Rural

COOPERA COOPERATIVES

USDA / Rural Development November/December 2004
2 November/December 2004 / Rural Cooperatives

When Farm Credit Services of

America (FCSAmerica) pulled the plug

on its proposed sale to Netherlandsbased Rabobank in mid-October, it

came as welcome relief to many.

Opposition to the sale was loud,

adamant and rapidly building steam

nationally, not just in the four-state

district (Iowa, Nebraska, South Dakota

and Wyoming) served by FCSAmerica. 

At a Congressional hearing in

Washington (see page 13) on Sept. 29,

Myron Edleman, a South Dakota cattleman and president of the grassroots

group Farmers for Farm Credit, testified that the opposition among his fellow member-borrowers was “overwhelming.” A number of major farmer

organizations — the National Farmers

Union and National Association of

Wheat Growers among them — also

weighed in against the deal. 

Regardless of the pros and cons of

the proposed sale, it appears that there

was a serious failure to communicate

here. It was incumbent upon the board

to make its case to members and to get

some read on their reaction to liquidating the co-op before plowing forward.

Indeed, for a step as radical as selling a

co-op, there should be substantial support before taking any such action. 

While members would have eventually been asked to vote on the proposal, this was a classic case of putting the

cart before the horse. Many co-ops are

attractive takeover targets for outside

firms, and Rabobank obviously saw this

as an opportunity to enter farm lending in America’s heartland. It should

serve as a wake up call to other co-ops

to be vigilant. 

Widespread concern has also been

expressed that the sale of FCSAmerica

could pull the first thread that would

eventually unwind the entire Farm

Credit System (FCS). All farmers have

a stake in this debate, since the existence of FCS forces other lenders to

be more competitive. Thus, the FCS

system benefits even non-members in

the same way ag marketing and supply

co-ops have a beneficial impact on

prices and services for both members

and non-members. 

The hearing turned the spotlight on

a much broader area than just the

Rabobank deal; it showed sharply

divergent viewpoints regarding the

need for, and role of, a cooperative system of farm lending in rural America.

Commercial banking industry trade

groups say “mission creep” has been

going on for years, and that the FCS is

no longer serving its intended farm

niche. As such, FCS should have its

charter yanked, or at least severely

scaled back, they say. 

The FCS and its backers’ stance is

the polar opposite: they say the charter

needs to be expanded to allow it to

serve more rural Americans with more

services. 

Given the uproar over just the proposed sale of one of its member institutions, the odds of Congress yanking the

FCS charter seems remote, to put it

mildly. Some have speculated that the

real strategy of the banking groups in

making these arguments is to keep FCS

from gaining increased lending flexibility, not taking away what it already has. 

The commercial bankers say they

are more than willing to meet any and

all farm credit needs in America, but

the track record shows that when the

going gets rough for farmers, so does

the interest of too many of these

lenders. The farmer owned and directed FCS, on the other hand, will always

be there, through good times and bad,

with its mission to serve farmers, not

outside investors. 

Some have commented that

FCSAmerica was an inviting target for

takeover because it has accumulated

large unallocated reserves. This situation has been at least partially addressed

by a recent announcement that the coop is allocating some of these funds

back to members.

The Congressional hearing was a key

event for co-ops in the early years of the

21st century. It showed how fervent producers still are about controlling their

fate through cooperatives that they own

and direct. Among the nation’s network

of farmer-owned cooperatives, none is

more vital than their FCS associations.

Any actions taken that could directly or

indirectly raise farmers’ cost of capital,

or reduce its availability in times of economic stress, would be precisely the

wrong step at the wrong time. ■

— Dan Campbell, editor 

COMMENTARY

Through good times and bad

The Congressional

hearing showed how

fervent producers still

are about controlling

their fate through

cooperatives that they

own and direct.
Rural Cooperatives / November/December 2004 3

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prohibits discrimination in all its programs and 

activities on the basis of race, color, national origin,

sex, religion, age, disability, political beliefs, sexual

orientation, and marital or family status. (Not all 

prohibited bases apply to all programs). Persons 

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communication of program information (braille, large

print, audiotape, etc.) should contact USDA’s TARGET

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

To file a complaint of discrimination, write USDA,

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Building, 14th and Independence Avenue, SW,

Washington, D.C. 20250-9410, or call (202) 720-5964

(voice or TDD). USDA is an equal opportunity

provider and employer.

Ann Veneman, Secretary of Agriculture

Gilbert Gonzalez, Acting Under Secretary,

USDA Rural Development

Peter Thomas, Acting Administrator, 

Rural Business-Cooperative Service

Pandor Hadjy, Acting Deputy Administrator,

USDA Rural Business-Cooperative Service

Dan Campbell, Editor

Vision Integrated Marketing/KOTA, Design

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Rural COOPERA COOPERATIVES

November/December 2004 Volume 71 Number 6

p. 4

p. 8

p. 13

p. 25

FEATURES & NEWS

4 Biodiesel with altitude 

Colorado's Blue Sun Co-op grows rapeseed for diesel production 

By Stephen Thompson 

7 Co-op completes purchase of 

Virginia turkey plant 

By Michael Leach 

10 27 co-ops among recipients of USDA funding 

13 Rabobank proposal sparks debate on FCS role 

By Dan Campbell 

17 Four leaders selected for Co-op Hall of Fame 

22 Co-ops help keep rural towns alive 

By Annie Baxter

24 USDA providing $6.3 million in 

grants for rural co-op development 

25 Survey shows dairy co-ops in 

generally strong financial state 

By Carolyn Liebrand 

31 1890s Land Grant Institutions use USDA

funds to promote business growth 

DEPARTMENTS

2 COMMENTARY

8 VALUE ADDED CORNER

18 IN THE SPOTLIGHT 

20 LEGAL CORNER

29 MANAGEMENT TIP

32 NEWSLINE 

36 2004 ARTICLE INDEX 

On the Cover:

Members of the Blue Sun Cooperative are growing rapeseed (a close cousin

of canola) in Colorado’s San Luis Valley and High Plains to produce high-quality biodiesel. About 45 percent of the weight of rapeseed is oil, compared to 20

percent of soybeans. See page 4. Grant Heilman Photo 
4 November/December 2004 / Rural Cooperatives

By Stephen Thompson, assistant editor

stephenA.thompson@usda.gov

thanol is being embraced nationally by farmers looking

to add value to their crops, but biodiesel has gotten off

to a slower start. Most U.S. biodiesel producers are relatively small operations that use soybeans or recycled

cooking grease as their feedstock. Now there’s something new under the sun: the Blue Sun Producers Cooperative and its

LLC partner, based in Colorado’s high altitude San Luis Valley. 

Blue Sun’s approach to biodiesel production differs from that taken

elsewhere in the United States to date. Its feedstock is a special variety

of rapeseed bred to do well in the arid climate of southern Colorado.

The biodiesel produced is blended at a 20-percent ratio with conventional petroleum diesel to produce a high-quality fuel, known as B20.

Blue Sun Producers, which currently has more than 40 memberproducers from Colorado, will be offering memberships this year to

farmers throughout the region as far north as Montana. Blue Sun has

an affiliated co-op exclusive to Nebraska which is actively seeking

more members from that state. This year, the co-op harvested its first

big rapeseed crop — more than 3 million pounds.

The cooperative’s affiliate, Blue Sun Biodiesel LLC, recently

opened a major state-of-the-art distribution terminal in Alamosa,

Colo., which lies 7,544 feet above sea level and is surrounded by the

Sangre De Cristo and San Juan mountain ranges. In May 2005, it

will open a processing plant and refinery co-located with the transportation facility. Both openings will be welcome events in Alamosa

and the surrounding San Luis Valley, an area of southern Colorado

that has been hurting economically, in part due to low commodity

prices and drought conditions. 

Rapeseed widely used in Europe

Rapeseed, some varieties of which are used to make mustard and

others to make canola oil, is the preferred biodiesel feedstock in

Europe. About 45 percent of the weight of rapeseed is oil, as compared with only 20 percent for soybeans. It can be planted and harvested with the same equipment used for small grains. In addition, its

oil offers certain advantages in the production of biodiesel.

The seed for Blue Sun was planted when former Duracell Batteries

executive Jeff Probst came to Colorado looking for an opportunity to

start a new business venture in the energy sector. Among other new

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows

rapeseed for biodiesel production 

E
Rural Cooperatives / November/December 2004 5

product and technology projects,

Probst had worked on Duracell’s

worldwide objective to replace the

environmentally hazardous mercury

battery. He was attracted to biodiesel

because, he says, he wanted his new

effort to help the environment as well. 

B20 fuel has many environmental

advantages over straight petroleum

diesel. Its exhaust is cleaner, especially

when it comes to soot particulates that

form the black smoke often seen coming from the stacks of diesel-powered

vehicles. 

Breathing diesel soot has been

linked by some to illness among children, including asthma, bronchitis,

pneumonia and, in adults, even cancer.

In addition to being healthier, the

exhaust generated by biodiesel or

biodiesel blends doesn’t have as much

of an objectionable smell as does the

exhaust from 100 percent petroleum

diesel. 

Is rapeseed the answer?

Probst soon concluded that buying

feedstock, such as soybeans, on the

open market would be risky for the

operation because of wide price fluctuations. 

“Feedstock is 85 percent of the cost

of 100 percent biodiesel,” he says. “So,

we felt that we had to have our own

source. We can always go to the commodity markets if we lose a crop or

have a shortfall.”

In 2002, Probst spent months talking to farmers in the San Luis Valley

area and elsewhere. “It was difficult,”

he says. “In the early days, we’d drive

lots of miles just to talk to four farmers.” What he found was that farmers

were interested in finding a crop that

was outside the commodity markets.

Soybeans and other commodity crops

posed too many risks involving government price supports and other factors. 

On the other hand, they were wary

of the risk of sinking money into a new

cooperative. Local service and other

co-ops hadn’t paid dividends in 10

years. Further, recent weather conditions had damaged crops and hurt

farmers financially, making them doubly cautious.

Despite farmers’ caution, Probst felt

that if they were presented with a wellthought-out business model, a valueadded co-op could fly.

From idea to reality

After talking with agronomists at

several universities, Blue Sun decided

that rapeseed was the best choice for

feedstock. They began working with

researchers at Colorado State

University and other universities to

identify the most suitable varieties.

Meanwhile, Probst turned to

lawyer Mark Hanson of Lindquist and

Vennum, an advocate of the new-generation co-op movement, for assistance. “He gave us a lot of help and

encouragement,” says Probst. “He

came to the office, looked at our business plan, and told us it could be made

to work.”

Hanson helped with the legal

paperwork needed to set up the producers’ cooperative, which would hold

equity in the manufacturing and distribution company, and advised that

the corporate side of the operation

change status from a regular corporation to a limited liability corporation

(LLC). The reason was simple and

vital: to allow the profits to get to the

producers without first being taxed.

They both agreed that producers had

to be paid first if the venture was to be

successful, Probst says.

With the legal groundwork done,

Blue Sun began actively recruiting

members for the co-op. One of the

first farmers to join was Brian

Starkebaum, who grows wheat, corn

and millet on his land in Phillips

County, in northeast Colorado. A

member of his local conservation

board, he sat through a Blue Sun presentation at one of the board meetings. Starkebaum was impressed, he

says, because of their willingness to

invest in rural Colorado. Afterward,

he volunteered to set up a meeting of

producers.

Adding value a necessity

for family farmers 

Starkebaum was interested in valueadded ventures because, he says,

“Value-added is the only way familysized farmers are going to survive. It’s

often the money from an outside

source that makes the difference

between breaking even and making a

profit.” 

However, ethanol production, currently the most popular value-added

activity, didn’t attract him. “Ethanol

hasn’t been doing as well around here

as it was billed,” he says. “They oversold the idea.”

The rapeseed producers’ co-op

offers farmers not riches, says

Starkebaum, but a way to mitigate risk,

and to earn some extra money above

the price of the crop. 

“With the rapeseed, we’re promised

a known, consistent price, and we also

make money on the ‘back side’

through the value-added activities,”

Starkebaum says. Blue Sun is already

planning to make its first dividend payment to co-op members.

Starkebaum agrees that generating

interest among farmers has been challenging. “It’s been a battle,” he says.

“Asking people to give $5,000 (the

required minimum equity stake last

year) is hard, especially with current

farm conditions. Farmers want to see

other people try it first, to see if it’ll

work out.”

Blue Sun is planning to split the

stock for current farmers, providing

them with twice the amount of units

that they can sell, lease or increase

their acreage planted. In addition, the

minimum investment will be reduced

this year to one unit at $1,000 vs. five

units at $5,000.
6 November/December 2004 / Rural Cooperatives

Organizing efforts are not helped

by the fact that local traditional co-ops

haven’t been paying dividends, says

Starkebaum. “It’s hard to get guys to

understand [the concept of] not making all your money back with the crop,

but instead getting a return on your

shares with dividends.” 

“It’s going to be tough,” says

Starkebaum, “But the retail and business side has been set up well.” 

“We’re gaining momentum. First it

was hard to get their attention,” adds

Probst. “Now they’re asking us to

come out and talk to them.”

Commodity, or branded product?

If the rapeseed-biodiesel model

works, and a market is created for Blue

Sun’s fuel, they expect to see competitors springing up to take advantage of

the market. How, then, can Blue Sun

avoid becoming just another commodity supplier? 

Probst thinks he has the answer. “I

wanted to do better than the standard.

I wanted us to have an advantage.”

That advantage would be selling Blue

Sun biodiesel as a differentiated product — a product perceived to have

advantages over other diesel fuels.

That meant aggressive innovation,

marketing and quality control.

Having control over the processing

and distribution infrastructure is the

best way to assure quality, which is the

route Blue Sun is taking. Although the

firm still has to use a contractor to do

its seed crushing, all the production

and blending will soon be done in Blue

Sun’s Alamosa plant.

Depending on when the minimum

amount of acreage is achieved in the

Valley, plans will move forward for a

crushing facility at the same location.

And Blue Sun retail pumps are already

in operation in a growing number of

localities, most recently in Santa Fe,

N.M. 

Overall, says Probst, the firm is

spending close to $4 million on the

plant, aided by a $500,000 Renewable

Energy Systems grant and a $450,00

Value-Added Producer Grant from

USDA Rural Development. “USDA

has given us major help in getting

going,” he says. “When the ValueAdded Producer Grant was announced

in the fall of 2003, it really helped our

credibility in the farm sector.”

Improving biodiesel 

Blue Sun has decided that establishing its brand will center around

improving on biodiesel’s advantages. It

continually researches new ways to

improve its fuel, working closely with

diesel manufacturers, especially

Cummins, to develop new additives

and blends.

Scott Bentz, vice president for

Operations and Marketing with

Cummins Rocky Mountain, was skeptical when Blue Sun approached for

help. “Diesel manufacturers have traditionally been hesitant about biodiesel,”

he says. “There’s so much variability

with the feedstocks, and quality control

hasn’t been that good.” 

But Blue Sun’s commitment to quality has made him a believer, says

Bentz. “I’m really impressed with their

quality control. They control the quality from the source to the pump.

They’ve developed their own infrastructure for blending and distribution,

so they can eliminate most of the

opportunities for problems. And they

make a superior product.” 

Many school districts have switched,

or are contemplating a change, to

biodiesel for their school buses to

reduce what they perceive as a health

risk to their students. Municipal bus

systems are beginning to adopt the

new fuel as well. 

Denver, with its serious air-pollution problem (often caused by air

inversions), offers a big potential market. Says Starkebaum, “Denver’s transit

system is already running 10 buses on

Blue Sun as a test. If they decide to

run their entire fleet on it, they could

use our entire production — 10 million gallons per year!”

Biodiesel and B20 also offer significant advantages to operators of diesel

Part of Blue Sun’s new transportation facility arrives, prefabricated, at the construction site

in Alamosa, Colo. Blue Sun Biodiesel is spending $3.2 million on a combined transportation

and blending facility, slated for completion this May. Photos courtesy Blue Sun 

Jeff Probst, CEO of Blue Sun Biodiesel LLC,

had to drive long distances at first to talk to

a few skeptical farmers about setting up a

rapeseed co-op. Now, he says, “they’re

asking me to come out and talk to them.” 

continued on page 34
Rural Cooperatives / November/December 2004 7

By Michael Leach,

USDA Rural Development 

he newly formed,

Virginia Poultry

Growers Cooperative

(VPGC) has acquired the

Pilgrim’s Pride turkey

processing operation in Hinton, Va., in

the heart of the Shenandoah Valley, for

about $35 million. The newly formed

co-op will keep the plant, which can

process 8 million birds annually,

operating under farmer ownership.

Also purchased as part of the deal

is a feed mill in Broadway, Va. 

Producers are using a combination of equity they raised among

themselves and outside sources,

grants and low-interest loans from

federal, state and local governments, and financing from Farm

Credit of Virginia to buy the plant.

The remainder of the financing

was close to being finalized at press

deadline in late October, with

CoBank expressing strong interest

in the deal. 

The plant was closed temporarily in

mid-September, but the co-op plans to

have it back in operation by the end of

November. 

Last April, Pilgrim’s Pride

announced plans to close the facility

unless a buyer was found by Oct. 1,

which sent an economic tremor rumbling throughout the region. If the

plant were shut down, it would have

left a $200-million dent in the economy of the Valley. Lost annual wages

for the plant’s 1,300 workers alone

would have been about $38 million

annually, and up to 200 farmers were

faced with the prospect of bankruptcy.

While not all the jobs are being saved,

the co-op hopes to hire back more staff

in coming months as plant volume

increases. 

Co-op President Sonny Meyerhoffer

says VPGC had to do in a few months

what typically takes at least 18 months

to accomplish. Organizers had to accelerate the takeover process — including

forging a solid business plan in a matter

of weeks — because the window of

opportunity was so limited. “The

dream is alive,” Meyerhoffer said at a

co-op meeting. 

“It’s almost a miracle that they were

able complete a fairly complex deal in

such a short amount of time, but it’s

also evidence of just how crucial this

plant is to the poultry industry and the

economy of the region,” says Norm

Hyde, a spokesman for the Virginia

Farm Bureau Federation. “It would

have been a crushing economic blow

had it closed.” 

Rockingham County, Va., where the

plant is located, is considered to be the

birth place of the modern turkey industry, Hyde noted. Additionally, in

recent years it has been the largest

turkey-producing county in the United

States.

Texas-based Pilgrims’ Pride said it

wanted to sell the plant, which

processes whole birds and turkey

breasts, to focus more on value-added,

deli turkey products. The co-op will be

phasing in de-boning operations to

produce more processed parts. A positive sign of the co-op’s prospects

in the marketplace came when a

strategic partner in the high-end

meat processing business agreed

to purchase turkey breasts from

VPGC. 

Cooperative members had

invested $2.6 million by early

August. USDA Rural

Development provided an $8

million grant — through its

Rural Economic Development

Loan and Grants program — to

the Shenandoah Valley Electric

Cooperative, which in turn made

a low-interest loan to the turkey

co-op. The state of Virginia’s

Department of Agriculture and

Consumer Services provided the co-op

with a $500,000 grant, and West

Virginia provided a $250,000 grant.

Rockingham County also chipped in

with a $100,000 grant.

When delivering the grant from

Virginia, VDACS Commissioner

Carlton Grant said the farmers who

formed the co-op “represent the true

spirit of American agriculture; they are

people who look adversity square in

the eye, brace harsh reality and then

band together to find a solution.” ■

Co-op completes purchase

of Virginia turkey plant 

T

USDA Rural Development presents the new Virginia Poultry

Growers Cooperative with a grant during a ceremony in

Hinton, Va. 
8 November/December 2004 / Rural Cooperatives

By Mark Berry

Editor’s note: Berry is media relations

manager for Battelle Co., a research and

technology company based in Columbus,

Ohio. This article is provided courtesy the

Ohio Soybean Council. 

ost U.S. consumers

have so far turned a

cold shoulder to tofu.

However, the big chill

may be ending. The

development of a new, frozen tofu

product shows that a thaw in this relationship may be just around the corner.

Recent product testing shows consumer interest is growing for this highly adaptable, protein-rich food that is a

staple in many Asian nations. The

key is a new technology that

allows the soy-based product to be

frozen while maintaining all of the

characteristics of fresh tofu.

That news should warm the

hearts of soybean farmers everywhere.

“Based on information and

analysis from previous projects

examining this opportunity, the

financial projections appear to be

quite attractive,” says John Lumpe,

new-use development director for

the Ohio Soybean Council (OSC).

“This technology can benefit the

Ohio soybean industry by increasing the use of soybeans as a food

product.”

If a USDA-assisted marketing

study and research ultimately

shows a strong likelihood of

success, the OSC hopes the

project will be pursued by a cooperative of Ohio soybean growers.

The new technology was

developed by a major food

processor using a patented,

flash-freezing process that

allows storage of frozen

tofu for up to a year.

Fresh tofu can be

stored no more than

seven to ten days.

Frozen foods less

common in Japan 

Tofu is much more popular in

Japan and other Asian countries than

in the United States. Frozen tofu has

been

available

in Japan for

several years,

but it remains

little more than

an afterthought for Japanese consumers. The reasons range from the

quality of the product — it is inferior

to fresh tofu, according to the

demanding standards of Japanese diners — to cultural habits and market

logistics.

While U.S. consumers rely heavily

on frozen foods, the Japanese do not.

The country doesn’t have the large

fleet of freezer trucks that allow easy

transportation of frozen products in

the United States. 

Also, Japanese houses are smaller

and so are their refrigerators. The

Japanese are much more likely to buy

food daily for same-day meals because

they lack the storage room for large

quantities of frozen foods. It’s a fundamental difference in cultures and buying habits.

Warming up to cold tofu

Ohio soybean growers study entry 

into emerging frozen tofu market 

V ALUE-ADDED CORNER

M

Amy Sigg Davis, vice chair of the Ohio Soybean

Council, checks out some of the tofu food products

during a recent market research trip to Japan. The

council is using grants from USDA to help gauge

the market for frozen tofu made with Ohio soybeans. Photos courtesy Ohio Soybean Council 
Rural Cooperatives / November/December 2004 9

All of those factors that work

against the frozen tofu market in Japan

make the product attractive in the

United States.

“Simply put, U.S. consumers are

used to frozen food. Japanese consumers aren’t,” says Bhima

Vijayendran, senior research leader and

vice president for technology commercialization at Battelle. “The advantage

with frozen tofu is they can buy a halfpound and use just a small amount,

then put the rest in the freezer for

another time. They can’t do that now.”

Vijayendran, Lumpe, Amy Davis,

vice chairman of OSC, and Steve

Miller, chairman of OSC, were part of

a group commissioned by the OSC

that traveled to Japan in March 2003

to study the technology and research

Japanese consumer habits as they pertain to fresh and frozen tofu. Among

the conclusions they reached was that

the convenience of frozen tofu, while

not a terribly important factor in

Japan, could make the product a viable

alternative in the United States. A second study mission to Japan is planned

for the near future. 

VAPG grants help council gauge

feasibility, develop business plan 

USDA Rural Development has provided $200,000 in grants for the project under its Value-Added Producer

Grants (VAPG) program (see page 10

of this issue for more on this program). The grants are helping OSC

study the technical feasibility and market viability of a commercial frozen

tofu plant in Ohio. 

In 2002, USDA awarded the council

a $50,000 VAPG to investigate the feasibility of such a plant. In 2003, it

received a second VAPG for $150,000

to develop a business and marketing

plan. 

Product convenience would make

little difference to consumers if the

product was deemed inferior. Unlike

the product on the market in Japan, a

new freezing process doesn’t compromise quality.

Recent food tests of tofu with focus

groups of consumers in Chicago and

New York City triggered “very favorable” responses, says Vijayendran. The

consumer groups could not tell the difference between the frozen tofu and

the fresh tofu they typically eat. 

The chef, who prepared a wide variety of meals with tofu — including salads, soups and pasta — confirms the

enthusiastic response.

“I do a lot of work with soy foods in

general, so this is an area of specialty,”

says Christopher Koetke, associate

dean of the School of the Culinary

Arts of Kendall College in Evanston,

Ill. “The frozen tofu performs wonderfully. It behaves surprisingly like fresh

tofu. It has a soft texture to it. It’s very

pleasing and not rubbery at all. The

groups loved it.” 

Performance and convenience are

two huge steps in the right direction,

but tofu remains a marginal product in

the United States. So consumer education is key to the success of frozen tofu

in America. Consumers do not know

much about the product or its many

positive characteristics.

Not many vegetable proteins are as

rich in protein as soy. There are specific health benefits for menopausal

women and people with high cholesterol. Whereas soy alternatives used

to be displayed separately from the

more traditional products, soy milk

can now often be found in the dairy

section. 

Tofu in the United States is a slowly

growing market, “but it’s gaining traction here,” says Vijayendran. Soy protein is recognized as a good, nutritious

alternative.

Obviously, it’s an emerging market,

says Vijayendran. “The health-conscious are early targets. At first, it

probably will be more attractive on

the West Coast than Chillicothe,

Ohio.” ■

The Japanese have never had much of a yen for frozen tofu, but new technology that produces a superior product may help change that. 
10 November/December 2004 / Rural Cooperatives

Agriculture Secretary

Ann M. Veneman in

mid-October announced

the approval of 97 ValueAdded Producer Grants

(VAPG), totaling more than $13.1 million, in 34 states. Farmer-owned cooperatives were awarded 27 of the grants.

The grants will help farmers and

ranchers increase their economic

opportunities through the development of new products and markets for

agriculturally based products.

In support of President Bush’s 2001

energy plan, 16 percent of the proposals selected will support biomass/

renewable energy-related ventures.

“The Bush administration continues to

place a high priority on creating new

sources of renewable and biomass

energy through such grant programs as

the value-added producer grant program,” Veneman said. “Creating an

energy independent nation, through

utilization of our nation’s natural

resources, is a valuable investment in

America’s future.”

“These grants are critical to helping America’s farmers and ranchers

increase markets for their commodities and to increase their profitability,” added Agriculture Acting Under

Secretary for Rural Development

Gilbert Gonzalez. “President Bush is

committed to helping more rural families live the American Dream

through the creation of new business

ventures that employ more rural

Americans. This program is a significant investment in the future of rural

families and communities.”

Authorized as part of the 2002 Farm

Bill, the VAPG program provides an

opportunity to refine agricultural commodities and products to increase their

value in the marketplace. 

Of the $13.1 million announced,

$2.1 million will fund 16 proposals

ranging from determining the feasibility and creating a business plan for harnessing wind energy in Colorado, to

determining the feasibility of marketing ethanol from a 50-million-gallon,

dry-grind ethanol plant in Illinois, to

determining the feasibility of converting dairy biogas into purity pipeline or

automotive quality fuel in Idaho.

VAPG is a highly competitive grant

program that attracted nearly 400

applications. An independent review

of applications is conducted to ensure

that selected proposals are scored

based on the criteria established in the

announcement of the funding availability. Funding of selected applicants

will be contingent upon meeting the

conditions of the grant agreement. 

Following is a list of the co-ops that

received a VAPG. A complete list of

the selected grant recipients can be

found posted on at the USDA Rural

Development Web site at:

http://www.rurdev.usda.gov.

USDA Rural Development’s mission is to deliver programs in a way

that will support increasing economic

opportunity and improve the quality of

life of rural residents. As a venture capital entity, Rural Development provides equity and technical assistance to

finance and foster growth in homeownership, business development and

critical community and technology

infrastructure. ■

27 co-ops among recipients of

$13 million in USDA Rural

Development VAPG funding

A

Sunsweet Ones — individually wrapped

dried plums — are being aimed at the

young adult market. Sunsweet Growers 

will be using VAPG funds from USDA Rural

Development to help establish the market.

Photo Courtesy Sunsweet Growers 
Rural Cooperatives / November/December 2004 11

Cooperative recipients of 2005 Value-Added Producer Grants

Recipient State Amount Description

1Soy Missouri $95,000 Grant funds will be used for a feasibility study, business and marketing

plans for marketing soy flour for use in premium soy food products targeting health-conscious American consumers.

Burnett Dairy Cooperative Wisconsin $150,000 Grant funds will be used for working capital expenses for marketing

deli cheese and individually-packaged string cheese products.

Cloverdale Growers' Alliance North Dakota $20,000 Grant funds will be used to study the economic feasibility of marketing

fresh and processed pork products to retail grocers under a producerowned label in partnership with Cloverdale Foods Company.

Country Side Cooperative Nebraska $415,000 Grant funds will be used to evaluate the feasibility of marketing soybean meal and soybean oil.

Darigold Inc., West Farm Foods Washington $249,000 Grant funds will be used to evaluate the feasibility of marketing whey

fractions and ultra-filtrated milk products and to develop business and

marketing plans for the venture.

Diamond Walnut Growers, Inc. California $450,000 Grant funds will be used for working capital expenses for expanding

the market for Diamond culinary and in-shell walnuts in U.S. retail

markets by creating new healthy lifestyle packaging and point-of-purchase materials.

Farmer's Cooperative of El Campo Texas $209,484 Grant funds will be used for working capital expenses for marketing

identity-preserved sorghum that has been evaluated using Near

Infrared technology to determine the nutritional value of the product.

Gateway Beef Cooperative Missouri $249,140 Grant funds will be used for working capital expenses associated with

expanding domestic and export markets for CAB kosher and non-hormone-treated beef products.

Golden Ridge Cheese Co-op Iowa $500,000 Grant funds will be used for working capital expenses for marketing

blue cheese.

Heartland Corn Products Minnesota $279,000 Grant funds will be used for planning activities associate with adding

value to the by-product stream of ethanol.

Kearney Area Ag Nebraska $130,700 Grant funds will be used to conduct a feasibility study and develop a

business plan that identifies alternative products for processing

and/or markets for alfalfa byproducts at a lutein-extraction plant.

MaxYield Cooperative Iowa $50,000 Grant funds will be used to conduct a feasibility study to determine the

viability of developing a community-based advanced bio-waste recycling and energy generation system, capable of recycling 100,000 to

250,000 gallons per day of hog manure from up to 100,000 sows.

Producers Alliance

continued next page
12 November/December 2004 / Rural Cooperatives

Miss-Lou Blueberry Growers Mississippi $28,400 Grant funds will be used to develop a business plan for marketing

frozen, free-flowing blueberries.

Missouri Northern Pecan Growers Missouri $140,000 Grant funds will be used for working capital expenses for marketing

organic pecans.

Niman Ranch Pork Cooperative Iowa $250,000 Grant funds will be used for working capital expenses for marketing

Nitrite-Free and Ready-To-Eat pork products to expanded markets.

Olive Growers Council of California California $249,170 Grant funds will be used for working capital expenses to market sliced

olive salad and nacho toppings.

Pacific Coast Producers California $300,000 Grant funds will be used for working capital expenses for marketing

private label canned tomato products, including organic tomatoes,

petite diced tomatoes, and flavored tomatoes.

Prairie Land Cooperative Iowa $107,000 Grant funds will be used to develop a marketing plan for marketing

soybeans processed into oil using continuous super-critical carbon

dioxide oil-extraction technology.

Puna-Hawaii King Papaya Co-op Hawaii $50,000 Grant funds will be used for a feasibility study to determine the viability of marketing tree-ripened papayas and to develop a marketing plan.

Siouxland Energy & Livestock Co-op Iowa $150,000. Grant funds will be used for working capital expenses for marketing 

E-85 fuel.

Small Farms Cooperative Nebraska $250,000 Grant funds will be used for working capital expenses for marketing

pre-cooked, ready-to-eat natural meat entrees.

Southeast Milk, Inc. Florida $185,000 Grant funds will be used for a feasibility study to identify value-added

products, and determine the market potential, viability, and profitability

of the products from dairy park effluent.

Sunkist Growers, Inc. California $450,000 Grant funds will be used for working capital expenses for marketing

Sunkist Smiles, a packaged fresh-cut orange product.

Sun-Maid Growers of California California $150,000 Grant funds will be used to conduct a feasibility study for implementing radio frequency identification into the handling and distribution of

raisins.

Sunsweet Growers, Inc. California $500,000 Grant funds will be used for working capital expenses associated with

introducing individually-wrapped dried plums to the U.S. market.

Valley Fig Growers California $61,348 Grant funds will be used for working capital expenses for marketing

products made from California fig paste, including Soft 40 Fig Paste

and E-Diced Figs.

Wisconsin Dairy Graziers Co-op Wisconsin $38,540 Grant funds will be used for working capital expenses for marketing

cold-pack cheese products. 

Association Cooperative

Recipient State Amount Description
Rural Cooperatives / November/December 2004 13

By Dan Campbell, editor

dan.campbell@usda.gov 

Editor’s Note: in late October,

FCSAmerica announced that it was

breaking off negotiations to sell to

Rabobank (see page 35). However, the

issues raised during the Congressional

hearing about the future of FCS in rural

America remain of great importance.

Congressional hearing

Sept. 29 in Washington,

D.C., examined the state

of the nation’s Farm

Credit System (FCS) and

the likely ramifications of a proposed

sale of a key FCS lender to a foreign

bank. The hearing presented sharply

contrasting views about the nature of

farm lending in America and the role

of the 92, farmer-owned associations

that comprise FCS in meeting farm

and rural credit needs. 

If there was ever any doubt, the hearing confirmed that the proposal to exit

the FCS by Omaha-based Farm Credit

Services of America (FCSAmerica) had

indeed stirred up a hornet’s nest. It also

revealed just how passionate many producers remain about the need for a

farmer-owned cooperative lending system for the nation. 

Opponents said the proposed sale of

FCSAmerica to Netherlands-based

Rabobank for $600 million should be

blocked because it is a poor business

deal for FCSAmerica stockholdermembers and could threaten the continued viability of the overall FCS.

They said Congress should also expand

the FCS charter to enable it to provide

a greater range of financial services to

more customers. 

During the hearing — held by the

House Subcommittee on Conservation,

Credit, Rural Development and

Research — several witnesses stressed

that their opposition was not based on

any ill feeling toward Rabobank.

Rather, they said they oppose allowing

any private bank — let alone a foreign

bank — to gain control of a vital piece

of FCS, which Congress created in

1916 to ensure a steady, reliable supply

of affordable credit is available to fuel

the nation’s farm economy through

good times and bad.

Banking industry proponents of the

sale to the Netherlands-based

Rabobank used the hearing to not only

voice support for the sale, but to blast

FCS as a “predatory lender,” which

they said has outlived its mission and is

abusing its present charter from

Congress. 

As a government-backed entity with

access to low-cost funds, FCS can offer

Rabobank proposal sparks

debate on role of FCS in 

farm & rural lending

A

USDA graphic by Stephen Thompson
14 November/December 2004 / Rural Cooperatives

interest rates that cannot be matched

by community banks, they said. The

banking groups accused FCS of using

its advantages to cherry pick well-todo, low-risk farm borrowers, rather

than catering to higher-risk borrowers,

as they say Congress intended. FCS

maintains that its mission is to serve all

sectors of U.S. agriculture.

Deal criticized as

‘breathtakingly bad’ 

Myron Edleman, a South Dakota

cattleman and grain/hay grower, spoke

on behalf of a group of FCSAmerica

borrowers who have formed Farmers

for Farm Credit, of which he is chairman. The group was formed, he said,

to “ensure that other FCSAmerica

stockholders could learn the awful

truth about the sale of their co-op.”

The proposal to sell the co-op lender

to Rabobank is “so bad that it is

breathtaking,” said Edleman, former

Farm Credit Council chairman. 

Opposition to the deal among

FCSAmerica stockholders is so overwhelming, he testified, that many suspect the board is “now struggling to

find a way to unwind this decision

without costing stockholders millions

of dollars.” He asked that Rabobank

and FCSAmerica be required to disclose the terms of any contracts

between them, including compensation

and management bonuses.

If Rabobank succeeds, “over $1 billion of borrower-contributed capital

will be wiped off the books of

FCSAmerica,” Edleman testified.

“Hundreds of millions more dollars

will be flushed down the drain as

FCSAmerica exits the system and pays

over $800 million as an exit fee into a

fund designed to protect Wall Street

investors — not farmers. None of this

money belongs to the management of

FCSAmerica; it belongs to the stockholders...”

Edleman said FCSAmerica’s capital

was built up over many years from

earnings generated on thousands of

loans. “This capital helps to ensure

that our families and future generations of Midwest farmers will have

access to a financially strong, borrower-owned source of credit.” 

If Rabobank becomes lender for

FCSAmerica’s 51,000 customers, all

business decisions that are today subject to the scrutiny by farmers,

Congress and the FCA will instead

become the sole prerogative of

Rabobank management, he noted. “It

is not possible to put a dollar value on

what we as farmers will lose.”

The principal of maintaining FCS

as a system of “farmer-owned, farmercontrolled lending cooperatives” is

absolutely essential to the future of

American agriculture, Edleman said. 

NCFC, FCC urge repeal

of ‘termination’ option 

Glen Keppy, speaking on behalf of

the National Council of Farmer

Cooperatives (NCFC), urged that

Congress revise the system’s charter to

eliminate the possibility of other such

terminations from the FCS in the

future. NCFC also supports additional

changes to modernize the Farm Credit

Act, he said, citing as an example a

proposal that CoBank be allowed to

lend to new and emerging types of

farmer cooperatives. 

“Many things have changed when it

comes to agriculture in today’s global

economy,” said Keppy, a hog/grain

farmer and CHS member from

Davenport, Iowa. What has not

changed, however, is the need for farmers, ranchers and their cooperatives to

have dependable, competitive sources

of credit and capital to operate to modernize and expand, and to take advantages of new market opportunities.” 

AgBank CEO Jerold Harris, representing the Farm Credit Council

(FCC), the industry trade association

for the FCS, also urged Congress to

repeal the Act’s termination authority

“as soon as possible.” That authority

was only inserted into the Act 17 years

ago to serve the interests of one small,

statewide credit association for livestock producers, he said. He, too,

stressed the need for more lending

flexibility and authority for FCS.

Harris said the Rabobank purchase is

not a good deal for its member stockholders. In exchange for $600 million,

Rabobank would be getting a lending

institution with total assets of $7.8 billion, including $1.35 billion in capital

and unallocated surplus, more than

$200 million in loan-loss reserves and

40 offices staffed by 900 employees. 

The decision to sell out to

Rabobank was far from unanimous,

according to Harris. Quoting “reliable

sources,” he said “a significant number

of FCSAmerica board members voted

against” the deal. 

As a system employee for 40 years,

Harris said, “I have seen very good

times in agriculture and very bad

times. I know first hand that the presence of a healthy, competitive, farmerowned Farm Credit System institution

helps all farmers — even those who

borrow from other sources — receive a

much more competitive interest rate.” 

Bankers support sale;

oppose broader charter 

Representing the American Bankers

Association (ABA), Roger Monson,

president of Citizens State Bank in

Finley, N.D., spoke in favor of the sale.

His testimony also stressed ABA’s grave

concern over the parallel discussion

about expanding the FCS charter. 

Monson called FCS “a company

which feels it has outgrown farming

and the rural America it was chartered

to serve,” and is now “pursuing an

expansionist agenda” without willingness to give up the advantages of being

a government-sponsored entity (GSE).

“It is not possible to

put a dollar value

on what we as 

farmers will lose.”

— Myron Edleman
Rural Cooperatives / November/December 2004 15

The FCS must recognize that “with

the advantages Congress has bestowed

upon it, there are limits and responsibilities. There is no economic or public policy argument that can be made

to justify expanding the charter of the

system.” 

Monson said FCS is providing government-subsidized credit to “those

that need it least...the rural rich,” even

helping them finance “country estates,

weekend getaways, hunting preserves

and golf courses.” 

For those FCS associations that

wish to expand their financial services,

the answer is to cut their ties to the

federal government, as FCSAmerica

has proposed to do, he said. “This is

natural evolution, and we support it.”

Monson called FCS “a large, sophisticated and highly profitable financial

services institution” with $119 billion

in assets, $94.3 billion in loans and a

net profit of $1.8 billion in 2003. 

FCS is the only GSE that competes

directly with the private, tax-paying

bank sector by doing direct, retail

lending, he said. “From a public policy

perspective, the justification for why

the system continues to enjoy such

extraordinary governmental support is

tenuous.” 

Monson noted that American taxpayers had to “bail out” FCS during

the farm credit crisis of the 1980s,

after what he termed “a decade of

spectacularly poor lending practices.”

Farmers in the early ‘80s made extensive use of low-interest loans from

FCS, but began to fail in large numbers when interest rates began to shoot

up. Ultimately, Congress had to offer

$4 billion in bonds to shore up the system in 1988, he said. 

Private sector lenders now see FCS

as a competitor that “exploits its GSE

status to the fullest,” such as offering

below-market pricing to gain market

share, Monson said. Complaints about

these practices to the FCA have been

largely ignored, he continued. 

Further, the system has made “deft

use of statutory and regulatory loopholes” to take in more non-insured

deposits, and has ignored its mandate

to serve young, beginning, small and

women-owned enterprises, instead of

focusing on low-risk loans to larger,

wealthier borrowers,” he said. 

Opponents of the sale have questioned the motives of FCSAmerica

management and directors, but

Monson said the same accusation

could be aimed at FCS management.

“When it is convenient for system

managers to extol the virtues of their

local boards, they do so; but when a

local, farmer-owner board makes a

decision that displeases them, they

heap abuse on their motives and their

character. Who really runs the Farm

Credit System?” 

Wheat growers support

AgStar’s counter offer

Mark Gage, a North Dakota grain

grower and president of the National

Association of Wheat Growers

(NAWG), said his group supports

preserving the FCS as a farmer-owned

lending system. NAWG does not

oppose Rabobank’s entry into U.S. ag

lending, he said, calling the bank “a

respected and strong lender with a

good track record in agricultural

finance.”

However, Gage said acquisition of

FCSAmerica by Rabobank “will

adversely affect the entire Farm Credit

System.” The sale could start a chain

reaction, in which the strongest FCS

institutions would be cherry picked

away, leaving the weaker ones to hold

up the roof. Each time one institution

is sold, it requires the remaining FCS

institutions to recapitalize a new association to take its place, drawing away

vital system resources, he said. 

He, too, questioned the economics

of the sale, saying FCSAmerica would

be sold for 41 cents on the dollar of

assets, including a reserve that represents dividends due to the association’s

farmer members. FCSAmerica has “an

excessive amount of unallocated capital

that has not been paid as patronage,”

he said. 

FCSAmerica should instead

embrace the merger proposal from

Minnesota-based AgStar Financial

Services, another FCS member, Gage

said. AgStar has offered $650 million

in cash to FCSAmerica stockholders,

and said future patronage could push

the value of the offer to more than $1

billion. Most important, farmers

Myron Edleman (left), South Dakota cattleman and chairman of Farmers for Farm Credit,

and Glen Keppy, an Iowa farmer representing the National Council of Farmer Cooperatives,

both testified against the proposed sale of FCSAmerica to Rabobank. The deal has since

been called off, but the Congressional hearing raised issues crucial to the future of farm

and rural lending in America. Photo courtesy Farm Credit Council 
16 November/December 2004 / Rural Cooperatives

would remain in control, since it

would stay within the FCS. 

Gage also called attention to the

massive changes that have occurred in

agriculture since the FCS charter was

last revised 30 years ago, urging that

the debate be used as a stimulus to

update that charter and enable FCS to

provide more services to producers and

rural America.

“The message of the National

Association of Wheat Growers is to

ensure that this cooperative remains

healthy and viable,” he said. 

Community bankers blast 

‘unfair’ lending advantage

John Evans Jr., appearing on behalf

of the Independent Community

Bankers of America (ICBA), said “regulator-assisted mission creep” has

occurred, allowing FCS to overreach

its charter. “If FCS banks are allowed

to offer the same products as us, small

town banks will be a thing of the past.”

Evans, president and CEO of D.L.

Evans Bank in Burley, Idaho, accused

sale opponents of “wanting to have it

both ways.” Last June, FCS representatives “had the audacity” to lobby the

FCA to expand the scope and eligibility of the system’s authority so that

FCS entities could make loans to individuals who “have little relation to

agriculture,” he said. 

CoBank’s desire to have its charter

expanded so that it can lend to producer-owned LLCs (considered by

some to be a new form of hybrid coop), with both producer and investor

class stockholders, is another contradiction of principle, Evans said. The

LLCs can wind up with producers

holding only 50 percent of the stock,

“allowing outside investors to easily

take control over this new style of

LLC-cooperative. 

“Why is the system supporting legislation to potentially allow every other

cooperative in the United States to be

put on the chopping block except for

its own?” 

Evans said ICBA surveyed its members on the sale, and found that the

majority favored the sale to Rabobank.

However, some ICBA members have

expressed concern over the Rabobank

proposal, Evans noted. They say

Rabobank would become yet another

major new competitor for community

banks, and that it would be buying “a

large book of business that was built

Nancy Pellett, chairman and CEO of the Farm Credit

Administration (FCA), which regulates the FCS, testified

at a Congressional hearing Sept. 29 as to the critical role

FCS plays in the nation’s food and fiber system. However,

Pellett said she would not take a position on the

Rabobank proposal, since the FCA board may ultimately

have had to decide its fate. 

She provided important background for the debate,

stressing that farmers and the rest of rural America have

a huge stake in the outcome. FCS has more than $100 billion in loans, representing about 30 percent of the

nation’s total ag credit market. The system is “sound in

all material respects,” Pellett stressed. 

“Without the FCS, we believe the soundness of agriculture and the quality of life in rural America would be

greatly diminished,” Pellett warned. FCS is a vital key to

the nation’s agricultural strength, the ultimate beneficiaries of which are American consumers, she said. On

average, Americans now spend only 14 percent of their

income on food, down from 21 percent in the 1970s. 

In the early 1990s, Congress directed the General

Accounting Office to study the cost and availability of

credit in rural America, Pellett said. The results,

released in 1994, concluded that no new statutory

authorities were needed for FCS in the near term. However, the study said that the restructuring of American

agriculture could make changes necessary in the long

term.

A decade later, “those changes have arrived,” Pellett

said. She noted that average farm real estate prices have

skyrocketed from $196 per acre in 1970 to $1,360 in 2004,

a 594-percent increase. 

At the same time, the rural population has declined

from 26 to 21 percent of the nation’s total. Many rural

towns are losing population and critical infrastructure,

Pellett continued. The number of farmers and ranchers

has declined from 3 million to 2 million since 1970, and

farmers have become increasingly reliant on off-farm

income and government payments. Much of the capital in

rural areas is in fixed assets and not easily converted for

investment purposes, she said. 

In response, FCA developed a five-year plan which

calls for giving system lending institutions greater flexibility and to reduce or eliminate regulations that “unnecessarily impair” their effectiveness. It recommends that

the FCS be allowed to expand operations, not only within

agriculture, but also to serve a broader portion of rural

America. Specifically, Pellett said Congress should consider changing the Act so that FCS institutions can make

home loans in rural towns of more than 2,500 people (the

current cap), and to enable them to engage in syndication lending (bringing in other banks to help them finance

projects that exceed their lending limits). 

The Farm Credit Act “must be brought into the 21st

Century,” Pellett said. ■

— By Dan Campbell 

FCA chair: stakes huge in credit debate; changes sorely needed

continued on page 33
Rural Cooperatives / November/December 2004 17

our outstanding cooperative leaders — Pete Crear

of the Credit Union

National Association,

Robert Kabat, formerly

with the National Rural Electric

Cooperative Association, and the late

housing co-op advocates Charles and

Eva Rappaport — will receive the

cooperative community’s highest honor

next April 20, when they are inducted

into the Cooperative Hall of Fame.

The Hall of Fame recognizes those

whose contributions to cooperative

enterprise are “genuinely heroic.” Two

committees of national co-op leaders

select the inductees. 

• Pete Crear has been a passionate

promoter of cooperative enterprise

for more than 40 years. The breadth

of his contribution is reflected in the

words used to describe him: organizer, statesman, educator, ambassador,

advocate, mentor and leader. His skill

as an organizer resulted in the establishment of numerous credit unions

in many states, including close to 20

in metropolitan Detroit alone, which

brought the first stable, non-predatory financial services to the inner city

and its mostly minority population. 

His statesmanship has been evident throughout his career as he

repeatedly demonstrated an ability to

read the politics of situations, apply

his senses of humor and fairness, and

broker compromises that produced

solutions. His commitment to education is evident in the major role he

played in establishing CUNA’s partnership with the National Endowment of Financial Education, which

now brings financial education to

nearly 1,000 high schools across the

country. 

• Robert “Bob” Kabat is credited

with creating a culture of continuing

cooperative education within the

electric cooperative industry. As

director of NRECA’s Management

Services Department for 40 years,

Kabat put in place the management

programs and consulting services

that have enabled electric and telephone cooperatives to thrive in a

changing utility environment. No

single person has been more instrumental in the development of effective governance and management

expertise within this cooperative sector. Literally thousands of locally

elected directors have benefited from

the “institutes” that he established to

provide training on the duties and

responsibilities of board members. 

Still in use today is the unique

model he developed, with assistance

from the Rural Electric Management

Development Council, for evaluating

management effectiveness for general managers and CEOs. He developed the Management Internship

Program, a six-week university-based

training program on all aspect of

electric cooperative management

that graduates more than 60 students

a year and is conducted at the business school of the University of

Wisconsin-Madison. 

• Charles & Eva Rappaport

(deceased) for more than 30 years

were tireless volunteers and influential leaders of the New York City and

national housing cooperative community. Charles served as president of

the Federation of 213s —later the

Federation of New York Housing

Cooperatives — founded in the 1950s

by 100 moderate-income co-ops. Eva

served as the organization’s executive

director, working as editor, writer,

conference coordinator and membership director in their home office. 

In a city where a third of all ownership housing is in cooperatives,

Charles was a strong advocate and

made sure housing cooperatives were

heard on issues like asbestos, lead,

energy and citywide labor contracts,

as well as real estate tax abatements

for veterans and senior citizens. 

While much of their focus was on

New York City, the Rappaports

advocacy has been felt throughout

the country. Charles directed his

attention to the national level, where

he led the Federation’s successful

campaign to separate 213 premiums

from all other Federal Housing

Authority insurance funds and create

the Cooperative Management

Housing Insurance Fund as a true

mutual. More than 40 years later, the

Fund is still returning patronage dividends to Section 213 cooperative

housing corporations. 

The Cooperative Hall of Fame was

established in 1974 by the National

Cooperative Business Association and

is now administered by the Cooperative Development Foundation, a

national foundation that uses cooperatives to help people improve their

lives. The Hall of Fame is housed in

the offices of the National Cooperative

Business Association in Washington,

D.C., and can also be visited on the

Web at: www.heroes.coop. ■

Four leaders selected 

to Co-op Hall of Fame

F
18 November/December 2004 / Rural Cooperatives

avid Landis, a state senator from Nebraska since

1978, has been getting

rave reviews at co-op

annual meetings for an

inspirational, one-man performance in

which he portrays co-op pioneer and

champion George W. Norris. Born at

the outset of the Civil War in 1861,

Norris was elected from Nebraska to

the House of Representatives in 1902,

spending 10 years in the House before

moving on to the Senate, where he

served another 30 years. During the

1930s, he authored legislation that created the Rural Electrification

Administration (REA) and the

Tennessee Valley Authority (TVA). 

These organizations gave millions

of Americans access to many of the

simple conveniences city people had

enjoyed for decades. Rural electricity

revolutionized farm life in America.

Throughout his career, Norris’ conscience was his only guide, and he

fought for the farmers and the common men and women of this country.

Q. How did you first become familiar with

Sen. George Norris, and what about his

life and work inspired to you to create your

one-man show based on his life?

A. When I was first elected to the

Nebraska unicameral, non-partisan

legislature, I discovered that both of

those innovations, unicameralism 

[a legislature composed of a single

body] and nonpartisanship, were the

ideas of George Norris. The idea for 

a one-man show, or for doing Norris,

was prompted by a request from the

Nebraska Humanities Council to

impersonate Norris at our 125th statehood anniversary celebration. The

Humanities Council felt Norris’ legacy

was slipping in the mind’s eye of

Nebraskans, and that he was no longer

a vital part of our communal memory.

Q. What major messages or lessons do you

think Sen. Norris would want the leaders

and members of today’s cooperatives to

remember, based on his experiences? 

A. Norris would remind us that the

cooperative is a mechanism for selfhelp. It is people determining their

own fate, getting together and charting

their own course. He was a great

believer in that kind of responsibility,

and that’s one of the reasons he loved

the cooperative movement. Second, 

I think he would remind them that

cooperatives sprang up because the

marketplace had failed them. The

desire for profits that motivates the

investor-owned utility was not sufficient justification to run electricity to

low-profit or no-profit customers. Coops are a product of the failure of the

investor-owned utilities to care enough

to extend service to people that needed

that service.

Q. Are the challenges confronting today’s

cooperatives much different than the ones

faced in Norris’ day? 

A. I’m sure there are new complexities

and difficulties facing co-ops today

that were not present in Norris’ time;

IN THE SPOTLIGHT

Sen. Dave Landis, as co-op

champion Sen. George Norris 

D

Dave Landis in costume as Senator

George Norris, who spearheaded efforts

to bring electricity to rural America

through the use of utility cooperatives.

Photo courtesy Dave Landis

“...we need to think 

in terms of what is

good today and what

is good in the future,

that our legacy runs

across generations and

the shadow of our life

falls upon generations

yet unborn.”
Rural Cooperatives / November/December 2004 19

however, those days were also difficult

and complex. Co-ops sprang up, for

the most part, in the days of the

Depression and WW II. They grew

up with the envy of the investor-owned

operators who wanted to stymie co-ops

at every turn, including the use of lawsuits to stop the creation of co-ops. 

I guess you could say that the co-ops

have never had an easy row to hoe.

They’ve always had critics and challenges and they’ve always risen above

and succeeded in the face of those

challenges.

Q. Is there one particular anecdote about

Norris that you think reveals the type of

man he was? 

A. There is a particular anecdote

that’s helpful to understand Norris,

although it’s one that he would say

reveals not himself, but his mother.

When he was ten and had spent a

hard day working on the family

farm, his mother called him over to

plant a tree. Both of them were

glistening with sweat, it was hot

and a hard day of work that they’d

just finished. Norris said, “Mother,

why do you work so hard? You

won’t even see this tree in fruition.”

And she looked him in the eye and

said, “Willie, I may not see this tree

bear fruit, but someday someone

will.” 

Norris used that anecdote over

and over in his life to say that we

need to think in terms of what is

good today and what is good in the

future, that our legacy runs across

generations and the shadow of our

life falls upon generations yet

unborn. He thought in terms of a

legacy that would last decades as it

affected people’s lives and he found

that obligation or responsibility in

that anecdote of his mother and his

childhood.

Q. The sheer tenacity of Norris — continuing to push for laws supporting coops even though he was defeated time

and again — is a striking feature of

your presentation. Even the fact that he

was left as a widower with three children

prior to making his first run for Congress

might have defeated a lesser man. What

do you think kept him fighting against

such formidable odds? 

A. Norris grew up on a farm, fatherless, with a mother and six older sisters

trying to eke out a living on relatively

poor soil in Ohio. He didn’t go to

kindergarten so he could help on the

farm. At the age of 11, he paid the

taxes on that farm by working on the

county road gang. Norris knew nothing but tenacious effort. It would not

have made a difference what line of

work he ultimately went into. The

kind of energy and fight that he had

was obvious by the age of 16. Norris

never calculated the odds, so that they

could intimidate him or dissuade him.

He calculated the public good and was

motivated by that alone.

Q. Who are the primary audiences for

your performances? How many shows do

you perform per year? How can interested

parties contact you?

A. Co-op annual meetings are a major

audience, although I also speak at

meetings of credit unions, which are

also organized as cooperatives. Norris

was a supporter of them as well. He

believed in the idea of the cooperative

one-person, one-vote form of selfdetermination. The Nebraska legislature is on-line; you can find me there

for e-mail or home telephone number.

Q. Are you able to “tailor the content of

the presentation if the audience is one or

the other type of co-op?” 

A. I try to tailor the content of the

presentation to the audience. Norris’

general approach did not distinguish

between utilities and [farm or other

types of] co-ops. His basic distinction

was between private and public power.

He found the virtues of public power

to straddle both the utility and the

cooperative.

Q. What would the nation lose if our

utility and farmer co-ops pass out of existence? 

A. I regard that future as unthinkable.

In a more light-hearted response, 

I would just quote Mark Twain who

said, “There is nothing so irritating as

a good example.” If there is tension

between the investor-owned utility

community and public power, it’s

because public power and cooperatives have been such a shining example of service, fair prices, community,

outreach and fair dealing. Those are

things we can’t afford to lose in our

communities. ■

Nebraska Senator George Norris tours the Norris

Dam in Tennessee, which is part of the Tennessee

Valley Authority (TVA), of which he was a champion.

Photo courtesy TVA 
20 November/December 2004 / Rural Cooperatives

By Marlis Carson

Vice President, Legal, Tax and Accounting

National Council of Farmer Cooperatives

Section 7 of the Clayton Antitrust

Act makes it illegal for one business to

acquire, directly or indirectly, the

stock of another business, where the

effect of the acquisition may be to

substantially lessen competition or

tend to create a monopoly. A U.S.

District Court in Kentucky has ruled

that Dairy Farmers of America (DFA)

did not violate this provision when it

purchased 50 percent of the voting

interest in the company that controlled one fluid milk processing plant

and a 50-percent non-voting, nonmanagerial interest in another company that operated a competing fluid

milk processing plant.

Case facts

DFA, a milk marketing cooperative,

markets raw, unprocessed milk to dairy

processors. It invests in downstream

dairy companies that process milk for

consumption. Such investments help

DFA secure outlets for its members’

raw milk and allow its members to

share in the earnings from the sale of

finished dairy products.

In 2001, DFA joined with several

individuals to form National Dairy

Holding, L.P. (NDH), which owns the

Flav-O-Rich dairy bottling plant in

London, KY. The individuals collectively owned 50 percent of the voting

interests in NDH; the remaining 50

percent was held by DFA.

In 2002, DFA and a family-owned

limited partnership formed Southern

Belle Dairy Company, LLC (Southern

Belle). Southern Belle owns a fluid

milk processing plant in Somerset, KY.

DFA owned 50 percent of the voting

interests in Southern Belle and the

family limited partnership owned the

other 50 percent.

In 2003, the U.S. Department of

Justice and the State of Kentucky filed

a civil antitrust lawsuit against DFA

and Southern Belle to compel DFA to

divest its interest in Southern Belle.

The complaint alleged that DFA’s purchase of its interest in Southern Belle,

after it had secured the 50-percent

interest in NDH, would substantially

lessen future competition for the sale

of milk to schools in Kentucky and

Tennessee.

In 2004, the ownership and control

of both joint ventures was restructured.

In February 2004, one of the individual

owners of NDH, Allen Meyer,

acquired the interests of the other individual owners. Now Meyer and DFA

each owned 50 percent of NDH. They

each also owned 50 percent of another

joint venture, Dairy Management

LLC, that served as the managing partner for NDH, with Meyer and DFA as

limited partners. Meyer was clearly

identified as the manager of Dairy

Management LLC, and thus of NDH.

Furthermore, the operating agreement

of NDH was modified to ensure the

NDH was operated and controlled

solely by its manager, Meyer.

In July 2004, DFA exchanged its

voting interests in Southern Belle for

nonvoting preferred capital interests.

DFA no longer had the right to vote

on any matter and did not have a seat

on the governing board of Southern

Belle. The family limited partnership

had the right to sell Southern Belle at

any time, including DFA’s interests.

Southern Belle, and hence the

Somerset plant, were managed by a

member of the family partnership.

The family partnership did not own

any interest in DFA and DFA did not

own any interest in the partnership.

The court issued its opinion in late

August 2004, holding that as the ventures are now structured, DFA is not in

a position to control the sale of milk to

schools in the area.

Holdings of the court

The district court identified the

issue at hand as to whether DFA’s 50

LEGAL CORNER

Dairy co-op acquisition does

not violate antitrust law

DFA’s 50 percent

share of each venture, in and of itself,

did not translate

into the degree of

control necessary to

establish an

antitrust violation.
Rural Cooperatives / November/December 2004 21

percent non-voting interest in

Southern Belle, when combined with a

50-percent voting interest in NDH

(and thus Flav-O-Rich, Southern

Bell’s competitor), would substantially

lessen competition. Citing the U.S.

Supreme Court decision in U.S. v.

Philadelphia National Bank, 374 U.S.

321 (1963), the district court noted

that Section 7 of the Clayton Act is

violated if the market is sufficiently concentrated and an

acquisition would enhance

that concentration.

The court noted that the

Philadelphia National Bank

standard requires that the

acquisition results in at least

some control of a large percentage of a market by one

firm. Here, the court concluded

DFA’s acquisition “has not resulted in

DFA controlling a large portion of the

relevant market for the sale of

processed milk to schools.” The purchase of shares does not enhance

DFA’s ability to influence the market

because “DFA’s non-voting interest in

Southern Belle does not give it any

control over the business decisions

made by Southern Belle,” the court

stated. The balance of control in the

market has not shifted to DFA, so the

acquisition of an interest in Southern

Belle by DFA has not enhanced concentration and thus is not illegal.

The United States argued that

DFA’s interest in Southern Belle and

NDH gave the dairies incentive and

opportunities to collude and diminish

competition. The court was not convinced, however, noting that with

respect to school milk bidding, DFA

has no voting rights and thus cannot

directly affect Southern Belle’s school

milk business decisions. Similarly, the

court concluded that DFA’s 50 percent

interest in NDH does not result in any

participation in business decisions.

The court noted that the operating

agreements for both Southern Belle

and NDH leave the operational

aspects of the company with the operational owners/partner, not DFA. The

court noted that there must be “some

mechanism by which the alleged

adverse effects in the sale of milk are

likely to be brought about by DFA’s

acquisition of a non-operational interest in Southern Belle.” While DFA

had an obvious interest in the success

of both dairies to maximize its 50- percent share of the earnings of each venture, that in and of itself did not translate into the degree of control necessary to establish an antitrust violation.

Referencing the limited nature of

DFA’s ownership interest, including the

lack of involvement in the day-to-day

operations of either NDH or Southern

Belle, the court found

that the “incentives

and opportunities for

collusion are not substantially greater by

virtue of DFA’s dual

ownership interests

than they were prior to

this challenged acquisition.” Accordingly, the

court granted a motion by DFA for

summary judgment, in effect holding

that even if all the evidence, facts, and

inferences before the court are viewed

in the light most favorable to the government, DFA would still prevail as a

matter of law. 

The U.S. Department of Justice

has notified the court that it intends

to appeal the decision to the U.S.

Court of Appeals for the 6th Circuit.

Justice contends the ruling permits

companies to invest more heavily in

competitors than antitrust enforcers

believe is appropriate. ■

In the Oct.–Sept. 2004 issue of Rural Cooperatives,

“Legal Corner” reported on a decision in antitrust litigation by Northland Cranberries against Ocean Spray

Cranberries. As part of a larger business deal, Northland agreed to dismiss, with prejudice, its lawsuit

alleging antitrust law violations on the part of Ocean

Spray. This leaves in place the U.S. District Court opinion in the case holding the presence of foreign (Canadian) producers in Ocean Spray’s membership does not

strip the cooperative of its antitrust protection under

the Capper-Volstead Act. 

In addition to ending the litigation, the deal provides

that Ocean Spray will purchase all cranberry processing assets and the current inventory of unprocessed

cranberries of Northland. Ocean Spray and Northland

also signed a 10-year agreement through which Ocean

Spray will, for a fee, receive and convert into concentrate all of the cranberries produced by Northland and

its contract growers. Northland will then be free to

bottle and market its own cranberry juice, in competition with Ocean Spray and other juice companies at

the wholesale and retail levels. ■

Northland vs. Ocean Spray antitrust

settlement preserves co-op win
By Annie Baxter

Editor’s note: the article originally was

broadcast on Minnesota Public Radio. 

he little farming communities of Vesta and Echo

in southwestern

Minnesota know the

plight of small towns

first hand. As local farms shut down

over the years, so did many businesses.

The townspeople tolerated the loss of

the pool hall or the gas station. But

when the café closed its doors down in

Vesta, that’s where people had to draw

the line. 

In Echo, the loss of the little grocery store was the last straw. So the

townspeople took matters into their

own hands and have established new

businesses through cooperatives they

formed. 

The Vesta café is a perfect postcard

picture: country knickknacks, like

teacups and tiny plastic apples, decorate the walls, and the smell of strong

coffee fills the air. At three in the afternoon, business is brisk. A group of

retired farmers plays a cut throat game

of cards in the corner.

“Sometimes they almost kill each

other just for a quarter,” one farmer

jokes.

A few feet away sit three Vesta

ladies, exchanging gossip over slices of

lemon meringue pie. They say they’re

here at least once a day.

“I think it was three times today for

me,” one woman admits.

For decades, a café next door was

the local hangout. It closed nearly

three years ago. The cafe seemed to

have plenty of customers, so locals

guess it wasn’t well-managed. 

Carole Jordan works at the new café

and she waitressed at the old one, too.

She says when it closed, she lost more

than just a job.

“The town died without a café,”

Jordan says matter-of-factly. “There

were no cars on the street. I said pretty

soon the tumbleweeds will be blowing

down the street.”

Once the café closed, that brought

the number of empty storefronts to

four — half the businesses on the

street. The farmers who play cards had

nowhere to go. Sometimes, they’d

resort to setting up a card table in the

liquor store.

Finally, people in town took action.

They pooled their resources together

to build this cafe. Dan Holmberg has

lived in the area all his life. He was one

of the organizers.

“A lot of people got their heads

together and decided maybe we can

build this thing if we get donations. So

we asked for donations from the community, and I think we put about

$90,000 together. It was all volunteer

labor, except for the electrical. I think

it took about eight months to build the

place, but I think we did a good job,”

Holmberg says.

The community founded a nonprofit organization to pay for the café.

Then they interviewed potential managers and decided to lease the business

to Yvonne Ellis. She and her husband

run the operation now.

If it weren’t for this cafe, Vesta residents would have to drive about 20

miles to Redwood Falls or Marshall

for a restaurant. But it’s not the commute that really bothers people. The

town needs a café for reasons that go

beyond convenience, according to the

local bank’s loan officer, David

Widman.

“If we don’t have this, we’re not

gonna have a community,” Widman

22 November/December 2004 / Rural Cooperatives

Co-ops help keep

rural towns alive

T

Vesta community members, such as these retired farmers, teamed up to open the Vesta

Café a year ago. The co-op café was built with volunteer labor and paid for by donations

from community members. Photos courtesy Minnesota Public Radio 
Rural Cooperatives / November/December 2004 23

asserts. “This is what’s facing small

towns throughout the Midwest.” 

Vesta has a lot in common with its

neighbor Echo, just five miles up the

road. The town’s about a mile wide

and a mile long, with a crush of abandoned buildings at the center.

Echo residents Nancy Harvey,

Corlys Chase and Guila Kurtz point to

the town’s landmarks, or what remains

of them.

“The grocery store just closed in

December,” Kurtz notes.

“And didn’t that used to be a

hotel?” Harvey asks. “There’s nothing

in there now, I believe.” 

“The pool hall had been there for

years and years and years. But it’s been

vacant for a long time. Someone lived

on the second floor,” Chase says, shaking her head.

“So you see, there are vacant buildings everywhere. And that’s what we

don’t want,” Harvey concludes.

These three women are shaking

things up in town. When the grocery

store closed last year, they were

spurred to do something about it.

They’re part of a group of mostly

retirement-age women who raised

enough money to build the town a new

store. 

It turns out they’re familiar with the

do-it-yourself approach. A few years

ago, the public school closed down,

and people in town got together to

open a charter school. Since then,

attendance has more than tripled. 

Guila Kurtz says people in Echo

learned a lesson from the school, and

they’re applying it to the grocery store.

“No one is going to do it for us. We

decided to take over!” Kurtz says with

a smile.

More and more rural towns are

coming to the same conclusion. In fact,

Minnesota has more than 1,000 coops. It’s one of the leading states

embracing the cooperative business

model.

The store in Echo will be nonprofit

and small-scale. They’ll keep a limited

inventory of items like milk, cereal,

and coffee. And it will bear the apt

name of Hope Market.

“One thing that’s happened since we

started this grocery store, is that there

have been people who are interested in

starting other businesses in town,”

Nancy Harvey says. “That’s gonna

bring in other income, it’s gonna be

good for the city — to help the town

start thriving again.” So far, no other

new businesses have opened up. And at

this point, Hope Market is still an

empty lot marked off by some plastic

orange fencing. But construction is

supposed to move fast, and the market

should open this fall. ■

Waitress Carole Jordan and café manager Yvonne Ellis prepare for lunch business.
24 November/December 2004 / Rural Cooperatives

ural cooperative development in 24 states got a

$6.3 million boost from

USDA Rural

Development in

September, when Agriculture

Secretary Ann M. Veneman

announced the recipients of 2004

Cooperative Development Grants. 

“Viable cooperative ventures are

important to increasing economic

development in rural areas,”

Veneman said. “These funds are

important to ensuring farmers and

ranchers have added opportunity

to fully use their natural resources

to create value-added ventures.” 

The grants were awarded on a

competitive basis and are intended

to foster rural cooperative development through projects that provide

rural residents with education and

technical assistance in areas of

cooperative startup, marketing and

managing, and other self-help tools. 

In Pennsylvania, for example,

Veneman said the Bush administration is providing grant funds to the

Keystone Development Center of

State College, which is working to

support the formation of 11 farmer

alliances and cooperatives. The

effort includes developing cooperatives for forest-owners, biodiesel

production and other natural

resource-based ventures.

Another example is the Center

for Rural Cooperative Business

Development (CRCBD) at South

Carolina State University, which

received a $146,656 grant to help

rural residents start new co-ops

and to develop marketing plans and

improve co-op management practices.

In 1999, South Carolina State became

the first historically black college or

university to house a CRBCD. In

2001, the Center launched a farm-toschool produce project which encourages school districts to buy fresh fruit

and vegetables from local co-ops of

small farming operations. ■

USDA providing $6.3 million 

in grants for rural co-op

development in 24 states

USDA RURAL DEVELOPMENT 

Rural Cooperative Development Grants 

STATE PROJECT GRANT AMOUNT

AL Federation of Southern Cooperatives $300,000 

AR Winrock International Institute for Ag Development 299,935 

CO Rocky Mountain Farmers Union 

Educational & Charitable Foundation 300,000 

GA Golden Triangle RC&D 266,816 

IA Iowa State University 299,943 

IL Western Illinois University 189,044 

IN Indiana Rural Development Council, Inc. 85,000 

KY Kentucky Center for Ag and Rural Development 184,150 

MA Cooperative Development Institute, Inc. 294,930 

MD University of Maryland Eastern Shore 296,500 

MN Northcountry Cooperative Foundation 300,000 

MO Missouri Farmers Union Family Farm Opportunity Center 298,065 

MS Mississippi Cooperative Development Center 300,000 

MT Montana Cooperative Development Center 300,000 

ND North Dakota Association of Rural Electric Cooperatives 300,000 

NE Nebraska Cooperative Development Center 299,958 

NH New Hampshire Community Loan Fund 300,000 

OH Ohio State University Research Foundation 299,867 

PA Keystone Development Center, Inc. 299,832 

SC S.C. University, Center for Rural Co-op Business Dev. 146,656 

SD Value-Added Agriculture Development Center 200,000 

VA Southern States Cooperative Foundation 299,989 

WA Northwest Cooperative Development Center 181,950 

WI Cooperative Development Services Fund, Inc. 300,000 

TOTAL: $6,342,635

R
Rural Cooperatives / November/December 2004 25

Carolyn Liebrand, Agricultural

Economist

USDA Rural Development

e-mail: carolyn.liebrand@usda.gov

Editor’s note: This article is based on

USDA's annual survey of all U.S. cooperatives, which gathered 2002 financial and

marketing data for dairy cooperatives.

More detailed results are presented in

Research Report 203, “Financial Profile of

Dairy Cooperatives, 2002” available at:

www.rurdev.usda.gov/rbs/pub/newpub.ht

m. For a hard copy, call (202) 720-8381,

or e-mail: dan.campbell@usda.gov.

n 2002, all types of U.S.

dairy cooperatives were

negatively impacted by

lower milk and dairy

product prices.

Nevertheless, dairy cooperatives in

general appeared to be in good shape

financially, irrespective of operating

type. Cooperatives successfully

employed a variety of methods to market members’ milk. While some used

few assets and operated on narrow

margins, others employed considerable

capital and generated wider margins. 

This report uses some basic financial yardsticks for measuring the fiscal

status of co-ops, based on the type of

operations. 

More assets per cwt 

Dairy co-ops used about $1 per

hundredweight (cwt) more of assets in

2002 than they did five years before.

Data analyzed by USDA Rural

Development shows that dairy cooperatives employed $6.22 of assets per cwt

to market their members' milk in 2002

(table 1). 

The growth in assets stemmed from

an increase in fixed assets (property,

plant, equipment and other fixed

assets). Much of this increase was supported by a rise in long-term liabilities

per cwt of member milk relative to

1997 — the last time a detailed look

into dairy cooperatives’ financial performance was taken by USDA Rural

Development. 

Total liabilities came to $4.13 per

cwt of member milk, which amounted

to two-thirds of total assets. The $2.39

in current liabilities represented mostly

pending payments to members and

made up 58 percent of all liabilities. 

On the other side of the ledger,

dairy cooperatives had $2.81 per cwt

in current assets and $2.90 per cwt of

property, plant and equipment in 2002

-- each representing around 46 percent of total assets. With current

assets exceeding current liabilities by

18 percent, the short-run solvency

picture looked strong for dairy co-ops

in 2002.

Member equity of $2.10 per cwt of

milk represented one-third of total

assets. Member investment in cooperatives per cwt was about the same as in

1997, but made up a slightly smaller

share of total assets. Furthermore, the

ratio of long-term liabilities to equity

almost doubled from that in 1997 (.83

vs. .44).

Relatively low milk and dairy product prices in 2002 were reflected in the

operating statement. Milk and dairy

product sales were about $3 per cwt of

milk handled below those reported in

1997 (table 2). Milk and dairy product

sales of $15.73 per cwt, the largest single income item, represented 86.1 percent of total dairy cooperative income

in 2002. 

Survey shows dairy co-ops in

generally strong financial state

I

Natalie and Katelyn Horning — daughters of Jeff and Lynda Horning — perform calf-feeding chores on the family dairy farm near Ann Arbor, Mich. The Hornings, fifth generation

dairy farmers, were honored as 2004 Outstanding Young Dairy Cooperators by Michigan

Milk Producers Association (MMPA). Photo by Mindy Pratt, courtesy MMPA 
26 November/December 2004 / Rural Cooperatives

Supply and other sales was the next

largest source of income, at $2.19 per

cwt, accounting for a slightly larger

share of total income than in 1997.

Total income was $18.27 per cwt while

net margins before tax came to 21

cents per cwt of milk handled. Return

on sales was a modest 1.2 percent in

2002.

These figures come from a survey

of U.S. dairy cooperatives conducted

by the Rural Cooperative-Business

Service of USDA Rural Development.

Forty-one percent of the dairy cooperatives in the United States provided

financial information in sufficient

detail to be included in the financial

profile of dairy cooperatives for 2002.

However, these 80 cooperatives represented almost all (98 percent) of the

combined total assets and most (97

percent) of the net milk volume handled by all U.S. dairy cooperatives.

Performance varies

by type of operation

U.S. dairy cooperatives use a variety

of means to market members’ milk.

The various types of operations

require differing levels of capital and

generate differing amounts of income

and returns. 

Cooperatives providing data for this

study were grouped into four general

operating methods: bargaining only;

commodity manufacturing; niche marketing; and diversified and fluid processing. The diversified and fluid processing cooperatives handled about

two-thirds of the net milk volume

reported while bargaining-type co-ops

handled 23 percent (fig 1).

Commodity manufacturing cooperatives made up 9 percent of the net

cooperative milk volume in 2002 while

niche marketing cooperatives represented less than 1 percent. 

Diversified and fluid processing

cooperatives were also the dominant

operating type in terms of assets, holding 91 percent of all assets of reporting

dairy co-ops while bargaining only coops held just 4 percent. Similarly,

diversified and fluid milk processing

cooperatives had almost three-fourths

of cooperative milk volume and dairy

product sales. Bargaining-only co-ops

had the next largest share, 18 percent.

Niche-marketing cooperatives’ shares

of assets and dairy sales were less than

1 percent.

The assets supporting the various

methods dairy cooperatives used to

market their members’ milk ranged

from $1 to $10 per cwt, depending on

the type of operations employed (table

3 and figure 2). Likewise, total income

per cwt varied by almost $8 while net

margins came to between 4 and 32

cents per cwt of milk handled (table 4).

Bargaining-only dairy co-ops

Bargaining-only cooperatives seek

the most profitable outlets for their

members’ milk at the first-handler

level and do not own or operate plants.

Thus, they require the fewest assets to

market a cwt of milk, $1.02 in 2002.

This was the only operating type of

co-op to show lower total assets in

2002 compared to 1997. Current

assets represented 75 percent of total

assets used. 

Likewise, bargaining-only cooperatives had the fewest liabilities and

member investment on a per-cwt of

member milk basis. As such, longterm liabilities came to just 6 percent

of total assets, the lowest level of the

four operating types.

At the same time, bargaining-only

cooperatives generated the lowest milk

and dairy product sales per cwt,

$12.84. Net margins of 4 cents per cwt

were well below those of any of the

other types. However, due to the low

use of equity and fixed assets, return

on equity (17.2 percent) and return on

fixed assets (18.5 percent) were highest

among the operating types. Further,

return on total assets was a modest 4.7

percent, below the average for all

cooperatives (5.3 percent).

Table 1—Balance sheet items per cwt1

U.S. dairy cooperatives 2002 1997

Current assets 2.81 2.89

PP&E and other assets 2.90 1.79

Investments in other cooperatives .51 .57

Total assets 6.22 5.25

Current liabilities 2.39 2.26

Long-term liabilities 1.74 .92

Total liabilities 4.13 3.18

Equity 2.10 2.07

Total liabilities and equity 6.22 5.25

1 Per cwt of member milk

Note: Totals may not add due to rounding.

Table 2—Operating statement items per cwt1

U.S. dairy cooperatives 2002 1997

Milk and dairy product sales 15.73 18.75

Supply and other sales 2.19 2.24

Service receipts and other income .31 .19

Patronage refunds .03 .06

Total income 18.27 21.25

Estimated expenses 18.06 20.96

Net margins before tax .21 .28

1

Per cwt of milk handled

Note: Totals may not add due to rounding.
Rural Cooperatives / November/December 2004 27

Commodity marketing dairy co-ops

Commodity marketing cooperatives

operate plants to produce bulk dairy

products in high-volume plants. Many

of these plants capture economies of

scale in producing undifferentiated,

storable commodity dairy products.

They required the second lowest level

of assets, $3.41 per cwt, in 2002. Like

bargaining-only cooperatives, current

assets made up a majority (53 percent)

of their total assets. Commodity manufacturing cooperative members had

the next to lowest investment in their

cooperatives, $1.60 per cwt.

Like bargaining-only cooperatives,

more than 90 percent of the commodity manufacturing cooperatives’ total

income came from the sale of milk and

dairy products. Net margins for commodity manufacturing cooperatives

were almost four times those of bargaining-only cooperatives, yet they

were well below the other two operating types. However, perhaps reflecting

efficiency of operation or economies of

scale, return on total assets was 6.7

percent, the highest of all operating

types in 2002.

Diversified and fluid 

processing dairy co-ops

Diversified and fluid processing

cooperatives were lumped together in

one category. Fluid processing cooperatives aim to capture value for their

members by processing and packaging

fluid milk, as well as products such as

ice cream, sour cream, cottage cheese

and/or yogurt. Diversified cooperatives

have a broad spectrum of operations,

selling a large portion of their milk

supply to other handlers while maintaining a steady volume at their own

processing or manufacturing plants to

Table 3—Consolidated balance sheet per cwt of member milk, by type of dairy cooperative, 2002

Type of cooperative

Item Bargaining Commodity Niche Diversified and

only manufacturing marketing fluid processing

Dollars per cwt of member milk

Current assets .76 1.80 2.50 3.68

Net PP&E1 and other assets .20 1.54 6.70 4.03

Investments in other co-ops .06 .07 .83 .73

Total assets 1.02 3.41 10.03 8.44

Current liabilities .69 1.39 1.82 3.13

Long-term liabilities .06 .42 2.41 2.51

Total liabilities .75 1.81 4.23 5.64

Total equity .27 1.60 5.80 2.80

Total liabilities and equity 1.02 3.41 10.03 8.44

Member milk (million pounds) 31,772 12,535 344 89,800

Table 4—Consolidated operating statement per cwt of total milk handled, by type of dairy cooperative, 2002

Type of cooperative

Item Bargaining Commodity Niche Diversified and

only manufacturing marketing fluid processing

Dollars per cwt

Milk and dairy product sales 12.84 15.36 18.30 16.69

Supply and other sales .68 .62 3.44 2.88

Service receipts and other income .23 .24 .13 .34

Patronage income .01 .02 .07 .05

Total income 13.75 16.25 21.94 19.96

Total expenses 13.71 16.09 21.62 19.68

Net margins before tax .04 .15 .32 .27

Milk volume handled (million pounds) 33,856 13,857 344 106,748

Note: Totals may not add due to rounding.

1 Property, plant and equipment. 

Note: Totals may not add due to rounding.
28 November/December 2004 / Rural Cooperatives

make both commodity and differentiated products. 

The system of plants operated by

diversified and fluid processing cooperatives and their marketing operations

required the next highest level of assets

in 2002, $8.44 per cwt. They also

showed the largest increase in asset use

compared to 1997’s $6.96 per cwt. 

Long-term liabilities represented 30

percent of total assets, the highest level

among the different operational types.

Furthermore, long-term liabilities

came to 90 percent of the equity members had in the cooperatives. The

other operating types had ratios that

were less than one-half of that.

Supply and other sales made up

more than 14 percent of total income

for diversified and fluid processing

cooperatives, well above the level of

supply and other sales of either bargaining-only or commodity-manufacturing cooperatives. Total income and

net margins before tax for diversified

and fluid processing cooperatives were

also far above those two types and

were only slightly below that of nichemarketing cooperatives. 

Return on total assets was 5.3 percent, a bit below returns for commodity

manufacturing cooperatives, but above

the other two operating types. Diversified and fluid processing cooperatives

achieved the second highest return to

members’ equity, 11.7 percent.

Niche-marketing dairy co-ops

Niche-marketing cooperatives typically process most of their members’

milk into specialty or branded dairy

products for particular market niches.

Most handle relatively small volumes

of member milk and, relative to the

other types, require the most assets per

cwt of member milk for cooperative

operations. 

Assets employed in 2002, $10.03

per cwt, were similar to asset use in

1997, $10.07. The small volume of

milk handled by most niche-marketing

cooperatives diminishes their ability to

capture the level of economies of size

that commodity-manufacturing and

diversified cooperatives do.

Niche-marketing cooperatives made

the most use of member equity -- the

only operating type where equity represented a majority of total assets (58

percent). Their members’ investment

of $5.80 per cwt was twice as high as

diversified and fluid processing cooperative members’ investment in their

cooperatives. Additionally, niche-marketing cooperatives, along with diversified and fluid processing cooperatives,

had significantly larger total liabilities

per cwt of milk than the other two

types.

Niche-marketing cooperatives generated the largest milk and dairy product sales per cwt. Niche-marketing

cooperatives also had the most supply

and other sales per cwt of all operating

types. Thus, niche-marketing cooperatives had the highest total income per

cwt, $21.94. 

Niche-marketing co-ops also had

the largest net margins before tax per

cwt, 32 cents. Return to sales was 1.4

percent, the same as diversified and

fluid processing cooperatives, and wellabove the other two operating types.

Nevertheless, return to assets for

niche-marketing cooperatives of 3.7

percent was lowest of all operating

types in 2002. ■

0

2

4

6

8

10

12

Bargaining-only Commodity

manufacturing

Niche

marketing

Diversified &

fluid processing

All financial

profile

cooperatives

$/cwt

Fig. 2 Dairy cooperative assets per cwt of member milk, by operating type, 2002.

Member equity

Total liabilities

Total assests 

Operating type

Fig. 1 Dairy cooperatives net milk volume and total assets, by operating type, 2002

Net milk volume Total assets

Bargaining only Commoditymanufacturing 

Niche marketing Diversified & fluid processing
Rural Cooperatives / November/December 2004 29

MANAGEMENT TIP

How does your local co-op rate?

Compare your farm supply cooperative1 with averages for cooperatives with similar functions.

Size (2002) 2, 3 Size (2003) 2, 3 Your 

Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative 

Sell farm supplies only Number 68 36 31 9 68 36 31 9 ________

Total assets Mil. dol. 1.8 4.2 8.0 14.3 2.0 4.1 8.1 15.6 ________

Long-term debt Thou. dol. 106.2 382.0 649.5 2,087.5 126.2 330.0 602.2 1,675.3 ________

Total liabilities Thou. dol. 540.4 1,504.8 3,014.9 6,019.8 586.3 1,423.5 3,347.3 6,199.4 ________

Total sales Mil. dol. 2.7 6.9 13.1 25.9 2.8 7.0 13.9 28.2 ________

Total service revenue Thou. dol. 64.1 239.8 207.4 478.1 77.1 170.5 382.9 774.8 ________

Total revenue Mil. dol. 2.8 7.4 13.6 26.8 2.9 7.2 14.5 30.0 ________

Net income (losses) Thou. dol. 64.8 196.8 353.0 261.9 22.8 106.3 311.1 803.6 ________

Labor of total expenses Percent 55 51 54 53 55 53 53 53 ________

Patronage refunds received Thou. dol. 37.9 105.1 207.4 417.1 1.4 32.5 89.4 344.3 ________

Liquidity ratios

Current Ratio 2.00 1.60 1.42 1.40 2.07 1.56 1.37 1.37 ________

Quick Ratio 0.98 0.88 0.81 0.58 0.99 0.81 0.71 0.61 ________

Leverage ratios

Debt Ratio 0.29 0.36 0.38 0.42 0.30 0.35 0.41 0.40 ________

Debt-to-equity Ratio 0.41 0.56 0.60 0.72 0.42 0.53 0.70 0.66 ________

Times interest earned Ratio 5.45 5.96 6.25 2.34 2.51 3.81 5.49 5.10 ________

Activity ratios

Fixed asset turnover Ratio 7.19 6.51 5.90 6.16 6.81 6.60 6.34 6.81 ________

Total asset turnover Ratio 1.47 1.66 1.64 1.80 1.43 1.70 1.71 1.81 ________

Profitability ratio

Gross profit margins Percent 18.32 16.46 19.12 16.94 17.66 16.31 17.39 17.00 ________

Return on total assets before

interest and taxes Percent 4.55 6.02 5.71 3.60 1.90 3.70 4.98 7.40 ________

Return on total equity Percent 6.77 9.76 9.57 4.16 2.27 5.23 9.05 11.58 ________

1 100 percent of sales were generated from farm supply sales. 2 Small = Sales are $5 million or less; medium = over $5 million to $10 million; large

= over $10 million to $20 million; and super = over $20 million. 3 There were 287 cooperatives surveyed in both years. 

Beverly L. Rotan, Economist

USDA Rural Development, Cooperative

Services 

Another year has come and gone

with some of the larger regional supply cooperatives no longer in business. How did this affect your local

cooperative? 

Many local cooperatives that would

have had positive net incomes had negative net incomes due to loss on disposal of investments. Has your cooperative fared better, about the same or

lower compared to cooperatives with

similar functions and factors, including

sales, product mix, etc.?

Comparisons with other cooperatives may help to determine whether

your cooperative is doing well or poorly. The following tables can help you

make industry trend and norm comparisons. 

The tables shown here contain

average financial data compiled from 

a survey of 287 cooperatives for 2002

and 2003. Fill in the blanks and compare these benchmarks with your

cooperative’s financial data. 

So how’s your cooperative doing? ■
30 November/December 2004 / Rural Cooperatives

Compare your mixed farm supply cooperative1 with averages for cooperatives with similar functions.

Size (2002) 2, 3 Size (2003) 2, 3 Your 

Measure/Item Unit Small Medium Large Super Small Medium Large Super cooperative 

Market farm products and

sell farm supplies Number 10 11 21 28 10 11 21 28 ________ 

Total assets Mil. dol. 1.5 4.1 8.6 22.9 1.5 3.3 8.1 22.4 ________

Long-term debt Thou. dol. 74.2 308.3 901.2 3,218.1 181.3 243.0 725.5 2,715.0 ________

Total liabilities Thou. dol. 504.9 1,500.5 3,491.9 11,156.2 600.7 1,310.8 3,147.4 11,035.7 ________

Total sales Mil. dol. 3.1 6.5 13.3 38.1 2.9 6.7 13.6 45.1 ________

Total service revenue Thou. dol. 172.3 329.1 619.6 1,660.5 116.8 249.3 646.6 1,626.7 ________

Total revenue Mil. dol. 3.2 7.0 14.3 40.6 3.1 7.1 14.5 47.2 ________

Net income (losses) Thou. dol. (94.1) 83.5 320.3 518.9 28.3 75.0 206.5 588.4 ________

Labor of total expenses Percent 52 47 52 51 54 48 52 52 ________

Patronage refunds received Thou. dol. (3.9) 86.1 181.4 1,660.5 24.9 92.4 33.5 197.0 ________

Liquidity ratios

Current Ratio 2.00 1.44 1.39 1.34 1.87 1.49 1.44 1.31 ________

Quick Ratio 1.11 0.66 0.72 0.66 1.04 0.73 0.71 0.67 ________

Leverage ratios

Debt Ratio 0.34 0.37 0.41 0.49 0.39 0.40 0.39 0.49 ________

Debt to equity Ratio 0.50 0.58 0.69 0.95 0.64 0.66 0.64 0.97 ________

Times interest earned Ratio -5.52 3.47 4.49 2.55 3.48 2.77 3.56 2.89 ________

Activity ratios

Fixed asset turnover Ratio 8.21 5.30 5.75 5.78 7.37 8.33 6.29 7.35 ________

Total asset turnover Ratio 2.04 1.58 1.55 1.66 1.89 2.03 1.69 2.01 ________

Profitability ratio

Gross profit margins Percent 13.47 14.77 15.92 15.90 12.69 12.88 14.49 13.40 ________

Return on total assets before

interest and taxes Percent -5.28 3.65 5.00 4.02 2.74 3.32 3.92 4.26 ________

Return on total equity Percent -14.35 4.16 8.62 5.96 4.11 5.29 5.94 6.96 ________

1 50 to 99 percent of sales were generated from farm supply sales. 2 Small = Sales are $5 million or less; medium = over $5 million to $10 

million; large = over $10 million to $20 million; and super = over $20 million. 3 There were 287 cooperatives surveyed in both years.

USDA Rural Development has awarded $22.8 million in competitive grants to 167 recipients in 26

states to support President Bush’s renewable energy

efforts. The funds will be used by rural small businesses, farmers and ranchers to develop renewable

energy systems and promote energy efficiency

improvements. 

“The Bush administration is committed to advancing

renewable energy ventures in rural America,”

Agriculture Secretary Ann M. Veneman said in

announcing the grants. “We have the natural resources

and the ingenuity to create new forms of energy and to

use it more efficiently.” 

Veneman said the Renewable Energy Systems and

Energy Efficiency Improvements program was created

as part of the 2002 Farm Bill to assist farmers, ranchers,

and rural small businesses develop renewable energy

systems and make energy efficiency improvements to

their operations. Under this program in 2003, the Bush

administration invested $21.7 million to develop or

improve wind power, anaerobic digester, solar, ethanol

and other bioenergy related systems or energy efficiency improvements in 24 states. 

A large percent of the 94 renewable energy applications selected this year will support anaerobic digesters

and small and large wind power type ventures. A predominate number of the 73 energy efficiency grants will

go to agricultural producers who will use the funds for

buildings. 

A complete list of the selected grant recipients and

projects can be found at: http://www.rurdev.usda.gov/

rd/newsroom/news.htm. ■

USDA awards $22.8 million to support renewable energy 
Rural Cooperatives / November/December 2004 31

ifteen 1890s Land Grant

Universities are receiving

nearly $1.8 million in

business and technology

development assistance

from USDA Rural Development.

These funds will provide outreach and

technical assistance in developing new

businesses, including cooperatives, and

to create employment opportunities in

under-served rural communities, and

to promote use of Rural Development

programs.

“USDA’s partnership with 1890

Institutions is critical to the development of new business opportunities in

under-served areas and supports

President Bush’s economic plan to create jobs in rural America,” said

Agriculture Secretary Ann M.

Veneman. “I commend the 1890

Institutions for placing a priority on

integrating new technologies into local

business initiatives. It is critical to the

ability of entrepreneurs to compete

domestically and globally.” 

The 1890 Institutions have some of

the best agricultural science and business education programs in the nation.

Through the cooperative agreement,

USDA will be building upon the

strength of these programs to ensure

that quality education related to small

business development is also available

in these communities.

“Underserved communities and

businesses are benefiting from the

effort to match up the technical and

financial resources of USDA Rural

Development with the technical business expertise at the 1890 Institutions,”

said Agriculture Acting Under Secretary for Rural Development Gilbert

Gonzalez. 

Gonzalez said that USDA has a

strong track record of support for such

1890 initiatives and cited two examples

of how the funds have created new

economic opportunity and improved

the quality of life for residents in economically challenged communities.

For example, the Center for Rural Life

and Economic Development at Alcorn

State University Entrepreneurial

Outreach program has provided training and technical assistance to individuals in business and planning to start

new businesses in its five-county area

of Southwest Mississippi. In addition

to the awards listed below, $75,000

grants were issued to: North Carolina

A&T State University; Tennessee State

University; Virginia State University,

and West Virginia State University. 

Other funds have been allocated for

the following projects: 

Tuskegee University in Tuskegee,

Ala.—$150,000 for strengthening

entrepreneurial and business development activities in the Alabama Black

Belt counties and other targeted communities by providing business economic development training, technical

assistance and develop information

technology for business and rural

development.

University of Maryland-Eastern

Shore in Princess Anne, Md.—

$125,000 to conduct outreach and provide technical assistance to develop

entrepreneurs and businesses, including

cooperatives. Funds will be used to

develop a micro-lending program and

develop and train micro-enterprise

businesses in business operations and 

e-commerce in cooperation with Maryland Capital Enterprises, a non-profit

organization. Additionally, funds will

be used to develop a network of hydroponic greenhouse growers. 

Southern University in Baton

Rouge, La.—$150,000 to provide the

residents in four rural communities

and parishes (counties) with essential

1890s Land Grant Institutions 

to use USDA funds to promote

business growth, new jobs

F

Tuskegee University in Alabama (above)

and the other 1890 Land Grant Universities

and colleges, offer some of the best ag science and business education programs in

the nation. Photo courtesy Tuskegee University 

continued on page 32
32 November/December 2004 / Rural Cooperatives

technical and financial services assistance through conducting seminars,

entrepreneurial conferences, and provide information technology training

and support services. 

University of Arkansas-Pine Bluff

in Pine Bluff, Ark.—$135,000 to be

used to provide outreach and technical

assistance to develop entrepreneurs

and businesses, including cooperatives.

Funds will be used to focus on the creation of business enterprises that

develop and/or utilize technologybased products and services, along with

implementation of a business support

incubator to house 12 to 15 new or

start-up businesses.

Fort Valley State University in

Fort Valley, Ga.—$150,000 to provide

services for expansion and enhancement of economic development, creation of new business and cooperative

development opportunities, community development and revitalization,

tourism and increased usage of computer technology.

Delaware State University in

Dover, Del.—$150,000 to provide sustainable business and economic development efforts that meet community

needs and assist in enhancing the quality of life, wealth creation and employment opportunities that will serve as a

catalyst for community revitalization. 

Prairie View A&M University in

Prairie View, Texas—$115,792 to focus

on business start-up and expansion in

13 targeted rural counties. Funds will

also be used to provide technology

outreach services in the form of onsight, on-hand internet/economic

development seminars and to continue

to provide entrepreneurship education

to primarily Hispanic and AfricanAmerican youth.

Alcorn State University in Alcorn,

Miss.—$149,608 for support and

enhancement of the program

“Strengthening Entrepreneurship and

Small Business in Five Counties

(Adams, Claiborne, Franklin, Jefferson

and Wilkinson) of Southwest

Mississippi.”

Langston University in Langston,

Okla.—$149,600 for strengthening and

growing rural enterprises in underserved communities; bringing to rural

entrepreneurs information about programs and services available through

USDA by conducting seminars, symposiums, workshops and community

meetings. Funds will also assist and

support business development and

growth through counseling, business

planning, grant writing and loan packaging preparation. 

Florida A&M University in

Tallahassee, Fla.—$100,000 to implement business and economic development outreach service to eight selected

rural counties in North Florida who

have the most economic need and to

establish long-term and sustainable

economic and business growth. 

South Carolina State University in

Orangeburg, S.C.—$125,000 to provide

business consulting in the area of marketing, customer service, human

resource development, business management, accounting, bookkeeping,

finance, and international trade. In

addition, funds will be used to work

with community youths to promote and

encourage future entrepreneurship. ■

Southern States turn-around

continues with $68-million profit

Southern States Cooperative,

Richmond, Va., continues to show

financial improvement with a pre-tax

profit of $68.5 million for the fiscal

year that ended June 30. The cooperative’s overall results and its balance

sheet benefited not only from

improved operations, but also from

debt restructuring that resulted in a

gain of nearly $65 million, the co-op

announced. The showing represents a

major turn-around from losses in the

previous three fiscal years, when the

cooperative was involved in major

restructuring efforts. 

“In many ways, the recently completed fiscal year was the most successful in Southern

States’ history,”

said Thomas R.

Scribner, president and CEO. “The year showed that

efforts to focus on our core business of

production agriculture, to reduce debt

and operating expenses and to re-establish sound business principles have

resulted in a successful turn-around.” 

The co-op closed on a new, $265

million financing package in October,

which will refinance all but a small

piece of the coop’s long-term

debt. In addition

to paying off existing debt, the refinancing will provide

one of the nation’s largest farmerowned co-ops with the capital it needs

NEWSLINE

Compiled by Dan Campbell

Send items to: dan.campbell@USDA.gov

1890s Land Grant Institutions to use USDA funds to promote business growth continued from page 31
Rural Cooperatives / November/December 2004 33

to focus on the future, Scribner said. 

According to Scribner, progress was

made in a number of key areas during

the past year, including:

• continued reductions in operating

expenses;

• further reductions in debt — now 70

percent below where it stood three

years ago;

• customer service improvements;

• improved inventory control and efficiency at the co-op’s distribution

centers;

• steps to boost marketing effectiveness and efficiency;

• development of a strategic plan.

Southern States also made its first

acquisition in four years by exercising an

option late in fiscal 2004 to buy out

Agway’s 50 percent ownership of a livestock feed mill at Gettysburg, Pa.

Southern States and Agway had operated the mill as a joint venture since 1999.

Southern States serves more than

300,000 producer-members with a

range of farm inputs, including fertilizer, seed, feed and pet food, animal

health supplies and petroleum products, as well as other items for

the farm and home. The

cooperative’s distribution network includes

more than 1,200

retail outlets in an

area that extends

from Maine to the

Gulf Coast and as

far west as

Kentucky. 

NCB’s Top 100 Co-ops

had revenue of $117 billion 

National Cooperative Bank (NCB)

reported that the nation’s 100 highest

revenue-earning cooperative businesses

had more than $117.4 billion in sales

in 2003. The list illustrates the vital

role cooperatives play in the nation’s

economy, says Charles E. Snyder,

NCB president and CEO.

“As the nation continues to struggle

and face challenges during this difficult economic period, cooperatives continue to enrich and

empower Americans

everyday, providing

strong returns to its

members,” Snyder said.

“Americans are

demanding dependable

businesses in which they

maintain a personal stake

and an active role in the

decision-making process.”

The continued strong performance

of cooperatives is especially notable,

with these companies impressively

rebounding from the recession and the

up over many years using GSE tax and

funding advantages.” Further, FCS

would likely set up a new bank to serve

the region “with the same advantages.” 

Some ICBA members are also questioning why an FCS member that exits

the system should be required to pay a

large fee (about $800 million in the

case of FCSAmerica) into the FCS

insurance fund. Evans said American

taxpayers had to “bail out” FCS during

the farm crisis of the 1980s, while rural

ag banks were “allowed to fail in staggering numbers, ruining many communities.” 

NFU fears “lethal precedent” 

John K. Hansen, president of the

Nebraska Farmers Union, spoke on

behalf of the National Farmers Union

and its 260,000 family farm and ranch

members. He said NFU has taken a

“position of firm opposition” to the

sale, and is “extraordinarily concerned”

about its short- and long-term impacts.

NFU fears that a “potentially lethal

precedent” would be set, damaging the

entire FCS network. 

FCSAmerica is the second largest

FCS association, and one of the system’s “most stable, profitable and secure

units,” Hansen said. A sale to Rabobank

would forever end the potential of dividend payouts to members who have

“decades of equity in their own institution.” The sale could shove aside FCS’

Congressional mandate to assist beginning and minority farmers and to help

local communities, he added. 

FCSAmerica “would go from a

farmer controlled and directed lender

to instead being owned by the world’s

largest ag lender, one that lends to

huge, vertically integrated industrialized operations that often compete

unfairly with our family-owned farmers and ranchers.”

Unlike some of the other sale opponents, Hansen indicated that caution is

needed regarding proposals to broaden

the FCS charter. NFU opposed the

“Choice” proposal several years ago,

which ultimately failed to gain traction

in the farm community or on Capitol

Hill. It would have allowed FCS associations to lend outside their designated territories and to take on expanded

lending roles, he said. 

“We were concerned that the

Choice proposals could have jeopardized the Farm Credit System’s taxexempt status, promoted “cherry picking” of borrowers and reduced local

services. We also opposed differential

interest rates for FCS member-borrowers because they are contrary to

cooperative principles.”

Hansen urged that further, regional

hearings be held in each of the affected

states before any action is taken on the

Rabobank offer.

At the conclusion of the hearing,

Subcommittee Chairman Frank Lucas

of Oklahoma pledged continued oversight of the FCS and FCA, adding that

“I will work to ensure any future

actions taken by the subcommittee are

in the best interest of America’s farmers and ranchers.” 

In mid October, Rabobank Chairman

Bert Heemskerk told the Omaha World

Herald that if the FCA should turn the

deal down, the bank will look for other

avenues to enter the U.S. market. ■

Rabobank proposal sparks debate on role of FCS in farm & rural lending continued from page 16
34 November/December 2004 / Rural Cooperatives

difficult economic situations created by

times of global conflict. Unlike

investor-owned firms, cooperatives are

controlled by their members, the individuals who use and benefit from the

goods and services provided. 

Cooperatives are organized to maximize economic returns for members,

not top-ranking executives or distant

investors. 

According to the National

Cooperative Business Association,

there are 48,000 cooperatives in the

United States. These entities exist in a

number of industries including agriculture, grocery, hardware and lumber,

finance, energy and housing. Many

cooperatives on the NCB Co-op 100

list are such well-known household

names as Ocean Spray, ShopRite and

The Associated Press. 

The entire NCB Co-op 100 

report, as well as additional information on cooperatives, is available at 

www.co-op100.coop. 

WestFarm Foods names

John Underwood as CEO 

John Underwood has been named

president and CEO of WestFarm

Foods, the $1.3 billion dairy products

manufacturing and marketing arm of

Northwest Dairy Association (NDA),

the fourth largest dairy co-op in the

nation, with 700 dairy farm members

in Washington, Oregon, Idaho and

California. NDA Board Chairman Rod

DeJong says Underwood’s knowledge

of the company and industry, his leadership skills and his performance during his tenure as interim CEO were

key factors in the 14-person board’s

unanimous decision. “John exemplifies

the leadership skills our members want

running this company,” he said. “He

has gained the confidence of the members, as well as our customers, suppliers and employees.” 

Underwood has 22 years of experience with WestFarm Foods and served

as Interim CEO since April 1, 2004. In

his most recent prior position, as

senior vice president of the Ingredients

Division, he led worldwide sales and

marketing initiatives for the company’s

bulk cheese, bulk butter and milk powder products that generate nearly 60

percent of the company’s revenue. 

Previously Mr. Underwood led operations at 12 milk processing facilities in

four Western states; overseen multimillion dollar capital improvement projects, from initial design through startup; raised manufacturing efficiencies

and productivity; and introduced stateof-the-art manufacturing processes. 

Improved milk prices 

give boost to Dairylea 

Dairylea Cooperative Inc. reported

sales of $962 million for the fiscal year

ending March 31, up 12.95 percent

from the previous year. The Syracuse,

N.Y.-based co-op paid its 2,500 members $846 million, up from $759 million the year before. Dairy lea reported

$892,000 in after-tax profits in 2004,

up from $696,000. 

Co-op President and Chairman

Clyde Rutherford said high milk prices

for the first time in many years helped

the co-op’s performance. 

Dairy lea sells it members’ milk to a

number of processors and provides a

variety of services to them, from

financing to insurance. 

Michigan Sugar completes

purchase of Monitor Sugar

Michigan Sugar has completed the

purchase of former rival Monitor

Sugar for about $40 million. The

company now becomes the nation’s

third largest sugar beet cooperative,

with sales of about $300 million

annually. 

Michigan Sugar became a co-op in

2002, when producers organized to

buy the operation from Texas-based

Imperial sugar. Co-op leaders say the

combined company will offer many

improved operating efficiencies. The

co-op will now have about 1,250

grower-members, 500 permanent

employees and 1,800 seasonal workers. 

AMPI members receiving

$11 million in patronage 

Midwest dairy producers who market milk through Associated Milk

Producers Inc. (AMPI), New Elm,

Minn., will share $2.9 million in earnings. Fifty percent, or $1.45 million, is

being paid in cash, while the balance

will be allocated to member equity

accounts.

AMPI’s annual revolvement of capital

retains and previously allocated earnings

are budgeted for November and

December. The total earnings and equiengines: better detergency and lubricity — eliminating the need for polluting sulfur as a lubricity additive — and

generally make engines run quieter

and cooler, with increased durability

due to reduced formation of harmful

engine deposits.

“Our fuel provides better horsepower, 5 to 10 percent better mileage, and

runs cleaner, with no drawbacks or

tradeoffs,” says Probst. “We have truck

operators telling us that they can cut the

run over the mountains from Denver to

Aspen by an hour using Blue Sun.”

Scott Bentz agrees; he’s using Blue

Sun’s product for something a bit more

fun — fueling a diesel-powered dragster with 100 percent biodiesel. His

team first tried it out by draining the

tank of conventional diesel fuel and

refilling it with Blue Sun. “When we

fired it up, it was like the difference

between day and night. All our best

times have been on biodiesel,” he says.

“I don’t mind saying I’m sold on the

product.”

Probst thinks that kind of response

will fuel a growing market for Blue

Sun. “This is only the beginning,” he

says. “When this business model

proves out, we plan to set up operations in other markets across the

country, too.” ■

Biodiesel with altitude continued from page 6
Rural Cooperatives / November/December 2004 35

ty that will be returned to owners this

year is expected to be about $11 million.

“AMPI is assuring member-owners

a fair return on equity,” said AMPI

General Manager Mark Forth.

“Sharing the profits is one of the benefits cooperative members expect from

owning the business,” said AMPI

President Paul Tuft, a dairy producer

from Rice Lake, Wis.

LO’L changes name

of animal feed unit

Land O’Lakes Inc. has changed the

name of its animal feed subsidiary

from Land O’Lakes Farmland Feed, to

Land O’Lakes Purina Feed. “Our new

name leverages our existing brand

equity and honors the heritage of our

two leading brands,” says Robert M.

DeGregorio, president, Land O’Lakes

Purina Feed. “It also communicates

the importance of both brands to our

membership, the cooperative system

and our customers.”

Land O’Lakes Purina Feed serves

producers through 2,800 local cooperatives and independent dealerships

across the United States. The company,

in combination with its wholly owned

subsidiary, Purina Mills LLC, is North

America’s leading feed manufacturer.

Countrymark to reduce

emissions at Indiana refinery 

Countrymark Co-op, Indianapolis,

Ind., is investing $40 million to build

an ultra-low sulfur diesel-fuel processing facility at the co-op’s refinery complex in Mt. Vernon, Ind. The project

will save about 125 jobs and will meet

U.S. Environmental Protection

Agency’s 2006 requirements for cleaner diesel fuel, the co-op says. 

“Countrymark is a Hoosier company that is keeping Hoosiers at work,”

Gov. Joe Kernan said at the groundbreaking ceremony. “Not only is the

investment for this complex good for

the community and our environment,

but it also reduces our dependency on

foreign oil by using Indiana materials

produced by Hoosier workers.” 

Countrymark expects to hire 15

production workers and up to five

more technical employees at the Mt.

Vernon refinery as a result of the new

complex. The Co-op currently has 230

workers in Posey County and supports

an additional 70 jobs through its

statewide member network in the

management, sales and delivery of

diesel fuel and gasoline. ■

Bowing to a rising tide of opposition, the board of

Omaha-based Farm Credit Services of America

(FCSAmerica) in October announced that it was ending its

proposal to sell the co-op bank to Netherlands-based

Rabobank. That announcement was followed about two

weeks later by the news that Jack Webster had resigned as

CEO of FCSAmerica. 

FCSAmerica has decided to go it alone at least for the

time being, having also rejected a counter merger proposal

from AgStar Bank of Minnesota. Some said that offer was

preferable because it would have kept FCSAmerica as part

of the Farm Credit System. 

Webster, who had pushed for the sale to Rabobank,

issued a statement saying that “For this company to move

forward, the board and I felt it was in the best interest of

this organization to continue to grow under new leadership.”

FCSAmerica Chairman Paul Folkerts said he believes

the sale would have provided greater opportunities for

farmers and ranchers, but that ultimately the board decided

“that it was not in the best interests of FCSAmerica to

move forward with the transaction.” 

The proposed sale had sparked intense grassroots opposition from farmers and ranchers, which was spearheaded by a

coalition of FCSAmerica stockholders who formed Farmers

for Farm Credit (FFFC) to block the sale. A Congressional

hearing was held Sept. 29 in Washington D.C. to examine

the proposed sale and related issues (see page 13).

“This decision is a clear and important victory for stockholders,” said FFFC Chairman Myron Edleman, a South

Dakota cattleman.

“They tried to sell our association for less than half its

value, and farmers would have lost ownership and control,”

added FFFC Co-Chairman Alan Dillman. “And at least 80

percent of our shareholders didn’t want their loans transferred to a foreign bank,” he added, referring to a poll of

about 700 FCSAmerica stockholders. 

Opposition was based both on the price being offered,

which Rabobank had boosted from $600 million to $750

million, and on the potential impact it could have had on

the rest of the nation’s Farm Credit System banks. 

“We are disappointed by the decision of

FCSAmerica’s board, given that we had significantly

increased our offer in order to clearly demonstrate our

commitment to completing the transaction,” said Cor

Broekjuyse, head of Americas for Rabobank

International. “We strongly believe our partnership

would have offered tremendous benefits to FCSAmerica

customers in terms of new products, improved services

and, of course, a considerable financial payment to

stockholders.” He said the board’s decision has denied

stockholders the right to vote on the proposal (stockholders and the Farm Credit Administration board both

would have had to approve the sale). ■

Plug pulled on FCSA sale; Webster resigns as CEO 
Information appearing in Rural Cooperatives magazine during calendar year 2004 has been indexed to help you find past

articles. Articles are indexed by month and page. Back issues can be found on-line at www.rurdev.usda.gov.

Title Features Issue—Page 

ACDI/VOCA spreads co-op model worldwide ................................................................................................................. May/June 37

African ag co-ops leading fight against HIV/AIDS ............................................................................................................ Jan./Feb. 15

Agribusiness, co-ops awarded $28 million in USDA grants .............................................................................................. Jan./Feb. 11

Agriliance to operate major terminal at Port of Galveston .............................................................................................. Sept./Oct. 17

Association of Cooperative Educators

Cross-border membership and collaboration brings growth ........................................................................................ May/June 36

Attracting the Upper Midwest’s next generation of dairy farmers ................................................................................. March/April 7

Backyard powerhouses

“Green Tags” spur development of renewable power co-ops ...................................................................................... Sept./Oct. 18

Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ................................................................................................. July/Aug. 18

Biodiesel: the 10 percent solution ....................................................................................................................................... July/Aug. 17

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed for biodiesel production .......................................................................... Nov./Dec. 4

Boosting the giant

USDA assistance effort helping Nigerian producers ...................................................................................................... Jan./Feb. 12

Buying biodiesel ‘off the rack’

CHS investing in new injection technology to streamline biodiesel blending process ................................................ July/Aug. 28

California ag tour gives U.S. trade rep crucial insight into state’s export crops ............................................................... Sept./Oct. 4

CCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ............................................................................................ May/June 35

CFC: rural electric co-ops’ own financing powerhouse .................................................................................................... May/June 29

Clean Air Act kickstarted ethanol ....................................................................................................................................... July/Aug. 16

Co-Bank keeps pace with co-ops’ changing needs ............................................................................................................ May/June 23

Community investments help launch plant ........................................................................................................................ July/Aug. 21

Compensating co-op directors

USDA study reveals wide range of pay plans ................................................................................................................. July/Aug. 38

Co-op boosting yields of protein, oil through approved variety program ...................................................................... Sept./Oct. 16

Co-op born of growers’ frustration with processor’s lack of long-term outlook ............................................................... May/June 9

Co-op completes purchase of Virginia turkey plant ........................................................................................................... Nov./Dec. 7

Co-op horizon problems: do you have one? ...................................................................................................................... July/Aug. 24

Co-op identity among topics during annual ACE institute ............................................................................................. Sept./Oct. 28

Co-op leaders focus on strategies for success ..................................................................................................................... Jan./Feb. 21

Co-op strives to help members reduce power use, lower bills ........................................................................................... Jan./Feb. 19

Co-ops can play role for members seeking trade adjustment assistance ............................................................................. July/Aug. 4

Co-ops help keep rural towns alive ................................................................................................................................... Nov./Dec. 22

CUNA: Meeting the needs of 83 million members .......................................................................................................... May/June 39

Dairy co-ops continue dominant role in marketing nation’s milk ................................................................................ March/April 14

Defending their turf

Growers see co-op’s legislative action as essential to future of nation’s sugar industry ................................................. May/June 4

Direct Access!

AGP’s new Pacific port an investment in Midwest soybean farms & facilities ........................................................... Sept./Oct. 14

1890s Land Grant Institutions use USDA funds to promote business growth ............................................................... Nov./Dec. 31

Election and voting policies of agricultural cooperatives .................................................................................................. May/June 14

Eligible bio-products defined ......................................................................................................................................... March/April 17

Exploring a greater role for ag co-ops in sustaining rural living .................................................................................. March/April 21

Ethanol co-ops unite to form marketing venture .............................................................................................................. July/Aug. 12

Farm Credit Council promotes lending system dedicated to improved quality of farm life ........................................... May/June 28

Farmers burn more of what they grow with E85 ............................................................................................................... July/Aug. 29

Farmer co-op sales, income fall in 2002 ............................................................................................................................. Jan./Feb. 28

FCA chair: stakes huge in credit debate; changes sorely needed ..................................................................................... Nov./Dec. 16

Federation of Southern Co-ops:

Three decades of sustaining rural Southern communities, saving black-owned farmland .......................................... May/June 31

Finding labor can be a struggle ........................................................................................................................................ March/April 8

Four leaders selected to Co-op Hall of Fame .................................................................................................................. Nov./Dec. 17

Fueling a rural revival

Ethanol co-op supports farmer income while providing lift to community ................................................................. July/Aug. 10

Furth, Wilson, Moorhouse win top honors for communications excellence .................................................................. Sept./Oct. 30

General conclusions about co-op’s downfall ..................................................................................................................... Sept./Oct. 23

Great Escapes

Agri-tourism co-op helping Georgia farmers diversify .................................................................................................. Sept./Oct. 8

Great Expectations

Ethanol is hot, but what is the long-term outlook for biofuel? ..................................................................................... July/Aug. 14

36 November/December 2004 / Rural Cooperatives

2004 Article Index
Rural Cooperatives / November/December 2004 37

Greener pastures for bio-tech co-ops?

New, bio-based products may only be scratching the

surface of potential .......................................................... March/April 16

Growers’ hay project may go statewide ............................. March/April 12

Hard lessons

Tri-State Ethanol struggling to overcome difficult start ..... July/Aug. 32

How business culture drives economic behavior in co-ops...... Jan./Feb. 23

How Green Tags work ........................................................... Sept./Oct. 19

KSU, NDSU Centers researching co-op issues ..................... May/June 34

Land O’Lakes reports nearly $84 million in earnings ....... March/April 23

Lost Horizon

Membership “horizon” problem preceded demise of MCP ... July/Aug. 22

Making hay, the right way

Oregon producers organize to market certified 

weed-free, premium hay ................................................. March/April 10

Making good things

Cass-Clay Creamery expanding product 

line and marketing horizons ............................................. March/April 4

Meeting the test

8,200 service calls in 24 hours tests 

mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

MFA Oil committed to development 

and marketing of renewable fuels ........................................ July/Aug. 26

Minnesota ethanol co-op producing premium Vodka ....... March/April 20

Missouri-based co-op brewery unveils 

Pony Express line of beer ............................................... March/April 20

NAHC advocates for co-p housing nationally ....................... May/June 27

National Cooperative Bank

Grocery, housing & purchasing co-ops 

on spectrum of organizations financed ............................... May/June 41

National Telecommunications Cooperative Association

Responses to evolving technology, 

deregulation key to members’ future .................................. May/June 40

NCBA helps co-ops compete in time of change .................... May/June 25

NCFC champions issues crucial to ag coo-ops ...................... May/June 24

NCFC names California’s Peltier president, CEO ............ March/April 15

Net income, sales decline for local farm co-ops ................ March/April 24

NMPF tackles tough issues for dairy co-ops .......................... May/June 26

Northland vs. Ocean Spray antitrust 

case settled; assets transferred ............................................ Nov./Dec. 21

NRECA programs benefit 865 co-ops, 

37 million consumers nationwide ....................................... May/June 30

NSAC: Making sure co-op numbers add up right ................. May/June 26

Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9

On the front line

Field representatives are the eyes and ears of a co-op .......... Jan./Feb. 4

Proposed sale of Farm Credit System 

lender to Dutch bank ignites controversy ........................... Sept./Oct. 7

Proximity to grain supply, livestock feeders 

key factors in ethanol plant site selection ............................ July/Aug. 19

Quick Picks—

Some select cooperative education resources .................... Sept./Oct. 27

Rabobank proposal sparks debate on 

role of FCS in farm & rural lending .................................. Nov./Dec. 13

Sharing the umbrella

State co-op councils broaden base to 

serve consolidating co-op sectors ........................................ May/June 18

Signs of Life

Have you checked your co-op’s education pulse lately? .... Sept./Oct. 26

Survey shows dairy co-ops in generally strong financial state .. Nov./Dec. 25

The canning of Tri Valley

What went wrong at Tri-Valley Growers, 

and what can other co-ops learn from it? .......................... Sept./Oct. 20

The right thing

GROWMARK’s Kelley says time is right 

for renewable fuels to gain larger share of market ............. July/Aug. 30

27 co-ops among recipients of $13 

million in USDA VAPG funding ....................................... Nov./Dec. 10

USDA co-op development efforts 

support commercial farming in Ghana ............................... May/June 11

USDA grant helping Colorado 

cooperative produce biodiesel ......................................... March/April 18

USDA grants support home-grown fuels ............................... July/Aug. 34

USDA providing $6.3 million in grants 

for rural co-op development in 24 states ........................... Nov./Dec. 24

USDA purchasing biobased products .................................... Sept./Oct. 12

USDA Rural Development: committed 

to the future of America’s rural communities ..................... May/June 42

USDA study boosts fuel conversion 

efficiency rating for ethanol ............................................... Sept./Oct. 13

UW Center for Co-ops: Working together, then and now ... May/June 34

Warming up to cold tofu

Ohio soybean growers study entry 

into emerging frozen tofu market ........................................ Nov./Dec. 8

Weighing in

Study gauges impact of local ag co-ops on rural 

economies of Great Plains, eastern Cornbelt ................ March/April 26

Why help Ghana’s cooperatives? ............................................ May/June 13

Wisconsin co-op offers fresh approach to produce auctions .... Jan./Feb. 8

Magazine Departments

COMMENTARY/EDITORIAL

Committed to our communities ............................................... Sept./Oct. 2

International co-op development promotes trade, democracy .... Jan./Feb. 2

Hard acts to follow ................................................................ March/April 2

Put a soybean in your tank ........................................................ July/Aug. 2

The extended family .................................................................. May/June 2

Through good times and bad ................................................... Nov./Dec. 2

Focus On...

Innovation drives Accelerated Genetics ................................. Sept./Oct. 25

Southern Marketing Agency Inc. ............................................. Jan./Feb. 20

In the Spotlight...

Sen. Dave Landis, as co-op champion Sen. George Norris .. Nov./Dec. 18

Legal Corner

Capper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10

Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Management Tip

How does your local farm supply co-op rate? ....................... Nov./Dec. 29

How is your co-op doing? ........................................................ Jan./Feb. 30

Newsline

Trio being inducted into Cooperative Hall of Fame ............. Jan./Feb. 32

Record growth for Organic Valley

CHS income down despite sales climb

Western Sugar plans new $3.5 million diffuser

Swiss Valley picks pair to replace CEO Quest

DFA allocated $28 million; plans N.M. cheese plant

Tom Camerlo Dairyman of the Year; Beckendorf to lead NMPF

Riceland buys ADM share of grain venture

Premium Pork plans plant in Missouri

Sun-Maid buys raisin facility in Selma

AGRI Industries to end grain pact with Cargill

Chippewa Valley’s Lee heads Renewable Fuels Association

Agway seeks court OK to sell produce business

LOL member promotes farmer-to-farmer aid

NCRA invests $340 million to settle clean air suit

USDA, NRECA seek to boost renewable energy use

PCCA net margins double as co-op marks 50th year

USDA to provide $1 million in grants for rural home health care co-ops

Iowa Turkey Growers Co-op expands new processing plant March/April 29

Georgia oilseed co-op plan launched with USDA grant

Iowa Premium Pork selling stock for plant purchase

NMPF says CWT program having major price impact

California Co-op Center closes; services continue via Extension

Wisconsin home-healthcare co-op named national finalist

Ralph Bunje, farm co-op bargaining leader, dies at 92

Ron Long, A.I. innovator, retires from Select Sires

Community credit union to serve low-income co-ps

Co-ops gain North American option for .co-op registration

Penlight restores power in record time

USDA to award $23 million for renewable energy projects .. May/June 45

UW’s Ann Hoyt elected NCBA board chair

Wisconsin’s Co-op Care Program finalist for prestigious award

Co-ops eligible for Value-Added Grants

Farm Credit Bank of Texas doubles earnings in 2003
38 November/December 2004 / Rural Cooperatives

ACDI/VOCA’s Deegan resigns

New logo adopted for California Tree Fruit

Forum for Dairy Women slated in Madison, Sept. 26-27

USDA awards $385 million for rural electric expansion

USDA announces $190 million in high-speed Internet loans

Darneille new PCCA CEO ..................................................... July/Aug. 41

Repayment demanded from Farmland bondholders

Tuscarora Organic Co-op expands

Turkey growers form co-op to pursue plant purchase

Gold Kist eyes possible conversion

Organic Valley sponsors “swim for clean water”

Iowa Premium Pork to operate in Le Mars

ACDI/VOCA names Baker interim president

New Sacramento nonprofit to promote cooperatives

Farmland’s share of feed, agronomy ventures sold

AMPI to close Glencoe plant

Decatur to lead FCL

Select Sires adds dairy breeds to product line

USDA launches renewable energy pilot project

Home health care co-ops get $1 million USDA boost

Innovative practices focus of Missouri co-op conference

Rural credit program achieves mission in Russia

Co-op Month activity to focus on contributions to communities

Iowa hearing examines key issues affecting co-ops ............... Sept./Oct. 32

U.S. Premium Beef converts to LLC; begins test marketing natural beef

Riceland’s Richard Bell retires in year of record sales, income

USDA’s Tom Gray honored for public service to co-ops

Co-op buys cigarette plant

Chesapeake farmers to market low-carb bread

GROWMARK profits climb; election reduces board size

Foremost Farms USA revolves $4.2 million in member equity

Dallas, Nielsen join Co-op Foundation board

Michigan Sugar to buy Monitor Sugar

Idaho wheat growers joining CHS

Iowa meatpacking plant closes

Former Lt. Gov. Bradley takes job with DFA

Southern States turn-around continues 

with $68-million profit ....................................................... Nov./Dec. 32

NCB’s Top 100 Co-ops had revenue of $117 billion

WestFarm Foods names John Underwood as CEO

Improved milk prices give boost to Dairylea

Michigan Sugar completes purchase of Monitor Sugar

AMPI members receiving $2.9 million in patronage

LO’L changes name of animal feed unit

Countrymark to reduce Emissions Indiana refinery

Plug pulled on FCSA sale

Page From the Past

Back to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39

Value-Added Corner

Amazing Grains!

Montana grain growers use VAPG funds from 

USDA to develop gluten-free flour ....................................... July/Aug. 6

Biodiesel project looks promising for Iowa co-op ............... March/April 9

USDA helps Michigan sugarbeet growers 

purchase processing plant ..................................................... Jan./Feb. 10

Warming up to cold tofu

Ohio soybean growers study entry 

into emerging frozen tofu market ........................................ Nov./Dec. 8

SUBJECTS

Agri-Tourism

Great Escapes

Agri-tourism co-op helping Georgia farmers diversify ....... Sept./Oct. 8

Biofuels & Products

Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18

Biodiesel project looks promising for Iowa co-op ............... March/April 9

Biodiesel: the 10 percent solution ........................................... July/Aug. 17

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows rapeseed 

for biodiesel production ........................................................Nov./Dec. 4

Buying biodiesel ‘off the rack’

CHS investing in new injection technology 

to streamline biodiesel blending process ............................. July/Aug. 28

Clean Air Act kickstarted ethanol ............................................ July/Aug. 16

Community investments help launch plant ............................ July/Aug. 21

Eligible bio-products defined ............................................. March/April 17

Ethanol co-ops unite to form marketing venture ................... July/Aug. 12

Farmers burn more of what they grow with E85 ................... July/Aug. 29

Fueling a rural revival

Ethanol co-op supports farmer income 

while providing lift to rural community .............................. July/Aug. 10

Great Expectations

Ethanol is hot, but what is the 

long-term outlook for biofuel? ............................................ July/Aug. 14

Greener pastures for bio-tech co-ops?

New, bio-based products may only be 

scratching the surface of potential .................................. March/April 16

Hard lessons

Tri-State Ethanol struggling to overcome difficult start ...... July/Aug. 32

Lost Horizon

Membership “horizon” problem 

preceded demise of MCP ..................................................... July/Aug. 22

MFA Oil committed to development 

and marketing of renewable fuels ........................................ July/Aug. 26

Minnesota ethanol co-op producing premium Vodka ....... March/April 20

Proximity to grain supply, livestock feeders 

key factors in ethanol plant site selection ............................ July/Aug. 19

The right thing

GROWMARK’s Kelley says time is right for 

renewable fuels to gain larger share of market ................... July/Aug. 30

USDA grant helping Colorado 

cooperative produce biodiesel ......................................... March/April 18

USDA grants support home-grown fuels ............................... July/Aug. 34

USDA purchasing biobased products .................................... Sept./Oct. 12

USDA study boosts fuel conversion 

efficiency rating for ethanol ............................................... Sept./Oct. 13

Communication

CCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ... May/June 35

Furth, Wilson, Moorhouse win top 

honors for communications excellence .............................. Sept./Oct. 30

Consumer Co-ops

Co-ops help keep rural towns alive ........................................ Nov./Dec. 22

CUNA: Meeting the needs of 83 million members ............... May/June 39

NAHC advocates for co-p housing nationally ....................... May/June 27

NCBA helps co-ops compete in time of change .................... May/June 25

Co-op Development

ACDI/VOCA spreads co-op model worldwide ..................... May/June 37

African ag co-ops leading fight against HIV/AIDS ................ Jan./Feb. 15

Boosting the giant

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

Co-op born of growers’ frustration with 

processor’s lack of long-term outlook ................................... May/June 9

Co-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7

Federation of Southern Co-ops:

Three decades of sustaining rural Southern 

communities, saving black-owned farmland ....................... May/June 31

Rural Cooperative Development Centers (listed) .................. May/June 32

USDA co-op development efforts support 

commercial farming in Ghana ............................................ May/June 11

USDA providing $6.3 million in grants for 

rural co-op development in 24 states ................................. Nov./Dec. 24

Why help Ghana’s cooperatives? ............................................ May/June 13

Co-ops & Communities

Community investments help launch plant ............................ July/Aug. 21

Co-ops help keep rural towns alive ........................................ Nov./Dec. 22

Exploring a greater role for ag 

co-ops in sustaining rural living ...................................... March/April 21
Rural Cooperatives / November/December 2004 39

Fueling a rural revival

Ethanol co-op supports farmer income 

while providing lift to rural community .............................. July/Aug. 10

Weighing in

Study gauges impact of local ag co-ops on rural 

economies of Great Plains, eastern Cornbelt ................ March/April 26

Dairy

Attracting the Upper Midwest’s next 

generation of dairy farmers ............................................... March/April 7

Back to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39

Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Dairy co-ops continue dominant 

role in marketing nation’s milk ....................................... March/April 14

Finding labor can be a struggle ............................................ March/April 8

Innovation drives accelerated Genetics .................................. Sept./Oct. 25

Making good things

Cass-Clay Creamery expanding product 

line and marketing horizons ............................................. March/April 4

NMPF tackles tough issues for dairy co-ops .......................... May/June 26

Southern Marketing Agency Inc. ............................................. Jan./Feb. 20

Survey shows dairy co-ops in 

generally strong financial state ........................................... Nov./Dec. 25

Director Education and Development

Compensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38

Election and voting policies of agricultural cooperatives ...... May/June 14

Signs of Life

Have you checked your co-op’s education pulse lately? .... Sept./Oct. 26

Education

Association of Cooperative Educators

Cross-border membership and 

collaboration brings growth ................................................ May/June 36

Co-op identity among topics during annual ACE institute .... Sept./Oct. 28

1890s Land Grant Institutions use USDA 

funds to promote business growth ..................................... Nov./Dec. 31

Quick Picks—

Some select cooperative education resources ..................... Sept./Oct 27

Sen. Dave Landis, as co-op champion Sen. George Norris .... Nov./Dec. 18

Signs of Life

Have you checked your co-op’s education pulse lately? .... Sept./Oct. 26

Environment

Backyard powerhouses

“Green Tags” spur development 

of renewable power co-ops ................................................. Sept./Oct. 18

Biodiesel: the 10 percent solution ........................................... July/Aug. 17

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows 

rapeseed for biodiesel production .........................................Nov./Dec. 4

Clean Air Act kickstarted ethanol ............................................ July/Aug. 16

Greener pastures for bio-tech co-ops?

New, bio-based products may only 

be scratching the surface of potential ..............................March/April 16

How Green Tags work ........................................................... Sept./Oct. 19

USDA purchasing biobased products .................................... Sept./Oct. 12

Farm Supply, Agronomy & Service

Buying biodiesel ‘off the rack’

CHS investing in new injection technology 

to streamline biodiesel blending process ............................. July/Aug. 28

Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28

How does your local farm supply co-op rate? ....................... Nov./Dec. 29

How is your co-op doing? ........................................................ Jan./Feb. 30

Innovation drives Accelerated Genetics ................................. Sept./Oct. 25

MFA Oil committed to development 

and marketing of renewable fuels ........................................ July/Aug. 26

Net income, sales decline for local farm co-ops ................ March/April 24

The right thing

GROWMARK’s Kelley says time is right for 

renewable fuels to gain larger share of market ................... July/Aug. 30

Finance

CFC: rural electric co-ops’ own financing powerhouse ........ May/June 29

Co-Bank keeps pace with co-ops’ changing needs ................. May/June 23

CUNA: Meeting the needs of 83 million members ............... May/June 39

Farm Credit Council promotes lending 

system dedicated to improved quality of farm life ............. May/June 28

National Cooperative Bank

Grocery, housing & purchasing 

co-ops on spectrum of organizations financed ................... May/June 41

NSAC: Making sure co-op numbers add up right ................. May/June 26

Proposed sale of Farm Credit System 

lender to Dutch bank ignites controversy ........................... Sept./Oct. 7

Rabobank proposal sparks debate on 

role of FCS in farm & rural lending .................................. Nov./Dec. 13

The canning of Tri Valley

What went wrong at Tri-Valley Growers 

and what can other co-ops learn from it? .......................... Sept./Oct. 20

Forage Crops

Growers’ hay project may go statewide ............................. March/April 12

Making hay, the right way

Oregon producers organize to market 

certified weed-free, premium hay ................................... March/April 10

Fruits, Nuts, Vegetables

California ag tour gives U.S. trade rep 

crucial insight into state’s export crops ................................ Sept./Oct. 4

Co-ops can play role for members 

seeking trade adjustment assistance ....................................... July/Aug. 4

Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9

The canning of Tri Valley

What went wrong at Tri-Valley Growers, 

and what can other co-ops learn from it? .......................... Sept./Oct. 20

What went wrong? Some opinions ........................................ Sept./Oct. 24

Governance & Structure

Compensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38

Co-op leaders focus on strategies for success .......................... Jan./Feb. 21

Election and voting policies of agricultural cooperatives ...... May/June 14

How business culture drives economic behavior in co-ops .... Jan./Feb. 23

Lost Horizon

Membership “horizon” problem preceded demise of MCP July/Aug. 22

NCFC names California’s Peltier president, CEO ............ March/April 15

Grains & OilSeeds

Amazing Grains!

Montana grain growers use VAPG 

funds from USDA to develop gluten-free flour .................... July/Aug. 6

Co-op boosting yields of protein, 

oil through approved variety program ....................................Sept./Oct. 16

Direct Access!

AGP’s new Pacific port an investment 

in Midwest soybean farms and facilities.............................. Sept./Oct. 14

Fueling a rural revival

Ethanol co-op supports farmer income 

while providing lift to rural community .............................. July/Aug. 10

Great Expectations

Ethanol is hot, but what is the 

long-term outlook for biofuel? ............................................ July/Aug. 14

Lost Horizon

Membership “horizon” problem preceded demise of MCP July/Aug. 22

Missouri-based co-op brewery unveils 

Pony Express line of beer ............................................... March/April 20

Warming up to cold tofu

Ohio soybean growers study entry 

into emerging frozen tofu market ........................................ Nov./Dec. 8

Legislative and Legal

Capper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10

Co-ops can play role for members 

seeking trade adjustment assistance ........................................July/Aug. 4

Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Defending their turf

Growers see co-op’s legislative action as 

essential to future of nation’s sugar industry ........................ May/June 4

NCBA helps co-ops compete in time of change .................... May/June 25

NCFC champions issues crucial to ag co-ops ........................ May/June 24
40 November/December 2004 / Rural Cooperatives

Rabobank proposal sparks debate on 

role of FCS in farm & rural lending .................................. Nov./Dec. 13

Livestock/Poultry

Co-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7

Innovation drives Accelerated Genetics ................................. Sept./Oct. 25

Proximity to grain supply, livestock feeders 

key factors in ethanol plant site selection ............................ July/Aug. 19

Management

Co-op leaders focus on strategies for success .......................... Jan./Feb. 21

The canning of Tri Valley

What went wrong at Tri-Valley Growers, 

and what can other co-ops learn from it? .......................... Sept./Oct. 20

What went wrong? Some opinions ........................................ Sept./Oct. 24

Marketing

Agriliance to operate major terminal at Port of Galveston ..... Sept./Oct. 17

Back to the future

Milk was cool with teens in ’55, gets an update for ’05 .... Sept./Oct. 39

Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18

Buying biodiesel ‘off the rack’

CHS investing in new injection technology 

to streamline biodiesel blending process ............................. July/Aug. 28

Co-op leaders focus on strategies for success .......................... Jan./Feb. 21

Direct Access!

AGP’s new Pacific port an investment in 

Midwest soybean farms & facilities .................................... Sept./Oct. 14

Dairy co-ops continue dominant role 

in marketing nation’s milk .............................................. March/April 14

Ethanol co-ops unite to form marketing venture ................... July/Aug. 12

Farmers burn more of what they grow with E85 ................... July/Aug. 29

Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28

How is your co-op doing? ........................................................ Jan./Feb. 30

Land O’Lakes reports nearly $84 million in earnings ....... March/April 23

Making good things

Cass-Clay Creamery expanding 

product line and marketing horizons ............................... March/April 4

Making hay, the right way

Oregon producers organize to market 

certified weed-free, premium hay .................................. March/April 10

Missouri-based co-op brewery unveils 

Pony Express line of beer ............................................... March/April 20

Net income, sales decline for local farm co-ops ................ March/April 24

Ocean Spray rejects Pepsi offer ................................................. July/Aug. 9

Southern Marketing Agency Inc. ............................................. Jan./Feb. 20

Survey shows dairy co-ops in generally strong financial state .. Nov./Dec. 25

USDA helps Michigan sugarbeet 

growers purchase processing plant ....................................... Jan./Feb. 10

Warming up to cold tofu

Ohio soybean growers study entry 

into emerging frozen tofu market ........................................ Nov./Dec. 8

Member Relations 

Attracting the Upper Midwest’s next 

generation of dairy farmers ............................................... March/April 7

Co-op horizon problems: do you have one? ........................... July/Aug. 24

Exploring a greater role for ag 

co-ops in sustaining rural living .................................... March/April 21

How business culture drives economic behavior in co-ops .... Jan./Feb. 23

Making good things

Cass-Clay Creamery expanding 

product line and marketing horizons ................................March/April 4

Organizations Serving Co-ops

ACDI/VOCA spreads co-op model worldwide ..................... May/June 37

Association of Cooperative Educators

Cross-border membership and collaboration brings growth May/June 36

CCA: Reflecting change, setting the pace

50 years of promoting innovative co-op communications ... May/June 35

CFC: rural electric co-ops’ own financing powerhouse ........ May/June 29

Co-Bank keeps pace with co-ops’ changing needs ................. May/June 23

CUNA: Meeting the needs of 83 million members ............... May/June 39

Farm Credit Council promotes lending system 

dedicated to improved quality of farm life ......................... May/June 28

Federation of Southern Co-ops:

Three decades of sustaining rural Southern 

communities, saving black-owned farmland ....................... May/June 31

KSU, NDSU Centers researching co-op issues ..................... May/June 34

NAHC advocates for co-p housing nationally ....................... May/June 27

National Cooperative Bank

Grocery, housing & purchasing co-ops 

on spectrum of organizations financed ............................... May/June 41

National Telecommunications Cooperative Association

Responses to evolving technology, 

deregulation key to members’ future ...................................May/June 40

NCBA helps co-ops compete in time of change .................... May/June 25

NCFC champions issues crucial to ag coo-ops ...................... May/June 24

NMPF tackles tough issues for dairy co-ops .......................... May/June 26

NRECA programs benefit 865 co-ops, 

37 million consumers nationwide ....................................... May/June 30

NSAC: Making sure co-op numbers add up right ................. May/June 26

Rural Cooperative Development Centers .............................. May/June 32

Sharing the umbrella

State co-op councils broaden base 

to serve consolidating co-op sectors ................................... May/June 18

State or regional cooperative associations .............................. May/June 21

USDA Rural Development: committed to 

the future of America’s rural communities ......................... May/June 42

UW Center for Co-ops:

Working together, then and now ........................................ May/June 34

Statistics

Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28

How does your local farm supply co-op rate? ....................... Nov./Dec. 29

How is your co-op doing? ........................................................ Jan./Feb. 30

Net income, sales decline for local farm co-ops ................ March/April 24

Survey shows dairy co-ops in 

generally strong financial state ........................................... Nov./Dec. 25

Sugar

Co-op born of growers’ frustration with 

processor’s lack of long-term outlook ................................... May/June 9

Defending their turf

Growers see co-op’s legislative action 

as essential to future of nation’s sugar industry .................... May/June 4

USDA helps Michigan sugarbeet growers 

purchase processing plant ..................................................... Jan./Feb. 10

Trade 

Agriliance to operate major terminal at Port of Galveston ...... Sept./Oct. 17

California ag tour gives U.S. trade rep crucial 

insight into state’s export crops ............................................ Sept./Oct. 4

Co-ops can play role for members seeking 

trade adjustment assistance .................................................... July/Aug. 4

Defending their turf

Growers see co-op’s legislative action 

as essential to future of nation’s sugar industry .................... May/June 4

Direct Access!

AGP’s new Pacific port an investment in 

Midwest soybean farms & facilities .................................... Sept./Oct. 14

USDA

Agribusiness, co-ops awarded $28 million in USDA grants ... Jan./Feb. 11

1890s Land Grant Institutions use USDA 

funds to promote business growth ..................................... Nov./Dec. 31

27 co-ops among recipients of $13 million 

in USDA VAPG funding .................................................... Nov./Dec. 10

USDA co-op development efforts support 

commercial farming in Ghana ............................................ May/June 11

USDA grant helping Colorado 

cooperative produce biodiesel ......................................... March/April 18

USDA grants support home-grown fuels ............................... July/Aug. 34

USDA helps Michigan sugarbeet growers 

purchase processing plant ..................................................... Jan./Feb. 10

USDA providing $6.3 million in grants 

for rural co-op development in 24 states ........................... Nov./Dec. 24

USDA Rural Development: committed to 

the future of America’s rural communities ......................... May/June 42

USDA study boosts fuel conversion 

efficiency rating for ethanol ............................................... Sept./Oct. 13
Rural Cooperatives / November/December 2004 41

Utility Co-ops 

Backyard powerhouses

“Green Tags” spur development 

of renewable power co-ops ................................................. Sept./Oct. 18

CFC: rural electric co-ops’ own financing powerhouse ........ May/June 29

Co-op strives to help members reduce power use, lower bills .. Jan./Feb. 19

How Green Tags work ........................................................... Sept./Oct. 19

Meeting the test

8,200 service calls in 24 hours tests 

mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

NRECA programs benefit 865 co-ops, 

37 million consumers nationwide ....................................... May/June 30

Sen. Dave Landis, as co-op champion Sen. George Norris .. Nov./Dec. 18

Value Added 

Agribusiness, co-ops awarded $28 million in USDA grants ... Jan./Feb. 11

Biodiesel project looks promising for Iowa co-op ............... March/April 9

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows 

rapeseed for biodiesel production ........................................ Nov./Dec. 4

Co-op born of growers’ frustration with 

processor’s lack of long-term outlook ................................... May/June 9

Co-op boosting yields of protein, 

oil through approved variety program ............................... Sept./Oct. 16

Fueling a rural revival

Ethanol co-op supports farmer income 

while providing lift to rural community .............................. July/Aug. 10

Great Expectations

Ethanol is hot, but what is the 

long-term outlook for biofuel? ............................................ July/Aug. 14

Greener pastures for bio-tech co-ops?

New, bio-based products may only 

be scratching the surface of potential ............................. March/April 16

Making hay, the right way

Oregon producers organize to market 

certified weed-free, premium hay ................................... March/April 10

Minnesota ethanol co-op producing premium Vodka ....... March/April 20

Missouri-based co-op brewery unveils 

Pony Express line of beer ............................................... March/April 20

27 co-ops among recipients of $13 

million in USDA VAPG funding ....................................... Nov./Dec. 10

USDA grants support home-grown fuels ............................... July/Aug. 34

USDA purchasing biobased products .................................... Sept./Oct. 12

Warming up to cold tofu

Ohio soybean growers study entry into 

emerging frozen tofu market ................................................ Nov./Dec. 8

AUTHORS 

Barr, William W.

Amazing Grains!

Montana grain growers use VAPG funds 

from USDA to develop gluten-free flour .............................. July/Aug. 6

Baxter, Annie

Co-ops help keep rural towns alive ........................................ Nov./Dec. 22

Berry Mark

Warming up to cold tofu

Ohio soybean growers study entry into 

emerging frozen tofu market ................................................ Nov./Dec. 8

Borst, Alan

Co-ops can play role for members 

seeking trade adjustment assistance ....................................... July/Aug. 4

Campbell, Daniel

Attracting the Upper Midwest’s next 

generation of dairy farmers ............................................... March/April 7

Balancing act

Risk-hedging strategy big part of Iowa co-op’s success ...... July/Aug. 18

Committed to our communities ............................................... Sept./Oct. 2

Defending their turf

Growers see co-op’s legislative action 

as essential to future of nation’s sugar industry .................... May/June 4

Fueling a rural revival

Ethanol co-op supports farmer income 

while providing lift to rural community .............................. July/Aug. 10

Hard acts to follow ................................................................ March/April 2

Making good things

Cass-Clay Creamery expanding product 

line and marketing horizons ............................................. March/April 4

Proximity to grain supply, livestock feeders 

key factors in ethanol plant site selection ............................ July/Aug. 19

Put a soybean in your tank ........................................................ July/Aug. 2

Rabobank proposal sparks debate on role 

of FCS in farm & rural lending ..........................................Nov./Dec. 13

The extended family .................................................................. May/June 2

Through good times and bad ................................................... Nov./Dec. 2

Carson, Marlis

Dairy co-op acquisition does not violate antitrust law .......... Nov./Dec. 20

Crooks, Anthony

Lost Horizon

Membership “horizon” problem preceded demise of MCP .. July/Aug. 22

Dunn, John

USDA co-op development efforts support 

commercial farming in Ghana ............................................ May/June 11

Eversull, Eldon

Farmer co-op sales, income fall in 2002 .................................. Jan./Feb. 28

Ely, G.

Boosting the giant

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

Frederick, Donald A.

Capper-Volstead protects co-ops with foreign members ...... Sept./Oct. 10

Gray, Thomas W.

Exploring a greater role for ag 

co-ops in sustaining rural living ...................................... March/April 21

Haskell, James

Boosting the giant:

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

International co-op development promotes trade, democracy ... Jan./Feb. 2

Hastings, Ann

The right thing

GROWMARK’s Kelley says time is right 

for renewable fuels to gain larger share of market ............. July/Aug. 30

Hogeland, Julie A.

How business culture drives economic behavior in co-ops .... Jan./Feb. 23

Jobe, Jeff 

Biodiesel project looks promising for Iowa co-op ............... March/April 9

Boosting the giant:

USDA assistance effort helping Nigerian producers .......... Jan./Feb. 12

Johnson, Mark S.

Farmers burn more of what they grow with E85 ................... July/Aug. 29

Karg, Pamela J.

Sharing the umbrella

State co-op councils broaden base to serve 

consolidating co-op sectors ................................................. May/June 18

Wisconsin co-op offers fresh approach to produce auctions .... Jan./Feb. 8

Leach, Richard E.

USDA helps Michigan sugarbeet growers 

purchase processing plant ..................................................... Jan./Feb. 10

Leach, Michael

Co-op completes purchase of Virginia turkey plant ............... Nov./Dec. 7

Liebrand, Carolyn

Survey shows dairy co-ops in generally strong financial state Nov./Dec. 25
42 November/December 2004 / Rural Cooperatives

Ling, Charles

Dairy co-ops continue dominant role 

in marketing nation’s milk .............................................. March/April 14

McNamara, Kevin; Fulton, Joan; Hine, Susan

Weighing in

Study gauges impact of local ag co-ops on rural 

economies of Great Plains, eastern Cornbelt ................ March/April 26

Merlo, Catherine

On the front line

Field representatives are the eyes and ears of a co-op .......... Jan./Feb. 4

Reynolds, Bruce J.

Compensating co-op directors:

USDA study reveals wide range of pay plans ...................... July/Aug. 38

Election and voting policies of agricultural cooperatives ...... May/June 14

Richter, Steve

Buying biodiesel ‘off the rack’

CHS investing in new injection technology 

to streamline biodiesel blending process ............................. July/Aug. 28

Rodenburg, Jim

Direct Access!

AGP’s new Pacific port an investment in 

Midwest soybean farms & facilities .................................... Sept./Oct. 14

Rotan, Beverly L.

How does your local farm supply co-op rate? ....................... Nov./Dec. 29

How is your co-op doing? ........................................................ Jan./Feb. 30

Net income, sales decline for local farm co-ops ................ March/April 24

Schofer, Dan; Deibel, Penelope; Sherwin, Dan

Making hay, the right way

Oregon producers organize to market 

certified weed-free, premium hay ................................... March/April 10

Schram, Susan G.

African ag co-ops leading fight against HIV/AIDS ................ Jan./Feb. 15

Scroggs, Craig

Great Escapes

Agri-tourism co-op helping Georgia farmers diversify ....... Sept./Oct. 8

Searcy, Diane

MFA Oil committed to development 

and marketing of renewable fuels ........................................ July/Aug. 26

Sexton, Richard; Hariyoga, Himawan

The canning of Tri Valley

What went wrong at Tri-Valley Growers, 

and what can other co-ops learn from it? .......................... Sept./Oct. 20

Thompson, Stephen

Backyard powerhouses

“Green Tags” spur development of renewable power co-ops Sept./Oct. 18

Biodiesel with altitude

Colorado’s Blue Sun Co-op grows 

rapeseed for biodiesel production ........................................ Nov./Dec. 4

Community investments help launch plant ............................ July/Aug. 21

Great Expectations

Ethanol is hot, but what is the 

long-term outlook for biofuel? ............................................ July/Aug. 14

Greener pastures for bio-tech co-ops?

New, bio-based products may only be 

scratching the surface of potential .................................. March/April 16

Hard lessons

Tri-State Ethanol struggling to overcome difficult start .... July/Aug. 32

Meeting the test

8,200 service calls in 24 hours tests 

mettle of Adams Electric Co-op .......................................... Jan./Feb. 16

USDA study boosts fuel conversion efficiency 

rating for ethanol ................................................................ Sept./Oct. 13

Wadsworth, James

Signs of Life

Have you checked your co-op’s education pulse lately? .... Sept./Oct. 26

Zeuli, Kimberly

Co-op leaders focus on strategies for success .......................... Jan./Feb. 21
Rural Cooperatives / November/December 2004 43
44 November/December 2004 / Rural Cooperatives

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