruit and tomato canning cooperative),

many critics of co-ops predicted that

these bankruptcies were evidence that

the end was nigh for farmer-owned

cooperatives. 

But the sky did not fall on co-ops,

and co-op sales were again hitting

records within a few years. Still, the

failure of Farmland taught co-op

leaders important lessons about the

dangers of becoming over-leveraged

and “betting” on commodity prices that

can take sudden, unexpected turns.

Combined with the lessons learned

during the 1980s farm crisis, co-op

advocates say this may in part explain

why the co-op sector came through the

Great Recession in much better shape

than many other segments of the

nation’s economy. 

In the 1990s, a number of articles in

this journal reported on the formation

of new-generation cooperatives,

launched to build a variety of

processing facilities for farmers who

bought shares to provide up-front

capital to finance the ventures. These

shares came with a right and obligation

to supply the co-op. 

Bioenergy, local foods 

spur new co-ops 

Through the 1990s and into the

2000s, this magazine carried many

reports about the creation of co-ops and

producer-owned LLCs formed to build

biofuel plants and other renewable

energy projects, such as wind energy.

Utility co-ops, now a regular part of

magazine coverage, also began building

broadband systems for their members, a

technology which is helping rural

America better compete with cities for

new jobs and commerce.

Many other

articles reported

on the surging

number of new,

mostly small

cooperatives formed

to help producers tap

the emerging markets

for organic, natural

and local foods, of

which Organic Valley

is the largest. While

the overall market for

organic food is still

small in terms of the

nation’s total food

production, it is a robust

and growing market.

Another new twist on

the co-op model seen in

the 2000s has been the

development of multistakeholder co-ops and food hubs,

which may include producers,

consumers, institutions (such a schools

and hospitals), food retailers,

restaurants and others as members. The

numbers of farmers markets and

community supported agriculture

(CSA) associations (essentially

subscriber services for fresh produce

from local farms), many of which are

organized as co-ops or operate on co-op

principles, have also surged. 

Compared to the early decades of

this journal, there are probably fewer

“how to” articles today; instead there’s a

greater emphasis on profiles of

successful and innovative co-ops. Each

of these articles carry lessons, based on

real life experiences that can inspire

other co-ops.

A major editorial thrust of the

magazine during the past decade has

been to show just how incredibly

flexible the co-op business model is in

meeting a wide array of needs. Whether

it’s a group of farmers striving to reach

up the value chain by processing their

crop into a value-added food, a utility

co-op pursuing wind energy or

broadband projects, or a group of

home-care workers forming a co-op to

earn a living wage for their labor

helping elderly and handicapped people

remain in their homes, a co-op can

provide the business structure to make

it happen. 

That this publication continues to be

published after 80 years is a testament

to the power of what is, in essence, a

simple concept: that people can

accomplish virtually anything when

they unite in a democratically governed

cooperative to meet a common need.

The power of one individual multiplied

by the many can still move mountains. ■
22 March/April 2013 / Rural Cooperatives

Editor’s note: This article provided courtesy Organic Valley.

rganic Valley, the nation’s largest cooperative of organic

farmers and a leading organic brand, is celebrating its 25th

anniversary in March. The La Farge, Wis.-based co-op

began in 1988 with a group of Wisconsin farmers who shared a love of

the land and a belief that a new, sustainable approach to agriculture was

needed to help family farms and rural communities survive. Frustrated

by the loss of nearly 2,000 family farms each week, these farmers set out

to create a solution: organic agriculture. 

“The success of Organic Valley proves that organic agriculture can be

a lifeline for America’s struggling family farms,” says George Siemon,

the co-op’s CEO. “In an era of rising and falling agricultural prices,

Organic Valley farmer-owners can count on a stable, living wage to stay

in business on their land. We are humbled and extremely thankful that

the original spirit of our founding farmers, and the co-op model, has

sustained our organization for 25 years.” 

Organic Valley turns 25

O

Editor’s note: This article provided courtesy Organic Valley. 
Rural Cooperatives / March/April 2013 23

In January 1988, when a “get big or

get out” strategy seemed to be the only

way for farmers to survive, a handful of

farmers gathered in Southwestern

Wisconsin’s “coulee region,” where

glacial valleys have produced unique

topography ideal for small-scale

agriculture. A small poster inviting area

farmers to join Siemon at the county

courthouse for an informational

meeting was all it took to gain

momentum. These producers became

the founding farmers of CROPP

Cooperative (Cooperative Regions of

Organic Producer Pools), which was

officially founded on March 13, 1988,

with the mission of keeping family

farmers on the land. 

The farmers decided that following a

cooperative model — where each

farmer was an owner of the

organization — would best ensure each

had a voice in how his or her products

were produced, marketed and sold.

Today, Organic Valley remains an

independent farmer-owned cooperative

helping to nurture local communities

and maintain the voice of farmers on

a mission. 

“Organic Valley is the kind of

company that shows the complete

beauty of organic leadership,” says

Maria Rodale, chairman and CEO of

Rodale Inc., and co-chairman of Rodale

Institute. “They have saved and

supported small family farmers around

the country while providing households

with food that is delicious and good —

both for people and the planet. I

congratulate them on their success,

their independence, their innovation!”

Today, CROPP Cooperative, under

its brand name Organic Valley, is the

largest organic farming cooperative in

North America, with more than 1,814

farmer-owners in 35 states and three

Canadian provinces, representing about

9 percent of the nation’s certified

organic farming community. In addition

to providing farmers a way to stay in

business, organic agriculture fulfilled

the vision for a sustainable agriculture:

farming without antibiotics, synthetic

hormones, pesticides or genetically

modified feed; raising animals on

pasture, and ensuring the land will be

preserved for future generations. 

“CROPP [Organic Valley], by its

example, has demonstrated how two

viewpoints on the goal of organic

farming can be successfully merged.

CROPP has both saved family farms

and provided healthier food,” says

Charles Benbrook, research professor at

the Center for Sustaining Agriculture

and Natural Resources, Washington

State University. “Without setting out

to do so, CROPP has invented a way to

capture and share wisdom that is

greater than the sum of its parts.” 

Organic Valley produces a variety of

organic foods, including organic milk,

soy, cheese, butter, spreads, creams,

eggs, produce and juice, which are sold

in supermarkets, natural foods stores

and food cooperatives nationwide. With

its regional model, milk is produced,

bottled and distributed in the region

where it is farmed to ensure fewer miles

from farm to table and to support local

economies. ■

The entry to Organic Valley’s headquarters in La Farge, Wis., may have a familiar feel to people

with a rural background! Facing page: the co-op’s proudest achievement after 25 years is helping

to keep many family farmers in business who might otherwise have had to sell their farms. Photos

courtesy Organic Valley
24 March/April 2013 / Rural Cooperatives

Editor’s note: This article is provided

courtesy FFC Services and the Ursa

Farmers Cooperative.

ince 1920, Ursa

Farmers Cooperative,

headquartered in Ursa,

Ill., has efficiently

served its base —

currently about 2,500 members. But

changes in production agriculture

necessitated a quicker turnaround time

for farmers to get their harvests to

market. 

All of the co-op’s grain-handling

facilities are in Illinois, so farmermembers of the cooperative in Missouri

were required to truck their crops —

corn, soybeans and wheat — to the

Mississippi River, then onto the Canton

Ferry to cross the river to the

cooperative’s Meyer, Ill., facility. With

technological advances producing

bigger harvests and more Missouri

farmers joining the cooperative, the

wait time was increasing to board the

ferry, which also carries workers,

tourists, students and other commodity

haulers. 

As a result of these delays, many

Missouri members no longer wanted to

use the ferry, says Roger Hugenberg,

assistant general manager for Ursa

Farmers Cooperative. “Operating the

ferry is expensive, and those dollars

could be invested in something the

cooperative owned,” he adds. To make

matters worse, a stretch of the river

closes seasonally, putting additional

constraints on the Meyer grain facility.

For all of these reasons, the

cooperative began contemplating

building a grain facility in Missouri,

closer to — and more efficient to use

for — many of its members. A new

facility would markedly reduce the time

farmers needed to get their crops to the

cooperative and increase their profits. 

Time to act

Finding the appropriate property

with river access was critical, so when

the right land became available, it was

clear to the Ursa Co-op that it was time

to act. 

The cost of the new grain-handling

facility was estimated at $14 million.

The cooperative’s lender required that

an objective feasibility study be done

before it would consider financing the

project. Ursa Co-op selected FCC

Services to complete the study.

The Farm Credit System formed

FCC Services more than 35 years ago

to create a central organization to

provide resources to benefit all of the

System’s entities. Some of the early

FCC Services programs included

director training and leadership

development. 

Through the years, FCC Services

responded to the changing needs of the

Farm Credit System by introducing

Ursa Farmers Co-op works with FCC Services

to prevent member profits from heading down river

S

The Need for Speed

Ursa Farmers Cooperative’s (URC) new grain facility in Missouri is reducing delays and costs for

members who were once slowed by reliance on a ferry to ship their crops across the Mississippi

River to Illinois. Photo courtesy URC
Rural Cooperatives / March/April 2013 25

additional programs and services. For

example, when liability coverage for

directors and officers became difficult

to purchase from the traditional

insurance markets, a captive insurance

company was formed by FCC Services

to meet this need. 

FCC Services continues to provide

professional development and risk

management services for the Farm

Credit System, but in 2007 it expanded

its reach into the agricultural

cooperative marketplace.

“It made sense for FCC Services to

serve agricultural cooperatives,” says

Scott Binder, chief executive officer of

FCC Services. “Like Farm Credit

entities that we have served for over 35

years, the companies are organized as

cooperatives, have like cultures, are

both integral parts of the food supply

chain and have similar board and

professional development needs.”

Study gauges 

project feasibility 

Bill Wilson, director of agribusiness

consulting for FCC Services and a 35-

year veteran of working with co-ops

and agribusiness, led the feasibility

study to analyze the potential for Ursa

Co-op to invest in a new grain facility.

The study focused on:

• Determining if the investment aligned

with the cooperative’s strategic

business plan.

• Evaluating the current and projected

financial condition to assess the coop’s overall capacity to support the

investment and associated leverage.

• Conducting a comprehensive analysis

of grain market dynamics and the

likelihood of sufficient grain

origination to support project

feasibility.

• Performing a comprehensive

evaluation of cash flow, investment

payback and value.

“We did a lot of ‘what if’ analysis,”

says Hugenberg. “What if we had a

marginal year? What else could

jeopardize the project?” Every angle

was thoroughly examined. 

The study indicated the project was

feasible. Based on the analysis of the

data and the results, Ursa decided to

proceed with the expansion.

River property purchased

After working with local and federal

government officials, Ursa Co-op was

able to purchase about eight acres of

formerly blighted property and gained a

land easement to access the Mississippi

River. In addition to conducting the

feasibility study, FCC Services also

originated a $2 million New Market

Tax Credit to reduce the cost of the

project.

Ursa Co-op broke ground on the

Missouri facility in March 2012. Phase

one of the project is expected to be

completed in March of this year.

Hugenberg says the facility already is

receiving grain and will ship stored

crops by the end of March. 

The Canton facility has the ability to

load three barges at a time via a 1,136-

foot, 36-inch wide belt. At the rate of

30,000 bushels per hour, a barge can be

loaded in about three hours. Ultimately,

when build-out is complete in the next

year, the facility will be able to store

about 3.8 million bushels.

“We’ve got a good project,” says

Hugenberg, who also manages the

Canton facility. “Now we’ll be able to

grow our customer base and better

serve existing members.” ■

Today’s dynamic business environment demands more from leaders

than ever before. They must be smarter, more effective and innovative

decision-makers as they navigate an increasingly complicated financial

and agricultural industry. 

FCC Services provides numerous resources, programs and services for

the Farm Credit System, agricultural cooperatives and other public and

private businesses. 

“To be a viable business in our fast changing world, you need great

governance,” says Scott Binder, chief executive officer of FCC Services.

“You need an effective board of directors and an innovative business

strategy. Once that strategy is ready to be put into place, you have to have

rich human capital to execute the plan.” 

FCC Services offerings include:

• Board development through the Governance Series program, geared

toward both the Farm Credit System and ag cooperative leadership;

• Talent management that assists in employee recruitment, selection and

retainment;

• Leadership development through a variety of educational programs and

assessments for executives and team members;

• The Gettysburg Leadership Experience, a multi-day course to develop

leadership skills;

• Organizational development, including strategic planning, consulting,

succession planning and merger and consolidation assessments;

• Property and casualty risk management programs; 

• Captive insurance and risk management;

• Credit risk management through audits of everything from credit to policy

to internal controls;

• National Discount Program that leverages the collective purchasing

power of cooperatives, associations, public entities and industry groups.

■

Building stronger co-ops
26 March/April 2013 / Rural Cooperatives

Worker Cooperatives:

Another variation on the co-op business model

Members of worker-owned co-ops democratically own, govern and manage their businesses. This solar-power co-op and a commercial laundry 

co-op (facing page) are both part of the Evergreen family of worker co-ops in Cleveland, Ohio.
Rural Cooperatives / March/April 2013 27

By Charles Ling, Ag Economist

Cooperative Programs

USDA Rural Development

worker cooperative is

organized by workermembers to pool their

labor and other

resources together for

the business of producing certain goods

and (or) services for the market. It is a

business entity that is democratically

owned, financed, governed and

managed by its worker-members and

accrues to them the benefits of their

labor and efforts. This category of

cooperatives represents yet another

variation on the cooperative business

model.

Economic structure

The economic structure of a

cooperative is defined as representing

an aggregate of economic units. It is

neither a vertical nor a horizontal

integration between the cooperative and

its constituent economic units, but a

third mode of coordination. However, a

worker cooperative is integrated with its

member-workers in at least one aspect:

its production operation. That’s because

the labor of worker-members is a factor

of producing its goods and services. 

The production operation needs to

have overall coordination for the

cooperative to be a coherent and

efficient production entity. Management oversight and administrative

control over members’ work is

necessary, although the management

and administrative rules may be

determined by worker-members

themselves.

Organization

The basic form of a worker

cooperative is a centralized organization

with all its workers as direct members.

Governance

Governance is exercised directly by

worker-members or indirectly through

the board of directors (and other

designated bodies of representatives)

who are democratically elected from

among worker-members. In a worker

cooperative, governance usually extends

into managing every aspect of the

cooperative’s operation — beyond the

usual domain of overseeing corporate

affairs, making policies and setting

guidelines.

Equity capital

Like all other cooperatives, workermembers should furnish the

cooperative’s equity capital. In some

cases, initial capital funding assistance

may come from economic development

agencies or social entrepreneurs to help

meet shortfalls. For long-term

economic viability, however, a

cooperative must be self-sustaining.

One way of accumulating worker

capital over time is by retaining a

portion of year-end net savings

(earnings or profits) after distribution to

members, based on the value of labor

contribution to the cooperative’s

business or on other agreed-upon

criteria.

Operation

Worker-members democratically

own, govern and manage the

cooperative and are meant to have total

control over the operation of the

business. They integrate their skill and

labor with the cooperative’s production

process. In addition, the membership

must possess entrepreneurship,

managerial ability, technological

knowhow and knowledge of the market

in order to help manage a successful

cooperative.

Entrepreneurship is the ability of

perceiving business

opportunities and setting out

to organize capital, labor and

other inputs to produce goods

and services to exploit

opportunities. Such ability is

essential not only for starting a

cooperative or other business,

but also for adapting to a

potential changing market

environment once the business

is running. Entrepreneurship

also entails shouldering the

risk of business gains or losses

and success or failure.

Management is responsible

for smooth and efficient

operations in order to carry

out the cooperative’s business plan. In a

worker cooperative, manager(s) are

democratically selected and

management decisions and

administrative rules are democratically

determined, from the ground up. This

is in contrast to most other firms, where

administrative control is usually by fiat

and workers have little say about

management.

Worker-members may know all the

technical processes of their industry, but

technology advances over time. To stay

A

A worker-member plays the dual role 

of being a worker and an entrepreneur.
28 March/April 2013 / Rural Cooperatives

competitive, worker-members have to

keep abreast of technology development

and have sufficient alacrity in changing

production processes.

Foremost in marketing, the

cooperative must ascertain consumers’

tastes and preferences and their

changing nature so that products

produced can meet consumers’

expectation and satisfy their needs and

wants. Knowledge of the market also

includes knowing competitors’

strengths and weaknesses.

Special attributes

The equity of a worker cooperative

is provided by member-workers.

Therefore, the cooperative’s ability to

raise capital is constrained by members’

financial resources. If there is not an

adequate level of equity to strengthen

the balance sheet, it would also be

difficult to obtain debt capital.

The manager of a worker

cooperative is usually democratically

promoted from among workermembers and is, therefore, one among

equals. This could cause management

to be ineffective if the manager is not

accorded adequate authority to manage. 

Because worker-members play the

dual role of being a worker and an

entrepreneur, their rewards should be

twofold: (1) a wage income for

supplying production labor; and (2) a

distribution of the cooperative’s net

savings for being a part-owner who

participates in managing the

cooperative’s business. 

By organizing the worker

cooperative, worker-members may

expect to have a higher wage income

compared to their counterparts in the

competing firms. However, to make this

possible, the productivity of the workermembers would have to be higher than

their counterpart workers. As for

rewarding their capital investment and

management time as part-owners, the

level of net savings is dependent on the

profitability of the cooperative.

With workers as members, if the

cooperative’s business is below its

capacity, the likely solution is to have a

shared reduction of working hours

instead of laying-off workers, as is the

common practice of non-cooperative

firms. If the cooperative’s business

expands beyond its capacity, new

worker-members would have to be

recruited. To build teamwork, many

worker cooperatives hire new

employees for a trial period or

apprenticeship before offering them

membership.

Issues may arise from these attributes

from time to time, but they should not

be difficult to resolve when the

cooperative is small with a limited

number of employees and its business

lines are relatively simple. (The vast

majority of worker cooperatives in the

United States are small businesses,

having fewer than a dozen employees

on average (United States Federation of

Worker Cooperatives; Deller, et al).)

Business model modifications

When a cooperative’s business

thrives and grows in its scale and

complexity, it may have to make some

modifications to its basic business

model. For example:

• The cooperative may have to obtain

capital infusion from outside its

membership if the financial resources

of its members are not sufficient to

finance its expansion. Members’

ownership stake, along with their

voice in governance, may then be

diluted.

• The cooperative may have to hire

management expertise from outside

its membership. This may entail

changes in the dynamism of membermanagement relations, especially if

the new manager is not a member and

seeks to exert management authority.

• If the cooperative has to hire a large

number of new workers to staff a fastexpanding business, it may have to

waive membership requirement of the

new recruits, especially if competing

in a tight labor market. Convincing

the uninitiated to be worker-members

and assume the dual role of being a

worker and an entrepreneur may be a

time-consuming process.

In the United States, modifications

to the basic worker-cooperative

business model may take the form of

worker-owned businesses organized as

Employee Stock Ownership Plans

(ESOPs).

References

• Deller, Steven, Ann Hoyt, Brent Hueth and

Reka Sundaram-Stukel. Research on the

Economic Impact of Cooperatives, University

of Wisconsin Center for Cooperatives, revised

June 19, 2009, table 2-2, p. 11.

• Emelianoff, Ivan V. Economic Theory of

Cooperation: Economic Structure of Cooperative

Organizations, Washington, D.C. 1942 (lithoprinted by Edwards Brothers., Inc., Ann Arbor,

Michigan). (A reprint by the Center for

Cooperatives, University of California, 1995,

may be accessed at: http://cooperatives.ucdavis.

edu/reports/index.htm, pp. 230-244.)

• Ling, K. Charles. “The Many Faces of the

Cooperative,” Rural Cooperatives, Volume 79,

Number 6, November/December 2012, pp. 24-

29, especially table 2.

• Nourse, Edwin G. “The Economic Philosophy

of Co-Operation,” American Economic Review,

Volume XII, No. 4, December 1922, pp. 577-

597.

• United States Federation of Worker

Cooperatives. “About Worker Cooperatives,”

http://usworker.coop/aboutworkercoops.

(Accessed July 31, 2012). ■

Worker-members democratically own, govern

and manage the co-op and are meant to have

total control over the business.
Rural Cooperatives / March/April 2013 29

By Joe Rinehart

Interim Rural Programs Coordinator

Democracy At Work Network

he Democracy At Work

Network (DAWN) has

launched a Rural

Technical Assistance

Program (Rural TA),

which will offer free or low cost

technical assistance to help support

worker cooperatives during the startup, growth and expansion phases. The

effort is being supported with the help

of a Rural Cooperative Development

Grant from USDA Rural Development. 

DAWN, a project of the U.S.

Federation of Worker Cooperatives

(USFWC), provides affordable business

consulting services to worker

cooperatives and cooperative

development organizations. A team of

certified peer advisors — comprised of

worker-owners of successful worker

cooperatives — will engage in a yearlong training program to gain the skills

needed to move from successful

business person to successful

cooperative peer advisor.

With its Rural TA Program, DAWN

hopes to help worker-owned businesses

realize their full potential to provide

sustainable livelihoods that support

thriving rural economies.

Worker cooperatives can be a

fundamental building block of vibrant

rural economies, anchoring jobs and

key pieces of economic infrastructure

inside of local communities. They are

already an important part of many rural

economic landscapes, ranging from

Select Machines in Kent, Ohio, which

preserved local manufacturing jobs after

the founders retired, to Ad Astra Books

and Coffee House in Salina, Kan.,

which is helping to lead the

revitalization of a rural town’s Main

Street. 

Other examples of worker co-ops

include Real Pickles, a local food

products manufacturer in Greenfield,

Mass., which recently converted to a

worker cooperative, and Cooperative

Care of Waushara County, Wis., a

cooperative of home-care workers that

helps elderly and handicapped people

remain in their own homes. Worker coops help ensure that a business remains

focused on job creation, community

health and providing a dignified

workplace.

“At Ad Astra Books and Coffee

House, we are expanding our

community's downtown activities and

culture,” says Matthew Wygal, a

worker/owner of the business. “We do

this by providing a marketplace for the

work of local and regional authors and

musicians, by offering a steady supply of

new and used books from both indie

and best-selling authors, and by serving

some of the best locally roasted coffee

in town. Operating as a worker-owned

cooperative, we can draw from each of

our strengths in order to provide as

much to our community as we can.”

“Rural Americans have always used

cooperatives to meet their needs,” says

USFWC Executive Director Melissa

Hoover. “Worker cooperatives have

previously tended to be concentrated in

cities, but as the economy changes

we’re getting more inquiries from rural

people — everyone from small farmers

to recent immigrants to professionals

who have lost their government

contracts. These days people are

struggling to make ends meet and to

access and provide basic services in

Effort launched

to assist worker co-ops

T

Top: Amber Baker (left) and Ona Lindauer

inside the Real Pickles facility in Greenfield,

Mass. Below: Inside the Select Machines

plant in Kent, Ohio. Both are worker-owned

cooperatives.

continued on page 42
30 March/April 2013 / Rural Cooperatives

By Chris Villines

This article is reprinted, slightly adapted

and abridged, from Tennessee

Cooperator, the member publication of

Tennessee Farmers Cooperative. The “Coops & Community” page spotlights co-op

efforts that fulfill the mission of “commitment to community.” If you know of a coop, a co-op member or co-op employee whose

efforts deserve to be recognized on this page,

please contact: dan.campbell@wdc.usda.gov. 

n a recent trek to the

grocery store, David

Coppock was at one

end of an aisle when he

saw a middle-aged man

smiling and waving at him from the

opposite end. Coppock waved back,

even though he couldn’t place the face.

More than likely, it was someone he had

in class during his 41-year educational

career in Union County.

“It happens all the time,” says

Coppock, a lifelong Maynardville,

Tenn., resident and a farmer who

belongs to Union Farmers Cooperative

there. “It makes you feel good that

people remember you, but a lot of the

kids I had in school have grown into

adulthood and changed so much that I

just don’t recognize folks sometimes. It

can get kind of embarrassing.”

To say that he’s influenced the lives

of a few boys and girls would be a

supreme understatement. Those who

attended school in his native county

from 1963-2004 might best remember

Coppock as their math teacher. Or

basketball coach. Or principal. Or as

superintendent of Union County

Schools for 17 years (1984-2001). Or

even as their bus driver. 

“I was at Big Ridge Elementary my

first 20 years,” says Coppock, who upon

retiring nine years ago was immediately

elected to the Union County School

Board and is now in his third term as

chairman. “Then, I went to

Maynardville Elementary for one year

before becoming superintendent. My

last three years were at Maynardville

again for one year and Sharps Chapel

Co-ops & Community

Retired educator, part-time farmer 

remains dedicated to schools

O

David Coppock is not only committed to farming and doing business with Union Farmers Cooperative, but also to the schools in Union County, Tenn.

During a 41-year career in education, he served as a math teacher, basketball coach, principal and superintendent. He still has a part-time job as a

school bus driver and serves on the school board. Photo by Jamie Bowman
Rural Cooperatives / March/April 2013 31

Elementary for two.”

Still steering for education 

Not only is he still helping to guide

the direction of the schools through his

seat on the school board, but he is also

literally steering kids home from school

each day as a school bus driver.

“When I retired, I went back to

running a bus route so I could earn a

little extra spending money,” he says.

“The bus and the school board keep me

involved and up-to-date with what’s

going on in the county. A lot of the kids

who ride my bus are children or

grandchildren of people I taught.”

There were also years during his

career when Coppock filled two roles at

once, such as teaching math and

coaching both the boys’ and girls’

basketball teams at Big Ridge

Elementary. At one time, he even had

three roles: teacher, coach and

principal.

“That was a bad situation,” he says.

“There were always phone calls for the

principal and people coming in wanting

to see the principal. Class got

interrupted a lot.”

About the only hats he didn’t wear at

one time or another were janitor and

cafeteria worker, though the

watermelons and cantaloupes the parttime farmer grew were always welcome

treats in school lunches around the

county.

“I tried my best to help the children

in any way I could,” he says. “When

you had good students who wanted to

learn, it was wonderful. I miss teaching

from time to time, but it passes pretty

quick.”

Committed to 

farming and co-op

One thing that’s remained consistent

throughout Coppock’s life, regardless of

what capacity he’s served, is his

commitment to farming with endeavors

that have included tobacco, beef cattle,

fruits and vegetables.

“I farmed the whole time I was in

teaching and education,” he says. “Early

in my career, I honestly don’t know how

I did it. I was teaching, coaching,

raising tobacco and some cattle, and

going to the University of Tennessee at

night to complete my degree. It was a

juggling act, I’ll tell you.”

He still grows some tobacco, albeit

on a much smaller scale due to the

tobacco buyout program, which the

federal government introduced to help

farmers transition to other types of

farming. His primary focus these days is

hay production and his 50-head

cow/calf operation that he runs with

help from his wife of 36 years, Kay, and

grandson, Tyson, a junior at Union

County High School. He also grows

peppers, watermelons, cantaloupes,

cucumbers and okra, on a small scale. 

“I just loved going around and

looking at those fields growing. Now, I

really enjoy checking on the cattle every

day and seeing how they’re doing.

There’s nothing like a field of nice

cattle. And now that there’s the

Tennessee Ag Enhancement Program,

I’ve been able to get the facilities to

handle the cattle better and not get

kicked or mashed.”

Coppock’s herd consists primarily of

Angus and Charolais cattle, kept on

three different lots around the 285-acre

farm. He purchases his feed, diesel fuel

and other farm supplies from Union

Farmers Cooperative.

“At one time, all I had was purebred

Charolais,” he explains, “but I started to

get toward black [cattle] because it

seemed like anywhere you went to eat

they served Angus beef.”

The farm, bus route and school

board aren’t all that keep Coppock busy

these days. He’s also active with the

Union County Optimist Club and

Union County Business Professional

Association and is on the boards of both

the Union County Soil Conservation

District and the Clinch-Powell

Educational Cooperative. He also

teaches Sunday School and leads

singing at the church he and Kay

attend. 

“I’ve heard of a lot of people who

retire and just go to the house and sit

all the time,” Coppock says. “They

don’t seem to last too long, either. I

don’t want that to happen to me.” ■

David Coppock raises Angus and Charolais cattle on his Maynardville farm. His dedication to

farming and civic causes includes serving on the Union County Soil Conservation District and the

Clinch-Powell Educational Cooperative. Photo by Chris Villines, courtesy Tennessee Farmers

Cooperative 
32 March/April 2013 / Rural Cooperatives

Brattleboro 

Co-op’s 

development 

includes 

downtown 

housing 

The new Brattleboro Food Co-op, in Brattleboro, Vt., not only includes expanded retail space, but also 24 new, energy-efficient apartments

on the upper levels. USDA Rural Development provided financial support for the award-winning project. Photos courtesy Brattleboro Food

Co-op

Smart

Growth
Rural Cooperatives / March/April 2013 33

By Molly Lambert, State Director

Vermont/New Hampshire

USDA Rural Development 

mart Growth” is a term

we hear more often

these days. It is the idea

that as communities

plan for the future, they

consider the highest and best use of

every resource — land, infrastructure,

organizations and people. From

housing to transportation, and from

energy to food, community developers

and planners are asking how smart

growth principles can be applied to

ensure a sustainable and dynamic future

for their communities and their residents. 

How is USDA involved 

in these efforts?

Consider Brattleboro, Vt. With a

population of 12,000, Brattleboro sits

on the state’s southeastern border and is

home to a vibrant mix of industry, art

and education. Brattleboro’s downtown

district was one of the first communities

to take advantage of Vermont’s Downtown Program, giving it access to state

tax credits and shining a spotlight on its

rich history. Its vibrant downtown is an

inviting mix of shops, restaurants,

offices and an art deco theatre and

hotel. 

Anchoring one end of the downtown

is the Brattleboro Food Co-op. 

Founded in 1975, the Brattleboro

Food Co-op started as a local buying

club. It eventually grew into a popular

retail destination featuring a wide range

of products from nearby farms in

Vermont, New Hampshire and

Massachusetts. 

By 2003, the Brattleboro Co-op was

outgrowing its space. It considered

moving to a new location outside of

downtown. The board of the co-op,

however, decided that its mission was

“S

The new co-op store, which includes 14,000 square feet of retail space, supports 

more than 100 jobs and is a major buyer from local farmers.

Paul Harlow, owner of Harlow Farm in Westminster, Vt., is a supplier of fresh

produce to Brattleboro.

Harvesting corn at High Mowing Organic

Seeds in Wolcott, Vt.
34 March/April 2013 / Rural Cooperatives

much more compatible with a smart

growth solution to its expansion needs.

In the meantime, the Windham and

Windsor Housing Trust (WWHT) and

Housing Vermont were looking for a

solution to Brattleboro’s need for more

mixed-income housing that would be

easily accessible to the downtown’s

services and amenities. 

With support from a $4.2 million

American Recovery and Reinvestment

Act loan guarantee from USDA’s

Business & Industry Loan Guarantee

Program, the Brattleboro Co-op

remained downtown in a new, highly

energy-efficient building with expanded

retail space. 

The new, $9.1 million co-op space

was originally envisioned as a two-story

building. Through innovative

partnerships, an additional two stories

on the new building were developed by

WWHT and Housing Vermont. 

Although the co-op and the housing

complex have separate ownership, they

have similar commitment to the

sustainable future of Brattleboro. 

The results are stunning. The new

Brattleboro Co-op building opened in

June 2012. The co-op now boasts over

14,000 square feet of retail space and

supports more than 100 jobs. Over 60

percent of the products come from

nearby farms, food producers and

vendors. 

The building also hosts a

commissary kitchen and classrooms for

cooking classes. Above the co-op, 24

new, energy-efficient, mixed-income

apartments are available in downtown

Brattleboro. 

Recently, the Brattleboro Co-op won

a 2012 National Award for Smart

Growth Achievement from the U.S.

Environmental Protection Agency

(EPA). These awards, which began in

2002, recognize exceptional approaches

to developments that respect the

environment, foster economic vitality,

enhance quality of life and provide new

opportunities for disadvantaged

communities. 

“The new cooperative building

incorporates money-saving and

innovative environmental features while

fitting with the character of a

traditional walkable New England

town,” an EPA official said in

presenting the award. “Community

members were the true champions of

this project, insisting on a downtown

location for their co-op that integrates

both the grocery store and mixedincome housing.”

The Brattleboro Co-op is profiled in

the Know Your Farmer Know Your

Food Compass (www.usda.gov/wps/

portal/usda/usdahome?navid=KYF_CO

MPASS) as an example of how local

food systems can anchor community

development and planning. Other

examples of how the federal

government is supporting the role of

local food in communities across the

country are also included on that

website. ■

Elaine Morley, of Couch Brook Farm, in A direction sign helps guide shoppers around the new store.

Bernardston, Mass., harvests produce that

will soon be on its way to the Brattleboro 

Co-op.
Newsline

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

Co-op developments, coast to coast

Fifth Season sees 

first year success

The Fifth Season Cooperative — a

multi-stakeholder co-op owned by

farmers, distributors, buyers, producer

co-ops, workers and processors — says

it has completed a successful first full

year of operations. The cooperative

produces and distributes locally grown

produce, meats, dairy and value-added

food products to institutional and

foodservice buyers from farms and

regional processors. Distribution is

made through its member, Reinhart

Food Service in La Crosse, Wis. 

The co-op, the members of which

are located within a 150-mile radius of

Viroqua, Wis., requires sustainable

farming practices and provides fair

pricing for small- and mid-sized

growers and processors. The

cooperative also works together with

businesses and organizations to provide

education on and increased exposure to

locally produced foods.

Current membership

includes 26 independent

farms, three farmer

cooperatives, seven

processors and one

distributor. Fifth

Season’s products are

available (through

Reinhart) to 3,500 food

service buyers. 

“It’s gratifying to see

how Fifth Season is

already contributing to

the health of our region’s

children by supplying

fresh foods to area

schools,” says Marilyn

Volden, Fifth Season

board member and

Food/Nutrition Program

supervisor for the

Viroqua Area School

District.

Fifth Season says it has met its

infrastructure and membership goals

and is seeking investors to build on that

success. The co-op has launched “Help

Us Grow,” a capital campaign with an

offering of Class B Series 1 preferred

stock to Wisconsin residents. The

campaign is intended to attract

investors who are interested in

supporting Fifth Season’s regional

model and the businesses and

communities it serves.

The campaign’s goal is to help

achieve a level of sales that makes the

co-op profitable and sustainable,

including a broader product portfolio,

more robust infrastructure and logistics

and marketing and staffing support.

“We’re fortunate to have visionary

partners and customers who are vested

in the growth of the Fifth Season

system, even though it’s still in its

infancy,” says Mike Dvorak, Fifth

Season board member and division

president at Reinhart Food Service.

For more information, contact

Chapeta at: info.fifthseason@gmail.com,

or 608-638-2667

ACE Institute set 

for Puerto Rico 

The Association of Cooperative

Educators (ACE) will hold its 2013

Institute in San Juan, Puerto Rico, this

Aug. 4-7. The program will focus on

innovations in co-op research,

education and development from across

North America. Attendees will also

learn about co-op education initiatives

in Puerto Rico, from elementary school

through the university levels, as well as

for co-op boards. 

Co-op curriculum and programs for

youth and professional development

opportunities for co-op educators will

be part of the program. Meetings will

also focus on how co-ops can help meet

economic challenges and examine coops that not only have a local economic

impact but also benefit the

environment. 

Carolyn Austin, co-owner of Austin’s Rush Creek Farm in

Ferryville, Wis., and her granddaughter, Ava Schneider, harvest

green onions to sell at an upcoming farmers market. Austin is a

member of the Fifth Season Cooperative.

Rural Cooperatives / March/April 2013 35
36 March/April 2013 / Rural Cooperatives

The institute will be hosted at the

Verdana Hotel. For more information,

contact Sarah Pike at: pike@ace.coop. 

Paper or plastic? 

Marva Maid provides option 

Marva Maid, a farmer-owned dairy

cooperative that has been supplying its

region with fresh milk for five decades,

has brought back the milk carton. The

original “paper bottle” was patented in

1915 by a toy maker in Ohio. Now,

almost 100 years later, Marva Maid is

leading the charge to bring back the

classic carton with a new, technological

twist. 

Why? Because it says cartons mean

better milk and a cleaner environment.

“First and foremost it’s about what

we are always focused on: freshness,”

says Danny Lovell, general manager of

Marva Maid Dairy, based in Newport

News, Va. “Our cartons feature TruTaste® barrier board that keeps oxygen

out, taste and vitamins in. That also

means the milk stays fresher longer.”

But better taste is only part of the story.

Lovell says Marva Maid cartons are

environmentally friendly. For more

than 40 million households, cartons are

recyclable. They are made with

renewable energy — more than 50

percent of the energy used to make the

carton comes from biomass. Further,

Marva Maid cartons are made from

renewable materials, with more than 70

percent of the carton material coming

from responsibly managed forests, he

notes. 

More than 1,500 dairy farmers in 11

states, from Pennsylvania to Alabama,

are the owners and operators of the

Maryland and Virginia Milk Producers

cooperative, of which Marva Maid is a

division. It processes nearly 3 million

gallons of milk per month and

distributes dairy products in

communities throughout most of

Virginia, West Virginia and eastern

North Carolina. 

DFA settles lawsuit 

Dairy Farmers of America in January

announced settlement in a class action

lawsuit filed by a group of producers in

the southeastern United States. While

making no admission of wrongdoing,

DFA will pay the plaintiffs $140 million

under the terms of the settlement, filed

with the U.S. District Court for the

Eastern District of Tennessee. 

Filed in 2007, the lawsuit alleged

that DFA and four other defendants

conspired to control the raw milk

market in the Southeast in several ways,

including the use of exclusive supply

contracts with Dean Foods that they

claim excluded competition from

independent milk farmers and co-ops in

the Southeast.

The Reuters news agency reported

that this was the third and final

settlement arising from the litigation.

Milk bottler Dean Foods’ settled for

$140 million and the Southern

Marketing Agency (SMA) and one of its

managers settled for $5 million.

DFA says the settlement includes an

additional, refundable $9.3 million per

year for two years that will be placed in

a fund to create stronger incentives for

Class I utilization rates in Federal

Orders 5 and 7. The agreement also

includes remedial actions involving

reporting, accounting and

communication of certain business

information and functions. DFA says

many of these components are

consistent with new policies and

procedures its management had

voluntarily developed and implemented

previously to emphasize a culture of

transparency within the cooperative.

“Our board and management team

have worked diligently to put certain

old issues behind us,” said Rick Smith,

president and chief executive officer.

“This outcome positions DFA to fulfill

a commitment to our members to

resolve pending litigation, to remove a

source of distraction for our leadership

and to avoid additional legal fees.”

The payment of the settlement will

not affect the cooperative’s day-to-day

To have news about your co-op appear in Newsline, send press

releases and announcements to: coopinfo@wdc.usda.gov, or

dan.campbell@wdc.usda.gov. Items of interest include: new co-op

formations, new products and services, notable co-op milestones

achieved (such as key anniversaries), acquisitions and mergers, coop subsidiary launches, annual financial performance, community

service efforts, new board chairs or CEOs/managers and co-op

education efforts, among many other topics. Photos are also

welcome, but need to be of print quality, or about 300 dpi at four to

five inches wide. ■

Share your co-op news
operations or its ability to market

members’ milk or pay them a

competitive price for that milk, he

added. Member milk checks and the

member equity program will not be

impacted.

USDA releases report on 

growing role of food hubs 

Agriculture Deputy Secretary

Kathleen Merrigan in February

announced the release of a report which

provides a comprehensive look at the

economic role, challenges and

opportunities for food hubs in the

nation’s growing local food movement.

The announcement was made during a

visit to Hollygrove Market and Farm, a

produce market, local distributor and

farm in downtown New Orleans.

(Editor’s note: for details on how to

order the report, see the back cover of

this magazine.) 

In operation since 2009, Hollygrove

sources from 20 local growers in

southern Louisiana and Mississippi.

Hollygrove’s mission includes

increasing access to fresh produce for

under-served New Orleans

neighborhoods. The organization first

began operations as part of the city’s

post-Hurricane Katrina rebuilding

efforts.

“At USDA, we are committed to

food hubs because we believe that they

offer strong and sound infrastructure

support to producers across the country

which will also help build stronger

regional food systems,” Merrigan said.

“This report is an important addition to

the ongoing research in this field and

Hollygrove is an example of how it is

done.”

James Matson, a former co-op

development specialist with USDA’s

Cooperative Programs and a frequent

contributor to Rural Cooperatives, is the

lead author of the report, titled:

The Role of Food Hubs in Local Food

Marketing. The report was produced

with financial backing from USDA. 

With an increasing demand for fresh,

local foods, the report finds that the

success of food hubs is rapidly

expanding, with well over 200 food

hubs now operating in the United

States. They are a part of a distribution

system designed to move locally

produced food into mainstream markets

by supplying chains for goods to go

from farms to the table efficiently. 

The dramatic increase in the number

of food hubs since President Obama

took office has been supported by state

and federal efforts, including USDA

programs such as Rural Business

Enterprise Grants, Rural Business

Opportunity Grants, Value-Added

Producer Grants and the Business and

Industry Guaranteed Loan Program.

For example, as noted in the report,

USDA Rural Development’s

cooperative grants can be used to

support building local food systems

infrastructure. The Federation of

Southern Cooperatives/Land Assistance

Fund in Alabama received a grant to

establish a vegetable processing and

marketing cooperative and a regional

goat processing and marketing

cooperative. The Federation also trains

and supports members involved in

direct marketing activities, such as

selling at urban farmers markets,

redeeming nutrition assistance coupons

and selling directly to schools. Part of

the grant focused on business planning

and training for community

development credit unions.

CHS sets records for income,

cash payout to members 

CHS Inc. reported record net

income of $1.26 billion on revenue of

$40.6 billion for its 2012 fiscal year.

During fiscal 2013, CHS expects to

return an estimated $600 million of its

fiscal 2012 earnings to its owners in

cash, believed to be the largest cash

payment to members ever made by a

cooperative. 

Thanks to consistent, strong

financial performance, coupled with

Agriculture Deputy Secretary Kathleen Merrigan watches Chef Paul Prudhomme prepare a

vegetable dish during her visit to Hollygrove Market and Farm in New Orleans, La., where she

announced the release of a new USDA report about food hubs. USDA photo by Karen Lawson

Rural Cooperatives / March/April 2013 37
38 March/April 2013 / Rural Cooperatives

strategic domestic and global

investments, CHS is positioned for

continued, long-term growth, company

leaders reported at the co-op’s annual

meeting in Minneapolis, attended by

2,200 of its owners and guests.

“When it comes to the producers

and cooperatives who own us, and the

customers we serve around the world,

we must not only invest in the future,

but make sure we provide relevant

options for doing business with us,” said

Carl Casale, president and CEO of the

nation’s largest cooperative. “In the last

two years, we’ve made three dozen

major news announcements on

investments and acquisitions on our

owners’ behalf that strengthen our

presence at home and around the world

in energy, grains, processing and food

ingredients.”

Highlights of fiscal 2012 include:

• Plans to acquire sole ownership of the

McPherson, Kan., refinery, in which

it has long been the majority owner.

The facility is the site of a $555-

million coker project, which converts

residual oil into gases and petroleum

coke. CHS also continues to invest in

its Laurel, Mont., refinery, as well as

strengthen its refined fuels supply and

distribution in the northern tier of the

United States. 

• Stronger cooperative system

alignment has been achieved as five

co-ops and a Canadian firm chose to

join the CHS Country Operations

retail business unit, and CHS

partnered with several local co-ops on

a variety of grain, crop nutrients and

energy projects. 

In other CHS news, Steve Burnet,

the co-op’s former chairman, died Jan.

19 at age 72. Burnett was a Moro, Ore.,

farmer who played a major role in the

mergers of several co-ops to create

CHS. The most notable merger was the

1998 unification of Harvest States

Cooperatives and Cenex Inc. 

“Steve’s vision, dedication, quiet

leadership and gentle humor played

invaluable roles in setting future

direction and in helping cooperatives

address challenging organizational

changes and emerge even stronger,”

says CHS Chairman David Bielenberg,

also an Oregon producer. “He viewed

the cooperative system as a tool

essential to producers’ success.” 

CoBank earnings climb 

sharply; record patronage paid

CoBank has reported net income of

$853.9 million for 2012, up 21 percent

from $706.6 million in 2011. Net

interest income rose 16 percent, to

$1.238 billion for 2012, which reflects a

40-percent increase in average loan

volume, to $70.3 billion. Total loans

outstanding at year end were $72

billion.

The large increase in average loan

volume was driven primarily by

CoBank’s merger with U.S. AgBank on

Jan. 1, 2012. Through the merger, the

bank acquired U.S. AgBank’s assets and

liabilities, including about $20 billion in

lower-spread, lower-risk wholesale loans

to 25 Farm Credit associations. CoBank

serves agribusinesses, rural

infrastructure providers and Farm

Credit associations throughout the

United States. 

CoBank also experienced higher

average loan volume during the year in

its Rural Infrastructure operating

segment, primarily due to growth in

lending to rural electric customers

throughout the country, as well as an

increase in agricultural export financing

due to the growing role of U.S.

agriculture in feeding the world. These

increases offset declines in seasonal

agribusiness lending that occurred as a

result of lower commodity prices in the

first half of the year, shifting farmer

delivery patterns at grain and farm

supply cooperatives, and the strong

financial position of agricultural

cooperatives and businesses.

“Our merger with U.S. AgBank

more than lived up to expectations,

delivering meaningful and enduring

benefits for our business,” says Robert

B. Engel, the co-op’s president and

CEO. In March, the bank will

distribute $425 million in total

patronage, including $344.5 million in

cash and $80.5 million in common

stock. For most customers, that will

represent 100 basis points of average

qualifying loan volume during the past

year, effectively lowering their overall

net cost of debt capital from CoBank.

“This year’s

record patronage

payout includes the 75

percent cash

component approved

by our board of

directors in

December,” Engel

said. “As a cooperative lender, we’re

delighted to be providing our customerowners with such a significant return,

which they can use to invest in the

future growth of their own businesses.”

In other news, CoBank has

announced the creation of a $5 million

fund to support agricultural research

and education at land-grant universities

and other institutions throughout the

nation. The CoBank contribution will

support a broad range of programs at

more than 30 schools, including

academic research, scholarships for

students, cooperative education and

leadership development. 

Co-op governance 

symposium slated 

Saint Mary’s University in Halifax,

Nova Scotia, will host the International

Cooperative Governance Symposium

this Sept. 5-7. The symposium will be a

gathering of leading co-op governance

practitioners and researchers who will

discuss and debate the challenges and

opportunities for cooperative

governance on a global scale.

The format of the symposium will be
interactive, with all participants highly

engaged in the agenda. Through a

combination of presentations, panels

and working sessions, the symposium is

intended to “stretch your mind, call on

your expertise and expose you to

approaches from around the

world.” Proposals for workshops, panels

and presentations from academics and

practitioners should be submitted by

May 1. 

Symposium focus areas will include:

emerging governance approaches and

models; preserving and enhancing

democracy in cooperative governance;

upholding ownership and control by

membership; challenges in applying

traditional and corporate approaches to

co-ops; maintaining governance

strength in crisis: demutualization,

competition, etc., and director

education, including leading practices

and areas of need.

For more information or to register,

contact: Karen Miner at: karen.miner@

smu.ca, call (902) 496-8170, or visit:

www.smu.ca/academic/sobey/mm/gover

nance-symposium.html.

UFC purchases Jensen 

Seed & Fertilizer 

United Farmers Cooperative (UFC)

has completed the acquisition of Jensen

Seed & Fertilizer, north of Aurora,

Neb., from owner Clint Jensen.

Headquartered in York, Neb., UFC

says it will increase regional efficiency

and reliability with the addition of

agronomy services based in the Aurora

area.

The acquisition will complement the

January 2012 purchase of the Marquette

location and allow UFC to better serve

a growing customer base, it says. The

purchase of the Aurora facility brings

UFC’s total to 32 locations in Nebraska

and Kansas.

“We are always looking for the right

fit for United Farmers Cooperative,”

says UFC CEO Carl Dickinson. “It’s

not about growth, but more about

‘Does it make sense to our current

producers?’ If we can clearly see the

value and we see the opportunity for

success, then it is a natural fit.”

The Aurora location will be

primarily an Agronomy location. UFC

serves over 3,500 voting members and

close to 8,500 non-voting members in

Nebraska and Kansas.

Southern States’ 

Roanoke Mill honored 

Southern States Cooperative’s

Roanoke Feed Mill has been named

best in the nation for 2012 by the

American Feed Industry Association

(AFIA), and Feedstuffs, a weekly

newspaper for agribusiness. This is the

third time in six years that a Southern

States mill has been so honored. The

award was presented in January at the

Vinton, Va., facility by Keith Epperson,

AFIA vice president of manufacturing

and training.

The Roanoke mill manufactures

more than 100,000 tons of feed each

year, mostly dairy, beef, horse and other

livestock feed products. “Our goal is to

be the best one-stop feed manufacturer

for the 60-plus Southern States stores

and private dealers we service,” said mill

Manager Dave Jones. “But the most

important part of the whole equation is

that we have a great staff of seasoned,

hard-working employees that love to

make feed!”

The award is designed not only to

recognize excellence in feed

manufacturing operations but also to

encourage overall improvement in the

feed manufacturing industry. A new

grading system, instituted in 2007,

provides valuable feedback to every

plant that enters the competition. Increased safety, quality,

regulatory compliance, operating

efficiencies and overall industry

awareness of food safety are promoted,

and as companies compete, their

operations continue to improve and the

overall image of the feed industry is

enhanced. About 90 mills throughout

the nation submitted entries in the 2012

competition.

Established in 1923, Southern States

has more than 300,000 farmer-members

and 1,200 retail outlets in the eastern

United States.

USDA Farm to School 

grants available

Agriculture Deputy Secretary

Kathleen Merrigan in February

announced the release of a request for

Southern States Cooperative’s Roanoke Feed Mill Manager Dave Jones (right) receives the

American Feed Industry Association’s (AFIA) Feed Mill of the Year Award from AFIA Vice

President for Manufacturing and Training Keith Epperson. Photo courtesy Southern States

Cooperative

Rural Cooperatives / March/April 2013 39
40 March/April 2013 / Rural Cooperatives

applications (RFA) for the latest round

of USDA’s Farm to School grants.

These grants help eligible schools

improve the health and well-being of

their students and connect with local

agricultural producers. 

“USDA’s Farm to School grants

connect schools with their local

farmers, ranchers and food businesses,

providing new economic opportunities

to food producers and bringing healthy,

local offerings into school cafeterias,”

Merrigan said. “USDA continues to

make improvements to the nutrition of

food offered in schools, and investing in

farm to school programs is yet another

important opportunity to encourage our

nation’s kids to make lifelong healthy

eating choices.” 

This year, three different kinds of

grants will be available. Planning grants

are intended for schools just getting

started on farm to school activities,

while implementation grants are

available for schools seeking to augment

or expand existing efforts. Additionally,

eligible nonprofit entities, Indian tribal

organizations, state and local agencies,

and agriculture producers or groups of

producers may apply for support service

grants in order to conduct trainings,

create complementary curriculum, or

further develop supply chains, among

other activities. 

Proposals are due at midnight

Eastern Time, April 24, 2013. 

The Farm to School Grant Program

is part of the Healthy, Hunger-Free

Kids Act, which authorized and funded

USDA to assist eligible entities,

through grants and technical assistance,

in implementing farm to school

programs that improve access to local

foods in eligible schools. The Act

provides $5 million annually to support

grants, technical assistance and the

federal administrative costs related to

USDA's Farm to School Program. In

this funding cycle, USDA anticipates

awarding up to $5 million in grants. 

For more information, visit: www.

fns.usda.gov/cnd/f2s/f2_grant_program.

htm.

Record sales, earnings 

at Land O’ Lakes 

Land O’Lakes Inc. achieved record

sales of $14.1 billion and record net

earnings of $241 million in 2012. Net

sales were up 10.2 percent and net

earnings increased 31 percent over 2011. 

Three of its business segments

achieved record sales. The co-op

returned $113 million to members in

2012, the fourth consecutive year in

which member returns exceeded $100

million.

The years 2007-2012 represent the

top six years for net sales and earnings

in company history. During the same

“Sound Ideas: The stage is set in

Nashville” is the theme for the 2013

Institute of the Cooperative Communicators

Association, to be held June 1-5 in

Nashville, Tenn. The conference provides

numerous opportunities for co-op

communicators to learn from each other

and from media experts. A presentation on

the art of storytelling will be made by Bill

Landry, host and producer of the five-time

Emmy Award-winning “The Heartland

Series,” based in east Tennessee. The

series is the most highly awarded local

television program in the region’s history.

Other speakers include famed

Appalachian region photographer Tim Barnwell; Associated Press bureau

chief Michelle Williams; creativity and brainstorming expert Tim Earnhardt;

media relations specialist and former TV anchorwoman Heather Orne and

“social media virtuoso” Megan McKoy-Noe of the National Rural Electric

Cooperative Association. 

Leanna Comer will discuss why “Image is everything” and how it relates to

co-op brands, both through graphics and market placement. Presentations

will also be made by Belmont University writing instructor Dorren Robinson,

by film pro Barry Richards and by voice-over artist Christi Bowen. Marketing

expert Bob Cohen of Ohio State University will conduct a “Co-op 101”

session, while Jim Sherraden, manager and chief designer of Nashville’s

iconic Hatch Show Print studio, will discuss the creative process and his

preservation of country and rock n’ roll music culture through poster and

music bill designs.

For registration and other information, visit: www.communicators.coop. ■

CCA Institute slated for Nashville in June
Rural Cooperatives / March/April 2013 41

time, Land O’ Lakes returned more

than a half billion dollars to members.

“This consistent, positive performance

is a direct result of the continuing

implementation of strategies designed

to build our value-added, branded

businesses in dairy foods, feed and crop

inputs,” said Chris Policinski, the coop’s president and CEO. 

Among the factors that influenced

2012 performance were warmer-thannormal weather (which benefitted crop

inputs business), volatile dairy markets

and fluctuations in commodity pricing.

The co-op also completed several key

acquisitions in 2012. 

The Dairy Foods unit achieved

strong results in 2012 despite significant

challenges in the first half of the year

caused by growth in milk supplies and

volatile markets. Net sales for the unit

were $4.2 billion, down 4 percent from

2011, while pretax earnings improved to

$38 million, a 34-percent increase from

the prior year.

In addition to the popularity of a

number of new consumer dairy foods,

the Dairy Foods segment also grew

through new acquisitions in 2012,

continued on page 42
help co-ops help communities.

We know our efforts boost rural

economies, which in turn bolsters U.S.

economic strength. As Agriculture

Secretary Tom Vilsack has noted, rural

America is critically important to our

nation. With 98 percent of Americans

living off the farm and many folks living

in metro areas, we need to tell our story

proactively and often.

We can’t afford to allow rural

communities to be left out or left

behind, particularly in Washington. A

strong rural electric network leads to a

stronger rural America — an innovative

rural America.

Rural innovation has given us the

most abundant and affordable food

supply in the world.

Rural innovation has given us

renewable energy and clean-burning

fuel. Rural innovation not only brings

down prices at the pump, but leads to

increased prosperity in rural areas. We

are expanding production of bioproducts, which are adding jobs and will

strengthen rural economies for years to

come.

As leaders in your communities, we

need you to tell the story. So I am

calling on each and every one of you to

not just speak to your neighbors, friends

and members, but to take our story to

the cities and suburbs. 

I look forward to working with you

and the communities we serve in the

year ahead!

Editor's note: Comments about how to

improve RUS programs can be sent to:

anne.mayberry@wdc.usda.gov. ■

Commentary

continued from page 2

tough rural economies. They’re seeing

cooperatives as a solution.”

As part of its rural technical

assistance program, DAWN will be able

to provide a wide variety of technical

assistance services to rural cooperatives

at low or no cost. From providing basic

business services and mentorship to

more in-depth research, DAWN’s peer

advisors prioritize building the internal

capacity of the cooperatives they work

with and connecting their clients to the

broader cooperative community.

Among the services that DAWN

offers are:

• Building cooperative business start-up

“road maps”;

• Feasibility studies;

• Strategic planning;

• Democratic governance structure

design and training;

• Growth and expansion planning;

• Financial training;

• Loan readiness;

• Support to nonprofits developing

cooperatives for economic

development.

For more information, or to request

assistance, rural cooperative members

and other interested parties should

visit: www.dawn.coop, or send an e-mail

to: rural@dawn.coop. To apply for

technical assistance, visit the application

page of the website. ■

Effort launched to assist

worker co-ops

continued from page 29

42 March/April 2013 / Rural Cooperatives

including Kozy Shack Enterprises Inc.,

a leading brand of refrigerated desserts,

and a 50-percent ownership in

Eggland’s Best LLC, a newly formed

joint venture with Eggland’s Best Inc. 

In the feed sector, Purina Animal

Nutrition had a strong performance,

boosted by the launch of a major new

branding platform, new product lines

and a key acquisition. Net sales were

$4.6 billion, up 15 percent, while pretax

earnings of $31 million climbed 63

percent. 

In the Crop Inputs division,

Winfield Solutions delivered record

results, with net sales $4.7 billion, 18

percent higher than 2011. Pretax

earnings of $228 million soared 62

percent.

For the Layers unit, conducted

through Moark LLC, it was a

challenging year. Unfavorable results

were caused primarily by high feed

costs and lower commodity and brown

egg pricing. Losses for the segment

totaled $34 million, compared with a

loss of $3 million in 2011, even though

a net sales record was set at $735

million, up 23 percent from 2011.

Ag journal seeks

papers on co-ops

The Journal of Agriculture, Food

Systems, and Community Development

(JAFSCD) is requesting manuscripts

that explore the intersection of

cooperatives with alternative food

systems. Deadline for submissions is

Aug. 1, 2013. Manuscripts will be peer

reviewed and, if selected, will be

published in the JAFSCD winter 2014

issue. 

Interested authors may visit the

JAFSCD website at: www.AgDev

Journal.com and access the “Latest

Call” web page to learn more. To be

considered, a query form and draft

manuscript must be provided to

Duncan Hilchey, editor in chief, at:

Duncan@newleafnet.com. Submission

guidelines and the query form are at

www.AgDevJournal.com/submissions.ht

ml. 

JAFSCD is requesting reports of

qualitative and quantitative studies, case

studies, review articles, essays and

commentaries. 

Manuscripts dealing with

collaborative initiatives that do not

involve formal cooperative enterprises,

but which still embody cooperative

values and principles, are permitted. 

To be considered, papers should be

empirically based and contribute to

knowledge about the development of

agriculture and food systems. ■
Farmers’ Rice has adopted best

production practices that have

decreased water use and promoted

development of disease-resistant

varieties. These and other actions have

helped the co-op reduce its carbon

footprint and preserve local wildlife. 

For example, many co-op growers

flood their rice fields after harvest,

which allows the crop stubble that

remains after harvest to biodegrade

naturally, creating habitat for flocks of

migrating waterfowl. In the past,

growers would burn off the rice stubble,

creating major conflicts with

Sacramento and other towns in the

growing region. 

Increasing numbers of U.S.

consumers say they value

environmentally friendly production

methods, but this is less the case in

developing nations, where food security

is the major issue. 

U.S. agricultural cooperatives face

constraints in conducting business

overseas. These include tariffs, import

quotas and other trade restrictions. 

Despite such obstacles, Farmers’

Rice cooperative has successfully

differentiated its products in the market

and has branded itself in many places

around the world as a top source for

medium-grain rice. It has also helped

U.S. rice producers to gain more

market access, resulting in higher

export sales and shifting global

consumer demand to U.S. products. ■

Farmers’ Rice Cooperative 

continued from page 15

This ad for Farmers’

Rice Cooperative

products ran in a

magazine in Jordan.

Rural Cooperatives / March/April 2013 43
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