USDA / Rural Development September/October 2011

Rural

COOPERATIVES COOPERATIVES

SPECIAL

SECTION:

PAGE 16

All the 

right moves

Page 6 

Features

Rural Cooperatives / September/October 2011 3

Volume 78, Number 5

July/August 2011

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Tom Vilsack, Secretary of Agriculture

Dallas Tonsager, Under Secretary,

USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

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p.6

04 Co-op sales, income second highest ever; 7,000 jobs added 

06 All the right moves 

Supply co-op adjusts and thrives in changing Central Texas market

By Dan Campbell

14 Farm Credit turns 95

Producer-owned lending system celebrates birthday with online salute to its members

16 Co-ops: Sprouting ideas and innovations! 

USDA’s Coopertive Month salute profiles 11 noteworthy co-ops

34 Smith, Jenkins win communications honors

By Greg Brooks and Amber DuMont 

36 New Web tool helps dairy farmers capture energy savings

By Rebecca MacLeod and Robert Madeja

Departments

02 COMMENTARY

33 FOCUS ON

38 NEWSLINE

p. 14 p. 16

ON THE COVER: On a weekday morning, there’s plenty of room in

the aisles at the Producers Cooperative Association supply store in

Bryan, Texas. But on weekends, the store is typically packed with

farmers, ranchers and “lawn and garden” shoppers, the latter a

market segment that the bright, spacious store was designed to

appeal to when it moved to this new location in 2006. Story on page 6.
Editor’s note: Information for this article was compiled by

the Cooperative Programs statistics staff of USDA Rural

Development: Jacqueline E. Penn and E. Eldon Eversull.

armer, rancher and fishery cooperatives

had their second highest sales and

income in 2010, trailing only the record

2008 levels. With four very good years

in a row for many cooperatives, they

were able to increase employment by more than 7,000

from 2009. 

The year saw significantly higher prices for dairy

products, cotton and livestock and falling prices for food

grains and oilseeds. Farm fuel prices were up 25 percent

while the prices of most other farm supplies decreased.

The 2,310 farm cooperatives surveyed had sales of $170

billion, exceeding the prior year’s sales by almost $1

billion (Table 1).

Dairy products led the increase in cooperative

marketing, with sales gains of almost $2 billion (Table

2). Livestock sales increased $500 million while sugar

sales increased $300 million. Grain and oilseed sales

dropped by more than $3 billion. Petroleum products

saw the biggest sales gain among farm supplies, with

sales up $1.2 billion. Crop protectants and seed also saw

sales climb, but fertilizer sales declined by $1.1 billion

and feed sales dropped by almost $200 million. 

Net income before taxes was up almost 4 percent, to

$4.3 billion, the second highest income ever but still

$500 million less than the record $4.8 billion set in

2008. The past four years have all produced record, or

near record, income levels for the nation’s agricultural

cooperatives.

“These sales and income figures for 2010 are near

record levels, with cooperatives showing confidence in

the economy by increasing employee numbers,” says

Dallas Tonsager, under secretary for USDA Rural

Development. “Dairy prices remain strong in 2011, as do

livestock, grain and oilseeds, pointing to another strong year

for the ag economy.” 

Marketing of food, fiber, renewable fuels and farm supplies

by cooperatives experienced slight increases over the previous

year (Table 1), according to the Cooperative Programs office

of USDA Rural Development. Gross business volume of

$170 billion was the second largest ever, as was net income

before taxes (Figure 1).

The value of cooperative assets grew in 2009 by more than

$4 billion; liabilities and owner equity both grew by $2

billion. Equity capital still remains low but is clearly showing

an upward trend, 2 percentage points higher than the

previous year (Figure 2).

Patronage income (refunds from other cooperatives due to

sales between cooperatives) fell by more than 23 percent, to

$692 million, down from $900 million in 2009. 

Farmer, rancher and fishery cooperatives remain one of

the largest employers in many rural communities, with a total

workforce of 184,000. The number of full-time employees

4 September/October 2011 / Rural Cooperatives

F

Figure 1—Cooperatives’ Gross and Net Business Volume, 1979-2010

Figure 2—Cooperatives’ Assets, Liabilities, and Net Worth, 2001-2010

Co-op sales, income second highest ever; 7,000 jobs added
experienced a large increase in 2010, to 129,000 (up 7,000

from 2009), while the use of part-time and seasonal

employees decreased 6 percent, to 54,000.

There was a slight uptick in farm numbers, with USDA

counting 2.2 million in 2010, up 700 from 2009. The number

of farmer cooperatives continues to decline. There are now

2,310 farmer, rancher and fishery cooperatives, down from

2,390 in 2009. Mergers account for most of the drop,

resulting in larger cooperatives. 

Producers held 2.2 million memberships in cooperatives in

2009, up 0.2 percent, or about 4,000 more than in 2009. The

number of U.S. farms and cooperative memberships are now

about equal, but this does not mean that every producer is a

member of an agricultural cooperative. Previous studies have

found that many farmers and ranchers are members of up to

three cooperatives, so farm numbers and cooperative

memberships are not strictly comparable. n

Rural Cooperatives / September/October 2011 5

Item 2010 2009 Change

Billion $ Percent

Products marketed:

Bean and pea (dry edible) 0.163 0.166 -1.81

Cotton 2.387 2.354 1.41

Dairy 32.518 30.543 6.47

Fish 0.225 0.200 12.69

Fruit and vegetable 7.723 7.547 2.32

Grain and oilseed 40.951 44.296 -7.55

Livestock 3.633 3.089 17.60

Nut 0.905 0.814 11.24

Poultry 1.174 1.177 -0.20

Rice 1.531 1.686 -9.20

Sugar 4.890 4.577 6.83

Tobacco 0.243 0.168 44.50

Wool and mohair 0.005 0.005 0.25

Other marketing 4.786 4.769 0.36

Total marketing 101.134 101.391 -0.25

Supplies purchased:

Crop protectants 8.095 7.710 5.00

Feed 10.824 11.050 -2.05

Fertilizer 11.119 12.223 -9.04

Petroleum 24.482 23.264 5.23

Seed 4.256 3.932 8.25

Other supplies 5.144 4.819 6.73

Total supplies 63.920 62.999 1.46

Services and other income 5.013 4.940 1.48

Total business 170.067 169.330 0.44

Item 2010 2009 Change

Number Percent

Sales (Gross, Billion $)

Marketing 101.1 101.4 -0.25

Farm supplies 63.9 63.0 1.46

Service 5.0 4.9 1.48

Total 170.1 169.3 0.44

Balance sheet (Billion $)

Assets 65.0 60.8 6.93

Liabilities 39.2 37.1 5.68

Equity 25.9 23.8 8.88

Liabilities and net worth 65.0 60.8 6.93

Income statement (Billion $)

Sales (Gross) 170.1 169.3 0.44

Patronage income 0.7 0.9 -23.11

Net income before taxes 4.3 4.1 3.71

Employees (Thousand)

Full-time 129.3 122.2 5.81

Part-time, seasonal 54.3 58.0 -6.29

Total 183.6 180.2 1.92

Membership (Million) 2.2 2.2 0.18

Cooperatives (Number) 2,310 2,390 -3.35

Table 1—U.S. cooperatives, comparison of 2010 and 2009 Table 2—U.S. cooperatives gross business volume, 2010 and 2009
6 September/October 2011 / Rural Cooperatives

By Dan Campbell, editor

mid the sounds of

hammers, drills and

idling concrete trucks,

Producers Cooperative

Association’s new $3

million agronomy center is rising along

North Texas Ave. in Bryan, Texas. The

facility, scheduled for completion by

fall, will be another crown jewel for this

thriving farm supply and services co-op,

which owns a complex of facilities on

25 acres along both sides of the road,

just a few miles from Texas A&M

University. 

When completed, rail cars and trucks

will be able to load and unload under

cover inside the 34,000-square-foot

facility, speeding operations while

eliminating exposure to the elements

and reducing the amount of fertilizer

dust that escapes into the air. The

center will also include a new

showroom where the co-op’s wide array

of agronomy products will be displayed. 

The new facility should make

conditions much more comfortable for

employees and customers alike. “It can

get very slick and messy here on hot,

high humidity days. This facility will

represent a big change for the better,”

says Kent Dunlap, communications

manager for the co-op, as he leads a

visitor through the construction zone.

The timing for the new agronomy

center to open, however, could have

been better, says James Deatherage,

president of Producers Cooperative

Association (Producers). Central Texas

has been suffering through a severe

drought (see sidebar, page 8), causing

sales of fertilizer and other agronomy

products to slump as crops withered.

According to some

mid-summer

estimates, about 30

percent of crops

had been

abandoned due to

lack of water. 

“There is no

corn crop this year — it is gone; we lost

it all,” Deatherage says. “Even much of

the irrigated corn is gone because of

heat and constant 30 mph wind that

dried it out. Irrigation pumps could not

keep up with it.” 

When the Producers board

approved the project about three years

ago, there was — of course — no way

of knowing a severe drought was just

around the corner. Regardless,

cooperative directors and management

say they have no doubts that the

investment will prove to be another

A

All the right moves

Supply co-op adjusts and thrives 

in changing Central Texas market
From top: More than 60

different feeds are available at any one time at

Producers’ feed mill, 

which can make hundreds 

of custom mixes on order.

Inside the supply store, staff

have the expertise to help both farmers and

homeowners. A robotic loader does some of

the heavy lifting in the feed mill. The exterior

of the supply store, with the feed mill in the

background. USDA photos by Dan Campbell

Rural Cooperatives / September/October 2011 7

valuable expansion of a co-op with a

track record of making all the right

moves. 

Cattle selloff 

effects could linger 

Lack of water and pasture has also

caused a big cattle selloff, the impact of

which could impact the co-op’s feed and

veterinary supply sales for several years

to come. 

“The drought has forced me to cull a

lot harder than I normally would have,”

says John Malazzo, who raises

champion Braford cattle (a cross of

Hereford and Brahma cattle that thrive

in the climate here). He also farms

2,400 acres of cotton and other crops.

“We still have a little hay to feed our

cattle, but when you run out of water,

that’s a different story,” continues

Malazzo, who has been a Producers

board member for 16 years. “We don’t

have the ability to haul water to all of

our cattle every day.”

Beef prices are already high, and

with smaller herds next year “we may

be seeing some historically high beef

prices,” Deatherage says. “Folks who

sold out may find that when they go to

buy back in, the price of replacement

cattle is unaffordable.” 

Deatherage says that he is concerned

that beef prices could climb so high that

“you can lose your consumer base —

there could be a shift to an alternate

protein as prices go higher.”

A co-op has to be very careful about

how it reacts to such changes. “When

your piece of the pie shrinks, the

immediate reaction is usually to cut

margins. So margins get cut in a

defensive posture; business is going

down and margins are shrinking as you

try to hold on to a smaller piece of the

pie.” 

The co-op, which was formed in

1943 and moved to its present location

in 1960, has been seeing its piece of the

pie grow steadily. Its main trade area is

an 11-county area roughly within a 70-

mile radius of Bryan and neighboring

College Station. 

Producers has four operating

divisions: Feed and Nutrition;

Agronomy Services; Fuels and

Lubricants; and Agricultural Supply

(which now includes lawn and gardentype supplies). Even with the drought,

Deatherage says he expects all divisions

to be profitable in 2011. 

He went to work for the co-op in

1980, having previously operated his

own farm supply business. That

business eventually failed, but the

lessons he learned from the experience

— and plenty more along the road —

have helped him become one of the

most widely respected farm leaders in

Texas. Indeed, Deatherage was recently

elected to represent this region on the

board of directors of Land O’ Lakes, a

federated farm supply and dairy foods

co-op to which Producers belongs. 

Changing market

Producers’ market has been

undergoing huge changes as formerly

rural areas have become suburbanized.

Where large ranches and farms once

dominated the landscape, hobby farms

and ranchettes with a few acres of land

and some horses, poultry or “exotic”

livestock (everything from goats to

Alpacas) are now commonplace. 

Rather than downsize and grumble

about the changes, Producers has

instead adapted by offering more goods

and services aimed at attracting the

hobby ranchers and the “lawn and

garden” trade while still focusing on its

core producer-members. “We tell our

staff all the time that we do not have
8 September/October 2011 / Rural Cooperatives

A good farm supply and service co-op can do so much to

help its members prosper. In good times and bad, a supply

co-op is like a producer’s business partner. 

But one thing even the best co-op cannot do is to make it

rain. 

In the cattle and cotton country of Central Texas, lack of

rain this past year caused one of the worst droughts in a

generation. The night before Rural Cooperatives visited with

members of Producers Cooperative Association (Producers)

in late June, the area received 2-3 inches of desperately

needed, desperately welcomed rain. 

But that was the first measurable perception in nearly a

full month. And while the rain did a lot of good, it was too late

to help much of the crops, already parched, withered or

stunted. Cattle herds had already been sharply reduced, in

direct response to the lack of water and forage. 

“Out of the 48 years I’ve been farming, I’ve never seen a

year like this, and I hope we never see another like it,” says

Joe Wilder, after sitting down in his farm office on a sizzlinghot June morning. “Things are dry now that I’ve never seen

dry before. I have pastures that look like this counter top

[brown and bare].” 

Yield was down 60 percent from average for the winter

wheat he had recently finished harvesting — which was very

late. Wilder says that’s because wheat that normally spouts

in November didn’t come up until January. 

“The cotton doesn’t look much better. It’s very sporadic —

I have some cotton that is two feet high, and right next to it

will be some that is only two inches high,” says Wilder, a

long-time Producers board member. “The milo is the same.

With soybeans, one row is up, one row is not.” 

Irrigation is traditionally considered “supplemental” in this

region, and not all land has access to irrigation.

Cattle herds reduced

“The drought has caused an unprecedented sell off in

cattle numbers — we’re at a nearly 80-year low,” says

Producers President James Deatherage. “There is no

Drought takes heavy toll on Texas ranches, farms 

“Out of the 48 years I’ve been farming, I’ve never

seen a year like this, and I hope we never see

another,” says cotton and cattle producer Joe

Wilder, with grandson Jayce Wilder. The drought

also set the stage for devastating forest and range

fires in Central Texas later in the summer. USDA

photo by Dan Campbell
Rural Cooperatives / September/October 2011 9

the luxury of picking who our customer

is, so we have to move in the direction

the market is taking us,” Deatherage

says. 

Traditionally, Producers’ trade area

has been dominated by the “three Cs”

of Central Texas agriculture: cattle,

cotton and corn. But the cattle business

has been coming on strongest for the

past 15 years or more. Today, about 80

percent of its trade is with cow-calf

operations. The overall trend is toward

more small ranches, although the

drought could cause a temporary

reversal of that trend. The average herd

of co-op members is less than 50 cows. 

Most of the small ranch owners have

off-farm jobs; their cow-calf operation

is typically a side business, although an

important one. 

The co-op welcomes and cultivates

non-member business to help subsidize

its producer-member business. Nonmembers do not receive patronage. The

co-op formerly issued class-B, nonvoting stock to non-producers. But as

the pace of suburbanization increased,

the proportion of class-B to class-A

stock was getting out of balance, so the

class-B stock plan was halted. 

Today, only producers can be

members, although the definition of

“producer” is broad. The co-op bylaws

specify that a member must produce an

agricultural product with the intent to

sell it. Thus, for example, a beekeeper

qualifies as a producer if he or she sells

honey. 

Producers averages 30 new members

a month, and today has nearly 10,000

members. Only active members are

counted, as the cooperative purges from

its membership roles anyone who has

not done business with the co-op for

two years.

Debt-free co-op

The co-op relies 100 percent on

member equity for capital projects such

as the new agronomy center. “We don’t

borrow money, which adds to our

strength,” Deatherage says. “A $3

million project for a relatively small coop to pay for out of its hip pocket is a

pasture, which is causing the selloff. Cattle prices are actually good, but if you

have no forage or no water, you have to sell.” 

Crops, of course, can bounce back the next year after a drought. But it is not

as easy for the cattle industry to launch a comeback. 

“That’s what really worries us — that our producers are selling off assets

that will take several years to rebuild,” says Deatherage. 

The co-op’s numbers this year will reflect the drought. “2011 will not be one

of our best years, which is strictly weather related,” say Deatherage. “We try

not to use the drought as an excuse, but for agriculture here, weather is

everything.”

When interviewed in late June, Deatherage said there was “still the

opportunity to make a cotton crop, but we are close to losing it on non-irrigated

land. With some timely rains, we could still pull out a cotton crop.”

With cotton prices the highest he has seen in his life — $1.25 a pound in

June — cotton farmer and cattle rancher John Malazzo had “hopes and

dreams” of a really big payday — one that would enable him to make some big

land payments this year. If only he could get near his average of three bales of

cotton per acre. 

“But Mother Nature put her knife right between our ribs in that regard,”

Malazzo says. 

“Most of central Texas crops have been devastated,” says Malazzo, a board

member of Producers and two other co-ops. Fortunately, out of the 2,400 acres

he farms, about 80 percent is irrigated. Four years ago, his farm was

flood/furrow irrigated, but much of the irrigated portion of the farm now has

transitioned to a center-pivot system. 

The irrigation system not only saves a great deal of labor needed for hauling

and assembling pipelines and digging out furrows, but it is also much more

water-efficient. “That’s really the most important thing — the environmental

benefits. The center-pivot saves water, and we are already having to pump from

about 400 feet deep.” 

“Here in the Brazos Valley,” he continues, “we are considered to be

supplemental irrigators. We don’t have the volume of irrigation that they do in

places like Arizona and New Mexico, where they know they must irrigate for

every drop of water needed. Here, if we can get enough moisture from Mother

Nature to make it until June, then we can take it from there with our irrigation.

But this year we had to pre-water, which we hardly ever do; then, by the time

we planted, there was so much wind and sun and heat that the moisture was

gone, so we had to water again.” 

The day after the farm got 2-3 inches of rain in June, Malazzo was still

optimistic that he might get 50 percent of a normal crop on his dryland acreage.

“It’s a shame, really, when you have a price that is a chance of a lifetime.”

But even on his irrigated land, the weather-related worries won’t be over until

the crop is harvested in October. The area is close enough to the Gulf Coast

that it can be seriously impacted by hurricanes — and cotton harvest coincides

with peak hurricane season. 

Still, Wilder says he feels fortunate to be a Texas farmer and rancher, even

in the grip of a drought. “We may be dry, but you see places like Joplin, Mo.,

and areas around Alabama that got literally leveled by tornadoes, so maybe we

don’t have it that bad. At least we still have a roof over our heads and a bed to

lie in.” n

— By Dan Campbell
10 September/October 2011 / Rural Cooperatives

big deal here, but we are fortunate to be

debt-free.” 

“Our board’s top priority is to find

and keep good management,” Malazzo

says. “James is a good manager because

he is 100 percent co-op — he lives and

breathes it; he has a real passion for it.

On top of that, he has good business

sense and stays on top of everything.

But he knows when to delegate, then

holds his team accountable for their

areas.” 

Malazzo is committed to the co-op

business philosophy, which he says has

been good to his family. “I’m definitely

a co-op guy — and I don’t mean just

with Producers Cooperative

Association,” says Malazzo. He gets his

farm operating loans from Capital Farm

Credit, a co-op, and uses the services of

the Taylor Co-op Cotton Compress

warehouse. 

“In all these businesses, as co-op

members we help guide the business

and participate in the profits. All are

well managed, so there is usually a good

chance of getting patronage every year.

We spend a lot of money on our crops

and cattle, so patronage can be a big

factor for us.”

That said, Malazzo notes that

Producers’ philosophy is “not to sell the

dividend. We sell the co-op based on

expertise and service.” Patronage is just

the icing on the cake, he says. 

Malazzo’s son, Jason, who recently

graduated from Texas A&M and is now

farming his own land, has inherited his

dad’s co-op philosophy. “I just wish we

had more co-ops around here, like a coop cotton gin; that would help us so

much.” 

But these days, that type of co-op

commitment is more the exception than

the rule, Deatherage notes. For

Producers to keep its competitive edge,

it can no longer rely on co-op loyalty.

“There was much more loyalty to the

co-op system years ago, but that

generation is fading away now — the

generation that put their blood and

sweat into building the co-ops. Member

loyalty today is always earned, never

expected.”

Stiff competition

The area’s growing population has

also attracted plenty of new competitors. “We’ve got big box stores all

around us. I can’t win a price war,” says

Deatherage. “If you sell on low price,

once you no longer have the low price,

you have nothing left to sell. Great

products, programs and services are

what keep us afloat. 

“We need to be competitive [on

price], but what we really sell is our

expertise,” he continues. “Unlike the

big box stores, our staff has to be able

to do more than to direct you to aisle

four.” The co-op thus has certified

agronomists and master gardeners on

staff who work with customers and help

to train sales clerks, many of whom are

Texas A&M students. 

“Do we have people who come in

and ask for our advice, then go

somewhere else to buy? Sure we do,”

says Deatherage. “But information is

king for us, and we truly have a staff

that is very knowledgeable about what

we sell.”

Producers will end the year with

about $65 million in sales and a staff of

140 employees, Deatherage notes.

“There are many grain co-ops that will

do far more business than us with only

10 employees. That’s because our focus

is on service and the retail customer.”

Most producer-members understand

the importance of the non-member

trade, although occasional frustrations

may be expressed. Deatherage recalls an

incident that underscores how

important both types of business are to

the co-op. 

“It was a typical Saturday — the

store was packed. An older rancher

grabbed me as I walked by and he said:

‘I’m trying to buy two tons of feed —

why do I have to wait in line behind a

lady who is buying two 12-packs of

vegetable plants?’ I said: ‘Your co-op is

probably making more money off those

two 12-packs of plants than on your

two tons of feed.’ The rancher smiled

and said he would be happy to wait

behind her!” 

The co-op supply store has about

13,000 products for sale, arranged in

seven “product zones,” each of which

appeal to different types of shoppers

and reflect the changing demographics

of the area, says Bill Lazenby, Ag

Supply Division manager. 

With the percentage of women

shoppers having soared, when the new,

24,000-square-foot retail center was

built in 2006, a big emphasis was placed

on creating a very bright, spacious

environment with more gift items on

the aisle end-caps. 

The two customers Lazenby helped

just before being interviewed symbolize

the diverse clientele of the co-op. One

was a woman who had just suffered a

house fire and needed a product for

removing smoke stains from her good

ceramic dishes, along with some advice

about how to use it. His previous

customer wanted to buy 15 miles of

fencing. “I was glad for the opportunity

to help them both,” he says. 

Overcoming doubts

Co-op board member Joe Wilder

says he was initially skeptical about the

move to expand into lawn and garden

supplies. “I thought we were wasting

our money,” says Wilder, who raises

cattle and runs a cotton farm that has

been in his wife’s family for more than a

century. “But it turned out to be the

best thing we ever did. On Saturdays

now it is hard to even get in the door

— mostly packed with weekend farmers

and homeowners. They like the co-op

because we don’t just sell them a

product; we also tell them how to use

it.”

Wilder says he had the same kind of

doubts when the co-op wanted to

expand the fueling station (built in

1998). “My dad was in the service

station business, and I thought there

was no way it would pay for itself.” But

he said the expansion has also proven to

be a winner for the co-op. 

“Sometimes it is good to be wrong!”

says Wilder, who started working the

farm 48 years ago with his father-in-law,

who retired in 1998. Now, Wilder

farms with his son. His twin grandsons,

although only in high school, also seem

intent to keep the family tradition going.
Rural Cooperatives / September/October 2011 11

Wilder says that “99 percent of

farmers will not misuse an ag chemical

— they cost too much and you can get

in all kinds of trouble if you do.” He

notes that some studies have shown

many problems with chemicals in the

water supplies are actually being caused

by urban residents who sometimes

over-treat their lawns.

So, to the extent that the co-op can

help prevent that type of urban runoff

by advising homeowners about the

proper use of fertilizers and herbicides,

it is doing a good turn for agriculture

and the environment, Wilder says. 

“Here’s a true story: I had a neighbor

ask me about my usage rates of

Roundup on the farm. I told him I

apply about 23 ounces per acre. He was

shocked, and said he applies about a

gallon and a half just on his one-acre

lot. I said: ‘I’m surprised you haven’t

killed everything on it!’ That’s a real

problem, and too often the farmer is

taking the blame.” 

Like the Malazzos, the Wilders are

co-op to the core. “Yes, we are a co-op

family. We do all of our agriculture

shopping at Producers. It has been very

good to us, and we are proud of it.” 

State-of-the-art feed mill 

Back at the co-op, Kent Dunlap is

standing in front of a panel board with

dozens of blinking lights and switches.

This control room, he explains, is “the

brain” of the co-op’s sophisticated feed

mill, which formulates hundreds of

custom feed mixes. 

“Everything is controlled from here,

and the computer logs every function,”

Dunlap says. “If there is ever any

question about something that occurs in

the process, we can go back to this log

and identify where it happened. It sure

wasn’t like this when I came here in ’85;

it is amazing what we can do now for

precision mixing and quality control.”

The co-op’s feed lab samples every

batch of grain or other feed ingredients

purchased and also tests all out-going

“The drought has forced me to cull a lot harder than I normally would have,” says cattle rancher John Malazzo (right), seen here with his son,

Jason, and Producers’ Kent Dunlap (far left). The drought has also reduced the size of his cotton crop. USDA photo by Dan Campbell
12 September/October 2011 / Rural Cooperatives

Lights, camera, co-op! 

A TV cameraman focuses his lens on Texas A&M ag

economist Joe Outlaw, who is being interviewed in a

meeting room at the Producers Cooperative Association

(Producers) farm supply store in Bryan, Texas, which is

doing double duty today as a makeshift film studio. 

Outlaw, a national expert on farm policy and co-director

of the university’s Ag and Food Policy Center, is answering

questions about the process that will result in the next farm

bill, as well as the types of issues Congress and farm

industry leaders are wrestling with that will impact it. 

Outlaw explains that the farm bill, which will likely entail

about $30 billion in spending, is really not so much a true

farm bill anymore as it is a “food and feeding program bill.”

That’s because food programs for low-income people are

now by far the biggest expenditure contained in the bill.

Actual farm programs account for a very small slice of

the nation’s total budget, he says, and while farm programs

will likely have to absorb their share of budget hits, these

cuts will have a very minimal role in reducing the national

debt simply because they represent such a tiny slice of the

overall federal budget. 

The TV interviewer asks Outlaw whether agriculture

would get more attention if the farm and feeding programs

were separated, each with its own enabling legislation.

“Farmers have been asking that for years — and they

don’t usually like the answer,” Outlaw responds. “But

without combining these programs into one bill, we likely

couldn’t get enough votes for the farm programs.” A big

part of the challenge for agriculture is that there are so few

in Congress now with a farm background, Outlaw says.

Educating the public

The interview is being filmed for a weekly TV program

called “From the Ground Up,” an ambitious education

project of Producers. The co-op picks the topics and sets

up the interviews each week, and then local CBS affiliate

KBTX produces a 2.5-minute episode that is aired every

Thursday morning and is re-broadcast Saturday evenings.

The program has the potential to touch about 225,000

people every week. The program is “non-commercialized,”

which enables the local station to market it as a news

segment.

Although the primary target audience is the general

public, the program also helps to strengthen bonds

between members and their co-op, says Producers

President James Deatherage.

Now in its 12th season, the show has never aired a

repeat — “although I’ve been tempted to do so on a few

occasions; those weekly deadlines roll around awfully

fast,” says Kent Dunlap, the co-op’s communications

manager, who spearheads the program. 

Visiting state and national leaders and ag experts of all

kinds are often asked to do interviews on timely ag topics,

while other shows are filmed on member farms and

ranches or even at locations such as the state capitol in

Austin. Recent topics have included global warming,

international trade, beef quality issues, the impact of

drought and soaring farm production costs. 

“Anybody in town or passing through could wind up on

the show,” Deatherage says. “We got started with it

because we wanted find a way to tell the story of

agriculture to the public. So we went to a local TV station

and created a show that would make our members look a

bit like heroes because of what they do. Too often in

agriculture we let others define who we are. We can’t

afford to let that happen, we must tell our own story.” 

The co-op also compiles a highlights video from the

year’s programs to show at its annual meeting each year.

One of the co-op’s board members does the narration.

“The show is so popular that we couldn’t stop it now if I

wanted to; but it is a big undertaking,” says Deatherage.

“We do this because we feel we must reach out beyond

agriculture and let the public and our government leaders

know more about the issues facing agriculture.” n

— By Dan Campbell

From the Ground Up Joe Outlaw of Texas A&M University faces the camera

for taping of a segment of From the Ground Up.
Rural Cooperatives / September/October 2011 13

shipments of finished feeds. This is a

U.S. Food and Drug Administration

(FDA)-licensed feed mill, which allows

the co-op to handle a range of additives,

under strict FDA guidelines. 

While the co-op develops feed for all

types of traditional and exotic livestock,

“beef is still king,” says Everett Lowe,

now in his sixth year as manager of the

feed division, the co-op’s largest unit.

Horse feed ranks second for sales, and

is a rapidly growing market segment.

“We still have a few dairies left, but that

segment is diminishing,” Lowe says. 

Over on the loading docks, a dozen

or so young men — many of them

Texas A&M students, including some

football players — are loading bags of

feed into a steady stream of pickup

trucks and trailers that are backed up to

the docks. It’s hard, sweaty work, but a

good way to stay in shape, they say. 

“I’ve had football players tell me that

working on the loading docks on a hot,

humid day is a better work out than

two-a-day football drills,” says Lowe.

Although the loading docks are

buzzing with activity on this June day,

Dunlap says it’s actually slower than

normal, due to the drought. Winter is

the busiest time for feed sales, because

beef producers are then supplementing

with more feed. “It can get pretty hectic

back here,” Dunlap says. 

Not far away, a robotic loading arm

swings back and forth like a

metronome, never missing a beat as is

stacks pallets high with feed bags. The

pallets are then moved to the loading

docks, where “people power” takes

over. 

“The robotic loader has been a

wonderful addition — and it very

seldom calls in sick,” Lowe jokes. 

Public Enemy No. 1 for a feed mill

is corn toxins, especially in this climate.

So the co-op lab screens every load of

corn, cotton seed, soy oil or any other

feed ingredients, resulting in some loads

being rejected. Ingredients are also

tested for nutritional profile — protein,

fat, fiber. If a load doesn’t meet the coops specs, it’s “no sale.” 

On the finished feed side of the

operation, Producers also tests to make

sure its feeds contain the nutritional

profile promised on the label. It also

tests to ensure the structural integrity of

feed cubes. “Our members are not

going to be real happy if they wind up

with a bunch of feed dust in the bottom

of the bag,” Lowe says. 

The majority of feed is picked up at

the co-op, mostly in 50-pound bags.

But about 25 percent of the feed is now

delivered to customers, with growing

demand for 3,000-4,000 pounds of

loose cubes that are loaded into feed

hoppers. 

At any one time, the co-op will have

50 to 60 different feeds for sale “on the

floor,” and it produces hundreds of

different custom feeds, on order. 

To take advantage of the volume

discounts the co-op offers and to keep

down their fuel costs when making a

pick up, Dunlap says some customers

have formed mini consumer co-ops.

“One person will pick up for five or six

neighbors.”

Committed to member

education 

Producers’ has a strong commitment

to member education. There is an open

classroom by a large stone fireplace in

the back of the store where free

workshops are held on Saturdays during

the fall and spring. 

“The classes can cover anything

from growing vegetables, to lawn care,

to pasture spraying and fertility, fruit

tree care — you name it,” says Wilder.

“We tap Extension and industry experts

as speakers. The classes have created a

lot of goodwill in the community

toward the co-op,” Wilder says. “They

are another way we use expertise as our

advantage over big box stores.” 

Another big undertaking that the coop stages each December is the

Producers Expo, which is like a trade

show that features about 60 vendor

booths, including some staffed by top

industry experts. “These experts can

answer just about any question a

producer has. They can normally be

very difficult to get a chance to talk to

one-on-one. But our customers can talk

to them at the Expo,” Dunlap says. 

The expo started in 1999 and is held

the first Saturday in December. In

conjunction with the Expo, Producers

also holds classes for the continuing

education credits that holders of

private-applicators licenses are required

to earn in order to apply restricted-use

chemicals. 

The co-op’s close proximity to Texas

A&M University, home of the

Southwest’s top agricultural school, has

been a big ace-in-the-hole for

Producers. The university is the source

of a ready supply of hardworking,

eager-to-please students seeking parttime work. 

The co-op also benefits in many

ways from the university’s expertise.

The co-op, in turn, is happy to help

host and provide tours for visiting

government officials, farm leaders and

scientists from around the world who

make stops at Texas A&M. These

visitors often want to also see how an

American farm co-op works and to visit

a Texas ranch or farm. Producers is

happy to oblige them. It does the same

for 4-H and FFA exchange groups. 

“From agriculture and trade

ministers from Europe and Asia to

kindergarten students, we play a role in

educating others about what we do,”

Dunlap says. Such efforts don’t just

benefit the co-op, he notes, but all of

Texas agriculture. n

Co-op President James Deatherage, right,

checks out the progress on the co-op’s new

agronomy center, slated to open by fall. 
Editor’s note: Information for this article was provided by the

Farm Credit System.

oe Freeman grew up on a farm, the son of

Mississippi sharecroppers. He spent his early

years on the farm earning his first nickels by

running errands for the farmer who owned it. 

Freeman moved to Chicago as a teenager,

and spent most of his life there, including 40 years working

for the White Castle food chain. Despite decades living in

urban America, Joe always planned to move back home. So,

when he retired from White Castle as a regional director in

2006, that’s just what he did. 

Today, Freeman and his wife, Rosemary, operate their own

cattle ranch in Mississippi. The Freemans are among the

farmers and ranchers being recognized for excellence by the

nation’s producer-owned Farm Credit System, which is

celebrating its 95th anniversary this year. 

Farm Credit is a national network of cooperatively owned

lenders offering financing and related services to agricultural

producers and agribusinesses. The Farm Credit System was

established by President Woodrow Wilson in 1916 to fill the

need for long-term agricultural credit. Today, it serves nearly

500,000 borrower-owners with more than $175 billion in

14 September/October 2011 / Rural Cooperatives

Farm Credit 

turns 95 

Producer-owned lending system

celebrates birthday with online

salute to its members

J

Joe Freeman, with his wife, Rosemary, retired from a successful corporate career to start a cattle farm in Mississippi.
loans and financial services in all 50 states and Puerto Rico. 

Focus on members

What better way to mark this milestone anniversary, its

leaders thought, than to “turn the camera” on its members:

the men and women who provide the food, fabric and fuel

that sustains our nation, as well as so many others around the

world. 

In July, Farm Credit launched the Producing Excellence

program, which uses a website — at:

www.FarmCredit.com/ProducingExcellence — to highlight

the strength, ingenuity and integrity of our nation’s farmers

and ranchers. The website includes a series of member

profiles that celebrate agribusiness leaders and entrepreneurs

in American agriculture. Visitors to the website can also learn

more about Farm Credit’s 95-year legacy through an

interactive historic timeline.

Joe Freeman began laying the groundwork for his return

to the farm by first buying a 20-acre farm in 2003, near

where he was born and where he built a home. The

Mississippi Land Bank, a Farm Credit System memberowned lender, provided financing for that purchase and for

the 61-acre ranch he bought three years later. 

“Branch Manager Joe Hill has a real love of the land, just

like I do,” Freeman says. “We’re on the same page, so it was

a good fit working with him and the Land Bank.” 

Freeman always intended to raise cattle, but first the new

ranch needed a lot of work to get ready to support a herd. He

spent every day clearing bramble thickets, building fences

and putting in ponds that would provide drinking water for

the herd.

Freeman has since built a 30-head herd of cattle, but he

isn’t satisfied yet with his second career. He plans to

eventually sell his current herd, a “scrap” herd built with an

Angus bull, and buy and raise registered Angus cattle.

Turning cotton ‘trash’ into cash 

Not many people are able to literally turn trash into cash,

but cotton-gin operators Lisa and Gerry Kasberg, who own

and operate Birome Gin Co. in Birome, Texas, figured out

how to do just that. The Kasbergs are also profiled on the

Producing Excellence website. 

Disposing of gin trash — the cotton burrs, stems and

broken seeds that are left over after the seed and lint are

separated from the plant — is a problem for many ginners.

After previously spreading their gin trash on local farmers’

fields or selling cotton burrs as cattle feed, the Kasbergs

Rural Cooperatives / September/October 2011 15

Lisa and Gerry Kasberg’s cotton gin is producing cotton compost made from cotton “trash” (the stems, seeds and husks left after ginning), which is

sold through local retail stores. Photos courtesy Farm Credit 

continued on page 43
16 September/October 2011 / Rural Cooperatives

The reason so many people are using cooperatives in so many ways is

really quite simple: because they work. Whether it’s ranchers and farmers

banding together in a co-op to purchase their production supplies or to

market their crops, fishermen processing and marketing their catch as a

group, or consumers who buy their food through a food co-op, the co-op

business model can fill the bill. In addition to the more traditional uses for

co-ops, rural doctors and home care workers are examples of new areas of

co-op formation where members seek to gain the benefits derived from

group action. For USDA’s Co-op Month salute, 11 cooperative

development centers and nonprofits that help to nurture co-op

development have provided the following articles to show some of the

ways co-ops are meeting diverse needs in their states or regions.

Co-ops: ideas and innovations! 
By Andrew Crow,

Alaska Cooperative Development Program

laska is the country’s

largest producer of

wild-caught seafood, so

it’s not surprising that

Alaska is also home to

the country’s largest

fishermen’s

cooperative. The

Seafood Producer’s

Cooperative (SPC) is

made up of 525 fishermen members

who primarily harvest hook- and linecaught albacore tuna, halibut, sablefish,

salmon and rockfish. 

The cooperative is modeled after

agricultural cooperatives, where each

member-owner has a capital investment

in the enterprise. The seafood industry

is highly competitive and there are few

companies that have survived in it as

long as SPC. 

The key to its success has been its

ability to adapt and change. SPC was

originally called the Halibut Producers

Cooperative when established in 1944.

It started out supplying the U.S.

military with vitamin A made from

halibut liver.

Co-op survives 

changing market

Shortly after World War II, scientists

discovered how to synthesize vitamin A,

and the cooperative found that halibut

liver no longer had much value. To

survive, the co-op had to adapt to the

changing market, which it did. 

The co-op changed its name and

transformed itself into a broader,

seafood-producing enterprise. Over

time, it began to focus on high-value,

branded, fresh and frozen products.

Today, it markets a significant share of

Alaska’s troll-caught salmon and

markets under its own Alaska Gold

brand. Each fish is caught and handled

individually, never allowed to “pile up

on the deck.” In the co-op’s processing

plant, from filet to freezer takes less

than one hour. 

So, while it has a long history, SPC

scarcely resembles the institution that it

once was. The co-op’s ability to adapt

to changing markets continues to be the

key to its success. 

Consumers today expect a lot from

their food. Not only do they care about

its taste and nutritional content, they

also care about its environmental, social

and economic implications. SPC has

Rural Cooperatives / September/October 2011 17

A

From fillet to freezer takes less than an hour at the Seafood Producers Cooperative (SPC) processing plant in Sitka, Alaska.

Photos by Dan Lamont, courtesy SPC

Alaska fishing co-op’s longevity tied to ability to adapt 
By Debbie Trocha, Executive Director

Indiana Co-op Development Center

e-mail: dtrocha@icdi.coop

he local foods

movement is sweeping

the country while

interest in farmers

markets is also soaring.

According to USDA,

the number of farmers

markets has increased

by more than 13

percent since 2009. In

Indiana, the number of markets grew to

more than 150 in 2008, a 257-percent

increase during a 15-year period. 

Consumers are looking for

relationships with local food providers

as food safety concerns have increased.

Many consumers want to know who

grows, processes and retails their food,

and they want to help sustain local food

systems and farms in their area.

Boot camps enhance

collaboration, profits 

In response to this growing interest,

a series of farmers market “boot camps”

was held to increase the viability and

profitability of Indiana direct-toconsumer marketing systems and to

enhance the collaboration of those

involved in these forms of marketing in

Indiana. The boot camps have been

sponsored by the Indiana Cooperative

Development Center (ICDC), a

nonprofit organization founded in 2003

to fill a void in services for cooperatives

in Indiana. The Center provides

technical assistance and education to

help startup and emerging cooperatives

across a wide variety of industries.

The boot camps have provided

opportunities for training and

been able to address these expectations

by marketing itself, its members and

their products as “the complete

package.”

When consumers buy salmon or

halibut from SPC, they are buying from

a fishery that has been “certified

sustainable” by the Marine Stewardship

Council and caught by a fisherman who

is being paid a fair price. 

Story beyond the plate

SPC tries to give its customers the

story behind what’s on their plate. The

cooperative is able to “connect the

dots” from the fisherman on a boat, to

the restaurant or grocery store, and

finally to customers, sitting down to

their meals.

To help fishermen tell their story,

SPC added a “featured fisherman” page

to its website (http://www.spcsales.

com/), with vignettes describing

individual SPC members, who they are,

how they started off in the industry, and

the pride they have for their work. 

It’s easier for a cooperative to do this

kind of marketing. As owners, SPC

members benefit directly when they

share their story with their customers. 

Craig Shoemaker, the SPC plant

manager, explains: “The fishermen who

produce the product own the

cooperative, and I don’t think that

private companies can market themselves to that degree.” 

In keeping with its successful

tradition, SPC continues to change

while remaining focused on providing

the best service to its members. n

18 September/October 2011 / Rural Cooperatives

Co-op marketing efforts strive to reduce the distance between Alaskan fishermen and consumers. 

Boot camp for co-ops

Workshops for Indiana farmers markets

provide strategies for managers, vendors

T
Rural Cooperatives / September/October 2011 19

collaboration to about 1,000 market

managers and vendors. Topics have

ranged from how to successfully

manage a farmers market to how to

merchandise products to maximize sales

potential.

Responding to requests from boot

camp attendees, the ICDC has helped

coordinate the development of an

Indiana Direct to Consumer Market

Association. The association will help

promote local food consumption in

Indiana by connecting more farmers to

consumers through direct-to-consumer

markets, such as farmers markets, farm

stands, community-supported

agriculture associations (CSAs) and

agri-tourism. 

The association will promote directto-consumer markets across the state

and help increase their visibility among

producers and consumers while also

aiding in direct-to-consumer market

management and education. It will also

develop long-term, sustainable funding

strategies. 

Another potential role will be to

collaborate with governmental agencies

on policy to make regulations friendlier

and more supportive of direct-toconsumer markets, such as farmers

markets and agri-tourism. The

association would serve as a repository

of information and resources. 

After months of work, the

association — called “My Local

Indiana” — is now a reality. The

organization is incorporated and is in

process of developing its marketing

materials and a website that will serve as

a hub for “all things local.”

Lost River Market a 

catalyst for renewal 

Another “front” in the local foods

movement is an increased interest in

food cooperatives. The Lost River

Market and Deli in Paoli, Ind., is the

first food co-op assisted by the ICDC.

Lost River is in its fourth year of

operation in rural southern Indiana.

According to co-op board member

Debbie Turner, “Our food co-op would

not have opened without the support of

the ICDC staff. Your support and

expertise came early and often during

our planning process which began in

September, 2006.” 

Paoli did not represent the typical

demographics associated with food coops. But supporters felt strongly that a

locally owned food cooperative was

exactly what the community needed. A

new market for local vendors was

created by the store, and the local

community had access to fresh, healthy

food without traveling an hour away. 

As a result, eight new jobs were

created, and the food market is acting as

a catalyst to help revitalize downtown

Paoli. It is also a vibrant community

gathering place. Two new downtown

housing projects in historic buildings

are in the works, further increasing the

importance of Lost River’s role in the

area.

With 810 current members, eight

employees and hundreds, if not

thousands, of additional shoppers, Lost

River Market and Deli has certainly

made an impact by delivering healthy

local food to southern Indiana. The

return on investment to the local

community is phenomenal. 

About 68 cents of every dollar spent

at Lost River Market and Deli stays

within a 100-mile radius, going towards

wages, local financial partners, vendors,

farmers and other local businesses. 

Despite the odds, Lost River Market

and Deli is a success and provides much

needed access to fresh, healthy, local

foods. n

The Lost River Market and Deli has proven to be a catalyst for revival of the downtown area in Paoli, Ind. Photo courtesy Lost River Market
20 September/October 2011 / Rural Cooperatives

Trail-blazing co-op helps Colorado ranchers

By Zach Devoy, President 

Colorado State University Farmers Union

Editor’s note: The Colorado State

University Chapter of Rocky Mountain

Farmers Union was founded in 2002 and

brings together students from various

backgrounds who share an interest in

agriculture, cooperative development and

sustainable living. A common thread among

members is making connections with their

rural roots. Over the chapter’s short

lifetime, its members have sponsored public

forums on issues that impact students, have

partnered with other ag-related

organizations to host public officials —

including U.S. Congressional

representatives and state legislators—and

have developed policy for Farmers Union

organizations on the state and national

levels. 

hen I think of the

American spirit, three

words come to mind:

innovation, dedication

and perseverance. 

Denise King-Stovall

and other producers

brought all three to

bear on the creation of

the Local Brands Farm

and Ranch Markets Co-op. The

formation of the co-op was not driven

by desire for profits, but rather by

neighborly instinct and a desire to offer

more healthy food options in their

communities. Pursuing a new idea with

dedication and a willingness to

overcome obstacles has led to a new

market for local producers in southwest

Colorado.

The roots of Local Brands can be

traced back to simple transactions

among neighbors. King-Stovall (Rolling

T Ranch Lamb) and two other

founding ranch members of the

cooperative — Last Ranch Beef and

Bonds Ranch Beef — began bartering

with each other because they all

enjoyed one another’s fresh-off-theranch quality food products. 

As time passed, their extended

families, friends and co-workers became

aware of the amazing products that

these ranchers were sharing with one

another. And so it went; like water

spreading over a planted field, business

rapidly expanded. 

Suddenly there was a need to

organize the transactions into a formal

business model. After an unsatisfactory

attempt at becoming a limited liability

company (LLC), the Local Brands

Farm and Ranch Markets Co-op was

launched in December 2010, with

assistance from the Rocky Mountain

Farmers Union Cooperative

Development Center (CDC). The

organization and its leaders also

partnered with some excellent social

organizations. 

The cooperative provides products

to the Farm-to-School Program,

Growing Partners, Healthy Community

Lifestyles and Community Food

W

Lamb producer Denise King-Stovall is a founding member of the Local Brands Farm and Ranch

Markets Co-op in southwest Colorado. Photo by Jen Burby
Rural Cooperatives / September/October 2011 21

Systems. These programs promote

healthy eating for all ages and

communities.

With the diligent work of KingStovall and the other Local Brands

board members — assisted by CDC

advisors — an application for a Rural

Business Enterprise Grant (RBEG)

from USDA Rural Development was

submitted in June 2011, seeking funds

to help the co-op hire additional

employees, deploy new marketing

strategies and expand its customer base. 

With new markets unlocked,

additional members will be recruited

from the long list of interested ranchers

and farmers. With the increased

revenues of Local Brands’ growing

business, the co-op hopes to be able to

offer a salary to its manager (to date,

King-Stovall has not been compensated

for her efforts). 

Clearly this young, promising

cooperative has all its ducks in a row, or

— more accurately — its chickens, cows

and lambs. Between the new

opportunities the grant would allow it

to pursue, the expanded membership

and markets and continued community

involvement, this cooperative is moving

in the right direction. 

Just like with any new endeavor, one

of the prerequisites for a successful coop is a strong leader. With the

organization following King-Stovall’s

leadership, a sometimes intimidating,

unknown market has been pioneered

quickly and methodically as the new coop blazes its trail. Although the next

chapter in this adventure promises no

relief for her from the flood of phone

calls, King-Stovall says she is excited to

see what tomorrow holds for Local

Brands. n

New structure symbolizes 

success of Lexington Farmers Market

By Nathan Routt, Business 

Development Specialist

Kentucky Center for Agriculture 

and Rural Development

nroutt@kcard.info

he Lexington

(Kentucky) Farmers

Market has long

provided its

member/owners with a

place to direct-market

a wide variety of fresh,

frozen and prepared

food products to a

large and growing

customer base. 

From April through November, the

sights, sounds and smells of a vibrant

farmers market can be experienced at

three different outdoor locations on

four days each week. The Saturday

market continues indoors from

December through March, extending

the season and providing a continuous

supply of seasonal products to the

Bluegrass Region of Kentucky. 

The Lexington Farmers Market was

legally incorporated in 1975 as a

cooperative of less than a dozen

members under the name: Farm and

Garden Market Cooperative

Association Inc. These area farmers had

been selling local produce in Lexington

for many years at a semi-organized

farmers market prior to the legal

incorporation. 

The decision to organize under a

T

Customer traffic has soared in recent years at the Lexington Farmers Market, which has added a

covered structure at the Cheapside Park location. 
22 September/October 2011 / Rural Cooperatives

cooperative business structure was a

logical step in the evolution of what has

become one of Kentucky’s most

successful farmers markets. The

cooperative structure was chosen

because the founding members wanted

an organization that could help them

expand the direct-to-consumer market

channel more effectively as a group,

rather than as individuals. The

cooperative structure has served its

members well over its 36-year history.

Obstacles faced by co-op 

As the market grew slowly during

the 1980s and 1990s, issues arose that

caused internal problems within the coop. The market had been operating

with volunteers to manage the daily

operations, such as collecting daily gate

fees, performing marketing tasks and

other necessary activities. 

As more members joined the

cooperative, the use of volunteers

became cumbersome and a lack of

member and board policies led to

confusion and operational inefficiencies. 

It was evident by the early 2000s that

the market was in need of an overhaul

for cooperative policies, governance

and staffing. 

KCARD assistance

The Kentucky Center for

Agricultural and Rural Development

(KCARD) was called to assist the co-op

with development of member policies,

governance issues and to address the

need for staffing. KCARD’s mission is

to promote rural economic

development in Kentucky and provides

hands-on technical business services.

Over several years, KCARD helped the

co-op develop new membership

agreements, board and member

policies, hold training for all board

members, revise the bylaws and

implement a staffing plan. 

KCARD helped draft a job

description for the manager and assisted

with interviewing candidates. The result

was a functioning cooperative that came

back to its roots with member/owners

who better understood how a

cooperative operates. 

Members now have confidence in

their board of directors, while relying

on a capable manager to carry out dayto-day operations. 

Growing the market

With smooth internal workings in

place, the market responded to the

growing demand for locally produced

and value-added foods. The co-op has

expanded to currently include 75

member/owners. 

Customer traffic has soared in recent

years and members have benefitted with

higher sales at their booths. Staff has

tirelessly developed and maintained

relationships with the city and makes

sure the market is clearly visible in the

community. 

These efforts have paid off, as the

market recently realized one of its most

sought after goals: a new covered

structure for the Cheapside Park

location in downtown Lexington. It

serves as a permanent marketing fixture

and as a great venue for an annual

fundraising dinner.

Even with recent success, the

Lexington Farmers Market still sees

many opportunities to grow and

improve the market for its members

and customers, who will rely heavily on

the strengths of their cooperative

structure in the years ahead. 

For more information about KCARD’s

efforts, visit: www.kcard.info. n

Co-op launch demonstrates

co-ops helping co-ops, commitment to community

By E. Kim Coontz, Director 

California Center for 

Cooperative Development

e-mail: ekcoontz@cccd.coop 

hen the owner of

Noah’s Ark, a natural

food store in the rural

northeastern California

community of

Placerville decided to

retire, he considered

either selling the business to a sole proprietor or selling the

building and land for some other type

of business. It appeared that the latter

option was the likely future for the

store, until Bill Scrivani, a Noah’s Ark

customer who taught yoga classes above

the store, said: “Why don’t we form a

co-op and buy it ourselves?”

After almost three years of work —

and with a lot of support from other

cooperatives — that idea is about to

come to fruition. Placerville Natural

Foods Co-op will open soon, pending a

few due diligence items on the part of

the store owner. Scrivani is now the coop president. 

Store manager Melisa Clark and a

group of loyal shoppers initiated the

cooperative development process

through old-fashioned grassroots

W
Rural Cooperatives / September/October 2011 23

organizing. In 2010, the

group began working with

the California Center for

Cooperative Development

(CCCD). Funding from

the Rural Cooperative

Development Grant

(RCDG) program of

USDA Rural Development

supported fundamental

business, education and

technical assistance from

CDS Consulting

Cooperative and CCCD. 

The Food Co-op

Initiative (FCI) was able to

contribute additional grant

funding and lend its

expertise (see page 26 for

more on FCI). Fundraising

events and well-organized

community member-share

purchases and donation drives contributed crucial funds to the endeavor.

The development of Placerville

Natural Foods Co-op is saving a valued

community business, retaining 14 rural

jobs and creating at least two additional

positions. The process has substantially

expanded sustainable food procurement

practices and nurtured relationships

with local producers to the betterment

of the entire community. 

Co-op Principle 6: Cooperation

among cooperatives

Cooperative-focused technical

assistance, fueled by RCDG funds from

USDA, helped generate the market

study and business plan. It also fostered

important co-op connections. Many

other food cooperatives in the region

provided advice and insights about how

to operate a successful cooperative. 

BriarPatch Co-op, a natural foods

cooperative in the neighboring rural

community of Grass Valley, contributed

extensive assistance. BriarPatch

manager Chris Maher and the store’s

deli manager, Tina Collins, spent an

afternoon at the Placerville store

completing a store audit. They shared

their findings and suggested

improvements. 

Key Placerville staff are spending

time at BriarPatch “shadowing” their

position counterparts and gaining

crucial on-the-job training and advice.

“BriarPatch has been great help; they

are experienced and knowledgeable,”

says Clark. “The process feels to us like

we’re a teenager and having someone

tell us what we’re going to be like when

we’re all grown up.” 

The Placerville steering committee

and staff attended conferences

conducted by CCCD, and in June

members attended the Consumer

Cooperative Management Association

conference. “The conferences we’ve

attended have offered ideas and an

opportunity to get into the co-op

world,” says Clark. “Talking to people

in that world has been very helpful. We

used connections from conferences in

our member outreach.” 

Co-op Principle 7: 

Concern for community

Placerville Co-op development has

engendered many projects that have

produced positive community results

and generated valuable support for the

cooperative. 

The co-op has a

regular table at the weekly

farmers market where they

promote healthy, locally

grown food and share

information about the coop. Co-op members

created a farm-to-table

exhibit that includes an

interactive activity table

for children (geared for

toddlers to age 9) that

teaches them where food

comes from and how it

gets from farm to table. 

The co-op recently

received a grant from the

Food Co-op Initiative to

complete the conversion

of a diesel van,

contributed by a

community member, to

run on biodiesel. The grant also funds

painting Placerville Co-op signage on

the vehicle. 

Once complete, the “Veggie Van”

will deliver local produce and other

fresh foods to homebound seniors and

to the local community college. It will

also be used to promote sustainability in

the community through education for

elementary school children and by

teaching others about the biodiesel

conversion process. 

The development of the Placerville

co-op incorporates the core cooperative

principles usually associated with

cooperative start-ups (open membership

and democratic member control, among

others), but it also incorporates what

some may overlook as being special

about cooperative development. In what

other type of business development

would other businesses volunteer so

much of their time to support new

business growth? And how many

fledgling businesses actively integrate

community development and education

at the same time they are building a

new store? 

These are just a few more examples

of the co-op difference! n

Placerville Natural Foods Co-op is scheduled

to open soon, thanks in part to the help of

some co-op friends. Above, the co-op’s booth

at a local farmers market.
Legends of the Lakes

Using cooperative principles helps save an industry

By Tom Kalchik, Associate Director

Michigan State University Product Center

tkalchik@anr.msu.edu

Editor’s note: Founded in 2003, the Michigan State University Product Center

helps Michigan entrepreneurs develop and commercialize high-value, consumer-responsive products

and businesses in the agriculture, natural resources and bio-economy sectors. The Center’s statewide

network of innovation counselors provides business counseling support to Michigan residents in

starting or expanding a business or product line. It has assisted in launching 174 new businesses or

business expansions that increased annual sales by $309 million (cumulative, first-year sales only),

created 750 jobs and retained 364 jobs. 

The Legends of the Lakes Cooperative in Michigan is credited for helping to substantially raise the price members

get for their catch. Photo by Mark Breederland, courtesy Michigan Sea Grant 

24 September/October 2011 / Rural Cooperatives
he lake whitefish is a

prime commercial

species of the upper

Great Lakes,

according to

Michigan Sea Grant.

At the turn of the

century, annual

harvest was about 8

million pounds. 

However, declining prices and

higher production costs were

causing commercial operations to

close down. Prices dropped to less

than $1 per pound. As the industry

continued to focus on traditional

Midwest and ethnic markets, the

price continued to decline, dipping

as low as 40 cents per pound in

some high-production years. 

By 2003, the industry faced

problems that threatened the

continuation of commercial fishing

operations.

The Product Center at Michigan

State University partnered with the

Michigan Sea Grant program to

help find a solution to the dilemma.

The Understanding and Insight

Group was hired to help the

industry determine a strategic

direction. 

Commercial fishermen,

processors, regulators and marketers

were called together to address the

issues using the consultant’s

trademarked program: Getting It!

The findings of the study were:

n Marketing: work to identify what

will help consumers buy

whitefish, including: 

• Use branding;

• Use labeling;

• Promote consumer education.

n Operations: identify better

practices to help commercial

fishermen and processors realize

profitable opportunities,

including: 

• Establish standards to assure

superior quality product;

• Build a certification program.

n People: Provide better

information to help fishers and

processors choose “best-fit

opportunities” in the demand

economy (rather than the supply

economy), including: 

• Use a pilot project around Select

Michigan (a state branding

program);

• Define gaps and future

opportunities. 

n Distribution: ensure continuing

infrastructure of shipping,

including: 

• Make direct deliveries to

customers;

• Establish target volume and price.

The industry developed a website

for consumer education and

conducted a semi-successful

program using the Select Michigan

campaign. However, the real

breakthrough came in 2007 when

the owners of four commercial

fishing boats (one of which was

tribal owned) decided to combine

their resources to incorporate

Legends of the Lakes Cooperative. 

This cooperative would market

Legends of the Lakes frozen

whitefish fillets. The four members

signed a “quality pledge” that

dictated how the whitefish that

would become Legends of the Lakes

fillets were to be caught, stored,

processed, frozen, packaged and

distributed. Legends recently added

a fifth member to the cooperative. 

The impacts for the cooperative

include:

n When Legends was incorporated,

the average price was 80 cents per

pound for whole lake whitefish; 

n Legends members now receive $6

per pound for pin-boned lake

whitefish fillets at the plant for

product meeting Legends

standards. By comparison,

commodity (non-branded)

producers receive $4.50 per

pound.

n Legends members created a

brand with standards to support

the $6 per pound price.

n Price for Legends product is

stable, while commodity whitefish

prices fluctuate.

n Target audience is consumers

interested in quality more than

price.

n In the 2010/2011 marketing year,

inventory of Legends whitefish

sold out three months ahead of

the projection.

Legends is continuing its product

development efforts. In 2010, it

added a frozen Whitefish Cake to

its product line. This product is

manufactured from meat that was

formerly discarded during the

deboning process. 

A third product – whitefish

spread – was added in 2011. Thus,

the members of Legends now have

products that appeal to the upscale,

quality-conscience consumer (frozen

whitefish fillets); the mid-range

youth consumers (frozen whitefish

cakes), and the party/snack crowd

(whitefish spread). A fourth product

is now under development: a

microwavable, seasoned lake

whitefish fillet.

For more information about

Legends of the Lakes, visit:

www.greatlakes whitefish.com. n

T

Rural Cooperatives / September/October 2011 25
By Stuart Reid, Executive Director

Food Co-op Initiative

www.foodcoopinitiative.coop

stuart@foodcoopinitiative.coop

ince its early

beginnings, the Food

Co-op Initiative (FCI)

has offered modest

“seed grants” to

qualified co-op

organizing groups.

These grants have

become an integral

part of our approach to

building relationships and providing

services that support grassroots co-op

development. 

Since 2005, FCI has awarded 31 seed

grants, ranging from $3,000 to $10,000.

From the 17 awards made in years prior

to 2011, 10 co-ops have opened and

two more will open this year. In 2011

FCI made a record 14 grant awards to

rural co-ops throughout the United

States. 

As with all co-ops, raising start-up

capital for retail food co-ops can be

challenging. Most food co-ops are

consumer-owned, and capital does not

come in until after incorporation. Even

then, it may be some time before the

co-op can afford to pay for significant

project costs. Early access to Food Coop Initiative grants can allow the co-op

to obtain professional assistance during

the critical early stages, when the coop’s vision and goals are formed and

planning begins. 

FCI’s first seed grants were made

possible by donations from NCB

(National Cooperative Bank) and the

Blooming Prairie Foundation. These

were awarded intentionally to a diverse

assortment of community sizes, co-ops

with dissimilar structures and visions

and for varying purposes. 

Changing parameters 

for funding 

Grant parameters have evolved as

lessons were learned from earlier

experience. Priority is now given to

groups that show strong organizational

talent, likelihood of adequate

community support and market

strength, and that show potential for

26 September/October 2011 / Rural Cooperatives

Planting the seeds for new food co-ops

S

The Company Shops Market in Burlington, N.C., is one example of a food co-op that has been assisted with a seed grant under the Food Co-op

Initiative. Facing page: Staff and board members of the new Company Shops Market. Photos courtesy Luck Photography.
Rural Cooperatives / September/October 2011 27

the grant funds to make a meaningful

impact. 

In 2011, the seed grants were

supported by Rural Cooperative

Development Grant funding from the

Cooperative Programs of USDA Rural

Development, so all awardees were

located in rural communities (by law,

these USDA funds must be awarded to

rural recipients). A typical grant award

is for about the $10,000 maximum

allowed, which is then matched by

money raised locally. 

The applicant agrees to provide FCI

with monthly updates on the project.

Grant funds are disbursed when the

recipient provides documentation that it

has a contract or invoice for approved

uses. FCI strongly encourages all retail

food co-ops to obtain a professional

market study, which is an approved use

for the seed grants. 

The initiative also supports

professional budgeting and financial

planning, legal advice for incorporation

and membership structure, design work,

member recruitment and capital

campaigns. It can also support some

innovative proposals that have potential

applicability to other co-op organizing

groups. These projects are tracked and

documented as case studies that may be

shared with other co-op organizers,

when appropriate.

Building crucial relationships

For FCI, the importance of the

grants is all about relationships. Co-ops

that receive seed grants commit to

ongoing reporting, consultation and

mentoring with FCI staff and its

development partners. We track their

progress and offer advice on best

practices, recommend professional

consultants, and review documents,

budgets and plans. FCI staff also help to

connect new boards with other co-ops,

both start-up peers and well-established

mentors. 

Conference calls are scheduled

monthly (or as needed) to allow the

entire board and/or steering committee

to discuss progress and ask questions.

FCI staff use these calls and reports

from grant recipients to help the co-op

stay on track. 

Thanks to the many co-ops FCI has

already worked with, we often can see

issues or obstacles developing before

the organizing group is even aware of

them. The relationship of trust that

evolves through regular contact and

respect allows FCI to promote best

practices more effectively; co-ops are

then less likely to dismiss our advice as

inapplicable to their “unique”

circumstances. 

Grant recipients are asked to

maintain this close working relationship

and to file reports for at least a year

after receiving an award. Most co-ops

are quite happy to continue the

arrangement all the way through, and

beyond, their store opening.

An additional benefit of this “handson” approach is the strong, lasting

relationships that develop among the

co-op organizers, FCI and other

advisors and mentors. New co-ops need

the support of their peers and often

benefit substantially from the expertise

and assistance of established stores in

their area. 

Successful food co-ops provide startup co-ops with everything from

financial assistance to staff training,

used equipment, policies and

procedures and help setting up displays.

This is not a one-sided transaction. Coops that work with start-ups benefit

from the improved skills that employees

develop when they become trainers and

mentors. 

They also find inspiration and

excitement in sharing their knowledge

and success with new co-op

communities. Best of all, the people

involved in organizing the new co-op

often become mentors and advisors to

the next generation of start-up co-ops,

continuing the cycle by giving back to

the cooperative community that helped

them succeed. n
28 September/October 2011 / Rural Cooperatives

By Cathy Smith, Executive Director

Keystone Development Center

e-mail: smith@kdc.coop

he Central

Pennsylvania

Physician’s

Cooperative (CPPC)

continues to grow and

evolve. This past

summer, the steering

committee of practice

representatives decided

to incorporate and

move forward with the cooperative. 

The group hopes to hire a

nutritionist as soon as possible, who

would ideally have a specialty in

diabetes and could share time among all

the cooperative members. The mostly

rural practices that are forming the

cooperative are primarily located in

Lebanon County, Pa., about 20 miles

north of Lancaster, Pa., and 70 miles

west of Philadelphia. 

The city of Lebanon, which is part

of the Harrisburg-Lebanon-Carlisle

metropolitan statistical area (MSA), has

about 24,461 residents. Lebanon

County falls in the middle of the socioeconomic scale. It has 102 percent of

the state’s median household income,

with a 6-percent unemployment rate.

About 9 percent of the residents live

below the poverty line. The county’s

population in 2010 was 133,568, about

1 percent of the state’s total of 12.3

million people. 

The members of the CPPC will be

physician practices specializing in family

medicine and primary care. Seven

medical practices are currently

represented on the co-op steering

committee. Several of these practices

have one to two doctors, while two of

the practices include 8 to 12 doctors. 

Motivation for the formation of the

cooperative is to share resources among

practices that continue to struggle for

viability in a world of increasing costs.

Small practices are not able to hire

specialty employees or capture volume

discounts in purchasing. The

cooperative allows the practices to work

together for the benefit of each

member.

This group has been meeting

monthly for the past year, discussing

how to work together. In addition to

the physicians, these meetings have

included key office staff and local

hospital administrators. Besides sharing

employees, the plan is to share in

purchasing of supplies and medicines. 

In the future, the cooperative would

like to investigate group purchase of

Doctors organizing co-op to improve

medical care in rural Pennsylvania 

By sharing resources, the Central Pennsylvania Physician’s Cooperative (CPPC) hopes to help small rural medical practices reduce overhead costs.

Photo courtesy CPPC 

T
Rural Cooperatives / September/October 2011 29

health care insurance, or self-insuring

the healthcare of employees. Employees

generally prefer not to go to their

employer for medical care, but they

would be able to go to another practice

in the cooperative and still have greater

privacy. In this way the doctors might

be able to partially self-insure. 

An important partner in this project

is the Family Medicine Education

Consortium. The executive director of

this group recognizes the importance of

the co-op project and its significance as

a model for other rural and/or small

practices across the United States. He is

able to assist with communication

between the Keystone Development

Center’s staff and the doctors. Because

of busy schedules, the physicians have

limited opportunity to discuss the

cooperative’s development. 

The Keystone Development Center

(KDC) has been providing technical

assistance to the group for the past nine

months. KDC staff introduced the

basics of cooperatives to the group and

conducted research on other physician

cooperatives as possible models. In the

future, it will assist the group in

incorporation, writing of bylaws and

feasibility analysis of various

cooperative activities. n

By Brian Gion, CEO

Montana Cooperative Development Center

brian@mcdc.coop

Editor’s note: Since its inception in 1999, the

Montana Cooperatve Development Center has

provided cooperative education and project

management, assisted with feasibility studies,

developed business and marketing plans,

helped develop articles of incorporation and

bylaws and provided clients with access to local,

state and federal funding sources. It also

analyzes resources, assesses project eligibility,

structures financial packages and develops

applications. It has provided hands-on,

cooperative education and project management

assistance to 135 entities and managed and

directed 48 feasibility studies; it has managed

and directed 66 business and marketing plans

and provided legal assistance to 46 projects,

among other efforts. The Center has formed

42 cooperatives in the past seven years.

he National Native

Leadership

Cooperative (NNLC)

is an employment and

economic development

cooperative formed to

create new

employment

opportunities for

Native peoples and

Native communities. It works through

education, project development and

marketing of members’ and member

companies’ qualifications, work

experience and abilities. 

The founders of the NNLC have

worked in communities throughout the

United States for 30 years. Business

experience gained in this time has

provided valuable insight into the very

specific problems that need to be

addressed to ensure the success of rural

U.S. economies. 

The NNLC’s primary goal is to keep

as many dollars circulating within a

community as possible through project

development and complete utilization

of all community project resources.

This means that when a community

plans for a new school, activity center

or infrastructure improvements, NNLC

provides project design, specification

and project management services to

ensure that residents of the community

have the opportunity to benefit from all

aspects of the project. This includes

giving them a chance at the

construction jobs created by a project. 

This is a very different development

model than is typically found in smalltown America. Today, a very small

percentage of the best community

contracts are actually performed by

hometown contractors. What typically

happens is that large construction

companies from somewhere else come

to town and bring their own workforce

to complete the project. Very few local

people are hired. 

When this happens, millions of

dollars are lost and the local economy

suffers because the money leaves town

and is spent elsewhere. Studies show

that people spend the majority of their

income where they live. So there are

big advantages to keeping those dollars

at home.

Leadership co-op creates jobs,

opportunities for Native Americans

T

Montana Lieutenant Governor John Bohlinger

(center), congratulates Delbert Thomas and

Steven Hadley for their work on the formation

of the National Native Leadership

Cooperative. 
30 September/October 2011 / Rural Cooperatives

Economic goals of communities are

best served when members of a

community are involved in the project

and benefit not only by the project’s

end use, but also by the most important

resource of any project: the jobs created

by the project. 

NNLC provides a voice to the smallbusiness person and assists communities

with the creation of positive

employment opportunities through

resource identification, resident

education and training, and project

development. 

Three different membership types

exist in the NNLC, each offering

different kinds of services and benefits.

The individual membership is for a

person seeking to expand his or her

presence as a qualified and skilled

employee. An organization membership

represents a Native company that is

seeking to expand its presence in the

business market, and the Level III

membership represents a tribal entity

seeking to expand the opportunities of

its tribal members through project

development, education and training. 

The primary focus of the NNLC is

the promotion and success of individual

tribal members who are either in

business for themselves or employees of

Native-owned companies. n

By Noemi Giszpenc, Executive Director

Cooperative Development Institute

e-mail: ngiszpenc@cdi.coop 

Editor’s note: The Cooperative

Development Institute is the Northeast

center for cooperative business education,

training and technical assistance, serving

New England and New York since 1995.

Its mission is to build a cooperative economy

through the creation and development of

successful cooperative enterprises and

networks in diverse communities

throughout the region. It provides assistance

to existing and start-up cooperativelystructured enterprises in all business sectors:

food, housing, energy, agriculture, arts,

health, forestry, fisheries, retail, service and

more. 

hen a co-op creamery

owned by dairy farmers

opened in the small

hill town of

Cummington, Mass.,

125 years ago, little did

anyone imagine that

the enterprise would

go through about a

half dozen transformations before returning to its roots as a

community-owned cooperative general

store in 2011. 

One year ago, current owners Alice

Cozzolino and Amy Pulley celebrated

their 10th anniversary as owners of the

Old Creamery, a beloved local grocery,

deli and gathering place in a town of

just over 1,000 people. Earlier that year,

the pair had expressed to the community their desire to transition the

creamery to a different form of

ownership. At a packed community

meeting, the Old Creamery Co-op was

born. 

“It’s so much more than a store. It’s

part of the heart and soul of these

towns,” says Board President Kimberly

Longey. “People are stepping forward

enthusiastically to help shape the next

phase of life of this 125-year-old

business; it’s not just a new venture, but

also a continuation of the legacy of

Alice and Amy and all the owners

before them.” 

The co-op is poised to conclude its

$200,000 fundraising campaign, and is

close to achieving its member equity

goals. Working closely with the current

owners, the board has completed

marketing, financing, renovation,

membership and business planning.

With luck, it will make the final

purchase this October. 

Many volunteers have helped

develop each piece of the puzzle. The

project’s supporters have been kept upto-date throughout the process by Web

postings, e-mail, newsletters and an allimportant series of monthly, in-depth

co-op conversations. 

There aren’t many stories of grocery

store owners seeking to sell to a

community-owned co-op, but co-op

supporters say there should be. Bottom

line: the owners of the Old Creamery

are being honored and recognized for

their hard work and dedication, and the

community will keep its store and

Don’t let ’em go!

How co-ops can keep vital

businesses, services in rural communities

W

The Old Creamery Co-op is “so much more

than a store. It’s part of the heart and soul of

these towns,” says board President Kimberly

Longey.
Rural Cooperatives / September/October 2011 31

gathering place. 

Co-op can preserve 

‘social fabric’ 

The need to retain

valued institutions in

rural areas — sources of

jobs, homes and food,

not to mention social

fabric — can be met

through the cooperative

business model, which

connects private and

public interests. 

In some cases, such as

the Old Creamery,

business owners are

seeking a way to “move on” that

preserves the value of what they have

created. If the business boasts a loyal

customer base, then conversion to a

consumer co-op can make sense. 

Sometimes a store owner can sell to

an existing cooperative that is looking

to expand, as was the case with Franklin

Community Cooperative of Greenfield,

Mass., which opened a second location

when it purchased McCusker’s Grocery

in nearby Shelburne Falls.

Several scenarios make sense for

conversion to a worker co-op. A

business owner looking to sell —

especially if the business is known for

great service from long-time,

knowledgeable employees — would do

well to consider an employee buy-out. 

Another example would be a business

seeking to expand its workforce from a

couple of highly motivated proprietors

to a broader, but still entrepreneurial,

team. The Crown O’Maine Organic

Cooperative (COMOC) is in the

process of turning a family operation

into a worker-owned co-op. 

Marada Cook, daughter of

COMOC’s founders, explains: “After

our dad died, my sister and I became

two heavily invested owners —

financially, emotionally, mentally — in

every possible way. Our business is

quickly growing and innovative, outside

of the norm of food distribution. We

want to work with people who are as

invested in it as we are, who will work

hard and bring good ideas because it’s

their business, too.” 

A worker cooperative helps a

business bring in more people,

increasing its ability to grow and giving

it longer term stability — making it less

vulnerable to the “life-events” of any

individual. 

Co-ops promote 

stability, growth

Stability and growth were also

considerations for the Turtle Ridge

Cooperative in Connecticut. In 2010,

this group of consumers took over the

Mill River Valley Gardens CSA

(community-supported agriculture),

which had been run for 21 years by

retiring farmer Walter Greist. Now the

consumer-members help plan the

growing season and work on the farm

alongside a hired farmer. 

These consumer-members achieved

stability in their source of local produce

and increased membership 15 percent.

With the majority of Connecticut

farmers now approaching retirement

age, communities need innovative ways

to preserve working farmland.

Achieving stability is also the key

motivation for the conversion of

manufactured home parks into residentowned cooperative communities

(ROCC). As a certified technical

assistance provider in the ROC-USA

network, Cooperative Development

Institute has assisted the conversion of

privately owned parks, such as

Oakwood in Ware, Mass., now the

Quabbin Sunrise

Cooperative, and

nonprofit-owned parks,

such as Bunker Hill in

Windsor, Vt. In both

cases, the residents can

now rely on themselves

to manage the shared

responsibilities of park

upkeep and don’t need to

fear the dislocation of

park closure or the

uncertainty of rising lot

rents. 

In Auburn, Maine,

organic dairy farmers

who are members of the

Organic Valley cooperative formed

Maine Organic Milling Cooperative

(MOM) to buy the privately held Blue

Seal mill in order to preserve an

invaluable organic feed resource. MOM

now produces organic rations for dairy

cows and other livestock throughout

New England. 

“When the Blue Seal mill in Auburn

closed down [in 2009], it left many

Maine organic dairy farms with limited

options,” says Steve Russell, an Organic

Valley farmer-owner and member of the

Maine Organic Milling board of

directors. “As local, organic dairy

farmers, it is essential to our businesses

— and frankly to the survival of our

farms — to source the highest quality

organic feed for our animals at prices

that keep us profitable. We need this

feed mill right in our own backyard.

Our cooperative model and the attitude

of banding together is what keeps us

and our farms together.”

Rural communities are used to

relying on themselves for their basic

necessities and understand the value of

interdependence among neighbors. The

entrepreneurial spirit and hard work of

business owners and the communityminded dedication of nonprofits can be

honored and sustained past the time

that individuals are ready to move on.

The benefits that these businesses and

organizations bring to their

communities can continue, and even

increase, through broadened ownership

in a democratic cooperative. n
Dan Lemke, Communications Director

Agricultural Utilization Research Institute

www.auri.org

leader in Minnesota’s

dairy industry is

celebrating its rich

history and looking to

its future. First District

Association cooperative

recently marked its

90th anniversary with a

major celebration,

while plans to expand

its operations by 30 percent and

modernize production processes get

underway. First District Association

currently provides cheese and whey

products to customers all over the

world.

Several years ago, First District

began looking at new technology to

replace 30-year-old equipment at its

Litchfield, Minn., processing facility for

greater efficiency and new

opportunities. 

“It’s never been our goal to see how

big we can become vs. how good we can

become,” says First District President

Clint Fall. “Our goal is to maintain the

reputation and quality First District is

known for.

“At the same time, we produce

commodity dairy products used as food

ingredients, so it is very competitive.

We need to be competitive on a global

basis.”

The Agricultural Utilization

Research Institute (AURI) was brought

in to help determine the project’s

feasibility before the dairy processor

made the commitment to move ahead.

After a thorough evaluation, First

District chose to move forward with the

expansion and installed a state-of-theart whey evaporator complex. It was

one of the state’s first major dairy

processing expansions in years.

Three major construction phases due

to be completed by fall 2012, including

equipment replacement or expansion

throughout the plant and a state-of-theart milk-processing system, will allow

First District to enhance both efficiency

and quality, two critical elements that

will boost Minnesota’s ability to

compete globally.

“Expansion plays an important role

in securing the future success of First

District and the entire Minnesota dairy

industry,” Fall says. “These plans will

allow us to successfully market our

products, satisfy customer needs and

compete in a dynamic, growing global

dairy industry.” 

The First District cheese plant

produced 144 million pounds of cheese

in 2010, or 4.54 pounds per second.

The expansion will give the cooperative

the ability to process 5 million pounds

of milk a day — a 25- to 30-percent

increase in production capabilities. 

First District provides cheese to

many of the most well-known fast food

chains, restaurants and national

grocery-store chains in the form of

spreadable cheese, popular name-brand

snack foods and bakery products. First

District’s whey products find their way

into leading brands of chocolate, infant

formula, bakery products and

pharmaceuticals.

First District has about 620 direct

member-owners, and nine member

creameries with 430 patrons. Together,

they will produce over 1.5 billion

pounds of milk this year.

“This expansion is tremendous news

for the dairy producers in the region

because First District will be able to

take in more milk, expand services to

current and new members and satisfy

their customers,” says Jennifer WagnerLahr, senior director for innovation at

AURI. “It also shows a long-term

commitment to Minnesota’s dairy

industry and is an example that real

innovation is taking place in rural

communities.”

AURI is an agricultural research

organization that provides scientific and

technical assistance to Minnesota

industries, cooperatives and

entrepreneurs to help them take

advantage of innovative opportunities in

biobased products, renewable energy,

co-product utilization and food. n

Growing Minnesota’s dairy capacity

A

First District Association President Clint Fall is overseeing the growth of his

dairy processing cooperative. The Litchfield, Minn., co-op is in the process of

boosting milk processing capacity by about 30 percent. Photo courtesy AURI

and Rolf Hagberg

32 September/October 2011 / Rural Cooperatives
Rural Cooperatives / September/October 2011 33

Focus On: Walton EMC

Co-op program helps rescue disabled woman’s home

The stone for

the columns of

Maureen

Richardson’s

home in Good

Hope, Ga., was

hauled by train

from Stone

Mountain in

1916. With help

from Walton

EMC’s Operation

Round Up, other

parts of the

home will get

needed

revitalization.

Photo courtesy

Walton EMC 

mong the first things you notice when you drive

up to Maureen Richardson’s home in Good

Hope, Ga., are the majestic oak trees

surrounding it and the sturdy rock columns

anchoring the porch. You can immediately tell

the 1916-built home has character. It has memories to relive and

stories to tell. But it’s also crying out for a little help. 

For many years, Richardson, who is disabled, had the help of

her dad in maintaining the home. But since he died in 2001, she

has struggled to keep up with needed repairs. As time wore on,

roof leaks became more frequent. To keep her belongings from

being damaged, Richardson shuffles them about the house to

drier areas. A section of the rear of the home is also in distress

due to a leaning foundation. 

Eventually, her insurance company sent a laundry list of

repairs required to keep her homeowner’s insurance. She didn’t

know how she'd get them done. “You know that knot you hang on

to at the end of your rope? Mine was fraying,” says Richardson.

Then came Walton EMC’s Operation Round Up. 

Walton Electric Trust, the volunteer board that administers

Operation Round Up funds, is providing a grant to purchase

building materials for needed repairs. The grant is going even

further because volunteers are furnishing labor. 

When the roof leaks are fixed and railings are installed on

outside steps, she has plans to move in her 82-year-old mother,

who now lives alone. “It’s a blessing to have Operation Round

Up,” says Richardson. “I owe them my undying gratitude.” 

Operation Round Up funds come from Walton EMC customerowners who allow their electric bill to be rounded up to the next

dollar. The resulting change stays in the cooperative’s 10-county

service area and cannot be used to pay electric bills. 

Other recent grants include: 

• Step by Step Recovery Inc. — $6,000 for a residential program

that provides shelter for men and women undergoing drug and

alcohol abuse treatment.

• Place of Seven Springs — $10,000 to fund an emergency

assistance program that provides emergency housing, food and

prescription medications.

• Family Promise — $5,000 for a van transportation program.

• Hebron Community Health Center — $10,000 for Raising the Bar

of Quality Care, a program that offers non-emergency primary

care services to people with low income and no insurance.

• Various types of assistance for three other families.

Walton EMC is a customer-owned electric utility co-op that

serves 118,000 accounts in a 10-county service area between

Atlanta and Athens. 

A
34 September/October 2011 / Rural Cooperatives

Editor’s note: This article is excerpted

from the June/July issue of The

Communiqué, the newsletter of the Co-op

Communicators Assoc. It was written by

Greg Brooks of Walton EMC and Amber

DuMont of Maryland-Virginia Milk

Producers. 

laire Smith, director of

corporate relations for

Sunkist Growers, is the

2011 winner of the

H.E. Klinefelter Award,

recognizing her for a career that has

demonstrated excellence in the use of

communications to build stronger

cooperatives. The award was presented

to Smith during the annual institute of

the Cooperative Communicators

Association (CCA), held in San

Antonio, Texas, in June. 

Winning CCA’s top award for a

young communicator, the Michael

Graznak Award, was Jason Jenkins,

managing editor of Rural Missouri, a

540,000-circulation monthly tabloid

newspaper published by the Association

of Missouri Electric Cooperatives.

Master of myriad

responsibilities

“During Claire’s watch as director of

corporate communications, she has

successfully helmed a myriad of

responsibilities, from grower

newsletters, news releases, speechwriting, producing corporate videos and

even addressing acts-of-God disasters to

the media with aplomb,” says Sunkist’s

Director of Marketing Leland Wong.

Among the words used to describe

Smith by those supporting her

nomination are: “mentor, dedication,

professional, inspiration and grace.” But

perhaps the most complimentary of the

words is, simply, “friend.”

A native of Houston, Texas, Smith

earned a journalism and advertising

degree from Texas Tech. Prior to

joining Sunkist, she was assistant vice

president of marketing and public and

member relations for the Farm Credit

Banks of Sacramento, where she

directed the advertising program for a

five-state area, managed member

relations activities, served as

spokesperson and was managing editor

of the news magazine.

As if her current duties with Sunkist,

the California-based citrus cooperative,

aren’t enough, she also shares her

expertise with Fruit Growers Supply

Co., a cooperative affiliate of Sunkist.

Always with an eye toward giving back

to her profession, Smith has served in a

variety of leadership roles in several

organizations, including: the National

Council of Farmer Cooperatives; the

Public Relations Society of America;

the International Association of

Business Communicators and the

Southern California chapter of the

National Agri-Marketing Association.

Her CCA involvement is long and

varied. A 22-year member, Smith served

two terms on the board and co-chaired

the successful 1993 Institute in

Monterey, Calif. An Institute presenter

and newsletter contributor, she has also

won several top awards in the CCA

Communications Contest.

“Her wisdom in big-picture decision

making is a true asset to our

organization, and she was often the

calming factor in heated discussions,”

says CCA President Allison Morgan, of

Tennessee Farmers Cooperative. 

“Keeping the welfare of others in the

forefront is a trademark of Claire

Smith’s style, even when her own life

has had more than its share of

tragedies,” says her Klinefelter

application. “No matter how you peel

it, when it comes to co-op

C

Smith, Jenkins win

communications honors 
Rural Cooperatives / September/October 2011 35

communications, Claire Smith has seen

it all and done it all, better than just

about anyone,” says another nominator. 

Graznak winner a trailblazer

“Innovator. Trailblazer. The total

package.”

That’s how the Graznak Committee

summed up its choice in selecting

Jenkins as the 2011 Graznak Award

winner. “Jason’s portfolio showed

variety, creativity and mastery of

cooperative communications,” says

K.D. Graham, a member of the

selection committee and 2006 Graznak

recipient. “He is simply the total

package.”

The award recognizes a

communicator under age 35 whose

work symbolizes accomplishments,

contributions, competence and promise.

CCA created the award in 1977 to

honor the memory of Michael Graznak,

an outstanding CCA member who died

while on field assignment for his

cooperative, Farmland Industries. 

Jenkins serves as a writer,

photographer and editor for Rural

Missouri and also oversees the

magazine’s digital and social media

presence. He won best of show honors

in the 2008 and 2010 CCA

photography contest and was the 2009

CCA Photographer of the Year. He’s

also earned second runner-up honors in

Writer of the Year judging.

Starting in 2008, he began shooting

covers for Rural Missouri and for stories

designed to run a year later. It has given

the magazine a more seasonal look.

Now, every cover photo is taken a year

in advance.

When a powerful ice storm hit

Missouri in 2007 and triggered requests

for information from news media

outlets, government officials and the

general public, Jenkins designed a

Storm Information Center that went

into action after 2008 and 2009 ice

storms. At the height of the 2009

storm, Jenkins’ Storm Information

Center received more than 1.5 million

web hits. He packaged photographs

coming in from around the state with

press releases showing progress on the

restoration efforts and an interactive

map highlighting the affected areas.

The website has earned a great deal

of praise from the governor’s office and

was in constant use by the State

Emergency Management Association

during the crisis. In February, the

association tested the center from a

remote location following a record

snowfall that made it impossible to get

into the office. The site again

performed to perfection and was in

constant use at the state’s Emergency

Preparedness Center, where it was

projected on a giant video screen.

Going beyond CCA, Jenkins

manages the website for the Statewide

Editors Association and he is a valued

member of the Outdoor Writers

Association of America. He was recently

elected to their national board of

directors and chairs the group’s

strategic planning committee.

CCA’s board awarded Steve Jacobs,

production coordinator for GEORGIA

Magazine, the 2011 Outstanding Leader

Award. The award is given annually to a

CCA member who demonstrates

exceptional leadership through his or

her volunteer activities within the

organization. 

The next CCA institute will be held

June 2-5, 2012, in Tucson, Az. 

Calcot’s Mark Bagby, as “Arizona Jones,” his wife Heidi (right), as femme fatale Adelaide

Wisenheimer, and Teri Ditsch as Jones’ evil nemesis, Teresa Desperado, starred in a video

spoofing “Indiana Jones.” It was followed by a live, bullwhip-cracking performance to invite CCA

members to next year’s conference in Tucson, Ariz. USDA photos by Dan Campbell continued on page 43
36 September/October 2011 / Rural Cooperatives

By Rebecca MacLeod, 

National Energy Efficiency Liaison

USDA Natural Resources Conservation Service 

Robert Madeja, Business Analyst

Innovation Center for U.S. Dairy

new web tool is

available for members

of dairy cooperatives

across the United States

to help them discover

the cost savings and other benefits

associated with energy efficiency on the

farm. Under the leadership of America’s

dairy farmers, the Innovation Center

for U.S. Dairy (Innovation Center)

worked with USDA’s Natural Resources

Conservation Service (NRCS) and

USDA Rural Development to develop

the tool — SaveEnergy — for dairy farmers.

SaveEnergy was just launched in

September to serve dairy farmers as a

guide to all of the local, state and

federal sources of financing available for

energy audits and energy efficiency

improvements. It also provides

information and resources on how

energy efficiency can be realized on

dairy farms, the benefits of energy

audits and real-world examples of dairy

operations that have profited from

energy audits. 

Many existing websites offer

information about energy efficiency.

SaveEnergy, however, is uniquely

designed to bring all of the available

options together as a one-stop resource

that helps dairy farmers to identify and

compare all appropriate resources, to

simplify the decision-making process

and to help dairy farmers make energy

choices that fit their particular operation.

“Dairy farmers are busy people. This

is all about convenience and costsavings,” says Erin Fitzgerald, senior

vice president of sustainability for the

Innovation Center for U.S. Dairy and

Dairy Management Inc., which

manages the dairy checkoff program on

behalf of the nation’s farmers. “By

aggregating the various sources of

financing in one place, we hope to

reduce time, frustration and confusion

for farmers and the field representatives

and customer service teams who work

with them. Quite simply, our goal is to

give more dairy farmers access to

energy savings. If the opportunity is out

there, we want to make sure farmers

have a shot at it.” 

The website facilitates the use of an

energy audit, which is a good first step

in the energy savings process. “When

performed by trained professionals, a

farm energy audit has been proven to

reduce a dairy farm’s energy use by 10

to 35 percent (according to actual audits

conducted by EnSave, Inc.). The farm

energy audit inventories a farm’s

current systems and equipment related

to the milking parlor and housing,

identifies the cost of energy and

provides a detailed recommendation

about actions, upgrades and potential

savings that could most benefit the

farm,” Fitzgerald says. 

The hierarchy of energy recommendations on a dairy farm is

illustrated by EnSave (a designer and

implementer of agricultural efficiency

programs) as an “energy pyramid,” the

base of which is analysis, energy

conservation and efficiency. Other

recommendations, including use of

renewable energy, should be considered

after implementation of all efficiency

upgrades.

Tool links farmers 

to local resources

One of the tool’s most important

features is the SaveEnergy Finder. The

SaveEnergy Finder is an interactive map

that instantly connects the user to state

and local financial assistance programs

for energy audits, incentives or rebates

for equipment retrofits and a

customized listing of local equipment

suppliers and installers.

“The goal is to help dairy farmers

make management improvements that

reduce energy use and cost,” says

Christine Brodeur, manager of forward

contracting operations for Dairylea and

Dairy Farmers of America-Northeast.

She is also a member of the Innovation

A

New Web tool helps dairy

farmers capture energy savings
Rural Cooperatives / September/October 2011 37

Center’s Sustainability Council.

“A qualified farm energy audit

identifies areas for change that could

result in the best return on investment,”

Brodeur continues. “While opportunities differ, there are often programs

that could either partially or completely

cover the cost of an audit or assist with

an equipment update. This tool helps us

to match farmers with those available

programs.”

The web tool highlights energy

efficiency programs and services offered

through USDA and provides contact

information for USDA personnel who

can help with applications for

assistance. NRCS provides financial

assistance toward developing an

Agricultural Energy Management Plan

(AgEMP), which determines energy

used in farm activities, including milk

cooling, irrigation pumping, heating

and cooling of livestock production

facilities, manure collection and

transfer, grain drying and other

common on-farm activities. 

The AgEMP will identify activities

where the farm could be more energy

efficient. USDA Rural Development

administers the Rural Energy for

America Program (REAP), which

provides grants for energy audits and

renewable energy development

assistance. It also provides funds to

agricultural producers and rural small

businesses to purchase and install

renewable energy systems and make

energy efficiency improvements.

Many rural electric cooperatives and

utility companies provide support for

energy efficiency improvements and are

featured on the interactive map as well.

The tool will help to connect dairy

farmers with utility providers — a

sector they may not have previously

considered as a partner in lowering

energy consumption.

Dairy farmers, cooperatives and

other dairy trade organizations can

expect more good things on the horizon

for farm energy efficiency. Additional

resources available on the SaveEnergy

tool will be added as changes occur in

the farm energy efficiency sector. In the

meantime, farm energy efficiency is just

one of 10 projects currently under way

at the Innovation Center for U.S. Dairy

to help achieve the industry’s voluntary

goal to reduce greenhouse gas (GHG)

emissions of fluid milk production

(from cow to consumer) by 25 percent

per gallon of milk by 2020.

A number of strategies exist to help

dairy farmers reach this ambitious goal,

including the installation of anaerobic

digesters — another project facilitated

by the Innovation Center and its USDA

partners. This is another example of the

strength of partnership, with the

Innovation Center providing outreach,

NRCS handling technical support for

design of waste management and

USDA Rural Development supporting

installation costs of alternative energy

options that utilize the anaerobic

digesters’ output.

Simple changes can 

lead to real savings

The SaveEnergy web tool is a great

starting point because simple changes

— such as changing light fixtures or a

milk compressor — could generate real

farm savings. 

“Farmers are the original

conservationists. Historically, we have

raised the bar by reducing, reusing and

recycling, using new technology and

improving management practices on

our dairies,” says Steve Graybeal, a

dairy farmer leader of Maryland

Virginia Milk Producers Cooperative

Association and a member of the

Innovation Center for U.S. Dairy’s

Sustainability Council. “Still, many

farmers aren’t aware of how easy or

affordable it could be to adopt energy

efficient best practices. We want to

change that with tools like SaveEnergy.”

The tool will help dairy farmers

reduce costs, become more energy

independent and keep their competitive

edge. To learn more, visit the

Innovation Center for U.S. Dairy at

USDairy.com/SaveEnergy or call 1-

800-732-1399. n

Opposite page: A technician collects equipment data on a dairy farm during an energy audit.

Most dairy farms reduce energy use by 10 to 35 percent as the result of an energy audit. Photo

courtesy EnSave. Below: Dairy cattle on a Michigan dairy farm await milking. USDA photo by

Lance Cheung 
Farmer Co-op Conference to

focus on globalization,

innovative finance 

Global demand and supply directly

impact prices for American agricultural

producers. The business side of the

food chain — including food security —

can require investment in

transportation, terminals and other

significant assets. How will agricultural

cooperatives reinvent themselves in

response to challenging opportunities?

What financing options exist, and how

will co-op members be rewarded? 

The current global economic impact

on agriculture, the challenges these

volatile economic conditions create for

ag cooperatives and some of the

responses adopted by co-ops will be

addressed at the 14th annual Farmer

Cooperatives Conference, Nov. 3-4 in

Minneapolis, Minn.

Organized by the University of

Wisconsin (UW) Center for

Cooperatives, this annual event features

the latest research, trends, critical

thinking, innovative approaches and

case studies about cooperatives as

business entities. Attendees are

agribusiness managers, board members,

educators, researchers, accountants and

many other professionals. 

“It is the one national conference

that focuses on agricultural cooperatives

themselves, rather than on the state of

the industry or an industry sector,” says

Anne Reynolds, assistant director for

the UW Center for Cooperatives. 

The theme this year is “Meeting

Competitive Challenges: Cooperative

Structure and Finance for the Future.”

Eight sessions in two days will address

global challenges in the food producer

market, innovative approaches to

finance, consolidation among

cooperatives, price volatility, energy and

the credit marketplace, and managing

risk for cooperatives and their

members. 

“Listening to experts weigh in on

potential market developments may also

provide attendees with the foresight to

prepare for adverse or positive market

developments,” says Jennifer Keeling

Bond, assistant professor in agricultural

and resource economics at Colorado

State University and a member of the

conference planning committee.

“Seeing how other cooperatives have

made adaptations may inspire audience

members to try something new at their

own co-op. This event not only creates

a forum where practitioners and

academics can share ideas and

observations, it also provides a

tremendous networking opportunity for

top cooperative leaders.” 

Early registration for the conference,

to be held at the Radisson Plaza Hotel

Minneapolis, is encouraged. More

information about the conference and

registration is available at:

www.uwcc.wisc.edu, or by contacting

Reynolds at 608-263-4775 or

atreynol@wisc.edu. 

NFU supports Year of

Cooperatives; Johnson stresses

need for rural development

The National Farmers Union (NFU)

board of directors has passed a

resolution in support of naming 2012

the “International Year of

Cooperatives,” as previously designated

by the United Nations General

Assembly. The U.S. Senate is

considering a similar resolution,

introduced by U.S. Senators Tim

Johnson of South Dakota and Thad

Cochran of Mississippi. 

“NFU has a long history of

supporting the development of farmerowned cooperatives as a way for farmers

to add value to the food, fiber and

energy they produce,” says NFU

President Roger Johnson. “Cooperation

is one of the three sides of NFU’s

triangle. Cooperatives and cooperative

education are keystones of rural

communities and remain essential to

our future.

“The cooperative business model has

been expanded beyond the agriculture

sector to serve the needs of many

different industries, consumers and

patrons who want to enjoy the benefits

of a business that they own and

control,” he continues. “The NFU

38 July/August 2011 / Rural Cooperatives

Newsline

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

Co-op developments, coast to coast
Rural Cooperatives / September/October 2011 39

Chad Parker has been named as the

new deputy administrator for USDA’s

Cooperative Programs. The office is

responsible for assisting the nation’s

producer-owned cooperatives with co-op

education materials (including Rural

Cooperatives magazine), research,

statistics, technical assistance and co-op

development assistance. It also

administers financial programs that can

benefit co-ops, including: the Value Added

Producer Grant program; Rural

Cooperative Development Grant program;

Small Socially Disadvantaged Producer Grant program; and

the Rural Business Opportunity Grant program. 

Cooperative Programs is an integral part of the Rural

Business-Cooperative Service, which is within USDA Rural

Development. 

Parker says he will strive to foster partnerships between

rural economic development entities in the private sector,

cooperatives, business development associations, rural

lenders, other rural development interest groups and the

Rural Business-Cooperative Service.

“Chad is going to be a great leader for this program and

will carry on its long tradition of service to the nation’s

cooperatives and their members,” says Dallas Tonsager,

under secretary for USDA Rural Development, himself a

strong advocate for cooperatives. “In addition to a

background in agriculture and working with co-ops, Chad

has the advantage of knowing the inner working of USDA

very well, which will prove to be a great advantage.”

Parker started his USDA career working with electric

cooperatives as a rural development specialist with the

Rural Electrification Administration (REA), a job he held from

1991-1995. The REA is now called the Rural Utilities Service,

also part of USDA Rural Development. He

then became a senior loan specialist with

the Community Programs office of USDA

Rural Development, which helps build a

strong rural infrastructure by providing

financial assistance for essential

community facilities, such as police and

fire stations and equipment, medical

clinics and hospitals, schools and

community centers and industrial parks.

From 1998 until 2010, he was director for

the direct loans and grants branch of that

office. 

Most recently Parker was acting deputy administrator

for the Single Family Housing program of USDA Rural

Development. 

“My background is in agriculture, cooperatives and

economic and community development,” says Parker. “I

believe my experiences have prepared me for the challenge

of broadening USDA’s role in supporting rural cooperatives.

I look forward to learning more about the needs of the

nation’s cooperatives and how USDA can continue to

strengthen its historic partnership with them.”

Parker earned his MBA from the Pamplin School of

Business at Virginia Tech in 1991. He also earned a BS in

Marketing, with a minor in English, from the same university

in 1988. 

As a youth he raised Duroc and Landrace swine, and as

a 4-H member he participated in its wildlife, livestock and

demonstration/public speaking programs. He was also an

FFA member. 

“I welcome any suggestions readers may have about

how USDA can enhance ongoing rural cooperative

assistance efforts,” Parker says. He can be contacted at: 

Chad.Parker@wdc.usda.gov.

Chad Parker to lead USDA Co-op Programs

board is pleased to see the U.N.

recognize the role that cooperatives

play in economic development around

the world.”

In other NFU news, Johnson

accompanied President Barack Obama

and Agriculture Secretary Tom Vilsack

in August on a three-day Midwestern

rural tour. The trip took them through

Minnesota, Iowa and Illinois. 

Johnson emphasized the importance

of safety nets, rural development

programs, conservation and renewable

energy. “As Congress begins to write

the next farm bill, one thing that the

legislation must include is a strong

safety net for farmers and ranchers,”

said Johnson. 

“With the struggling economy, we

must deploy rural development

initiatives to create jobs,” he said,

adding that “renewable energy

continues to be a big part of

development in rural areas.” 

Nearly half of nation’s milk 

supply now under FARM

umbrella

Today’s consumers want to know that

the food they purchase is safe,

wholesome and nutritious. The

National Milk Producers Federation

(NMPF) reports that U.S. milk

producers are demonstrating that

commitment by enrolling at a rapid

pace in the National Dairy FARM

Program: Farmers Assuring Responsible
Management (FARM). Since the

program began in September 2010, 45

percent of the nation’s milk supply —

coming from cooperatives, farmers and

proprietary processors — has been

reenrolled in the FARM program.

Voluntary and open to all producers,

FARM is a national dairy animal care,

third-party-verified program designed

to demonstrate dairy farmers’

commitment to outstanding animal care

and a quality milk supply. “Telling this

story is essential at a time when

consumers want to know how their

food is produced,” says John Miles,

Land O’Lakes FARM implemen-tation

leader. “The FARM program helps us

reach out to customers, consumers and

the entire marketing chain. It sends a

strong message that Land O’Lakes

member producers work hard caring for

their animals and producing quality

milk.” 

FARM was created by NMPF, along

with support from Dairy Management

Inc. 

Participating producers are provided

comprehensive training materials and

undergo an on-farm evaluation

conducted by a trained veterinarian,

extension educator, co-op field staff

member or other FARM-trained

professional. Evaluators then provide a

status report and, if necessary,

recommendations for improvement. 

Blue Diamond wins food safety

award; hosts event focusing on

trade, jobs

Blue Diamond, the leading U.S.

almond grower and manufacturer,

announced that its Sacramento

manufacturing facility was named

“Plant of the Year of the Pinnacle Club”

by the American Council for Food

Safety and Quality. The Council, which

maintains state‐of‐the‐art food labs and

testing facilities, promotes better

understanding of food safety issues

among growers, processors and

purchasers of dried fruit and tree nuts.

It has a formal working partnership

agreement with the U.S. Food and

Drug Administration.

At its annual meeting in July, the

Council recognized top performing

members and companies in the area of

food quality and safety, designating

them for the “Pinnacle Club.” This

recognition is based on scores from

tri‐annual, unannounced GMP (good

management practices) and sanitation

audits, certification of HACCP (Hazard

Analysis and Critical Control Points)

plans and achievement of higher levels

of food safety certification. Blue

Diamond’s award recognizes it as the

“best of the best” in a group of about 75

plants and facilities inspected. Blue

Diamond is a producer co-op owned by

more than half of the state’s almond

growers. 

In other Blue Diamond news, job

creation that could result from approval

of pending free trade agreements

(FTAs) was the hot topic at an

agricultural roundtable held at the coop’s headquarters in Sacramento. The

roundtable was led by United States

Trade Representative Ron Kirk, who

said Congress was expected to consider

approving FTAs with South Korea,

Colombia and Panama when it

reconvened in September. If approved,

the trade deals would greatly increase

the ability of U.S. exporters to compete

in the global marketplace. 

Ambassador Kirk commended

California’s agricultural organizations

for making the state the largest exporter

of agricultural goods in the nation.

“Every billion dollars in agriculture

exports supports almost 8,500 jobs, on

the farm and on

production lines,”

Ambassador Kirk said.

He urged participants

to educate their

friends and neighbors

about the positive

impact that trade

agreements and

exports bring to local

communities.

Almonds are

California’s largest

food export (valued at

$2 billion annually)

and the nation’s sixth

largest food export.

Seventy percent of the

almond crop is

exported to 95

countries. It is

estimated that a

record, 1.95-billion-pound crop will be

harvested this year. California grows

more than 80 percent of the world’s

almond supply. Worldwide

consumption of almonds has grown

every year since 2005 at an average

annual growth rate of 10 percent.

Livestock genetics 

co-op wins Compass Award 

Accelerated Genetics, a Wisconsinbased global provider of bovine genetics

and research, has been presented with

the Compass Award for its long-term

commitment to excellence in the

stewardship of its employees’ retirement

assets. The award was given to the coop by Francis Investment Counsel, a

nationally recognized expert retirement

plan investment consulting organization.

“The leadership team at Accelerated

Genetics has put in place and

maintained over many years a system of

in-depth due diligence, rigorous

ongoing oversight and consistent

employee education that represents

industry best practices,” says Mike

40 September/October 2011 / Rural Cooperatives

U.S. Trade Ambassador Ron Kirk discusses pending trade

agreements in Sacramento. At left is Karen Ross, secretary of

the California Department of Food and Agriculture; at right is

Blue Diamond President and CEO Mark Jansen.
Rural Cooperatives / September/October 2011 41

A hallway display case at USDA headquarters in

Washington, D.C., was recently re-designed by staff

from the National Council of Farmer Cooperatives

(NCFC). The display now provides an overview of the

role and functions of U.S. farmer co-ops and

includes samples of co-op products. Responsible for

the display overhaul (bottom photo, from left) are:

Brandon West, an NCFC intern and Kansas State

University student from Marion, Kan.; Kathleen

Heron, NCFC manager of member relations and

development; Kelsey Swango, NCFC’s manager of

government affairs; and Emily Parkman, an NCFC

intern and student at Clemson University, from

Swansea, S.C. USDA photos by Dan Campbell

Telling the co-op story at USDA

Francis, president of Francis Investment

Counsel. This has led to above average

results. 

Whereas 84 percent of Accelerated

Genetics employees save in their coop’s plan, other plans average a 74-

percent participation rate, according to

Vanguard, a leading manager of mutual

funds. Further, the average Accelerated

Genetics co-op saver defers 8 percent of

his or her income to the plan, vs. a

national average of 6.9 percent of

income. 

CHS, Cargill eye 

expanded scope for TEMCO

CHS Inc. and Cargill announced in

August that the two agribusiness

companies are in discussions to expand

the scope of TEMCO LLC to include

other Pacific Northwest export assets

owned by the companies. TEMCO,

which operates an export facility in

Tacoma, Wash., is owned equally by

CHS, the nation’s largest ag co-op, and

Cargill. 

TEMCO currently exports corn,

soybeans and milo to Asia Pacific

markets. Cargill and CHS both said

that the TEMCO joint venture has

been successful and that they are

considering expanding the scope in

anticipation of continued demand for
wheat, feed grains, oilseeds and byproducts in Asia.

CDF fund to help 

co-ops hit by hurricane

Citing the need to help in the

recovery of cooperatives impacted by

Hurricane Irene, the Cooperative

Development Foundation (CDF) has

created the Hurricane Irene

Cooperative Recovery Fund. The fund

will direct tax-deductible contributions

specifically to individuals and

cooperative businesses along the East

Coast and throughout New England

that have experienced losses. The fund

also will seek to assist organic farmers

who are prime suppliers to food

cooperatives. For complete details, visit:

www.cdf.coop. 

The first contributions to the fund

were $5,000 from the National

Consumer Cooperative Bank (NCB)

and $5,000 from the National

Cooperative Grocers Association

(NCGA). The fund will seek

contributions from all sectors of the

cooperative business community and

from the general public.

“Regions throughout the continental

United States have been hit by a

devastating series of storms, tornadoes,

floods and wildfires. In the latest major

storm, Hurricane Irene, the victims

again include co-ops and their

members; we want to help them,” says

CDF Executive Director Liz Bailey.

“The devastation has been massive,

with flooding and wind damage that has

inundated both urban and rural areas

from North Carolina to Vermont. This

is all about co-ops helping co-ops.” 

Missouri co-op, USDA help

college expand energy program 

A Trenton, Mo.-based electric co-op

has been recognized by USDA for its

role in helping a local college obtain

financing for a new agricultural campus.

Grundy Electric Co-op worked with

North Central Missouri College to

obtain a $740,000, interest-free loan

under USDA Rural Development’s

Rural Economic Development Loans

and Grants (REDLG) program. The

program helps co-ops underwrite

community-development and jobcreation projects. 

The new campus will help students

prepare for careers in fields that include

alternative energy and wind energy

technologies. The farm’s solar panels

and a 10-megawatt wind turbine will

allow hands-on training. Students may

also participate in internships at

northwest Missouri wind farms from

which Springfield-based Associated

Electric Cooperative purchases power

for its distribution co-op members.

The Barton Farm project marks the

third time the co-op has worked with

USDA on REDLG-assisted efforts to

benefit the college. Previous projects

involved construction of a community

center and gym as well as construction

of a health center and other facilities. 

Editor’s note: reprinted courtesy ECT

Magazine.

CoBank, U.S. AgBank merger

approved by stockholders

CoBank and U.S. AgBank

stockholders have approved a proposed

plan of merger between the two banks.

Ballots were tabulated at special

meetings Sept. 7 in Colorado and

Kansas. Regulations issued by the Farm

Credit Administration, the independent

regulator for the Farm Credit System,

prohibit the disclosure of exact vote

tallies in order to preserve voter

confidentiality. However, the

stockholders of both organizations

approved the merger by substantial

majorities.

“We’re delighted that our

stockholders have demonstrated such

enthusiastic support for this merger,

which will create an even stronger,

more durable bank that is better able to

fulfill its mission to serve future

generations of rural borrowers,” says

Everett Dobrinski, board chairman of

CoBank. “We look forward to receiving

final regulatory approval and closing

the merger at the beginning of the

year,” adds John Eisenhut, board

chairman of U.S. AgBank.

CoBank and U.S. AgBank executed a

letter of intent to merge in December

2010. The merged bank will continue

to do business under the CoBank name

and be headquartered in Colorado, but

will also maintain U.S. AgBank’s

existing presence and operations in

Wichita, Kan., and Sacramento, Calif.

The bank will continue to be organized

42 September/October 2011 / Rural Cooperatives

A classroom at North Central Missouri College (NCMC) where students can train for

careers in wind energy and other alternative energy sources. Photo courtesy NCMC
Rural Cooperatives / September/October 2011 43

decided to begin composting it instead.

Cotton compost is a nutrient-rich soil

additive that effectively breaks up clay

soils, but no one was producing it yet in

their central Texas region. 

Using a large aerobic in-vessel

composter they installed in 2007, the

Kasbergs are now able to produce 15

cubic yards of compost a day, although

their composting process takes several

months. Today, Birome Gin is the only

central Texas gin that is bagging

compost. They sell in bulk and also bag

and market their “Birome Gin’s Best”

through garden stores in the Waco area. 

“Burrs used to be a cost to the gin,”

Gerry Kasberg says. “When it got

where they didn’t cost you, it was a big

deal. Now it’s nice to be able to make a

little money off them.” 

It is because of innovations like this

and the Kasbergs’ experience and good

business sense that the 100-year-old gin

continues to thrive, according to the

Kasbergs’ Texas Land Bank loan officer,

Ryan Janek.

Nearly a century of service 

“After 95 years of supporting

agriculture and rural America, Farm

Credit is proud to introduce America’s

hardworking farmers and ranchers —

such as the Freemans and Kasbergs —

to consumers as we celebrate this

important milestone,” says Joy

Upchurch, a Farm Credit System

employee for more than 30 years and

vice president of AgFirst Farm Credit

Bank, one of the wholesale banks within

the Farm Credit System. 

Farmers, ranchers and agribusiness

leaders have developed new, more

efficient and sustainable ways to thrive

in the business of agriculture, all while

bringing safe, high-quality products to

market. Each Producing Excellence

profile highlights the individuals who

have dedicated their lives to agriculture. 

Farm Credit is planning additional

95th Anniversary initiatives throughout

the coming year, including activities

around its partnership with America’s

Heartland, a PBS television program

featuring American farmers and

ranchers who share a passion for hard

work and excellent products, as well as a

commitment to food safety,

sustainability, environmental

stewardship and animal welfare. n

Farm Credit turns 95

continued from page 15

Top award winners in each of the

four CCA contest areas were:

• Writer of the Year — Megan McKoyNoe, National Rural Electric

Cooperative Association, for a

portfolio of articles.

• Publication of the Year — “Fresh,”

produced by the communications staff

of Tennessee Farmers Cooperative;

• Photographer of the Year — Kyle

Spradley, of the Missouri Association

of Electric Cooperatives, for a

portfolio of photos.

• Programs and Projects, Best of Show:

the 2010 Dairy Farmers of America

(DFA) annual meeting, produced by

the DFA communications team.

USDA’s Rural Cooperatives magazine

won two honors: Editor Dan Campbell

won second place for feature writing for

“The Little Co-op that Could,” about a

Vermont food cooperative; Assistant

Editor Stephen Thompson won an

honorable mention for news writing for

“Biofuel Prometheus,” about a biodiesel

cooperative. n

Smith, Jenkins win

communications honors

continued from page 35

and operate as a cooperative, with

eligible borrowers earning cash and

equity patronage based on the amount

of business they do with the

organization. 

The bank will have more than $90

billion in projected assets post-merger

and a well-diversified loan portfolio

encompassing every major sector of

U.S. agriculture, as well as the rural

water, power and communications

industries. Robert B. Engel, CoBank’s

president and CEO, will remain the

chief executive of the combined entity.

Darryl W. Rhodes, president and CEO

of U.S. AgBank, will retire in

connection with the merger.

“Through its wholesale lending to 30

Farm Credit associations and direct

lending to agribusiness and rural

infrastructure companies, the combined

bank will be one of the leading

providers of credit to America’s rural

economy,” Rhodes says.

Worker co-ops eligible 

for SBA pilot program

In a recent meeting at the U.S. Small

Business Administration (SBA),

National Cooperative Business

Association (NCBA) leaders discussed

the different types of cooperatives and

how they relate to the agency’s lending

programs. SBA staff determined that

worker cooperatives are eligible for

loans from lenders participating in its

new Intermediary Lending Pilot

Program (ILP) program. 

ILP Intermediaries were selected last

summer and should be ready to start

making loans under the program this

fall. NCBA will continue to assist SBA

on this issue, including exploring the

financing of all types of cooperatives

under SBA’s other lending programs

and plans to work with them in the

future. 

For more information, contact R.L.

Condra, NCBA’s director of public

policy at: rcondra@ncba.coop, or 202-

383-5480. n
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44 September/October 2011 / Rural Cooperatives