USDA / Rural Development November/December 2009

DAIRY

CO-OPS

STRIVE TO

HELP MEMBERS

WEATHER

STORM

DAIRY

CO-OPS

STRIVE TO

HELP MEMBERS

WEATHER

STORM

Rural

COOPERATIVES COOPERATIVES

Page 8
By Greg Berberich, CEO

Matanuska Telephone Association 

Editor’s note: this guest commentary originally appeared in the

Anchorage Daily News.

ast spring Alaska’s Matanuska Telephone

Association mailed checks to our

member/owners, ranging in size from $10 to

$24,000. These were capital credits returns,

which are sent annually to members based on

their share of the cooperative’s margins. 

A cooperative exists for the benefit of its members, who

are also its customers. And while this benefit is predicated on

a service-over-profit philosophy, even during challenging

economic times the success of the cooperative form of

business is clear: its singular focus is on creating long-term

value for its owners. 

In a marketplace where the traditional for-profit business

model has often demonstrated an inability, and at times

unwillingness, to create sustainable value for its investors, a

locally owned cooperative, dedicated to its customers,

employees and the communities it serves, is a precious

commodity. 

The global economic crisis is a prime example of how the

bigger some companies grow, the more their priorities

change. In order to satisfy the demands of investors, they

often create an environment of profit and risk-taking that

shifts the focus from the sound business practice of serving

their customers to serving themselves. 

In contrast, a defining point of a cooperative is that it

focuses on its members and gives them a democratic voice in

its governance. In co-ops, member-owners have a close

association with the enterprise as producers, employees

and/or consumers of its products and services. 

Excess economic benefits are distributed proportionally

according to each member’s patronage in the cooperative: the

more revenue a member generates, the greater the benefits

received in return. 

Co-ops are typically formed to meet consumer needs not

being served by existing market participants. Many

cooperatives were created to bring telephone service to rural

communities because for-profit providers knew there would

2 November/December 2009 / Rural Cooperatives

Commentary 

Cooperatives make good sense,

serve their communities

The Chugach

Mountain Range

towers above the

headquarters of the

Manatanuska

Telephone Association

(MTA) in Palmer,

Alaska. The co-op

employs 400 people

and pumps millions of

dollars into the local

economy. Photo

courtesy MTA

continued on page 39
Features

Rural Cooperatives / November/December 2009 3

Volume 76, Number 6

November/December 2009

Rural Cooperatives (1088-8845) is

published bimonthly by USDA Rural

Development, 1400 Independence Ave.

SW, Stop 0705, Washington, DC. 20250-

0705.

The Secretary of Agriculture has

determined that publication of this

periodical is necessary in the transaction

of public business required by law of the

Department. Periodicals postage paid at

Washington, DC. and additional mailing

offices. Copies may be obtained from the

Superintendent of Documents,

Government Printing Office, Washington,

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

send address change to: Rural

Cooperatives, USDA/RBS, Stop 3255,

Wash., DC 20250-3255.

Mention in Rural Cooperatives of

company and brand names does not

signify endorsement over other

companies’ products and services.

Unless otherwise stated, articles in this

publication are not copyrighted and may

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

necessarily reflect those of USDA or its

employees.

The U.S. Department of Agriculture

(USDA) prohibits discrimination in all its

programs and activities on the basis of

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

status, familial status, parental status,

religion, sexual orientation, genetic

information, political beliefs, reprisal, or

because all or part of an individual’s

income is derived from any public

assistance program. (Not all prohibited

bases apply to all programs.) Persons

with disabilities who require alternative

means for communication of program

information (Braille, large print, audiotape,

etc.) should contact USDA’s TARGET

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

To file a complaint of discrimination, write

to USDA, Director, Office of Civil Rights,

1400 Independence Avenue, S.W.,

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

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

USDA is an equal opportunity provider

and employer.

Tom Vilsack, Secretary of Agriculture

Dallas Tonsager, Under Secretary,

USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?

Call (202) 720-6483, or email:

coopinfo@wdc.usda.gov

This publication was printed with vegetable oil-based ink.

p.8 p. 14

ON THE COVER:

The nation’s dairy producers have been through a wringer during the

past year as milk prices plummeted. Dairy co-op leaders discuss what

they are doing to help producers and what type of structural action is

needed to prevent a reoccurrence of the situation. See page 8. Photo

illustration by Stephen Hall

4 What Cooperatives Are (and Aren’t) 

Economist says co-ops represent the aggregates of economic units

By Charles Ling

8 Storm Shelter 

Dairy co-ops strive to help members survive severe market downturn 

By Dan Campbell

14 Banking on the Future 

U.S. farm credit co-op model paying dividends in Armenia 

By Pamela J. Karg

18 Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity, logo and tagline 

22 Marginal Land Tapped for Biofuels 

New York land bank co-op could be first of its kind 

By Anne Todd 

Departments

2 COMMENTARY

7 LEGAL CORNER

21 UTILITY CO-OP CONNECTION

25 NEWSLINE

31 2009 ARTICLE INDEX

p. 22
4 November/December 2009 / Rural Cooperatives

By Charles Ling, Ag Economist

Cooperative Programs 

USDA Rural Development 

any factors are converging to bring new

attention to the cooperative business model.

Discussions about a possible role for co-ops

as part of national health-care reform and an

explosion of interest in local foods, farmers

markets and community-supported agriculture and fisheries

— which often employ co-op business models — have added

to this attention. 

During the past 10 or 15 years, we’ve also seen many

experiments with variations on the traditional co-op business

model, as have occurred with some new-generation

processing co-ops and producer-owned limited liability

corporations (LLCs), including those involved in renewable

energy production. As such, it is timely to take a fresh look at

what a cooperative is and how it differs from an investorowned business. 

Emelianoff’s definition

A concise definition of a cooperative by Ivan V. Emelianoff

— in explaining the economic structure of cooperative

What Cooperatives Are (and Aren’t) 

Economist says co-ops represent the aggregates of economic units

Graphic by Stephen Thompson
associations about 70 years ago — remains refreshingly clear

and applicable today. His work marked the beginning of a

new era in the development and evolution of cooperative

theory. The narrative of ideas presented in this article is

primarily drawn from Emelianoff’s book, and will hopefully

shed light on the nature of cooperatives. 

In Economic Theory of Cooperation, Emelianoff carefully

reviewed the worldwide literature on cooperative theory from

the late 19th century until 1939. He came to the conclusion

that for economic analysis of cooperatives, the economic

structure of cooperative organizations should be clearly

defined, and that the definition should be free from the

encumbrance of sociological, legal, technical, socialphilosophical and ethical considerations. 

Against this backdrop, Emelianoff established this

definition: “Cooperative organizations represent the

aggregates of economic units.” While that is more “bare

bones” than many definitions of cooperative, it crystallizes

the essence of what cooperatives should have in common. 

“Aggregate” is commonly defined as: “Any total or whole

considered with reference to its constituent parts; an

assemblage or group of distinct particulars massed together.”

Further, as defined by Emelianoff: “An economic unit, or

economic individual, is an economic body admittedly

complete and sufficiently integrated for individual existence

and independent (in conditions of an exchange economy —

interdependent) economic functioning.”

Co-ops as aggregates of farms

In the agricultural context, farms are such economic units.

The nature of cooperative associations as aggregates of

member-farms is clearly discernible in the embryonic forms

of such associations. For example, a buying club of farmers

may want to purchase certain goods together, such as

fertilizer.

The buying club would have someone take orders from

member-farmers and place orders with a vendor, as well as

perform other related chores. If the vendor requires a

deposit, members may advance money to the buying club for

the deposit requirement in proportion to their respective

buying volume. 

There may be an elected committee to facilitate decisionmaking if the number of members is large. Members may

each have one vote if their purchasing volumes are about the

same. Otherwise, some form of proportional voting may be

adopted to conciliate large-volume members.

When the fertilizer (for example) is delivered, members

pay the balance of their obligations. After the transactions

have been completed, payment to the vendor and other

expenses are subtracted from the sum of money paid by

members. Any surplus is returned to members in proportion

to the volume of fertilizer they have purchased. 

This buying service is conducted at cost; every aspect of a

member’s transaction through the buying club is in

proportion to their patronage (buying) volume. The buying

club may be disbanded after fulfilling its joint-buying

purpose.

This scenario shows that the buying club represents the

aggregate of its member-farms, through which they purchase

fertilizer. If the buying club metamorphoses into a permanent

purchasing cooperative association, the picture may look

more complicated. However, the underlying nature of the

cooperative as an aggregate of member-farms remains the

same.

Making it permanent

In this new scenario, the person who manages buying

orders and other chores will be the manager of the

cooperative (usually a hired professional). The committee of

members becomes the board of directors. Advanced payments

by members to the cooperative become equity capital for

financing the operation and for carrying inventories and

owning facilities. 

Year-end surplus is returned to members as refunds in

proportion to patronage volume, but a portion may be

retained as revolving capital. The principles of

proportionality and service at-cost remain intact, but their

practices may be less evident because the operation has

become more complex.

Although the above example is based on purchasing

cooperatives, the same line of reasoning also applies to

marketing cooperatives. The difference between purchasing

and marketing cooperatives is: instead of procuring goods, a

marketing cooperative markets products produced by

member-farms.

In either case, the member-farms coordinate their

activities through the cooperative, but each fully retains its

economic individuality and independence. 

A cooperative may be described as a center of memberpatrons’ coordinated activities, or as an agency owned and

controlled by members through which they conduct their

business. In this respect, it is identical with the special

departments or branches of single member-farms. 

For example, a dairy cooperative is the collective

marketing arm of its member dairy farms; a farm supply

cooperative is their supply purchasing department; and a

livestock-genetics cooperative is the breeding service branch

for its members. As some would say: a cooperative is an offfarm extension of the farming business.

Characteristics of co-ops

Being aggregates of member-farms, cooperative

associations have these characteristics in common:

a) The equity capital of a cooperative is the sum of

advances needed for financing anticipated

transactions of individual members of the

cooperative; it is not the same as the entrepreneurial

capital of an investor-owned corporation.

Rural Cooperatives / November/December 2009 5
6 November/December 2009 / Rural Cooperatives

b) The member-owners of a cooperative are

independent farmers who have chosen to coordinate

certain activities via a cooperative. They are not the

same as the stockholders of an investor-owned

corporation, who are a diverse set of shareholders

joined solely by common investment.

c) The surplus or deficit of a cooperative is the account

payable to, or receivable from, the member-patrons

of the cooperative on their current transactions; this

is not the same as the profit or loss of an investorowned corporation.

d) The sum for patronage refunds to members is the

sum either underpaid (overcharged) to the members,

or — in case of a deficit — overpaid (undercharged)

to members on their transactions through the

marketing (or purchasing) cooperative; the sum for

patronage refunds is not the profit of the cooperative

or its income.

e) The dividend on capital, if any, does not represent a

profit or any income of the cooperative; it is the

interest payment for using capital advanced by

members. By contrast, investor-owned corporations

pay dividends to shareholders out of earnings.

f) All the economic functions of a cooperative are

ultimately the economic functions of the memberfarms performed through the cooperative as their

collective branch or collective department.

Therefore, all economic services of cooperative

associations are performed at cost.

Emelianoff emphasizes: “None of such traits can be

unreservedly used as an unerring test of a truly cooperative

organization, since these traits only indirectly disclose the

economic character of the cooperative aggregate....The only

comprehensive and indisputable test of the cooperative

character of organizations is their aggregate structure.”

Unique aspects of co-ops 

The unique aspects of cooperative character, however, are

often not readily apparent. There are many reasons for this,

some examples being:

• Cooperatives only reflect the characters and aspirations of

their membership, which are diverse and manifest the

diversity of the population, the geographical regions and

the commodities involved. Such differences directly, or

indirectly, have a certain bearing on the character of an

association and its cooperative ideals. The variability of the

external characteristics of cooperatives is kaleidoscopic and

infinite. Differences in their external and superficial

features obscure cooperatives’ ultimate economic character

of being aggregates of their member-farms.

• Most cooperatives are incorporated. The legal vestments of

incorporated cooperative associations also cloak their

economic structure as aggregates of member-farms to such

a degree that they are often mistaken to be the same as

investor-owned corporations. This is one of the principal

sources of confusion in understanding cooperative

organizations.

• A lack of distinction between the concept of an investorowned corporation as a profit-seeking economic unit and

the concept of a cooperative as an agency of its member

farms is another factor that confuses many. Use of common

accounting terminology for both business models adds to

this confusion. As the above list of co-op characteristics

shows, such conventional terms as “profit,” “capital,”

“shareholders,” “dividends,” etc., should be used with

reservations when describing cooperatives.

• In governance, a cooperative board of directors —

including its board election rules, composition, function,

responsibilities and interaction with management — is not

the same as the board of an investor-owned corporation

(especially the publicly traded ones). Consequently, the role

of the top manager of a cooperative is also somewhat

different from that of an investor-owned corporation (even

if they have the same title).

Emelianoff’s conclusion that cooperative organizations

represent the aggregates of associated economic units

provides a clear insight into how cooperatives organize and

function. This insight is not limited to agricultural

cooperatives. 

A unique mode of organizing coordination

In a paper dealing with the issue of economic coordination

some 45 years later, James Shaffer echoed (though without

citing) Emelianoff’s definition of cooperatives as aggregates

of member-farms. Because member-farms are independent

entities, represent independent profit centers and act

independently, except that they jointly own the cooperative,

the cooperative association is neither a horizontal integration

of its member-farms nor a vertical integration between

member-farms and the cooperative. He asserted that “the

cooperative is a third mode of organizing coordination.”

References: 

Emelianoff, Ivan V. Economic Theory of Cooperation:

Economic Structure of Cooperative Organizations, Washington,

D.C. 1942 (litho-printed by Edwards Brothers, Inc., Ann

Arbor, Michigan), 269 pages. (A reprint by the Center for

Cooperatives, University of California, 1995, may be accessed

at: http://cooperatives.ucdavis.edu/reports/index.htm.)

Shaffer, James D. “Thinking About Farmers’

Cooperatives, Contracts, and Economic Coordination,”

Cooperative Theory: New Approaches, ACS Service Report

Number 18, U.S. Department of Agriculture, Agricultural

Cooperative Service. July 1987, pp. 61-86.

American Heritage Dictionary of the English Language,

New College Edition, Houghton Mifflin Company, Boston,

1976. n
Rural Cooperatives / November/December 2009 7

Legal Corner

What Is Democratic Control? 

By Stephanie M. Smith,

Senior Legal Adviser 

Cooperative Programs

USDA Rural Development 

he cooperative business

model is drawing extra

attention these days in

the media. Industries

such as health care,

dairy and utilities have attracted

headlines and sparked discussions about

what cooperatives are and how they

function. Furthermore, members within

cooperatives are retooling their efforts

to “bullet-proof” their organizations

against the financial downturn. 

One way that members are seeking

to sustain their cooperatives is to

encourage participants to contribute

equity beyond what is proportional to

their use of the organization and to seek

outside or non-member equity. The

question then emerges as to whether

these deeper pocket cooperative

members can seek more control of the

cooperative in return.

If cooperatives are looking to attract

members with deeper pockets or

incentivize them to buy more products

and services offered by the cooperative,

should these members be given more

weight in voting rights than other

cooperative members? With respect to

outside or non-member equity

investors, should voting rights be

proportional to their level of

investment? In both of these scenarios,

does the notion of these alternative

forms of voting shake the very

foundation of one of the fundamental

principles of cooperatives: democratic

control equals one member/one vote? 

Cooperatives traditionally allow for

every member to have one vote

(sometimes evidenced by their being

issued one share of voting common

stock) because they are user-controlled,

not investor-controlled, organizations.

Although the basic premise for this

concept was based on cooperative

members having democratic control to

encourage an egalitarian existence, the

question is: do other methods of voting

also constitute democratic control? 

Federal laws do not expressly define

the term “democratic control.” Federal

laws related to cooperatives — such as

Capper Volstead, the CoBank

borrowing eligibility statute and the Ag

Marketing Act of 1929 — allow for

alternative voting, but do not specify

what those alternatives are. Internal

Revenue Code Section 521 and

Subchapter T, which describe how

cooperative corporations are required to

calculate their taxable income, are silent

on this issue. 

The Internal Revenue Service (IRS)

has not provided a statutory definition

of “democratic control.” It has,

however, long been in favor of one

member/one vote, based on its reliance

of case law, as revealed in certain prior

revenue rulings. In Rev. Rule 93-21, it

held that the cooperative principles

provide the basis for determining

whether a corporation is operating on a

cooperative basis for purposes of

Subchapter T (see Puget Sound

Plywood, Inc. v. CIR, 44 TC 305, June

14, 1965 and Etter Grain Co. v. United

States, 462 F.2d 259, 263 (5th Cir.

1972).

In fact, the IRS has generally

referred to “democratic control” as “the

periodic assembly of the members at a

democratically conducted meeting at

which each member ordinarily has only

one vote” (GCM 38061, 1979 WL

52855).

However, IRS co-op training

materials have referred to “member

control” and not specifically to “one

member/one vote.” Therefore,

apparently cooperative members can

control their cooperative either through

one vote per member or through some

other weighted voting system that

relates to the amount of business

(referred to as “patronage”) that each

member does with the cooperative. In

two private letter rulings, the IRS

determined that a cooperative’s proxy

voting arrangement satisfied the

democratic control requirement and

approved a weighted vote for the

nomination of directors of a federated

cooperative (PLR 200629018 and PLR

9725011).

As confusing as this may be,

cooperatives can have some level of

comfort in how to govern their

organization by examining the statutory

requirements of their state laws. Some

state co-op incorporation laws require

one member/one vote. In those states

that do not, cooperatives have several

alternative forms of governance. The

most widely used is some type of

“weighted voting” based on a member’s

patronage, delivery rights and/or equity

investment (assuming it is reflective of

patronage). Other forms of weighted

control may be evident in some form of

membership delegate system whereby

members in different districts are

represented by one or more delegates. 

continued on page 38
8 November/December 2009 / Rural Cooperatives

Storm Shelter 

Dairy co-ops strive

to help members

survive severe market

downturn 
By Dan Campbell, Editor

dan.campbell@wdc.usda.gov

hen the national and

world economies fell

into recession in the fall

of 2008, the impact

slammed home with a

vengeance on many farms across the

nation. But few have borne the brunt as

heavily as dairy farmers. 

“It would be difficult to overstate

how bad the situation is,” says Steven

Rowe, senior vice president and general

counsel with the Northwest Dairy

Association/DariGold in Seattle, Wash.

“Our members’ operations vary in size

from 50 cows to many thousands of

cows. But no size, sector or method of

farming has remained profitable during

this period.”

A survey of nine dairy cooperatives

by “Rural Cooperatives” in October

shows a unanimous perception that the

downward spiral for milk prices has

indeed been a crisis for the industry.

“This cost-price squeeze is the worst I

have seen in the dairy industry,” says

Richard Cotta, President and CEO of

California Dairies, Artesia, Calif.

“Many producers have gone out of

business in California either through

forced sellouts or the CWT

[Cooperatives Working Together, the

industry-funded herd-retirement

program]. The 4-percent drop off in

milk production is all the evidence one

needs.” 

From a record-high, U.S. all-milk

price of $21.90 per hundredweight in

November 2007, milk prices hit a low

of $11.30 in July 2009. Co-ops in some

regions report widespread farm failures,

and many more are likely still to come. 

“From coast to coast, America’s

dairy farmers are struggling to survive

the worst economic conditions since the

Great Depression,” confirms Dairy

Farmers of America (DFA)

President/CEO Rick Smith. “Faced

with record-high production costs and

the lowest milk prices in years, farms of

every herd size are losing money on

each pound of milk they produce.”

Farm failures in Northwest Dairy’s

territory (Washington, Idaho, Oregon

and far Northern California) have been

common, Rowe says. “We’ve had

bankruptcies, while some are selling

their cows to others. There was one

unfortunate situation where the farmer

just quit — literally just walked away

and a neighbor had to come in and care

for the cows. Liens are being enforced

on farms almost every day. There are

many other farms just hanging on.”

But some co-ops report minimal loss

of farms, as producers have so far been

able to get by digging into equity and

tightening their belts. “Market attrition

has been very slow, in spite of

prolonged low milk prices. It appears as

if the bankers also think waiting for

price recovery is a better option than

loan foreclosure,” says Michigan Milk

Producers Association (MMPA)

General Manager John Dilland. 

Mitigating the situation somewhat is

that “many of our producers raise most

of their own hay and silage, which has

helped reduce current cash needs for

feed costs, since the feed was laid-in last

year,” Dilland says. Still, many more

MMPA members have chosen to send

their herds to slaughter under the last

round of the CWT program than in

any previous rounds of the program. 

Florida-based Southeast Milk Inc.

also reports a minimal loss of

producers. “Fortunately, there have

been few dairy farmers exit the business

due to the financial situation,” says coop CEO Calvin Covington. “Most are

digging into their equity, reducing

expenses, have a good banker and hope

that prices will soon improve.” 

Impact extends far

beyond farms

The ramifications of the crisis extend

far beyond the farm gate, or even the

co-op office. Not only dairymen, but

those who supply the industry — grain

dealers, hay dealers, pharmaceutical and

equipment suppliers and financial

institutions — have been negatively

impacted, says Cotta. 

DFA’s Smith concurs. “In many parts

of the country, dairies are bedrocks of

their rural communities,” Smith says.

“In regions that have been especially

hard hit, the agriculture service industry

also is struggling as farmers have cut

spending on both essential and nonessential services, and rely increasingly

on equity and credit to maintain their

operations.”

As a rule of thumb, Rowe says that

for every $1 invested on a farm, another

$5 to $7 is invested in non-farm

locations — such as suppliers, downstream processors, retailers, etc. “I can

only assume there is a lot of other

suffering related to the dairy situation.”

As a feed mill operator and a farm

supply co-op, as well as being a milk

handler, Southeast Milk has been

feeling both the primary and secondary

impacts of the crisis. Sales at both the

feed mill and dairy supply business have

fallen off. 

Reversal of fortune 

There is no mystery as to the

identity of the “truck” that ran down

the dairy market. Co-op leaders are

unanimous in saying it was the national

Rural Cooperatives / November/December 2009 9
10 November/December 2009 / Rural Cooperatives

and global recession that caused

demand to wither, seemingly overnight. 

This situation was made even more

acute by the fact that there had been a

“bull market” and record-high milk

prices the previous 2 years. The market

had been bolstered by a cheap dollar

that led to a surge in demand on export

markets. High demand triggered a

surge in production, much of which was

starting to fill the pipeline just in time

to collide with the recession.

“The worldwide economic collapse

last fall dealt our industry a double

whammy,” Smith says. “Dairy exports

dropped more than 50 percent during

the first 5 months of 2009, according to

USDA. Then, as all that milk backed up

in domestic markets, belt-tightening by

U.S. consumers and slow movement by

retailers to cut dairy prices exacerbated

the situation.”

Foremost Farms (Baraboo, Wis.)

President David Fuhrmann also sees the

loss of exports as being a key

component of the market collapse.

“The downturn in the world economy

at the end of 2008 and early 2009

caused dairy exports to vaporize,” he

says. Prior to the worldwide economic

crisis, 11 percent of U.S. milk

production was exported as cheese,

butter, whey products and nonfat dry

milk. 

Dairy farmers responded to that

demand by ramping up milk

production, reinvesting in facilities and

new technology and keeping cows in

the milking string longer rather than

sending them to slaughter, Fuhrmann

says.

AMPI dairy farmers and field representatives take a break from making the rounds at the La Crosse County Fair in La Crosse, Wis.,

to discuss the dairy market. Milk prices plunged from nearly $22 per hundredweight in late 2007 to $11.30 last July. Photo by Sheryl

Meshke, courtesy AMPI
Rural Cooperatives / November/December 2009 11

Co-ops pull out stops

to help members 

Co-ops have responded in many

ways to try to help their members.

Some have sped up payment and equity

revolvement schedules, or even dipped

into reserves to make extra payments.

Other co-ops have delayed scheduled

cost increases for milk hauling and

other services, while some co-ops have

tightened the belt on expenses by

freezing salaries and hiring. DFA even

established a hotline for farmers dealing

with financial and psychological stress. 

Prairie Farms, Carlinville, Ill., moved

aggressively to enhance prices to

members by about $1 per

hundredweight after March 2009,

amounting to about an extra $9 million

going directly to co-op members. “This

has come out of Prairie Farms’

earnings,” says Executive Vice

President/CEO Edward Mullins.

“Payout of allocated earnings is being

sped up. The cash payment portion of

earnings from the 2008-2009 fiscal year

is being increased from 60 percent to

75 percent.”

California Dairies took steps to

discourage increases in production.

“One thing we reluctantly did was

implement a cooperative-wide Supply

Management Program to help stop

increasing milk production when

growth was exceeding our ability to

handle milk,” says Cotta. “More

recently, we have paid an early advance

on our cooperative profits.”

At MMPA, Dilland says the co-op

has been striving to get as much money

to members as possible to help them

ride out the down market. “We have

maximized producer pay prices within

our available budget, which has

included increasing monthly advance

payments, early payment of cash

patronage refunds and equity

retirements, as well as the payment of a

year-end supplement payment.” 

Northwest introduced the Producer

Retention Program, designed to create

financial incentives for members to stay

in business, which returned an

additional $13 million to producers, or

nearly $2 per hundredweight. “We also

deferred certain increases in hauling

costs and service-fee charges,” Rowe

says. 

Co-op government affairs offices and

co-op trade groups have shifted into

overdrive to educate congressional

representatives about just how critical

the situation has grown, and lobbied for

assistance.

Co-ops are also fighting the

downturn by throwing greater effort

into new product and market

development to bump up demand. In

some cases, new processing machinery

and/or facilities are helping in these

efforts. 

“We understand the importance of

manufacturing infrastructure that

generates returns to help weather times

like these,” says Associated Milk

Producers Inc. (AMPI) (New Ulm,

Minn.) President/CEO Ed Welch. “For

example, we recently installed a whey

protein concentrate dryer at our

Paynesville, Minn., manufacturing

plant. The co-op can now move into

the growing protein market.”

DFA recently completed a $23-

million expansion at a plant in Fort

Morgan, Colo., and has a $39.4 million

expansion underway in Schulenburg,

Texas. It also has a number of new retail

dairy products hitting the shelves. 

“We’re also finding supply-chain

savings,” says Smith. “Several projects

are underway to improve transportation

efficiency, including negotiating

reduced hauling rates, a new

transportation management system to

consolidate loads and a pilot program to

reduce members’ transportation costs.”

Lessons learned?

While opinions vary as to what

should be done to try to bring balance

back to the market — and to reduce

market volatility in the future — most

co-op leaders contacted say reviving

export markets and use of the Dairy

Export Enhancement Program will

continue to be a key to the health of the

industry. A number of respondents also

say the time has come for the industry

to take a long, hard look at a new

industry-wide production management

program. 

Several co-op leaders expressed the

fear that the industry will not learn

lessons from the current market crisis,

and that there will be another surge in

production once prices improve,

DFA recently completed a $23-million

expansion at this plant in Fort Morgan,

Colo. Photo courtesy DFA
12 November/December 2009 / Rural Cooperatives

leading to yet another inevitable oversaturation of the market. 

“I fear that as prices begin to rise in

the future, the dairy community will

come back with a new flush of milk and

crush the milk market again,” says

Northwest’s Rowe.

“Hopefully, the industry can learn

from this period of low milk prices and

negative margins and work to develop

long-term plans to prevent or at least

lessen the flow from future such

occurrences,” says Southeast’s

Covington. “The challenge is that when

milk prices recover, and margins

improve to a profitable level, there is

less interest in doing something. We

must not let improved milk prices slow

down efforts to make long-term

improvements.” 

“In the long run, you cannot avoid

the supply-demand equation,” adds

Cotta. “The industry needs to find a

tool to reflect strong market signals to

the trade quicker and better. Perhaps a

sliding scale support purchase price or

some form of crop insurance for milk is

needed.”

DFA’s board recently adopted a

proposal called the Dairy Growth

Management Initiative (DGMI). “This

plan, which would require legislative

support, is designed to replace the

current CWT program and would serve

as an effective tool to manage/minimize

volatility,” Smith explains. DGMI

would be a producer-funded, producergoverned program that would allow for

growth in the industry while providing

a variety of mechanisms to quickly

adapt to changing market forces and

stabilize milk prices. 

“DFA is collaborating with other

cooperatives and industry groups on

DGMI and working with NMPF to

advance this plan, or something similar,

and achieve congressional support on a

solution that will improve the outlook

for America’s dairy farmers,” Smith

says. 

AMPI is urging national dairy

leaders to implement a dairy price

stabilization program to “ensure we

don’t go through another stretch like

this,” Welch says. An effective program,

he continues, must include import

controls and impose tariff quotas on

such products as milk protein

concentrate, casein and butter fat. Milk

Income Loss Control (MILC) and the

Dairy Product Price Support Program

(DPPSP) must also be maintained, he

stresses. “When the Farm Bill passed

more than 1 year ago, most didn’t think

these programs were relevant. At

AMPI, we’re glad they are in place

today.”

Supply management —

last resort? 

Prairie Farms’ Mullins says he thinks

supply management should be

examined, but only as a last resort, and

that tools for price and income

protection should be more readily

available to dairy farmers who want to

use them. “We need to regain access to

export markets on a continuing basis,”

Mullins says. “The U.S. dairy industry

should be a player in world dairy

markets all the time, not just a supplier

of last resort to the world.” 

The domestic market also needs to

be grown, in part by enhancing the

school milk program, Mullins says. 

Rowe thinks federal milk order

pricing “needs to be simplified, not

made more complicated. I have no

problem with discussion of supply

management, but it is extremely

important that we do not end up with

something that tries to predict the

future — which we have ample proof of

that none of us are good at — or that

would hinder our ability to fill

AMPI’s new whey dryer at Paynesville,

Minn., is opening new markets for the

co-op. Below: A Northwest Dairy

Association field representative pays a

call on members. Photos courtesy

pictured co-ops
Rural Cooperatives / November/December 2009 13

international demand at a moment’s

notice. We have to grow the pie. I

believe the world has a desire for dairy,

and as world economies come back,

dairy will be in demand again. We as an

industry need to be ready.” 

AMPI’s Welch says MILC has been

an effective, counter-cyclical dairy

program during this unprecedented

market downturn. “The temporary

increase in the DPPSP was also a good

move,” Welch says. “Implemented for 3

months — August through October

2009 — the program will cost the

government very little. The program’s

“invisible” floor price has been

maintained without the Commodity

Credit Corporation purchasing a pound

of cheese. Cheese buyers are not

interested in having the government

build inventory at that price. They want

it in their warehouses.”

But Southeast Dairies’ Covington

sees trouble ahead if the industry

depends too much on dairy price

supports. “Government programs, such

as the increase in dairy support prices,

are just a band aid and provide no longterm solution. In actuality, they help

extend the misery of low milk prices

and prolong milk-price recovery,”

Covington says. 

He favors eliminating the dairy price

support program, and instead expanding

the use of risk-management tools,

which he feels should be made more

user friendly. Covington also supports

allowing contracting on all classes of

milk and developing a different method

of pricing milk used for the fluid

market that is more in tune with the

market. 

“Establish basic milk prices on a

competitive situation,” he urges, “and

develop a pricing mechanism that

allows the U.S. to be a more consistent

exporter of dairy products.” He would

also like to see an economic incentive,

via a market for dairy farmers to breed

a portion of their herd to beef bulls. 

Rowe thinks the MILC program

needs to be re-examined, saying it is no

longer clear what the program is

accomplishing.

The overall market situation would

be worse had it not been for efforts

such as milk support prices, export

incentives and the CWT program,

Smith says. “The CWT program has

removed 225,000 cows so far this year

and another herd retirement is in

progress (as of late October). The Dairy

Export Incentive Program (DEIP) has

helped to export more than 82 million

pounds of nonfat dry milk and 35

million pounds of butter in an effort to

reduce inventory levels. In addition to

these short-term efforts, we need to

find ways to minimize, and manage

through, volatility in the future. A

growth management plan that allows

for growth, provides a mechanism to

more quickly react to changing market

conditions and helps stabilize the milk

price is needed to ensure the

sustainability of our members and the

health of the U.S. dairy industry.”

Rowe says the major flaw in CWT is

that “two-thirds of the people pay in,

and 100 percent get the benefit.” He

does, however, credit CWT as an

industry self-help effort to cut down

excess supply. “I don’t see any other

sector of agriculture doing that.” 

Signs of recovery

MMPA’s Dilland says there are signs

that a price recovery has begun. “But

there is still a lot of inventory that

needs to move, and current milk

production still needs to come down.”

AMPI’s Welch is encouraged by the

recent weakening of the dollar, which

may once again open global markets.

“Dried milk proteins are becoming

more affordable abroad. The difference

between today and early 2008 may be

strong production in New Zealand,

another milk protein exporter,” Welch

says. “World buyers, too, may be less

willing to tolerate the extreme market

volatility of the past few years.”

Rowe says he is “just beginning to

see some more international activity,

but it is still very tenuous. I have a very

guarded sense of optimism.”

The strengthening on cheese

markets at the end of September “is

encouraging and hopefully means we

are past the low point in prices and on

the road to recovery,” says Foremost’s

Fuhrmann. Through September, milk

receipts from same-member farms are

up significantly from a year ago, he

notes. He also salutes the many

businesses that provide goods and

services to dairy producers for “working

patiently with farmers, and for

extending lines of credit and repayment

schedules.”

Retail demand for cheese has been

strong due to lower prices and

promotional activities, Fuhrmann says,

leading to a 5-percent increase in sales

that has helped offset weak food service

sales.

“Milk production is coming down,

and demand is starting to improve,”

says Larry Salathe, a USDA economist.

“The market is tightening both on the

demand side and on the supply side.”

Still, a way has to be found to

strengthen milk checks soon. “What we

need right now is [more] dollars per

hundredweight,” says Welch. “The only

way to achieve that will be a change in

supply and demand. That may demand

a price-stabilization program.” n
14 November/December 2009 / Rural Cooperatives

By Pamela J. Karg

Editor’s note: Karg is a freelance writer

from Baraboo, Wis., with extensive

experience working with cooperatives. She

currently lives in Armenia, where she is a

volunteer with the United Methodist

Committee on Relief/Armenia. She also is

an agricultural cooperatives instructor at

the Agribusiness Teaching Center, a

university department funded by USDA

through Texas A&M University. 

top Farm Credit

Administration official

recently saw first-hand

how the co-op lending

structure is working to

extend much-needed capital infusion to

farmers in a former Soviet republic. 

Leland “Lee” Strom, chairman of

the board and CEO of the Farm Credit

Administration, spent the first days of

October — National Co-op Month —

witnessing the successes and challenges

faced by Farm Credit Armenia (FC

Armenia). From small-scale vegetable

farmers to owners of newly constructed

wineries, sometimes in broken English

and other times through a translator,

FC Armenia member-borrowers

repeatedly told Strom that the U.S.

farm credit cooperative model is

working well here as a partner that

helps them finance their dreams. 

“It’s one thing to read about it, and

I’ve read a lot about Farm Credit

Armenia. It’s a whole different thing to

see it first-hand and to hear the stories

of what Farm Credit Armenia means to

the agriculture industry, the farmers

and the businesses associated with

them,” says Strom, who was appointed

to a 6-year term on the FCA board in

2006 and was designated chairman and

CEO in May 2008. He also serves as a

board member of the Farm Credit

System Insurance Corporation

(FCSIC). 

Bridging the cultural chasm 

As part of his agricultural tour of a

country about the size of Maryland

bordered by Iran, Georgia, Turkey and

Azerbaijan, Strom learned more about

the challenges land-locked Armenia has

faced in its past 100 years. He realized

the cultural chasm farmers and

agribusiness owners had to cross from

the former Soviet collective ideals to

the internationally recognized, free

enterprise cooperative model.

“I better understand the basic

challenges they’re facing here, and they

are complex. But I also see that a

cooperative farm lending institution is

the right structure, and it’s working,”

say Strom, owner of a third-generation

corn and soybean farm near Elgin, Ill. 

U.S. farm credit co-op model paying dividends in Armenia 

Banking on the Future 

Against the backdrop of Mount Ararat, visitors tour a vegetable farm

with a drip-irrigation system installed as part of ACDI/VOCA’s Water to

Market program. Farm Credit Armenia is struggling to secure the

capital needed to back farmers who are adopting new technologies.

Photos by Pamela J. Karg 
Rural Cooperatives / November/December 2009 15

Organizations such as USDA and

non-governmental organizations

(NGOs), such as the United Methodist

Committee on Relief and ACDI/VOCA

(which promotes economic development in emerging democracies), set up

farm programs soon after Armenia

declared its independence from the

Soviet Union in 1991. Since then,

farmers and processors have learned

more efficient production techniques,

basic business skills, how to organize

cooperatives and have started youth

education programs, such as 4-H. 

They’ve also learned about microcredit and how to jump-start the

country’s Cooperative Extension-like

information and training system. Other

NGOs, such as the Center for

Agribusiness and Germany’s GTZ,

followed with more help. While this

work is ongoing, improving farm credit

became the next logical step.

Access to credit is essential for the

nation’s farm sector to advance, says

Fred Johnston, agricultural project

coordinator for USDA’s Foreign

Agricultural Service (FAS) in Armenia.

“As we’ve learned from the micro-credit

experience, credit is a crucial

component in the development of

sustainable enterprises of all sizes.

Credit allows farmers and processors to

take advantage of the technical training

that they have or are receiving. It’s an

essential element in the recipe for

success of rural enterprises in any

country.” 

The co-op commitment 

In Armenia, there are institutions

that claim to serve agriculture, but they

have neither a real mandate nor any

incentive to do so, Strom says. “Regular

banks may abandon agriculture should

the rural economy falter or more

lucrative opportunities arise. A

cooperative organization such as Farm

Credit Armenia is owned by its

members and, through its bylaws, is

required to serve only rural clients.”

If credit is the next logical step, the

issue of sustainability looms large over

Farm Credit Armenia has been working to extend

credit to agricultural operations in the fertile

Ararat Valley, such as this fruit-drying operation

near Artashat. Below: Trout in Lake Sevan have

been over-fished, so this aquaculture operation

near the resort town of Jermuk has been

developed to help meet the demand for fish in

Armenia and Russia. 
FC Armenia and its members. It received an initial infusion of capital

from Millennium Challenge Account-Armenia (MCA) and continues to

get technical support from the Farm Credit Administration, the Farm

Credit System and the USDA. Strom says he hopes the Armenian

government “will see how this structure can and will work, is working,

and will help in its sustainability.”

He sees parallels between the 1916 start of the American Farm Credit

System, funded through legislation signed by President Woodrow

Wilson, and the struggles Armenia faces today. “The U.S. Farm Credit

System started small and has grown to serve over 40 percent of U.S.

farmers. I can see the same thing happening in Armenia,” Strom says.

Johnston explains that USDA has been working to foster farm credit

in Armenia for many years, beginning with a Credit Clubs project.

When FAS assumed management of the project from USDA’s

Cooperative State Research, Education, and Extension Service

(CSREES) in April 2005, FAS began to look for ways to make the

project sustainable. While there were several organizations involved

with micro-credit and others that claimed to serve agriculture, the needs

of agricultural lenders were not being met. 

“With that in mind, FAS engaged the U.S. Farm Credit

Administration to review the state of agricultural lending in Armenia

and make recommendations,” Johnston explains. “One of their

recommendations was to set up a farm credit organization that was

legally mandated to serve rural Armenia in good times and in bad. Based

on that recommendation, we worked with the Farm Credit System and

the Farm Credit Administration to set up Farm Credit Armenia.”

Key questions 

As Strom sat through an FC Armenia board meeting during his week

in Armenia, he reflected on more parallels. Where should a new office

be constructed to more conveniently serve existing and new rural

members? Who should be selected from the 170 applicants to fill 11

new loan officer positions? When starting from scratch, what are the

available sources of capital the cooperative needs to remain a viable

partner for farmers and agribusinesses?

“These are some of the same issues Farm Credit started with in 1916

in America. Boards of directors deal with some of the same issues every

16 November/December 2009 / Rural Cooperatives

By Pamela J. Karg

ith a lifetime of

experience in farming

and finance, one might

think William Eyman

would want to relax,

enjoy the fruits of his labor and watch his

crops grow. Maybe keep track of his

retirement account. He’s doing all that, but

also much more, using his experiences to

help agricultural banks around the world

grapple with new economies.

“After I retired from full-time farming, I

went to work for the United State Bank [in

northeast Missouri] full time,” explains the

79-year-old from Knox City, Mo., as he

packs up after a 6-week assignment in the

Republic of Armenia. “I also felt I was a

fifth-generation Knox County American

farmer losing touch with a changing

world, so I decided it was time to see that

world.” 

Eyman and his wife, Rosalyn, a retired

art instructor, packed their bags and

headed to the Czech Republic on what

was his first of many assignments around

the world.

“It’s been a chance to go all over the

world and work in finances in many

emerging countries or economies. Either I

go in to work starting banks or with loan

officer training,” Eyman explains. His work

always involves the agricultural side of

the bank’s portfolio and people.

From Tanzania to Siberia 

To date, he has worked through

organizations as diverse as the World

Bank and International Monetary Fund,

ACDI/VOCA and the International

Executive Service Corps. The countries in

which he’s worked include Armenia,

Ghana, Uganda, Tanzania, Ethiopia (twice),

Kenya, Kyrgyzstan (twice), Republic of

Georgia (twice), Zambia, South Africa,

Latvia, Poland, Romania (twice),

Macedonia, Russia (five times), western

Twyla and Lee Strom (left) of the U.S. Farm Credit Administration and Armen

Gabrielyan (center), CEO of Farm Credit Armenia, learn how this farmer and

his grandson are using a line of credit to upgrade their greenhouse. 

continued on page 39
Rural Cooperatives / November/December 2009 17

Siberia, The Czech Republic and Brazil.

“I’ve really enjoyed the people more

than anything,” he says. “Whether

working side-by-side with eager loan

officers wanting to learn how they can

help their local banks and farmers prosper

in emerging capitalist economies, or

seeing the country through their eyes,

they’ve all always been very kind. And

they’ve always wanted to show me the

best their country has to offer, and to

learn so they can create a future for

themselves, their families and their

country.” 

Eyman is generally on assignment for 2

months at a time. Often working long days

traveling to remote areas, he spends most

of his time on farms or in the classroom

with loan officers for hands-on, one-onone or small-group training. That was the

case during his trip earlier this year to

Armenia, a semi-arid, land-locked former

Soviet republic located between Georgia,

Iran, Azerbaijan and Turkey. Eyman

worked with local ACDI/VOCA employees

as part of its “Water to Market” (WtM)

program.

The fragmentation of Armenia’s

agricultural production base is keeping

the country’s farms from achieving the

scale necessary for efficient production.

Though rural family landholdings average

3.5 acres, these farms are usually made

up of three or more smaller parcels in

different locations. 

As a result, farmers get low yields and

inconsistent quality and cannot assemble

enough produce to meet market demand.

That makes Armenia a food-deficit

country and requires it to import costly,

and sometimes uncertain, imports through

the only two open borders it has with

neighbors: Georgia and Iran.

Farmers face

numerous challenges 

More importantly for Eyman‘s

purposes, limited financial resources and

a lack of information about on-farm water

usage and pest management have led to

widespread use of herbicides and

pesticides that come from dubious

sources and are applied with rudimentary

spraying devices, according to

ACDI/VOCA. 

Due to the small-scale, highly

fragmented and diverse production of

fruits and vegetables, local marketing is

carried out by small traders, or even by

the producers themselves. Thus,

throughout rural Armenia, the laborintensive ag sector produces low yields

and poor incomes for small farmers. 

ACDI/VOCA, in partnership with

ARCADIS Euroconsult from the

Netherlands and VISTAA in Armenia, was

awarded an $18.4 million contract to

implement the Water to Market project as

part of the Millennium Challenge Armenia

(MCA).

Like other countries’ farmers with

whom Eyman has worked, small-scale

Armenian farmers have no money and

little access to credit. As a result, they

can neither improve their knowledge on

how to be better farmers, or fund any

improvements. A majority end up in a

subsistence cycle, hoping to produce

more than their families can consume so

that they can try to sell the extra for

whatever the market may bring. Nearly 15

percent of Armenia’s 2.8 million people

live on less than $1 a day.

The smallest Armenian farms list

assets such as hoes and bicycles as part

of the balance sheet they completed with

loan officers under Eyman’s tutelage. “It

doesn’t compare at all with U.S. farm

operations,” he says.

Missouri farmer helping ag banks in developing countries

Working side-by-side with loan officers eager to learn how they can help their local

banks and farmers prosper has been one of the greatest “paybacks” for farm credit

volunteer Bill Eyman (right), seen here with translator Roman Asatryan in Republic

Square in Yerevan, Armenia. Photo by Pamela J. Karg

continued on page 39
18 November/December 2009 / Rural Cooperatives

ditor’s note: In the Sept-Oct. issue, CoBank

responded to a series of questions dealing with the

co-op’s decision to update its corporate image with

a new logo and tagline. In this issue, Barry

Wolfish, senior vice president for corporate

marketing and communications at Land O’Lakes (LOL), discusses

the same process as LOL approached it. This discussion refers to the

co-op’s corporate logo, not the co-op’s famous Indian Maiden brand

logo, which is still used for its dairy foods division. 

Land O’Lakes is a farm supply and dairy foods cooperative with

3,200 direct producer-members and 1,000 member-cooperatives

which serve more than 300,000 agricultural producers. The co-op

handles 12 billion pounds of milk annually and produces a wide

variety of dairy food products.

Question: Why did your co-op decide it was time to change

the logo?

Barry Wolfish: “In late 2007, the company conducted a

communications audit, which looked at all aspects of our

communications efforts. We took a really deep dive,

examining things like culture and process, as well as the

vehicles and elements we saw and used every day. We

recognized that there was a significant opportunity to

increase the visibility and awareness of our corporate identity

and that our existing corporate brand identification was not

working very hard to establish personality and distinctiveness

for Land O’Lakes Inc.”

Was this part of a larger “re-branding” effort?

“Again, the pursuit of a new corporate brand identity came

out of our communications audit. We felt it was an element

of our overall corporate communications we could enhance.”

Did you do it in-house, or hire an agency? 

“We worked with a Twin Cities-based integrated

communications firm called OLSON. The agency conducted

the communications audit for us and eventually developed

the new corporate brand identity in conjunction with our

Corporate Communications department.”

What was the timeline and budget? Did you stick to it?

“We had a very accelerated timeline and were working on

a number of projects connected to, and driven by, the

updating of the corporate brand identity. Some of those

projects included redesigning our corporate website and

creating new marketing collateral, such as our corporate

brochure and first Corporate Social Responsibility report. 

“So, from the time we started thinking about creating a

new corporate brand identity until it was introduced, it took

between 4 and 5 months. A meaningful amount was invested

in the various aspects of the project as part of an ongoing

commitment to increase our investment in corporate

identification and awareness.”

Did this effort also involve a new tagline to go with the

logo?

“Yes. We developed our “growingtogether” tagline shortly

after the completion of our communications audit and used it

throughout most of 2008. The tagline was incorporated into

the design of the new corporate brand identity.” 

Land O’Lakes freshens image with new

co-op brand identity, logo and tagline 
Rural Cooperatives / November/December 2009 19

The new Land O’Lakes logo (above) and the old one it recently replaced (below).

“The new corporate brand identity is

much more dynamic and appealing. The

more we see it, the more it really feels

like we made the right decision.”
20 November/December 2009 / Rural Cooperatives

Did you have any problems

registering logo as new

trademark?

“No. We had our Law

Department register the new

corporate brand identity;

they encountered no

problems registering it.”

What kind of review or

approval process did you

follow?

“Land O’Lakes President

and CEO Chris Policinski

and the Corporate

Marketing and Communications team worked closely with

the agency throughout the process. We went through a

number of iterations before we got to the final version. Chris

shared our recommended approach with the Land O’Lakes

board.

How many revisions did it go through?

“There were three rounds of review before we arrived at

the final version.”

Did you do consumer/customer testing?

“Our communications audit involved asking employees,

members and other stakeholders about their thoughts and

feelings about the co-op.”

In what ways is the new logo being used?

“We are using our new corporate brand identity

extensively. You’ll find it on our corporate website,

letterhead, business cards, corporate brochure, signage,

annual report, Intranet site, member magazine and clothing

and other collateral items. Moving forward, the corporate

identity will be featured prominently in all public endeavors.”

Any special effort to launch the new brand?

“We introduced the new corporate brand identity to

employees during an employee meeting in February. The

meeting was held in our corporate headquarters and

broadcast to more than 20 facilities around the country. So,

we had a very large, captive audience that heard about it

firsthand. 

“Employees returned to their desks after the meeting to

find a screensaver of the new corporate brand identity. We

also added the new corporate brand identity to the employee

Intranet site that morning. We rolled the corporate brand

identity out to members the following week at our annual

meeting. Chris introduced it to all the members in

attendance. 

“All the presentations and materials handed out after that

point contained the new corporate brand identity. We

continued to communicate the rollout in our member

magazine, Internet site and other vehicles.”

What was the biggest mistake you made?

“Waiting so long to update the old logo. The old one used

a common font and really didn’t convey much about the

organization. The new corporate brand identity is much

more dynamic and appealing. The more we see it, the more

it really feels like we made the right decision.”

Major lessons learned?

“To develop something like a new logo or brand identity,

you need a foundational document from which to base it.

This document articulates exactly what the brand is and

should convey. It’s something that needs broad alignment

among your key decisionmakers before moving forward. The

creative aspect of designing a logo will be based almost

entirely on it.”

What was the smartest thing you did?

“We hosted luncheon meetings for our administrative

assistants to discuss the rollout of the new corporate brand

identity. These employees are really in the front trenches as

far as the rollout is concerned. They order the business cards

and letterhead; they create presentations; and they advise the

people they support on its use and misuse.

“So, we felt it was really important to discuss the

philosophy behind the new corporate brand identity, its

proper uses and how to get the resources they needed to

incorporate it into their departments or businesses. We

believe this step really helped to facilitate the introduction of

the new corporate brand identity throughout the company.”

What has the reaction been like so far?

“Very positive. We’ve received great feedback from

members, employees and others outside the company. People

seem to have embraced it quickly.” n

“To develop something like

a new logo or brand identity,

you need a foundational 

document from which to base it.” 

Barry Wolfish
Rural Cooperatives / November/December 2009 21

By Anne Mayberry

Rural Utilities Service

USDA Rural Development 

anne.mayberry@wdc.usda.gov

wo rural electric

cooperatives in

Missouri are engaged in

a “green energy”

research project that

has the potential to help resolve some

air-quality issues while also yielding a

new source of renewable fuel. The

technology — while still years away

from being commercially viable — uses

algae to remove carbon dioxide from

electric power plant emissions, then

converts it into products such as

biofuels and livestock feed. It is hoped

the technology can eventually help ease

concerns over carbon capture and

climate change.

The two cooperatives — Associated

Electric Cooperative in Springfield and

Central Electric Power Cooperative in

Jefferson City — are working with

Lincoln University and the Missouri

University of Science and Technology

to determine whether algae can use

solar energy to capture carbon dioxide

and reduce power plant emissions. The

demonstration project will use carbon

dioxide in flue gas from Missouri’s

Chamois Power Plant to feed the algae. 

The work is funded by the

cooperatives and USDA’s National

Institute of Food and Agriculture

(formerly the Cooperative State

Research, Education, and Extension

Service).

Radio show call

triggers project 

Using algae to reduce carbon dioxide

emissions is probably not high on the

list of “green energy” projects being

considered by most electric utilities. So

how did these cooperatives become

involved in this research?

“One of Missouri’s rural electric

cooperative managers was a guest on a

radio show discussing energy, when one

of the algae researchers called him,”

explains Nancy Southworth, manager of

corporate communications for

Associated Electric Cooperative Inc.

Chamois, a small coal plant in central

Missouri, has been the site of other

research, and the plant manager was

open to these types of projects, she says. 

“The bigger picture is this: right

now there is no answer to the question

of how to sequester carbon dioxide

emissions generated at power plants,”

notes Southworth. “Any research that

has the potential to reduce carbon

dioxide from emissions can benefit us,

particularly as our nation wrestles with

climate-change legislation that will

affect operation of coal plants. Our coops are dependent on coal for

electricity.” 

The use of algae to develop a

renewable transportation fuel was first

studied by the U.S. Department of

Energy more than 30 years ago. Back

then, algae research focused on the use

of carbon dioxide from coal-fired

generation plants to produce biodiesel.

But because such alternative fuels were

not then financially feasible because of

competition from traditional petroleum

products, the process was shelved, being

deemed to lack commercial application. 

Renewed interest in technology

Today, any process that has the

potential to cost-effectively capture

carbon dioxide is of growing interest.

The big question, of course, is whether

the project can move from the research

stage to commercial viablility. Success

may hinge not just on the ability of

algae to reduce emissions, but on the

value of the byproducts created in the

process. 

The algae use energy from sunlight

to feed on the carbon dioxide. The

algae can also produce oil, which can be

processed into bioplastics and ethanol;

livestock feed is another byproduct of

the process.

“We are an agricultural state, so our

members are interested in the

possibility that this process may

produce biodiesel and livestock feed,”

Southworth says. “But they also

understand that we are a long way from

Utility Co-op Connection

Algae may help filter CO2 from power plant emissions 

University and co-op officials turn the valve to officially commission the new algae

research facilities at the Chamois Power Plant, where tanks of algae absorb power plant

emissions. Photo by Jim McCarty, courtesy Association of Missouri Electric Co-ops 

continued on page 37
22 November/December 2009 / Rural Cooperatives

By Anne Todd

USDA Rural Development

ost of the land around Danby, in upstate New

York, is considered marginal for farming.

Goldenrod, a weed, grows naturally in

abundance, as do perennial grasses. Further,

the number of farmers in the area has been

declining, resulting in less cultivation of the land (which

quickly reverts to brush when not cultivated). Because of

these conditions, many fields are not very productive. 

While others might view this as a signal of decline, Danby

resident Elizabeth Keokosky saw opportunity in those wild,

woolly fields.

Keokosky, a Cornell University employee who is pursuing

a master's degree in city and regional planning, realized that

the marginal land she saw all around her was ideal for the

alternative energy biofuels market, in part because it doesn’t

compete with farmland dedicated to food production.

She came up with the idea of forming a land bank

cooperative that would allow local farmland owners to market

their grass to be sold as bio-feedstock.

Pilot takes shape

Keokosky soon set to work organizing a pilot project

called the Danby Land Bank Cooperative. Under this pilot

project, local member-producers of the co-op would lease

their land to be harvested as biofeedstock for grass pellets or

briquettes to burn as fuel. 

“Our estimates indicate that biomass could heat up to 40

percent of the homes in the county, and that assumes average

efficiency. If homes were super-insulated that number could

be larger,” says Ed Marx, Tompkins County Commissioner of

Planning and Public Works. 

In return, farmers’ land would be cleared for free and they

would receive tax benefits, supplies and — eventually, if all

goes as planned — a share of the profits generated. If

implemented, Keokosky believes this proposed cooperative

model could be the first of its kind in the United States.

New York farmers are eligible for a real property tax

reduction, known as an agricultural assessment, if they have

at least seven acres of productive agricultural land and gross

at least $10,000 in annual sales. By participating in the

cooperative land bank, member-producers may become

eligible for this agricultural assessment.

In February, Keokosky held the first meeting with Danby

residents to discuss the proposed project. The people in

attendance, including landowners, citizens and town board

members, were enthusiastic about the concept and excited

about the possibility of Danby entering the alternative energy

market. 

Tompkins County teamed up with Cornell to apply for a

$500,000 grant from the U.S. Environmental Protection

Agency (EPA) to establish a county-wide rural biomass

demonstration project and implement a self-sustaining

biomass fuel model for the county. The rural biomass project

would have accounted for about half of the $500,000.

While they were not successful in the quest for the EPA

grant, the co-op is working closely with Cornell Cooperative

Extension of Tompkins County, which has played a

leadership role in all aspects of this effort, to find other

funding sources. 

Economic potential 

Since the kick-off meeting only a few months ago, 20 local

land owners have joined the pilot and contributed more than

300 acres toward the project. In addition, a steering

committee and advisory committee have been formed to

support the pilot and move forward toward full realization of

the land bank. Members of the Tompkins County Planning

Department and Cornell University Cooperative Extension

are advisors to the project.

“We want the land bank to become the trusted entity that

will bring biofuels entrepreneurs to the area,” says Keokosky.

She sees an ideal opportunity to create an economic “virtuous

cycle” for the community, where the land bank would provide

the bio-feedstock and local suppliers would then distribute

the grass pellets to consumers for fuel. 

The economic potential for the land bank cooperative in

the biofuels market, and the resulting benefits for the Danby

community, are significant. For example, in the future, the

land bank could invest in a local pellet mill to produce its

own briquettes. This would reduce costs, increase profits and

bring more jobs to Danby. In addition, the land bank could

Marginal Land Tapped for Biofuels 

New York land bank co-op could be first of its kind
Rural Cooperatives / November/December 2009 23

Members of the

Danby Land Bank

Cooperative hope to

process weeds and

perennial grasses into

biomass heating

pellets (below). Co-op

steering committee

members (from left)

include: Elizabeth

Keosky, Tony Nekut

and Mike Rutzke.

Photo by Ted Crane,

courtesy Danby Land

Bank Cooperative
24 November/December 2009 / Rural Cooperatives

expand into other biofuels production, such as biochar, a

feedstock byproduct. As the project moves forward, it will

create an impetus for grants and other development

opportunities in Danby.

What’s next for land bank?

Keokosky hopes that the project will ultimately expand

Danby’s business opportunities, provide networking and

growth opportunities for local producers, and sustain the

local economy and soils. She has almost met all the goals for

the first year of the pilot project: She is on track to sell some

of the goldenrod to a distant pellet producer and sell hay a

member has donated. The two sales will provide more than

the necessary $10,000 in gross sales for the pilot project,

though contractor costs will need to be subtracted. 

Working closely with Cornell Cooperative Extension of

Tompkins County, the county is researching and seeking

funding sources for the Danby Land Bank project. Keokosky

hopes to be able to use some of those funds, if approved, for

the legal work needed to formally incorporate as a

cooperative organization.

The Danby Land Bank Cooperative recently launched a

Web site at: http://www.danbylandbank.com. The Web site

will promote its mission and services, its goals for 2010 and

provide information and resources about grass-based

bioenergy to member-producers and the public. To learn

more about the Danby project or the benefits of grass pellet

use, visit the Web site or send e-mail to info@danbyland

bank.com. n

Ed Marx, Tompkins County Commissioner of Planning and

Public Works, discusses more details of the land bank

cooperative project: 

Question: Will there be any help for county residents in

purchasing the special stoves needed to burn the biomass

pellets? Do you think it will it require a “hard sell” to get

consumers to convert to using biomass pellets? 

Ed Marx: “The idea of the project is to demonstrate both the

technology and the economics of transitioning to this heat

source. The purchase and installation of the heating unit will

be heavily subsidized for participants in return for their

agreeing to supply the data for the study. We hope that

demonstrating both the practicality and the economic

benefit of using biomass will spur others to make the

decision to change to biomass as a heating fuel. We don't

expect that this will occur in a wholesale manner

immediately, but as existing heating equipment needs to be

replaced and fossil fuel sources become increasingly

expensive, a gradual transition would occur.”

Q: How important is a local ownership structure for the Land

Bank Cooperative?

A: “The benefit of the local ownership structure is that by

helping to cover the costs of rural land ownership, it will

allow local people to continue to live on the land and

contribute to a revitalized rural economy. The hope is that

the cooperative will provide them with the ability to manage

the resource for local benefit. This is truly a grassroots effort

(excuse the pun).”

Q: How important is a local pellet plant to the economic

viability and long term success of the land bank

cooperative? Can the county do anything to facilitate

development of a local plant?

A: “The local pellet plant is essential. We need to be able to

demonstrate a reliable local supply in order to give people

the confidence to change the source of something so critical

as their heating fuel. Also, a local processor is essential to

the economics of the local biomass resource. Transporting

biomass long distances is not likely to be economically

efficient or environmentally sustainable in the long run. The

grant would provide some seed money to help in getting the

local mill up and running. We may also be able to offer other

economic incentives through our Tompkins County Industrial

Development Agency or through other Federal or State

programs.”

Q: Going forward, what do you think the biggest challenge

will be to take this project from a pilot phase to a sustained

operation?

A: “As with any small business or new industry, I suspect

that scaling up will pose some challenges. The Land Bank

Cooperative will either need to grow or spawn similar

groups around the county. The same is true for the

pelletizing operation, the purveyors of heating equipment,

etc. However, partners in the community are working to

simultaneously develop all aspects of the supply chain for

both the fuel and equipment, and we firmly believe that all of

these challenges can be overcome.” n
Rural Cooperatives / November/December 2009 25

Bravante Produce joins Sunkist

Bravante Produce, a well-known

grower/shipper in the California citrus

industry, is the newest member of

Sunkist Growers, the grower-owned

citrus marketing cooperative

headquartered in Sherman Oaks, Calif.

“We are excited about our affiliation

with Sunkist,” says George Bravante,

managing partner of the Reedley,

California-based operation. “Sunkist

has an excellent marketing and

transportation network and a brand

name that is known

worldwide for its

premium products.

We’re looking forward

to enjoying the benefits

of Sunkist membership,

which we believe will

enable us to improve

volume and

profitability.” 

Bravante Produce is a

premier grower, packer

and shipper of fresh

citrus, with a modern 3-

year-old packing facility

in Reedley, and groves

throughout the San

Joaquin Valley. With a

product list that

includes navel and

Valencia oranges,

lemons and minneolas,

Bravante is bringing

2,000-plus acres of

citrus into the Sunkist

system. 

“We’re extremely

pleased to welcome

Bravante into our

organization,” says Russ Hanlin,

Sunkist president and CEO. “They are

an experienced, respected grower and

packer, and bring to our system nearly

1.4 million cartons of quality citrus and

a philosophy of excellence that matches

our own.” 

Bravante is projected to add 1

million field cartons of navels, 200,000

field cartons of Valencias, 150,000 field

cartons of lemons, and 20,000 field

cartons of minneolas to Sunkist’s

portfolio for the 2009-10 season.

University to develop

urban food co-op 

The University of Nebraska-Lincoln

has been awarded a $10,000 grant by

the U.S. Environmental Protection

Agency (EPA) to develop an urban food

cooperative that involves urban parttime growers in an agricultural region

focused primarily on commodity crop

production. The grant is one of 43

awarded to teams of college and

university students across the country

who will design creative technologies to

address sustainability challenges. 

The People, Prosperity, and the

Planet (P3) Phase I awards for the

2009-2010 competition challenge

students, working together on

interdisciplinary teams, to design and

build sustainable technologies that

improve quality of life, promote

economic development and protect the

environment.

The competition begins in Phase I

with the award of $10,000 grants to

student teams who submit applications

that focus on a wide range of categories,

including water, energy, agriculture,

environment, materials and chemicals,

and information technology. After

working on the project for 8 months,

the teams will take their designs to the

6th Annual National Sustainable

Design Expo on the National Mall in

Washington, D.C. At the Expo, the

projects will be judged by a panel of

experts, and a few will be awarded P3

Awards and Phase II grants up to

$75,000 for students to further their

designs, implement them in the field, or

move them to the marketplace.

Newsline

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

Co-op developments, coast to coast

Bravante Produce is bringing nearly 1.4 million cartons of

additional citrus fruit annually into the Sunkist system.

Photo courtesy Bravante Produce
Michigan co-op

acquires grain facility 

Cooperative Elevator Co., Pigeon,

Mich., has announced the purchase of a

grain-receiving facility in North

Branch., Mich. The co-op had been

operating the facility under a

lease/purchase option since July 2008,

with marketing provided through J & J

Farm Services in North Branch. It exercised the purchase option on Sept. 1. 

Cooperative Elevator Co., which has

been operating since 1915, has a 17-

million-bushel grain capacity and is

owned by more than 900 Michigan

farmers. It also has plants in Akron, Bad

Axe, Deckerville, Elkton, Fairgrove,

Gagetown, Ruth and Sebewaing. Jeff

Render is the North Branch plant

manager. 

“We will work hard to earn the trust

and respect from the North Branch area

farmers,” says Patricia Anderson, the

co-op’s CEO.

Missouri biomass co-op 

first to earn BCAP payments

USDA’s Farm Service Agency (FSA)

has made the first matching payment

under the new Biomass Crop Assistance

Program (BCAP) to Show Me Energy

Cooperative of Missouri. The co-op is

the first biomass conversion facility in

the nation to qualify under BCAP, a

2008 Farm Bill Program. Less than a

month later, it was paying producers for

biomass materials; FSA matched the

payments with BCAP collection,

harvest, storage and transportation

(CHST) program funds.

Show Me Energy has more than 500

biomass producers supplying materials

such as switchgrass, straw, corn stover,

sawdust, woodchips and other biomass

materials.

According to Show Me Energy

Cooperative CEO Kurt Herman, “Our

plant produces fuel pellets from

agricultural waste products, but could

expand to produce cellulosic liquid

fuels.” Herman also

says pellets produced

by Show Me Energy

are used to heat

houses and livestock

facilities. Kansas

Power & Light

Company’s Sibley

plant is testing pellets

to determine if the

biomass fuel could

supplement coal for

generating electricity.

The BCAP

program encourages

biomass conversion

facilities to sign

agreements with

FSA. The agreement

can be downloaded

from: www.fsa.usda.gov.

Once signed up, FSA

confirms qualifications

and assigns facilities

identification numbers. Producers who

sell eligible materials to qualified

biomass conversion facilities can then

apply for FSA payments that match the

amount received from the facility. The

payments are authorized under the

CHST component of BCAP.

For example, if a qualified biomass

conversion facility pays a producer $30

per dry ton for biomass, the material

owner or producer would be eligible for

a matching payment of $30 per dry ton

from FSA. Eligible material owners or

producers, who market eligible material

to a qualified biomass conversion

facility, may apply for the matching

CHST payment at their FSA county

office. An application must be

submitted before the eligible material is

sold and delivered to a qualified

biomass conversion facility.

2.4 million agri-tourists

visit California farms in ‘08 

The University of California (UC)

Small Farm Center says California

farmers and ranchers hosted more than

2.4 million agricultural tourists in 2008,

based on results from California’s first

statewide economic survey of agritourism operators. A number of

cooperatives of farms and ranches have

been formed nationally to promote

agri-tourism. 

The survey’s preliminary findings

suggest agri-tourism can indeed be a

profitable supplement to a farm or

ranch business. Agricultural tourism

allows travelers a chance to visit

working farms and ranches and can

include experiences such as picking

their own fruit, visiting a petting zoo,

touring a vineyard, buying fresh

produce or riding horses.

Small farms made up more than twothirds of the farms that reported

offering agri-tourism. The survey was

conducted by a group of researchers

from the University of California

26 November/December 2009 / Rural Cooperatives

Agriculture Secretary Tom Vilsack (far

left) tours the Show Me Energy

biomass plant in Missouri. USDA photo

by Charlie Rahm 

Larry Knapp, owner of Yosemite Trails Pack Station near

Fish Camp, Calif., is one of the ranchers and farmers in

California who played host to 2.4 million agri-tourists in 2008.

Photo courtesy Larry Knapp
Rural Cooperatives / November/December 2009 27

Cooperative Extension and the UC

Small Farm Program, with funding

from the California Communities

Program. 

USDA: 5,200 farmers

markets now open

Agriculture Secretary Tom Vilsack

has announced that the number of

farmers markets in the United States is

up more than 13 percent from a year

ago. The online Farmers Market

Directory now lists 5,274 markets

nationwide, up from 4,685 in 2008.

“Farmers markets assure that

consumers have easier access to local

fruits and vegetables and this growth

demonstrates incredible interest

consumers have in purchasing from

local producers,” said Vilsack. “Farmers

markets also connect the community to

the local farmers who produce the fresh

food, and play an important role in the

direct marketing of produce to local

consumers.”

Since USDA’s Agricultural

Marketing Service began to track

farmers markets in 1994, the number

has grown by nearly 4,000 nationwide.

USDA’s support of farmers markets

is just one component of the “Know

Your Farmer, Know Your Food”

initiative to help develop local and

regional food systems and spur

economic opportunity. By successfully

restoring the link between consumers

and local producers there can be new

income opportunities for farmers and

wealth can be generated that will stay in

rural communities. There also can be a

greater focus on sustainable agricultural

practices and families can better access

healthy, fresh, locally grown food.

New distribution deal

in Poland for CRI

Cooperative Resources International

(CRI), Shawano, Wis., has announced

that P.H. Konrad Krzyztopf

Przezdziecki is the new distributor in

Poland for CRI’s dairy and beef cattle

genetics. Nick Kirby, managing director

of CRI Europe, notes the new

relationship will provide advantages for

both companies. “P.H. Konrad will be a

credible outlet for CRI genetics

throughout Poland. At the same time,

CRI will share its expertise derived

from experience as a major global

player in the field of bovine genetics.” 

P.H. Konrad was established in 1995 as

a marketing firm for dairy and beef

breeding stock. In 2002, the company

expanded its services into the genetic

sector to create access for Polish

producers to the world’s best genetics.

It is the largest importer of bovine

semen in Poland. 

CRI has also entered into a longterm agreement with Flying Crane

Dairy, one of China’s largest producers

and distributors of premium infant

formula and milk powder. According to

a report in the “Business Journal of

Milwaukee,” CRI will advise Flying

Crane as it constructs 10 dairy farms to

house 10,000 dairy cows. CRI will

provide Flying Crane with expertise in

farm construction, dairy production

technology, advanced operation

concepts and farm management.

CRI, a member-owned holding

cooperative, is comprised of three

subsidiaries: Central Livestock

Association, AgSource Cooperative

Services and Genex Cooperative Inc.

USDA awards $4.8 million

for co-op development 

Agriculture Deputy Secretary

Kathleen Merrigan in September

announced that 28 organizations in 21

states have been selected to receive $4.8

million under the Cooperative

Development Grant program of USDA

Rural Development. The announcement was made as part of the “Know

Your Farmer, Know Your Food”

initiative, a USDA-wide collaboration

that connects people more closely with

the farmers who supply their food and

increase the production, marketing and

consumption of fresh, nutritious food

that is grown locally in a sustainable

manner. 

“The cooperative business model

continues to be successful in creating

wealth in rural communities and can

also play an important role in

strengthening our food systems,”

Merrigan said. “USDA is proud to be a

partner in the effort to bolster these

cooperatives and help them increase the

value and appeal of the products and

services they deliver.” 

USDA Rural

Development is awarding

a $200,000 grant to The

Ohio State University

Research Foundation to

support the foundation’s

efforts to help individuals

and new and emerging

cooperative business

entities. The Foundation

will provide technical

assistance to a statewide

farmers market

management network

cooperative and to a

newly formed purchasing

cooperative for businesses

in Appalachia. 

The Value-Added

Agriculture Development

Center in Pierre, S.D.,

has been selected to receive a $200,000

grant to continue supporting the

creation of producer-owned, valueadded agriculture. The Center will help

local growers educate the public,

Representatives of Cooperative Resources

International (CRI) and China’s Flying Crane Dairy

sign an agreement, under which CRI will help set up

10 dairy farms with 10,000 cows in China. Photo

courtesy CRI
28 November/December 2009 / Rural Cooperatives

lenders and producers about the

benefits of value-added agriculture.

These efforts often increase sales of

locally grown crops in addition to

increasing local agriculture’s

contribution to area residents’ health

and to the local economy. 

Cooperative Development Grant

program funds may be used for

technical assistance, research and

informational materials to help rural

residents form cooperative businesses or

improve the operations of existing

cooperatives. 

Below is a complete list of the

selected grant recipients. Funding of

each recipient is contingent upon the

recipient meeting the conditions of the

grant agreement. 

• Alabama: Federation of Southern

Cooperatives/Land Assistance Fund –

$200,000; 

• Alaska: University of Alaska

Anchorage – $197,783; 

• California: California Cooperative

Development Center – $200,000; 

• Colorado: Rocky Mountain Farmers

Union Educational & Charitable

Foundation – $200,000;

• Georgia: Southwest Georgia United

Empowerment Zone Inc. – $50,000; 

• Indiana: Indiana Cooperative

Development Center Inc. – $126,521; 

• Iowa: Iowa State University –

$200,000;

• Kentucky: Kentucky Center for Ag

and Rural Development – $200,000;

• Massachusetts: Cooperative

Development Institute – $200,000; 

• Michigan: Michigan State University

– $200,000; 

• Montana: Montana Cooperative

Development Center Inc. – $200,000; 

Lake County Community Development

Corporation – $99,696; Fort Peck

Assiniboine & Sioux Tribes – $50,000; 

• Nebraska: University of Nebraska –

$200,000;

• North Carolina: North Carolina State

University – $200,000; 

• North Dakota: North Dakota

Association of Rural Electric

Cooperatives – $200,000; Common

Enterprise Development Center –

$200,000; ABLE Inc. – $50,000;

Griggs Steele Empowerment Zone –

$30,600; 

• Ohio: Kent State University –

$200,000; The Ohio State University

Research Foundation – $200,000;

National Network of Forest

Practitioners - $200,000; 

• Oklahoma: East Central University –

$199,966; 

• Pennsylvania: Keystone Development

Center Inc. – $200,000; 

• South Dakota: Value-Added

Agriculture Development Center –

$200,000;

• Virginia: Virginia Foundation for

Agriculture, Innovation & Rural

Sustainability – $200,000; 

• Washington: Northwest Cooperative

Development Center – $200,000; 

• Wisconsin: Cooperative Development

Services, Inc. – $200,000. 

GROWMARK sales

top $6.1 billion

GROWMARK had sales of $6.1

billion for the 2008-09 fiscal year, with

net income of $96.9 million. It returned

$82 million in patronage refunds to

GROWMARK member cooperatives. 

“The 2009 fiscal year has been

challenging for many farmers as they

attempted to plant a crop with

extremely volatile pricing for fuel,

fertilizer and grain,” said Bill Davisson,

GROWMARK chief executive officer.

“Overall, I believe this has been a

successful year on many fronts, and

when looked at historically, this is still

projected to be the fourth-highest

income in our history.”

The Energy Division enjoyed strong

income again, and investments continue

to be made in division infrastructure,

including biodiesel blending capabilities

at the Menard County, Ill., terminal and

at Madison Service Co.’s Roxana, Ill.,

bulk plant. GROWMARK received

more than $50 million in patronage

from the National Cooperative

Refinery Association (NCRA). The

cooperative owns nearly 19 percent of

the refinery operation located in

McPherson, Kan.

Seed Division sales hit $240 million,

a 23-percent increase over the previous

year. FS corn sales grew 5 percent this

year, Davisson said. An 18-percent sales

increase was reported by the Crop

Protection Division. GROWMARK

recently reorganized field-level

personnel to support crop specialists in

creating and delivering whole-farm

cropping plans through FS Green Plan

Solutions.

Plant food operations resulted in a

gross income loss. Davisson cited a

worldwide economic downturn, which

created significant demand destruction

and oversupply of fertilizer, resulting in

a huge drop in fertilizer prices after

inventories at GROWMARK were in

place for fall application. “Still, if you

evaluate plant food results over 24

months instead of 12, it was the best

period of internal income in our

history,” Dawson said.

The cooperative’s Facility Planning

and Supply Division posted increases in

sales and gross income for the fourth

consecutive year. Contributing to this

success was the construction of

commercial grain storage facilities and

programs with equipment

manufacturers as FS member

cooperatives invested in application

equipment and rolling stock.

In addition to grain partnering

efforts with local FS member

cooperatives in Illinois and Ontario,

Canada, the GROWMARK System is

adding storage capacity and connecting

farmers with more end-use markets

through a partnership with Central

States Enterprises. 

MID-CO Commodities had $1

million in income this year and will

continued on page 30

GROWMARK’s Energy Division enjoyed

strong income in 2009.
Rural Cooperatives / November/December 2009 29

NCB Co-op 100 revenue

hits $209 billion

The nation’s 100 largest

cooperatives earned $209 billion in

2008, up $36 billion from 2007.

NCB (formerly National

Cooperative Bank), which compiles

the list annually, reports that the

2008 total represents a 157-percent

increase from the first Co-op 100

report NCB issued in 1991, when

America’s top 100 cooperatives

generated $81.4 billion in revenue. 

While the companies and

rankings change year to year, the

cooperative sector continues to

advance, playing an increasingly

influential role in the nation’s

economy, says Charles E. Snyder,

president and CEO of NCB. “The

record-setting dollar amount

highlights the benefits of

cooperatives’ adaptable structure,

ultimately enabling these

organizations to prosper even in the

most difficult of climates. As a bank

created and focused on providing

financing to this community, we’re

proud to have been instrumental in

the expansion of these businesses

over the past 30 years.”

As the report indicates,

cooperatives remain a driving force

in today’s marketplace, generating

over $500 billion in annual revenue.

Total assets of all cooperatives

nationwide surpass $1 trillion. Nine

agriculture cooperatives made the

top 100 for the first time in 2008. 

The top co-ops, based on revenue

by economic sector, include:

• Agriculture: CHS Inc., Saint Paul,

Minn., $32.1 billion, up from $17.2

billion in 2007, which maintained

its first place position overall on

the NCB Co-op 100 list. Land

O’Lakes Inc., Saint Paul, Minn.,

$12 billion (second place overall);

Dairy Farmers of America (DFA),

Kansas City, Mo., $11.8 billion

(third place overall); 

• Grocery: TOPCO Associates

LLC, Skokie, Ill., $9.9 billion

(fourth overall); Wakefern Food

Corp., Elizabeth, N.J., $8.4 billion

(fifth overall); 

• Hardware & Lumber: ACE

Hardware, Oakbrook, Ill., $3.8

billion (11th overall); Do it Best

Corp., Fort Wayne, Ind., $2.5

billion (17th overall); 

• Finance: CoBank, Greenwood

Village, Colo., $2.7 billion (14th

overall); Navy Federal Credit

Union, Merrifield, Va., $2.7 billion

(15th overall, up four slots from

2007); 

• Healthcare: HealthPartners Inc.,

South Bloomington, Minn., $3

billion (13th overall); Group

Health Cooperative, Seattle,

Wash., $2.7 billion (16th overall); 

• Energy & Communications:

National Cable Television

Cooperative Inc., Lenexa, Kan., $2

billion (21st overall); Basin Electric

Power Cooperative, Bismarck,

N.D., $1.5 billion (32nd overall, up

from 67th in 2007).

Cooperatives directly employ

nearly 500,000 people across the

country, and when including indirect

and induced effects, support more

than 2 million jobs nationwide. As

many sectors absorb the slowing

activity of the current economic

conditions, cooperatives and their

members often fare better in difficult

conditions than investor-owned

firms, due to their adaptable

structure and governing body. 

Since cooperatives are controlled

by their members, the individuals

who use and benefit from the goods

and services provided, cooperatives

can more readily readjust to market

conditions than many of their

investor-backed counterparts. As a

result, cooperatives are organized to

maximize returns and are prepared

to weather a downturn, like today’s

current marketplace. 

The entire NCB Co-op 100

report is available at:

www.ncb.coop/uploadedfiles/coop10

0_2009_web.pdf. 

CHS is the nation’s largest cooperative,

with sales of $32.1 billion. Below: Food

testers at TOPCO Associates, the nation’s

largest grocery co-op, which had $9.9

billion in revenue last year.

Navy Federal Credit Union’s mascot

congratulates children who participated in

a recent fun run. Navy Federal is the

nation’s second largest financial co-op,

with $2.7 billion in revenue last year.
30 November/December 2009 / Rural Cooperatives

return $250,000 in cash patronage.

AgriVisor, LLC, a joint venture

between GROWMARK and Illinois

Farm Bureau, continues to bring a

broad spectrum of products and services

that help producers develop and

implement risk management strategies

tailored to their operations.

For the second year in a row,

General Manager John Knobloch of

AGRILAND FS, in Winterset, Iowa,

received the prestigious Chairman’s

Award for Excellence in Management

from GROWMARK Chairman Dan

Kelley at the cooperative’s annual

meeting in Chicago. The award is the

highest honor GROWMARK bestows

to member cooperative managers who

have achieved outstanding results in the

following management categories:

percent or dollars of sales increase,

credit administration, operating expense

efficiency, and return on invested

capital.

California small farm

conference set 

The 2010 California Small Farm

Conference will be held Feb. 28 to

March 2 in San Diego. The conference

will feature five short courses with offsite tours of local farms and farmers

markets; 25 focused workshops on

issues of conservation, business

management, marketing and

production; numerous networking

opportunities and three keynote

addresses by industry leaders. 

Russ Parsons, food columnist for the

Los Angeles Times, will be the keynote

speaker. He has been the newspaper’s

food editor, managing editor and

deputy editor and is the author of the

cookbooks How to Read a French Fry and

How to Pick a Peach.

USDA loans $2.4 billion to RECs

Agriculture Secretary Tom Vilsack

on Sept. 30 announced that 58 rural

utilities and cooperatives in 33 states

have been selected to receive $2.4

billion in loans and loan guarantees to

build and repair over 12,000 miles of

distribution and transmission lines and

make system improvements that will

benefit almost 113,000 rural customers.

Vilsack made the announcement during

a Rural Tour stop in Las Cruces, N.M.,

as part of the Obama Administration’s

effort to develop infrastructure and

build the economy of rural

communities. 

Several of the loan guarantees

support renewable energy ventures. For

instance in Fitzgerald, Ga., Fitzgerald

Renewable Energy LLC has been

selected to receive a $139 million loan

guarantee to build a biomass-fueled

power generating facility. The plant will

use locally produced wood fuel waste to

generate 55 megawatts of renewable

electric power. The fuel typically will be

waste wood provided by vendors within

50 miles of community. 

Multitrade Rabun Gap LLC, located

in Rabun Gap, Ga., has been selected to

receive a $20.7 million loan guarantee

to construct and operate a 17 megawatt

wood-fueled biomass facility. The

facility has a significant amount of

existing equipment already on site,

including a wood-fired boiler that was

previously used to supply steam and

electricity to a textile manufacturing

operation. The new biomass facility will

use native renewable fuel from the local

forest industry and is expected to sell

power to a Georgia cooperative under a

long-term power purchase agreement. 

$71 million to bolster

rural co-ops, business 

An Ohio farmer cooperative is

among the rural businesses nationwide

receiving $71.7 million in American

Recovery and Reinvestment Act funds,

made available through the Business &

Industry (B&I) Guaranteed Loan

Program, administered by USDA Rural

Development. Altogether, $1.7 billion is

available to businesses across the

country through the Recovery Act and

B&I loan funding. 

In Franklin County, Ohio, a farmerowned cooperative was selected to

receive a $7.5 million loan guarantee.

The loan will help provide business

services to more than 50,000 livestock

farmers in Ohio, Kentucky, Michigan,

Indiana, Illinois and Missouri. The B&I

loan will help the cooperative continue

to maintain health insurance for its

nearly 500 employees, many of whom

live in counties with unemployment

rates 125 percent greater than the

national average and counties that have

been affected recently by natural

disasters.

Eligible B&I applicants include

private businesses, cooperative

organizations, corporations,

partnerships, nonprofit groups,

federally recognized Indian tribes,

public bodies and individuals. Funds are

targeted to create and retain quality

jobs and serve difficult-to-reach

populations and areas hardest hit by the

current economic downturn. Learn

more about the program by visiting

www.rurdev.usda.gov/rbs/busp/b&i_gar.

htm. 

More information about USDA’s

Recovery Act efforts is available at:

www.usda.gov/recovery. More

information about the federal

government’s efforts on the Recovery

Act is available at: www.recovery.gov. 

Willie Wiredhand, the mascot of the

nation’s rural electric cooperatives (RECs),

was incorrectly referred to as Willie

Wirehands in the last issue of “Rural

Cooperatives.” But, as can be seen in this

photo, he’s not taking it too hard.

Illustration by Richard Biever, courtesy

Indiana Statewide Association of RECs
Rural Cooperatives / November/December 2009 31

TITLE FEATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ISSUE—PAGE

About Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24

Bagby, Dorman Named Top Co-op Communicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 30

Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 14

Bigger methane role for farmer co-ops? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 16

Bigger role seen for Ohio farmers’ markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 28

Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 10

Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16

City Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 28

Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 20

Conner to head NCFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 35

Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 22

Conversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 13

Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 4

Co-op educators see critical need to ramp-up, expand education efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 30

Co-op Hall of Fame inductees played crucial role in co-op movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 31

Co-op not just a home, but a support system for members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 7

‘Co-op 100’ revenues top $173 billion in ’07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 36

Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4

Core principles of Stroud Community Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 24

Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 26

Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24

CWT removes 101,000 cows; NMPF launches new task force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 40

Dairy co-op financial performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 5

Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4

Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that bankrupted VeraSun . . . . . . . . . . . . .March/April 16

Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 32

Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

Full Sail for Shipwrights’ Co-op

Dissatisfied working for others, craftsmen are now the bosses of boat-repair business . . . . . . . . . . . . . . . .Sept./Oct. 22

Generosity by local farmer cooperative is appreciated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 40

Green Thumbs Up

Interest in community gardens sprouting across America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 26

Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16

High-priced inventory from ’08 big problem for some supply co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 7

Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former inmates, others . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

2009 Article Index

Information appearing in Rural Cooperatives magazine during calendar

year 2009 has been indexed to help you find past articles. Articles are

indexed by issue and page. Back issues can be found online at:

www.rurdev.usda.gov/rbs/pub/openmag.htm
32 November/December 2009 / Rural Cooperatives

How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20

Humboldt Creamery Files Chapter 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 33

Identity Heft

CoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16

Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity, logo,

and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Kick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Learning from potato bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 9

Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile 

markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17

More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29

Natural turf still preferred for sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 10

NCB Co-op 100 revenue hits $209 billion . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 29

NCBA supports role for co-ops in national healthcare reform . . . . . . . . . . . .July/Aug. 39

New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26

New life for an old town

Wine co-op helps transition from tobacco while boosting 

agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

News that Gets Used

Media tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Organic Valley sales top $528 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 37

Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented 

credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4

Place at the Table

NFU delegates carry family farmer concerns to Capitol, 

White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Possible benefits and associated costs from byproducts of anaerobic 

digestion of dairy manure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 20

Possible benefits of a cooperative effort to support the adoption of anaerobic digesters by

dairy producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 21

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Royal Treatment

Rhode Island farmers join forces to market RI Royal 

brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21

Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Tillamook’s commitment to community includes environmental 

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8

A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24

USDA educational publications seen as valuable resource . . . . . . . . . . . . .March/April 30

USDA, Justice Dept. to hold workshops to explore ag competition,

antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11

Waste Not

Minnesota dairy farms use manure digesters to produce methane gas . . .May/June 14

Webinar examines starting worker-owned cooperatives . . . . . . . . . . . . . . . . . .July/Aug. 33

What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4

Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19

Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

MAGAZINE DEPARTMENTS

Co-op Development Action

Greenhouse grows more than plants – co-op teaches youth about 

nutrition, community involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25

National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

Succession planning critical to future of small Iowa meat-processing 

plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32

Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

Commentary

California’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2

Cooperatives make good sense, serve their communities . . . . . . . . . . . . . . . . .Nov./Dec. 2

‘Go-Local’ Movement: How will your co-op be affected? What is 

your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2

Growing world population presents challenge and opportunity 

for U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2

Local ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2

Rural America Runs on Co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 2

Focus On...

Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

In the Spotlight

Park sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

Legal Corner

Capper-Volstead, Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 17 

Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19

What Is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

Management Tip

Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

Newsline

Record sales, income for Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 34

Tree Top buys Oregon fruit puree company

DFA pays $12 million to settle with CFTC

Blue Diamond says confidence key to future market stability

WFC-MAC now Cooperative Network

Mooney to chair NMPF; CWT to continue in ‘09

CHS notches fifth consecutive year of record earnings in ‘08

CCA speakers available to address key co-op issues

USDA program aims to help African-American farmers

Brownlee to fill key USDA communications role

G&T co-ops support Iowa wind farm

USDA funding biorefinery projects

‘Grower-owned’ key to Musselman’s new applesauce advertising campaign

Lamb co-op buys out partner

Montana co-ops to merge

CoBank earnings surge to $538 million . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 32

Smith, Bozick win top honors at NCFC’s 80th annual meeting

Wisconsin economic recovery plan aims to boost state’s dairy co-ops

Global co-op award competition launched

Study boosts ethanol status for environmental quality

Does your co-op rock? Send videos to NCGA

Video focuses on credit unions

Irwin new CEO at Welch’s

Rural Economic Development funds awarded in 13 states

Sunkist sales top $1 billion

Hal Doran remembered for dedication to co-ops

Helping family farms prosper

AGP marks 25th year with record cash returns . . . . . . . . . . . . . . . . . . . . . . . .May/June 31

Maine fishing co-op opens certified processing facility

AgStar buys six VeraSun plants; hopes to re-sell to farmer co-ops

Record revenue at DFA in ‘08; plunging milk price sparks effort

Record milk volume, sales growth at AMPI

Agri-Mark earns $11.8 million

NCFC meeting explores impact of climate change laws on ag
Rural Cooperatives / November/December 2009 33

Record sales, manager payments for LO’L

Two-thirds of milk supply enrolled in CWT program

Hog co-op files for bankruptcy

N.Y. Times includes special co-op section

USDA accepting applications for co-op development grants

E85 signs sprouting along Wisconsin Interstates . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 37

Wisconsin co-op to link local farms and institutions

United Co-op returns record $2.37 million in cash to members

USDA offers $25 million loan to reopen SoyMor Biodiesel

AgStar sells three ethanol plants

Fishermen create new CSF: Cape Ann Fresh Catch

DFA launches Texas plant expansion

PCCA forms new company to produce fashion jeans

Report: broadband critical to future of rural America

$1 billion in USDA electric loans to strengthen rural infrastructure

Foster Farms bids on Humboldt

Consumers pick favorite farmers markets . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 36

Idaho potato growers pursue anti-trust case

Vermont’s City Market named top U.S. food cooperative

Indiana co-ops form new feed business

USDA offering $18 million in Value-Added Producer Grants

Montana landowners to build wind-power project

Court approves Humboldt sale

CWT accepts third herd retirement of year

Ontario groceries form co-op to promote sale of local food

Frederick awarded NSAC’s Silver Bowl

New co-op law book published

USDA grants help handicapped farmers

Bravante Produce joins Sunkist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 25

University to develop urban food co-op

Michigan co-op acquires grain facility

Missouri biomass co-op first to earn BCAP payments

2.4 million agri-tourists visit California farms in ‘08

USDA: 5,200 farmers markets now open

New distribution deal in Poland for CRI

USDA awards $4.8 million for co-op development

GROWMARK sales top $6.1 billion

California small farm conference set

$71 million to bolster rural co-ops, business

USDA loans $2.4 billion to RECs

Page From the Past

Cooperatives: tools for self-help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 47

Revamped member-relations program turns around negativity 

toward co-op . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 39

Utility Co-op Connection

Adelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26

Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39

Need for new baseload capacity, expanded transmission are huge 

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13

Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

Value-Added Corner

Family Farmers Seed Cooperative: Colorado co-op aims to meet 

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14

Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21

SUBJECTS

Co-op Advantages/Impact

Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4

Agri-Tourisum

City Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28

New life for an old town

Wine co-op helps transition from tobacco while boosting 

agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

Bargaining

Learning from potato bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 9

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

Communications

Bagby, Dorman Named Top Co-op Communicators . . . . . . . . . . . . . . . . . . .Sept./Oct. 30

Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20

Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity,

logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

News that Gets Used

Media tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

Conferences

Kick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11

Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile

markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Place at the Table

NFU delegates carry family farmer concerns to Capitol, 

White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Co-op Development

Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14

Co-op Hall of Fame inductees played crucial role in co-op movement . . . . .July/Aug. 31

Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24

Greenhouse grows more than plants – co-op teaches youth about nutrition, community

involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25

Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26

Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17

Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

Succession planning critical to future of small Iowa meat-processing plants .July/Aug. 32

What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4

Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

Co-op Principles/Advantages/Impact

Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4

Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24

Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16

Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20

Madison Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 26

Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . . . . . .Nov./Dec. 4

What Is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

Cotton

Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16

Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26

Dairy

Conversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . .July/Aug. 13

Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4

Place at the Table

NFU delegates carry family farmer concerns to Capitol, 

White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Tillamook’s commitment to community includes environmental 

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8
34 November/December 2009 / Rural Cooperatives

Waste Not

Minnesota dairy farms use manure digesters to produce 

methane gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 14

Directors

Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19

Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

Education

Co-op educators see critical need to ramp-up, expand education efforts . .March/April 30

Greenhouse grows more than plants – co-op teaches youth about nutrition, community

involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25

Park sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

Environment

California’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2

Growing world population presents challenge and opportunity for 

U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2

Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

Tillamook’s commitment to community includes environmental 

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Farm Supply

Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4

High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7

Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Farmers Markets

Bigger role seen for Ohio farmers’ markets . . . . . . . . . . . . . . . . . . . . . . . . .March/April 28

Finance/Tax/Legal/Legislative

Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14

Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10

Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19

Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that 

bankrupted VeraSun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 16

High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7

How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20

Identity Heft

CoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17

More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29

New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented 

credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4

A Place at the Table

NFU delegates carry family farmer concerns to Capitol, White House . .May/June 8

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

USDA, Justice Dept. to hold workshops to explore ag competition,

antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11

Foreign Co-ops

Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14

Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . .May/June 22

Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov./Dec. 17

Forestry

Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

Fruits, Nuts, Vegetables

Co-op not just a home, but a support system for members . . . . . . . . . . . . . . . .Jan./Feb. 7

Grower control and responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 16

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

New life for an old town

Wine co-op helps transition from tobacco while boosting 

agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Royal Treatment

Rhode Island farmers join forces to market RI Royal brand potatoes .March/April 22

So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . . . . . .Jan./Feb. 8

Grains & Oilseeds

Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21

Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented 

credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4

Livestock & Poultry

City Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28

Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

Succession planning critical to future of small Iowa meat-processing 

plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32

Management

Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20

Conversation with Tillamook President/CEO Harold Strunk . . . . . . . . . . . . .July/Aug. 13

Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity,

logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

Managing Risk

Farmer Co-op Conference eyes strategies for business in volatile 

markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Marketing

About Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24

Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16

Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4

Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26

Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4

Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former 

inmates, others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

Identity Heft

CoBank describes effort to update corporate image . . . . . . . . . . . . . . . . .Sept./Oct. 16

Identity Heft, Part II

Land O’Lakes freshens image with new co-op brand identity,

logo, and tagline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 18

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented 

credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Royal Treatment

Rhode Island farmers join forces to market RI Royal 

brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8

Member Relations/Benefits

Co-op not just a home, but a support system for members . . . . . . . . . . . . . . . .Jan./Feb. 7

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8
Rural Cooperatives / November/December 2009 35

Mergers

Managing Risk

Farmer Co-op Conference eyes strategies for business in 

volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Renewable Energy

Bigger methane role for farmer co-ops? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 16

Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that 

bankrupted VeraSun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 16

Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32

How the Renewable Fuel Standard works . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 20

Kick-starting the rural economy with renewable energy . . . . . . . . . . . . . . . . .May/June 11

Local ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2

Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22

More VeraSun Ethanol Plants Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 29

New financing mechanisms for renewable energy . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 26

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24

Waste Not

Minnesota dairy farms use manure digesters to produce methane gas . . .May/June 14

Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19

Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Specialty Crops

Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former 

inmates, others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Natural turf still preferred for sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 10

Statistics

Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . . . . . .May/June 4

Cooperatives Set Sales, Income Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 4

Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Sustainable/Local/Organic

About Farm Fresh Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 24

Consumers, farmers share risks and rewards of organic farm . . . . . . . . . . . . .May/June 22

Family Farmers Seed Cooperative: Colorado co-op aims to meet 

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14

Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

‘Go-Local’ Movement: How will your co-op be affected? What is 

your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2

Green Thumbs Up

Interest in community gardens sprouting across America . . . . . . . . . . . . .May/June 26

Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . .May/June 20

Place at the Table

NFU delegates carry farmer concerns to Capitol, 

White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Trade

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Transportation

Overcoming constraints to growth in biofuels industry . . . . . . . . . . . . . . . . . .Jan./Feb. 18

USDA

Adelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26

Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32

Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21

USDA, Justice Dept. to hold workshops to explore ag competition, 

antitrust issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 11

Utility Co-ops

Adelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26

Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39

Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20

Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32

Need for new baseload capacity, expanded transmission are huge 

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13

Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Value Added 

Cotton co-ops benefit from cottonseed oil comeback . . . . . . . . . . . . . . . . .March/April 26

Family Farmers Seed Cooperative: Colorado co-op aims to meet 

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14

Identifying ‘better ideas’ helps MaxYield Co-op double sales . . . . . . . . . . .March/April 21

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

New life for an old town

Wine co-op helps transition from tobacco while boosting 

agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8

Worker-Owned Co-ops

Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10

Full Sail for Shipwrights’ Co-op

Dissatisfied working for others, craftsmen are now the bosses of 

boat-repair business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 22

Succession planning critical to future of small Iowa meat-processing 

plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 32

Webinar examines starting worker-owned cooperatives . . . . . . . . . . . . . . . . . .July/Aug. 33

Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

AUTHORS

Berberich, Greg

Cooperatives make good sense, serve their communities . . . . . . . . . . . . . . . . .Nov./Dec. 2

Borst, Alan

Market Power Problem

Bargaining co-ops help farmers avoid ‘race to the bottom’ . . . . . . . . . . . .Sept./Oct. 6

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Brockhouse, Bill

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Burdett, Bruce

Royal Treatment

Rhode Island farmers join forces to market RI Royal 

brand potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 22

Campbell, Dan

Communications Can Help Co-ops Shine

Top CEO communicator Bob Ray shares insight . . . . . . . . . . . . . . . . . . .Sept./Oct. 20

High-priced inventory from ’08 big problem for some supply co-ops . . . . .March/April 7

News that Gets Used

Media tips and war stories abound at CCA roundtable . . . . . . . . . . . . . . .Jan./Feb. 32

Passing the Stress Test

Grain co-ops and lenders work as a team to meet unprecedented 

credit needs during ‘08 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 4
36 November/December 2009 / Rural Cooperatives

Place at the Table

NFU delegates carry family farmer concerns to Capitol, 

White House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 8

Rural advocate Dallas Tonsager to lead USDA Rural Development . . . . . . . .July/Aug. 21

Storm Shelter

Dairy co-ops strive to help members survive severe market downturn . . .Nov./Dec. 8

Chesnick, David

Largest co-ops reap record, $88 billion sales . . . . . . . . . . . . . . . . . . . . . . . . .March/April 9

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Cline, Harry

Calcot surviving in floundering cotton industry . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 16

Coontz, Kim

Worker co-op members must wear three business ‘hats’ . . . . . . . . . . . . . . . .Sept./Oct. 35

Crooks, Anthony

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Fannin, Blair

Park sees bright future for Texas ag co-ops . . . . . . . . . . . . . . . . . . . . . . . . .March/April 11

Farrell, John

Local ownership of biofuel yields greatest benefit for rural America . . . . . . . .Jan./Feb. 2

Freeman, Jean

Look in the Boardroom Mirror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 25

Gordon, Don

California’s 30-year drought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 2

Gray, Thomas W.

Shift to multifunctional agriculture complicates biofuels development . . . . . .July/Aug. 34

Healy, Donna

City Slickers

Co-op boosts Montana ranchers that offer working vacations . . . . . . . . .July/Aug. 28

Henry, Kellen M.

Honey Co-op Buzzing in Chicago

Urban farming co-op also provides job training for former 

inmates, others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 12

Hogeland, Julie

Making a Market

Co-ops facing challenges of global supply-chain economics . . . . . . . . . . . .Jan./Feb. 4

Karg, Pamela J.

Banking on the Future

U.S. farm credit co-op model paying dividends in Armenia . . . . . . . . . .Nov./Dec. 14

Missouri farmer helping ag banks in developing countries . . . . . . . . . . . . . . .Nov.-Dec. 16

Liebrand, Carolyn

Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

Ling, K. Charles

Dairy co-ops maintain steady market position . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 4

Switching On Cow Power

Co-ops can play role in turning dairy waste into energy, byproducts . . . .Jan./Feb. 18

What Cooperatives Are (and Aren’t)

Economist says co-ops represent aggregates of economic units . . . . . . . .Nov./Dec. 4

Little, Jane Braxton

Forestry Co-ops Take Root . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 14

Littlefield, Dee Ann

Feeding the Concrete Cow

Dryland forage sorghum to fuel Texas biomass plant . . . . . . . . . . . . . . . .Sept./Oct. 32

Maras, Philp

Shenandoah Valley Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 14

Mayberry, Anne

Adelstein to lead USDA rural utility programs . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 26

Algae may help filter CO2 from power plant emissions . . . . . . . . . . . . . . . . .Nov.-Dec. 39

Need for new baseload capacity, expanded transmission are huge 

challenges for RECs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 13

Tri-State to build largest co-op solar power plant . . . . . . . . . . . . . . . . . . . . . .May/June 13

Patrie, Bill

Creating Co-op Fever: Hard Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 24

Perry, Mike

Legacy of Cooperation

Plunkett Foundation still follows founder’s vision for co-ops . . . . . . . . . .May/June 20

Pitman, Lynn

Co-op Economic Footprint

Multi-sector analysis estimates co-op impact at $653 billion . . . . . . . . . . .May/June 4

Managing Risk

Farmer Co-op Conference eyes strategies for business in 

volatile markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 28

Pleasant, Bruce

Ripe Time Delivery

Carolina growers form co-op to supply farm-to-school market . . . . . . . .July/Aug. 14

Policinski, Chris

Growing world population presents challenge and opportunity for 

U.S. Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 2

Reynolds, Bruce

Building a Bridge for Ownership Succession

Worker co-ops, ESOPS help keep business doors open . . . . . . . . . . . . . . .Jan./Feb. 10

Robinson, Robin

Opportunities for co-op ownership of cellulosic ethanol . . . . . . . . . . . . . . . . .Jan./Feb. 22

Schultz, Madeline

Succession planning critical to future of small Iowa meat-processing plants .July/Aug. 32

Simerly, Rita

Greenhouse grows more than plants – co-op teaches youth about 

nutrition, community involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 25

National network of practitioners connects forestry cooperatives . . . . . . .March/April 12

Smith, Stephanie M.

Capper-Volstead, Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 17 

Co-op directors must adhere to high standards of conduct . . . . . . . . . . . . . . .May/June 19

What is Democratic Control? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 7

Thompson, Stephen

Ethanol Crunch

Farmer-owned ethanol plants may ride out the market crash that 

bankrupted VeraSun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 16

Full Sail for Shipwrights’ Co-op

Dissatisfied working for others, craftsmen are now the bosses of 

boat-repair business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 22

New life for an old town

Wine co-op helps transition from tobacco while boosting 

agri-tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 18

So Far, So Good

Potato co-op achieving mission to bring stability to market . . . . . . . . . . . .Jan./Feb. 8

Waste Not

Minnesota dairy farms use manure digesters to produce 

methane gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .May/June 14

Todd, Anne

Family Farmers Seed Cooperative: Colorado co-op aims to meet 

growing need for organic seed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jan./Feb. 14

Marginal Land Tapped for Biofuels

New York land bank co-op could be first of its kind . . . . . . . . . . . . . . . .Nov./Dec. 22
Rural Cooperatives / November/December 2009 37

Tillamook’s commitment to community includes environmental 

stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .July/Aug. 11

Traditions run 100-years deep at Tillamook County Creamery . . . . . . . . . . . .July/Aug. 8

A true grassroots effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nov./Dec. 24

Whatever Happened to E85? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 19

Wind power key to reducing costs for Alaskan villages . . . . . . . . . . . . . . . . . .May/June 28

Tonsager, Dallas

Rural America Runs on Co-ops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sept./Oct. 2

Torgerson, Randall

‘Go-Local’ Movement: How will your co-op be affected? What is 

your role? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 2

Wadsworth, James

Co-op educators see critical need to ramp-up, expand 

education efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .March/April 30

a viable project that can successfully

sequester carbon dioxide.” 

With climate-change legislation

moving through Congress, any

approach that can keep costs affordable

for rural electric utilities is of interest.

Southworth says that Associated

Electric Co-op is among six utilities

serving Missouri that are looking at

carbon sequestration. A U.S.

Department of Energy grant is funding

another project that will inject foodquality carbon dioxide into a sandstone

formation 1,900 feet under the plant

site. 

“This project will look at stability —

what happens after the carbon is

injected,” Southworth says. 

The sequestration projects are longterm efforts. Southworth says that the

rate at which the carbon dioxide can be

“bubbled” into the algae is critical, but

this is one aspect of the research that

has been determined. Next, researchers

Dr. Keesoo Lee of Lincoln University

and Dr. Paul Nam of the Missouri

University of Science and Technology

will look at the effect of colder

temperatures on algae growth. 

“This winter will be the first for the

algae project,” Southworth says.

“Currently, the effect of the colder

temperatures is not known.” 

Uility Co-op Connection

continued from page 21
38 November/December 2009 / Rural Cooperatives

The same principle applies in the

methods by which directors are

nominated and/or elected. Some

cooperatives have director districts with

different numbers of directors assigned

to each district. The bottom line is that

some members may have more say than

others. 

The governing aspect of cooperatives

is evolving in order for cooperatives to

compete in a more competitive and

diversified financial and economic

environment. At the end of the day,

however, cooperatives must still

maintain the basic cooperative

principles, including having “democratic control” in the governance of

their organization in order to keep their

status as a cooperative. 

The possible risks that cooperatives

face if they do not have democratic

control are: 

• Loss of Subchapter T eligibility;

• Loss of eligibility as a 501(c)(12)

organization; 

• Possible lawsuits from members

against board members for breach of

their fiduciary duty. 

As cooperatives start to “think

outside the box” regarding the

governing structure of their

organization, make sure your

cooperative does not inadvertently

abandon the principle of democratic

control. Any form of member voting

other than one-member/one-vote, or a

method of weighing board member

representation should be carefully

studied to make sure that it does not

result in defacto control of your

cooperative by an individual or small

group.

Legal Connection

continued from page 7
Rural Cooperatives / November/December 2009 39

be insufficient returns on their investment in those markets. 

In 1953, none were stepping up to fill the communication

gap in Eagle River and the Matanuska-Susitna Borough. In

response, valley residents joined together to create

Matanuska Telephone Association (MTA). Fifty-six years

later, MTA — built through the dedicated labors of local men

and women — is an industry leader and powerful economic

engine in the region. 

This year alone, MTA will pump tens of millions of

dollars into the local economy by employing more than 400

Alaskans. We will continue to support our service area

through donations of both time and money to local

organizations to help make our communities stronger. 

Because we are not required to pay dividends to outside

investors, another benefit of the co-op model is that we are

able to continually reinvest in our infrastructure, which is

vital to the long-term health of our company. 

As a result, MTA is in an excellent position to compete

with other providers, who now, 56 years late, see our market

as a profitable business proposition — for their investors. 

Without the cooperative model, dividends issued by forprofit organizations traditionally flow outside of Alaska. Not

so with capital credits. They stay right here to be circulated

back into Alaska’s economy because they are paid to local

residents, business owners and government organizations.

This year, about $30,000 was paid to the Matanuska-Susitna

and Anchorage School Districts. 

There are other co-ops in Alaska that serve multiple

community needs, such as credit unions, and REI sporting

goods. The success of co-ops has been due in large part to

the fact that their customers are their owners. While no

business model works without dedicated employees, strong

ethical management and relevant product offerings, the co-op

model in today’s environment bodes well for the future. 

While many large companies are under pressure to pay

out higher dividends, co-ops re-invest in themselves, their

customers and the communities they serve. At a time when

there is less money for corporate re-investment, co-ops will

continue to thrive for this reason alone. n

Commentary

continued from page 2

Roman Asatryan concurs. The young Armenian man

befriended Eyman and volunteered as a translator and tour guide

in the evenings and on weekends. Asatryan’s parents are typical

of many small landowners who raise mostly produce to feed their

families, selling any excess in the marketplace.

Subsistence farming

“People in rural areas and small villages farm to stay alive,”

Asatryan says. “They really don’t have any assets more than

what they can carry in their hand or store in the small shed most

people build on their land.” 

Eyman notes that larger Armenian landowners may own

enough to hire someone to operate the farm, while the owner

also runs a one-room general merchandise store or a small foodprocessing operation. Separating the farm operations from other

businesses was challenging. 

“I was on tarragon [herb] farms and vineyards, in wineries

and cheese factories and greenhouses, all the time working with

Armenian loan officers who would, in turn, train other Armenians.

Then, on behalf of the farmers who qualified, I would go to credit

organizations to present recommendations on who could viably

handle a loan,” Eyman explains. “A large part of the goal was to

help the farmers install drip irrigation to improve farm yields.”

Working from a loan policy he first developed in Ethiopia,

Eyman introduces the document in every country. He follows up

with other policies and forms, such as a basic balance sheet,

cash-flow assessment and collateral inspections sheets. The

countries are free to use them as is, or adapt them to specific

nuances in their customs and cultures. The WtM project has

reached all 10 Armenian marzes, or provinces, through its training and credit programs and has established demonstration sites.

“The business of banking in agriculture has similarities

around the world,” he says, adding that “it’s a wonderful

experience to help people who are looking to the future.” n

Missouri farmer helping ag banks in developing countries continued from page 17

month or every quarter they meet,” notes Strom. “But then

you realize this is just the beginning for Farm Credit

Armenia’s five directors, outside director and staff — at a

time when there are global financial challenges.”

Strom says one solution he has offered is to speak

favorably about FC Armenia and how its members have

embraced the cooperative structure and principles as a means

to rebuilding the agricultural sector in their country’s

emerging free-market economy.

“I do agree with Lee’s assessment,” says Johnston. “But I

would add that I think Farm Credit Armenia offers an

opportunity for other donors and investors to fund a great

organization that is built on sound cooperative and credit

principles.” As potential donors and funders look into FC

Armenia, he thinks they will recognize the same opportunity

to serve rural Armenia as MCA did when it provided it with

lending capital. 

“Farm credit in Armenia today is where the U.S. system

was 50 years ago,” Strom says. “Look what has been accomplished in the United States. The same can be done here.” n

Banking on the Future continued from page 16
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