July/August 2013 Rural

COOPERATIVES COOPERATIVES

The Art of

Co-op Branding
2 July/August 2013 / Rural Cooperatives

By Dan Campbell, editor 

uiz: What do artist

Norman Rockwell,

movie director

George Lucas and

Sun-Maid raisins

have in common? 

If you’ve looked at the cover of

this issue, you may already have a

rough idea of the connection

between Sun-Maid and Rockwell.

In the 1920s, the raisin cooperative

commissioned Rockwell to produce

several paintings that were used to

promote Sun-Maid raisins, part of

the co-op’s “ahead-of-its-time” food

brand development strategy.

Lucas enters the picture because

he is one of the world’s great

admirers and collectors of

Rockwell’s art, as is fellow movie

director Steven Spielberg. Indeed,

the two Hollywood moguls shared

57 paintings from their Rockwell

collections during a special

exhibition at the Smithsonian

American Art Museum here in Washington, D.C., two years

ago.

When I was in college in the 1970s, I recall my art history

professor making disparaging remarks about Rockwell, whom

he dismissed as a “mere commercial illustrator of cornball,

overly sentimental” art. His taste in 20th century American

art ran more to Andy Warhol’s paintings of soup cans. 

But the public has never lost its love for Rockwell’s art; he

is often referred to as “America’s favorite artist.” Rockwell’s

ability to see the hero in the common man, to find humor

and drama in the activities of everyday life, and his ability to

inject so much personality into his subjects that you would

swear you know them, make him one of the great visual

chroniclers of American life. Thanks in part to fans such as

Lucas and Spielberg, there is an ongoing critical reassessment

of Rockwell, helping to establish his rightful place among the

great American artists of the past century. 

In “Fruit of the Vine,” produced for Sun-Maid, Rockwell

takes on a subject that others might

view as the mundane task of

pouring out some raisins while

gathering ingredients for a raisin

pudding or cake. He transforms

this kitchen chore into a loving

ritual of daily life, perhaps at a time

when raisins were a bit more of a

“luxury” food item than they are

today. There is more than a passing

similarity to the way Jan (“Girl with

a Pearl Earring”) Vermeer

portrayed Dutch household life in

the 17th century. 

Once asked to pick his favorite

Rockwell painting, Lucas named

“Peach Crop,” a painting he owns,

which was created to illustrate a

short story by Ruth Burr Sanborn

in the April 1935 issue of American

Magazine. It tells the tale of a

medical student who spends a

summer working in a peach orchard

to pay for his final year of tuition.

There he falls in love with the

daughter of a poor sharecropper. In

the painting, the med student is

trying to revive the young woman after she has apparently

worked to a state of exhaustion, her hands bandaged from the

wear and tear of the labor. 

The painting dramatizes the incredibly hard work that

goes into every meal we sit down to. It is easy to see why it

would have such meaning for Lucas, who grew up amid the

peach orchards and vineyards that surround Modesto, Calif.

He says it brings him to a “dead stop” every time he sees it,

and he marvels at the story-telling power Rockwell captured

“in a single frame.” 

Sun-Maid members and employees must have been proud

then, and now, to have such a wonderful link established

between Rockwell, a master of the brush, with their own

mastery of the vineyard and packing plant. For it is indeed a

work of art to bring forth such a bounty of fruit from the

near-desert of the San Joaquin Valley. Rockwell and SunMaid — an early, highly successful, co-op marketing joint

venture! n

Q

Commentary 

Fanfares for the common man

Norman Rockwell’s “Fruit of the Vine” depicts the

preparation of a raisin dessert as something much more

than a simple kitchen chore. In a 1967 letter to SunMaid, Rockwell said the elderly woman was the mother

of his first wife. Artwork courtesy Sun-Maid Growers of

California
Features

Rural Cooperatives / July/August 2013 3

Volume 80, Number 4

July/August 2013

Rural Cooperatives (1088-8845) is

published bimonthly by USDA Rural

Development, 1400 Independence Ave.

SW, Stop 0705, Washington, DC. 20250-

0705.

The Secretary of Agriculture has

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Cooperatives, USDA/RBS, Stop 3255,

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Mention in Rural Cooperatives of

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Doug O’Brien, Acting Under Secretary,

USDA Rural Development

Dan Campbell, Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?

Call (202) 720-6483, or email:

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This publication was printed with vegetable oil-based ink.

p. 14

04 Pennsylvania Bred and Fed 

Keystone Beef’s aggregation and marketing boosts income for small-scale cattle producers

08 From Rhode Island to Puerto Rico, co-ops ‘adding value’ 

with USDA support 

11 A ‘Real Pickle’ for workers 

Food processor re-forms as worker co-op to maintain role in local food system

By Joe Rinehart

14 The Face of the ‘Franchise’ 

Brand development key to Sun-Maid’s sweet century as raisin industry leader

22 A Way with Words...and pictures, and websites, etc.

CCA salutes best in co-op communications 

28 Battlefield Lessons

Gettysburg Leadership Experience demonstrates that lessons from 150 years ago are still relevant 

31 Director Diligence

Co-ops should assess director skills for fulfilling duties

By James Wadsworth

34 Premier Co-op adapts equity policy to reflect 

changing membership

By Margaret Lund

36 Co-ops urged to plan now for Co-op Month activities

Departments

02 COMMENTARY

32 CO-OPS & COMMUNITY

38 NEWSLINE

p. 28

ON THE COVER: By employing talented artists, most notably

Norman Rockwell (whose “Market Day Special,” from 1927, is seen

here), Sun-Maid helped boost the popularity of raisins as a cooking

ingredient and snack. On the co-op’s 100th anniversary, we look back

at some milestone marketing achievements. See page 14.

p. 22
Editor’s note: Lyn Millhiser, management and program analyst with the Cooperative

Programs of USDA Rural Development, and Jim Henry, president of Keystone Beef

Marketing Network, contributed to this article.

early 200,000 beef calves are raised each year on more than 12,000

farms in Pennsylvania, yielding gross receipts that top $600 million.

That makes beef the state’s second most valuable agricultural

commodity (dairy ranks first). 

About 96 percent of the state’s beef is produced on small family

farms that average fewer than 50 head. These producers are highly dependent on

income from the sale of their livestock, but the small scale of their operations hurts

their profitability in an industry that increasingly buys calves only in large quantities. 

Pennsylvania’s family farms have traditionally sold beef calves in small lots of about

10 head, usually through the state’s 31 licensed auction barns or buying stations.

Large cattle backgrounders (see sidebar, page 7), however, prefer to buy 500-pound

calves in 90-head truckloads. As a result, Pennsylvania cattle producers receive an

4 July/August 2013 / Rural Cooperatives

N

Pennsylvania

Bred and Fed

Keystone Beef’s aggregation and marketing

boosts income for small-scale cattle producers
average of $100 to $150 less per head

than do beef producers in states with

larger cattle operations and/or an

infrastructure that supports produceraggregated marketing and sales. 

The lost income is often reaped by

dealers who buy calves from these small

farms, then aggregate them, capturing

higher prices by offering the larger

volumes sought by backgrounders,

many of which are based out of state.

Keystone Beef helping 

small producers

Helping small producers address this

market imbalance is the Keystone Beef

Marketing Network (KBMN), formed

in 2010. It is not only helping

producers aggregate and market their

cattle jointly to boost their income, but

also to realize the value added that

comes from marketing “natural” and

“local” beef.

Jim Henry, a long-time Pennsylvania

cattleman and a co-founder of KBMN,

says the lack of aggregation of small lots

of cattle has resulted in a “highly

fractured market” that has hurt

producers in the Keystone state. “With

more than 50 percent of Pennsylvania

calves currently exported to

backgrounders in other states,

individual producer sales to dealers not

only reduces producer income...but

also dilutes the remaining availability of

‘Pennsylvania bred and fed’ cattle to

meet local and regional market

demands at premium pricing,” Henry

says. 

Increasing consumer interest in food

safety and knowing the source of their

food is expanding demand for locally

grown and all-natural beef products.

KBMN is addressing this demand by

marketing its members calves as

“Pennsylvania bred and fed” — cattle

born, raised and harvested in

Pennsylvania by farmers who adhere to

their association’s quality-assurance

protocols, including traceability to the

farm that produced the beef. 

Developing a value-added

supply network

To illustrate the producer-based

aggregation and marketing deficiency in

Pennsylvania, Henry and fellow

cattleman John Sargent presented

multi-year statistics of calf sales from

three livestock auction barns to the

Rural Cooperatives / July/August 2013 5

“Our cattle are fed a grass-only diet, from birth to harvest,” says “Uncle” Bob Boyce. He and his wife, Kate, raise Black Angus beef cattle (also

seen on opposite page) near Carlisle, Pa. Bob Boyce is board secretary for the Keystone Beef Marketing Network (KBMN). Photos courtesy KBMN. 
6 July/August 2013 / Rural Cooperatives

Pennsylvania Department of

Agriculture (PDA) in March 2010.

Their data documented substantial loss

of producer income under the current

marketing system. Convinced of the

need for — and the benefits to be

derived from — aggregated beef

marketing and sales, the PDA awarded

a $115,000 two-year grant to help

launch an effort to promote greater use

of cattle aggregation and sales

coordination. 

This funding spurred Henry and

Sargent to co-found KBMN in New

Bethlehem, Pa. KBMN is a nonprofit

agricultural producer group legally

formed in June 2010. It operates with a

volunteer board of directors that is

entirely comprised of Pennsylvania

cattle producers. KBMN’s primary

purpose is to coordinate statewide cattle

programs to enhance Pennsylvania

cattle producers’ profitability through

aggregated marketing and sales of

“Pennsylvania bred and fed” beef stock. 

Current inventory management

requires sales to both local and regional

markets, but KBMN’s mission includes

a special emphasis to develop the cattle

backgrounder industry in Pennsylvania

as a key component in the production

cycle. The ultimate goal is to provide

Pennsylvania beef products to

Pennsylvania retailers, while keeping

family farmers in business. 

After using PDA’s grant to launch

KBMN, discussions ensued with United

Producers Inc. (UPI) in Columbus,

Ohio, a large farmer-owned and

operated livestock-marketing

cooperative. In addition to livestock

marketing, UPI provides financial and

risk management services to agricultural

communities in Kentucky, Illinois,

Indiana, Michigan, Missouri and Ohio.

Pennsylvania can now be added to that

list of states served, because the

discussions resulted in KBMN entering

into a management contract with UPI. 

Ohio co-op performs key

functions for Keystone

UPI, which handles about 3 million

head of livestock annually for 35,000

Pennsylvania 

cow/calf producers Stocker/

backgrounders

Feedlots 

KBMN for local marketing

and aggregation services

UPI regional marketing,interim

financing, risk management services 

Four aggregation facilities 

in Pennsylvania

Harvesters

Transportation /distribution facilities

Local and regional retail outlets

Consumers

Graphic by Stephen Thompson

Beef supply chain roles
Rural Cooperatives / July/August 2013 7

members, is a critically important

partner in the KBMN-organized supply

chain. UPI performs many key

functions, including: 

• maintains custodial financial accounts

to facilitate sales to backgrounders

and feedlots; 

• provides short-term financing of

operational costs for active inventory

management, including sales to

feedlots, pre-conditioning (such as

vaccinations), acclimating weaned

calves to dry feed environments, and

castrations; 

• provides regulatory oversight for

compliance with the Packers and

Stockyards Act; 

• provides risk management services;

and

• provides administration and payroll

services for all of KBMN’s marketing

and sales activities. 

Working together, UPI and KBMN

facilitate the collection of calves into

consolidated loads, purchase and sell

cattle in local and regional markets, and

develop in-state infrastructure for

increased local sales, which reduces

transportation costs, and additional

premiums. They also conduct

competitive analysis or bidding and

price discovery before cattle leave the

farm and define and administer

protocols to optimize value and increase

revenue for producers. 

With KBMN at the helm to

represent “Pennsylvania bred and fed”

cattle producers, its farmer-members

are now treated as strategic partners in

the marketing process, not as

“interchangeable input suppliers.”

Producers participate fully in valuechain decisions to optimize their

collective interests. Prices are

negotiated based on production and

transaction costs, plus a reasonable

margin or increase in value-added

derived revenue that is returned to the

cattle producers. 

Adding value to increase

producer revenue

Aggregation alone adds $100 to $150

per animal when sold as a weaned calf

or yearling, Henry estimates. By

marketing “locally grown beef,”

consistent with USDA’s Know Your

Farmer, Know Your Food effort, feedlot

producers can average an additional $60

per carcass, with $20 each going to the

cow/calf producer and the

backgrounder. 

During the aggregation process,

cow-calf producers must vaccinate their

animals to reduce health risks to the

calf. Healthy animals not requiring

antibiotic treatment or growth

stimulants qualify as “naturally” reared

beef. Market premiums average $90 per

head for “natural” cattle, with shared

premiums negotiated between the calf

producer, backgrounder, and feedlot.

Additional savings result from

reduced transportation costs when

cattle remain within Pennsylvania. By

selling cattle locally, “shrinkage”

(weight loss) during shipping is

reduced, freight costs are reduced, and

auction barn sale expenses are reduced

or eliminated, adding another $50-$75

per head. 

KBMN says its program is thus

helping producers realize up to an

additional $315 per head, based on a

1,200-pound finished animal grading

“choice.” All “Pennsylvania bred and

fed” animals wear an identifying ear tag

throughout the supply chain process.

The ear tag shows its “KBMN

identity,” and an affidavit of source

continued on page 46

(1) Cow/Calf Producers: Raise calves from birth to 500 pounds, which

typically takes 7-8 months. USDA estimates that Pennsylvania’s beef cow

population, including heifers, is 200,000 head and slowly trending upward.

These cattle operations are predominantly in western Pennsylvania, with

other key producers in north central counties and in the extreme southeast

corner of the state. 

(2) Stockers/Backgrounders: Are the primary customer for weaned calves

of 400 to 600 pounds, which the backgrounder then grows to 800-900 pound

yearlings ready for finishing (or fattening). Backgrounder facilities are

limited in Pennsylvania (there are 25 currently that market 6,400 head per

year). More than 50 percent of the beef calves are sold out of state because

of the lack of backgrounder operations. 

(3) Feedlot: The final production step, where animals are finished on highenergy rations for 2-4 months, until they reach about 1,200-1,300 pounds and

are ready for processing (average age of 18-20 months). Pennsylvania has

327 feedlots with a capacity of at least 100 head; total feedlot capacity is

160,000 head annually. Feedlots representing about 40 percent of the state’s

capacity are concentrated in Lancaster, York and Lebanon counties.

(4) Harvesters: Perform either “semi-processing” for retailers, who then

complete further processing, or the harvester may perform custom

processing to produce finished beef cuts for the retail trade. Two major

custom processors operate in Pennsylvania, both of which also provide

logistics for storage and distribution of finished beef products. n

Key beef industry sectors
8 July/August 2013 / Rural Cooperatives

The cause for celebration in early

May at Louis Escobar’s Middle Road

Farm, near Portsmouth, R.I., was to

mark the latest endeavor of the Rhode

Island Dairy Farms Cooperative: the

launch of Rhody Fresh Butterkase

cheese, a hand-crafted, German-style

soft cheese. The cheese is being custom

made for the co-op at Narragansett

Creamery, using milk from Rhody

Fresh member dairy farms.

USDA Rural Development is

helping the co-op launch its new

product with a Value-Added Producer

Grant (VAPG) for $150,000. In 2009,

the co-op also received a $32,000

VAPG to develop a plan for the

expansion of operations for cheese

production. 

About 2,500 miles away, a co-op

owned by a dozen plantain growers in

Puerto Rico was also celebrating its

award of a $300,000 VAPG from

USDA. The funds will help the co-op

expand its customer base and reach new

markets. The Asociación de

Productores de Farináceos del Este,

near the island’s southern municipality

of Yabucoa, will now be able to

he glasses were held high in

a celebratory toast, then

tipped back to deliver a taste of farmfresh, home-grown Rhode Island

milk. There were smiles all around

from state and local political leaders,

dairy farmers, guests and media who

had gathered to celebrate the latest

milestone in the life of a small

farmers’ co-op formed nine years ago

to help save the state’s few remaining

dairy farms.

From Rhode Island to Puerto Rico 

Co-ops ‘adding value’ with USDA support

T
Rural Cooperatives / July/August 2013 9

significantly expand its acreage and

production.

110 VAPGs awarded

The Rhode Island and Puerto Rico

co-ops received just two of the 110

VAPGs worth a total of $16.8 million

that USDA Rural Development

awarded in May to agricultural

producers nationwide, including nine

farmer co-ops and a number of quasi

co-op groups. 

In total, 269 eligible applications

competed for VAPG funding. Winning

a VAPG is a highly competitive process.

Applications are scored on a number of

factors, such as: (1) the technological

feasibility and operational efficiency of

the project; (2) projected economic

sustainability and profitability of the

project; (3) qualifications and

experience of the project personnel; (4)

demonstrated commitments and

support from agricultural producers,

end-users and strategic third-parties

engaged in the project; and (5)

quantitative and narrative descriptions

in the work plan and budget relating to

eligible activities and sources and uses

of all funds. 

“This support will benefit rural

businesses and the communities where

the recipients are located,” Agriculture

Secretary Tom Vilsack said when

announcing the awards. “These awards

also will advance USDA’s goals to

develop a bio-based economy and

support local and regional food

systems.” 

The goal of the VAPG program is to

help agricultural producers enter into

value-added activities, including

processing and marketing activities for

bio-based, value-added products,

thereby increasing income for

producers and producer co-ops and

enhancing rural economies. For more

details about the VAPG program —

including deadlines to apply for next

year’s grants — and to see a list of this

year’s recipients, visit: http://www.rur

dev.usda.gov/BCP_VAPG.html.

Co-op’s milk a hit 

with consumers

The Rhode Island Dairy Farms

Cooperative was formed in 2004 by five

dairy farmers who were determined to

maintain their way of life in the face of

the urban sprawl and development that

had greatly reduced the ranks of dairy

farmers. The co-op estimates there are

only about 20 dairy farms left in the

state, down from about 80 as recently as

1977. 

“An aging farm population and the

encroachment of urban development

into rural areas” took its toll, the co-op

says on its website. “Here, in Rhode

Island, issues surrounding the price of

milk and high land values are forcing

producers out of business,” it continues.

“The demand for subdivisions has

raised the price of farmland so high in

taxes that in many of the communities it

has taken a lot of the farmers out.”

Today, the co-op includes eight dairy

farmers who have been successful in

saving their farms by marketing their

own Rhody Fresh brand milk. The coop’s milk has proven popular with

consumers in Rhode Island who not

only find it delicious, but who also

support the ideas of the local foods

movement and want to preserve the

state’s farming culture and open spaces.

Within the first six months of launching

Rhody Fresh milk, the co-op met its

three-year projected sales goal. In 2007

alone, the co-op saw sales jump 30

Facing page (top): U.S. Senator Jack Reed of Rhode Island (middle) joins Rhody Fresh member

Louis Escobar (right) and another dairy farmer in drinking a milk toast to the co-op’s new cheese

offering. Facing page (lower): Escobar does media interviews during a ceremony to launch

Rhody Fresh Butterkase cheese. Below: Co-op cheese was available for sampling at the event.

Photos courtesy Rhody Fresh
10 July/August 2013 / Rural Cooperatives

percent.

“This grant will be used not only to

create awareness of new Rhody Fresh

products, but to help sustain a vibrant

agriculture industry in this state —

especially the local farm-to-table

initiatives,” said Steve Volpe, chief

operating officer of Rhody Fresh.

“W hen you bring home Rhody Fresh,

you’re bringing home a staple and

you’re preserving open space,” added

co-op member Escobar.

“I am pleased Rhody Fresh won this

competitive federal grant to help

increase production and promote the

sale of fresh, local dairy products that

are made right here in Rhode Island,”

said U.S. Senator Jack Reed of Rhode

Island. “Buying from Rhode Island

farmers has important environmental,

economic and health benefits. It also

helps preserve open space and active

farmland. This federal grant will help

ensure our local dairy farmers can

compete and earn a living by producing

fresh, local products.” 

Co-op expanding

Puerto Rico market 

The VAPG awarded to the

Asociación de Productores de

Farináceos del Este should help

increase the co-op’s annual sales of

plantains from 580,000 to 850,000

pounds. This will also involve

expanding farming from 23 to 34 acres. 

The co-op members harvest green

plantains and deliver them to a packing

plant where the crop is sorted, cleaned

(by submerging the fruit in a water and

chloride solution) and dried. After

drying, the fruit is packaged and placed

in “carton cages.” Some of the fruit is

peeled and vacuum-packed in different

sizes for the retail market. 

More than 85 percent of food sold in

Puerto Rico is shipped in from outside

the island. The co-op will be addressing

the desire for more locally produced

food by marketing its fruit as a “100

percent locally produced” Puerto Rican

food product. This value-added strategy

includes the use of a identity-preserved

marketing system that will reinforce the

trust of customers in the product, based

on their ability to know what farms

grew the food and how it was grown. 

The larger customer base and new

markets established within Puerto Rico

should greatly boost revenue for the

farmers, helping to transform their coop into a stronger, sustainable business,

according to José Otero-García, USDA

Rural Development state director for

Puerto Rico. 

Indian tribes now 

eligible for VAPGs 

This year marks the first time that

tribal entities have received funding

through the VAPG program, and a

number of Native American applicants

received support for their projects. For

example, the Ute Mountain Ute Tribe

Farm & Ranch Enterprise of Colorado

will receive about $92,000 to bring a

cornmeal product to market. This grant

will help the tribe market and distribute

the Indian cornmeal products and

secure customers. 

The Ute Mountain Farm & Ranch

Enterprise cultivates 7,600 acres of

farmland. Lack of irrigation water is

pushing the co-op to add value to the

crop, since water availability limits the

amount of food that can be grown.

“Our emphasis has been on production

agriculture to date; now we want to

vertically integrate,” said Paul Evans,

Farm & Ranch’s general manager,

according to an article in the Cortez

(Colorado) Journal. “We want to go up

[the value chain], because we don’t have

any more water. The only way we can

generate more revenue is to value-add.”

Deshler Farmers Elevator Co. in

Ohio received a $65,000 VAPG. The

co-op will use the grant to conduct a

feasibility study to determine the

profitability of building a containerloading facility used to export nonGMO (genetically modified organisms)

This plantain grow ers’ cooperative in Puerto Rico w ill use a Value A dded Producer Grant from

USDA to help boost its annual production from 580,000 to 850,000 pounds of fruit. Photo courtesy

A sociación de Productores de Farináceos del Este 

continued on page 44
Rural Cooperatives / July/August 2013 11

By Joe Rinehart

e-mail: joe.rinehart@dawn.coop

Editor’s note: Rinehart is rural

technical assistance program coordinator

and peer advisor for the Democracy at

Work Network (DAWN), which assists in

the development of worker-owned

cooperatives. 

hen Dan Rosenberg

and Addie Holland

founded Real Pickles in

Greenfield, Mass., in

2001, it was with the

intention of creating a different kind of

food processor. They aimed to create a

business that was not only financially

successful, but was also deeply rooted in

the local community and that moved

large enough volumes of vegetables to

have a real beneficial impact on the

local economy. In doing so, they also

wanted to ensure that the volume of

crop being handled did not come at the

expense of the environment. 

“We wanted to make a contribution

to building a regionally oriented food

system by running a small business

based on organic and sustainable

agriculture,” Holland said.

Today, 12 years after they founded it,

Real Pickles stands as a growing,

profitable food company that helped to

pioneer the naturally fermented food

trend and which has ridden a “wave of

success” as consumer demand has

increased for such foods. 

And while the business continues to

fulfill the original mission of its

founders, it no longer belongs to

Holland and Rosenberg. It belongs to a

worker-owned cooperative. 

When Rosenberg and Holland

decided it was time to free up more

time in their lives by expanding the

ownership, they concluded that a

worker-owned cooperative could best

W

A ‘Real Pickle’for workers

Food processor re-forms as worker co-op 

to maintain role in local food system

Real Pickles, now a worker-owned cooperative, is experiencing annual sales growth of about 25 percent. It offers 11 naturally fermented foods in its

product line. Photos courtesy Real Pickles
12 July/August 2013 / Rural Cooperatives

maintain the business as a keystone of

the local food economy while

continuing its reputation for excellence.

Giving employees an ownership stake in

the business would provide a strong

incentive to help ensure that its

outstanding workforce would stay with

Real Pickles.

They were able to leverage the local

and regional connections they had

forged over the years and to use

innovative financing mechanisms to

raise funds needed to sell the business

to its workers.

Naturally fermented 

product line 

Real Pickles buys all of its vegetables

from organic sources, most within 40

miles of its home base. It sells only in

the Northeast, creating strong local

connections across the region. It

purchases 250,000 pounds of local

produce every year, most of it from six

local farms with which the co-op enters

into pre-purchase agreements in late

winter. This allows the farmers to plan

for the year ahead and secure needed

financing. 

Any crop shortfalls, usually due to

weather, are made up from other farms

in the Real Pickles’ sales region: New

England, New York, New Jersey and

Pennsylvania.

Currently, Real Pickles manufactures

11 naturally fermented food products

that “would not have been out of place

on your grandmother’s table,” says

Rosenberg. Pickled cucumbers and

beets join Korean style kimchi, German

sauerkraut and Ukrainian beet kavas

among the co-op’s delicious food

offerings. 

The co-op’s production process relies

on LactoBacilli bacteria and brine,

rather than vinegar, to produce the acid

necessary for pickling. All Real Pickles

Real Pickles buys about 250,000 pounds of local, organic produce – grown within 40 miles of its

plant in Greenfield, Mass. – every year.

“A sale to employees helps guarantee

the owners’ legacy in the community.”
Rural Cooperatives / July/August 2013 13

products are unpasteurized. 

Real Pickles products are available in

most natural food stores in its

marketing region, ranging from small

food cooperatives to the Whole Foods

grocery chain. The co-op’s foods are

also sold at farm stands and farmers

markets across the Pioneer Valley

region of Massachusetts, where the

company is located. 

With sales growing at a rate of 25

percent per year, Real Pickles has

become an anchor for the rapidly

expanding Pioneer Valley local food

economy.

Co-op retains founding mission 

Once Holland and Rosenberg

decided to sell the business, they looked

at various ownership scenarios. After

careful consideration, “a worker-owned

cooperative felt like the most promising

option,” Rosenberg says. A worker coop, they reasoned, would allow the

worker-owners to include the business’

mission in the co-op by-laws while also

providing an incentive “for the great

staff to stick around.”

According to Margret Christie,

executive director of Pioneer Valley’s

Communities Involved in Sustainable

Agriculture, the question of mission

retention is a common problem in local

food ventures. “When the owners are

ready to do something else — or just to

shoulder a little bit less of the burden of

keeping the business going — how can

their commitment to regional sourcing

be maintained? Real Pickles’ decision to

form a worker co-op [offers] one

answer to this important question,” says

Christie.

It is an answer that is gaining

momentum in rural areas, according to

the U.S. Federation of Worker

Cooperatives. Worker co-ops allow

retiring business owners to realize the

value of their company by selling it to

their employees while simultaneously

helping to retain the positive impact

(jobs created, local taxes paid, etc.) of a

business on the local economy. 

Selling to employees can also avoid

the possibility that a competitor will

buy a business and then shut it down,

its primary goal having simply been the

removal of a competitor. A sale to

employees helps guarantee the owners’

legacy in the community. 

The business conversion process to a

cooperative for Real Pickles included

five of the company’s 12 workers

(including Rosenberg and Holland) who

worked to define a new ownership and

governance structure for the business.

This entailed creating a board of

directors. Holland and Rosenberg

stayed on as part of the management

team for several years. 

The owners-to-be reaffirmed the

long-term vision for the company,

planned for new growth and re-worked

the business plan to ensure long-term

financial stability. They also set out

terms by which more of the company’s

employees could join as owners. To

date, two more workers are working

towards becoming co-op owners,

boosting the ranks of the workerowners to seven.

The transfer to co-op ownership

involved the five new worker-owners,

each of whom invested $6,000 to

capitalize the new cooperative

corporation. They also had to purchase

the assets of the previous partnership

and secure working capital. 

Cutting Edge financing

To raise funds for the purchase, the

new owners turned to the community

via a sale of preferred stock. The stock

plan was developed with the help of

Cutting Edge Capital, an Oakland,

Calif., financial and law firm. 

According to Jenny Kassen of

Cutting Edge, these types of stock

offerings are increasingly popular with

local food and other businesses that are

seeking funds in a tight credit market.

They allow the public to invest directly

in a company. The firm must set a

minimum individual investment (often

$1,000, but sometimes as low as $100),

set a maximum value of stock to sell and

register in each state in which it plans

to sell stock.

In the case of Real Pickles, the goal

was to sell $500,000 in stock in

Massachusetts and Vermont, with a

minimum investment of $2,500. It was

hoped this could be accomplished in 20

weeks. 

Thanks to a well-planned marketing

campaign and their widely respected

brand name, the co-op was able to

attract the 80 investors necessary in just

eight weeks. The stock purchases

ranged from the minimum $2,500 to a

$25,000 investment from a local food

cooperative and a $50,000 investment

from a local foundation. 

The preferred stock is nontransferable, except to the cooperative,

and does not afford the holder voting

rights in the company’s governance.

Real Pickles says it expects to pay a 4

percent dividend per year. If all goes

according to plan, in five years the coop hopes to re-purchase all of the

outstanding stock. 

On May 9, Real Pickles Cooperative

announced it had finalized the purchase

of the previous company, closing one

chapter in its history and, it hopes,

ensuring its growth and success for

years to come.

For more information about the coop, visit: www.realpickles.com. For

information on converting an existing

business to a worker cooperative via a

direct public offering, visit:

www.usworker.coop. n
14 July/August 2013 /

Loraine Collett was the original Sun-Maid raisin girl, who modeled for a painting

in 1915 that became one of the nation’s most iconic food logos. Photos and

artwork courtesy Sun-Maid Growers of California
Rural Cooperatives / July/August 2013 15

ne day in 1974, Lorraine Collett slid open a dresser drawer and

removed the carefully folded, red cloth bonnet she had first worn

in 1915. More than just a keepsake from her youth, it was the

sunbonnet she had worn while modeling as the original Sun-Maid raisin girl,

a painting of which would become the brand logo for Sun-Maid raisins. If

Helen of Troy was the face that launched a thousand ships, hers was the face

that helped launch Sun-Maid on its voyage to success as one of America’s

most recognized food brands. 

After so many decades, the once bright red sunbonnet had started to fade to

pink, but that made it no less precious to Collett. It must have been an

The Face of the ‘Franchise’ 

Brand development key to Sun-Maid’s 

sweet century as raisin industry leader

Editor’s note: This article is based on excerpts, adapted by Editor Dan Campbell, from Sun-Maid’s 100th anniversary

book. For a free download of the entire book, visit: www.sunmaid.com.

O
16 July/August 2013 / Rural Cooperatives

In celebration of Sun-Maid’s 75th

anniversary, the treasured original

sunbonnet was donated to the

Smithsonian Institution in Washington,

D.C., on January 26, 1988, in the

presence of then U.S. Secretary of

Agriculture Richard Lyng. 

The Sun-Maid raisin girl is a key

part of an inspirational marketing story

that shows how a group of growers,

organized in a cooperative, can develop

an industry-leading brand recognized

around the globe. Few, if any, food

companies have ever done a better job

of brand development and marketing

than this farmer-owned cooperative,

located in the heart of California’s

Central Valley. Through television,

print media, websites, social networks,

promotional products and recipe books,

the Sun-Maid line of products

continues to reach out to consumers

worldwide.

1915 Expo helps 

launch Sun-Maid

Raisins sold by the California

Associated Raisin Company — as the

growers’ co-op was originally known —

were first packaged under the Bear

brand trademark, a reference to the

state’s Bear Flag. In 1914, E.A. Berg,

advertising manager of the new co-op,

coined “Sun-Maid” as the co-op’s brand

name. It was inspired by the natural,

sun-dried raisin process, with Berg

adapting the “made in the sun” slogan

to the Sun-Maid brand.

In 1915, San Francisco hosted the

Panama Pacific International

Exposition, which celebrated the

completion of the Panama Canal and

the host city’s recovery efforts following

the devastating earthquake and fire of

1906. The Expo would prove to be a

seminal event in the history of SunMaid. Attractions there showcased the

greatest achievements of the day in the

arts, transportation — including a

working model of the Panama Canal —

machinery and agriculture. 

Sun-Maid had its own exhibit space

during the nine-month-long Expo,

which helped launch the brand to

worldwide recognition. Loraine Collett

attended the Expo as one of a number

of “Sun-Maid girls” who represented

the recently formed co-op. They

handed out raisin samples while

wearing white blouses with blue piping

and (initially) blue sunbonnets. 

The Exposition attracted visitors

from around the world, many of whom

were sampling raisins for the first time.

Visitors could also view three

dimensional scenes of raisin production

in the San Joaquin Valley through a

stereomotograph, a device that

projected three-foot-square images.

“It was only after we returned to

Fresno that Sun-Maid executive Leroy

Payne saw me wearing my mother’s red

bonnet in my backyard that the bonnet

color was changed from blue to red,”

emotional decision when she graciously presented it to leaders of the Sun-Maid farmers’

cooperative during a small ceremony in 1974. 

When she first posed for the original watercolor painting, little did Collett or anyone at

Sun-Maid realize that the artwork would become one of the most widely recognized

product logos in history — a brand that would become synonymous with one of nature’s

sweetest, healthiest treats: the California raisin. 

Early Sun-Maid ads, such as this, helped educate consumers about how raisins were produced

and the nutritional profile of the dried fruit. 
Rural Cooperatives / July/August 2013 17

Collett would later recall. W hy the

color change? “Because red reflected

the color of the sun better.” Payne also

asked her to model for possible use on

the co-op’s new logo. 

Back in San Francisco, Collett posed

every morning for two weeks at the

Post Street studio of artist Fanny

Scafford, then would spend the rest of

the day working the Expo, where the

Sun-Maid girls were by then all wearing

red bonnets. The artist experimented

with a variety of positions and props,

finally settling on the iconic pose of

Collett holding an overflowing tray of

grapes with a glowing sunburst in the

background.

Collett would go on to do further

modeling and appeared in the 1916

Cecil B. DeMille film Trail of the

Lonesome Pine. Lorraine Collett

Petersen, as she was known after

marrying, later became a nurse and,

until her death at the age of 90,

continued to make special appearances

as the original Sun-Maid girl.

From Raisin Train 

to Rockw ell art

The co-op’s first major advertising

campaign was created in 1914 when a

train loaded with 1,250 tons of raisins

left Fresno for Chicago, festooned with

signs reading “Raisins Grown by 6,000

California Growers.” For 2,000 miles,

the Raisin Train piqued the country’s

interest in both raisins and California.

Fresno held its first Raisin Day

Parade on April 30, 1909. The event

was a huge success, drawing 100,000

people. Visitors enjoyed contests, races,

performances and the parade, which

boasted float entries from community

groups, businesses, townships and

counties as far away as Los Angeles.

The parade became an annual event.

The cooperative first hired a national

sales team in 1915 to market raisins

directly to grocers. This effort — in

conjunction with the introduction of

the new Sun-Maid brand, print

advertisements and recipe booklets —

significantly increased America’s raisin

consumption.

Sun-Maid ads in national

publications touted the sweet, simple

purity of the raisin and its health

benefits. Recipes for raisin bread and

raisin pies promoted home baking and

prompted people to ask for these

products at their local bakeries, which

in turn increased sales to wholesale

buyers.

Sun-Maid’s advertisements have

employed the talents of many skilled

artists and writers over the years, but

none were more notable than beloved

painter of American life Norman

Rockwell, the greatest commercial

illustrator of his day. During the 1920s,

Rockwell created a series of

advertisements which illustrated SunMaid’s integral place in the traditional

e been

sting of

ell

w s that

l e first

s

0 tons of

r go,

f Grow n

Clockw ise from top: Great strides hav

made in advancing mechanized harve

grapes for raisins; this Norman Rockw

painting, produced for the co-op, sho

ove of raisins is inter-generational; th

major raisin advertising campaign w a

created w hen a train loaded w ith 1,25

aisins traveled from Fresno to Chica

estooned w ith signs reading “Raisins

by 6,000 California Grow ers.” 
18 July/August 2013 / Rural Cooperatives

American household. These

illustrations appeared in the leading

magazines of the time, including the

Saturday Evening Post, Good Housekeeping

and Ladies’ Home Journal. 

A celebration to mark the 100th

anniversary of Rockwell’s birth was held

from 1994-1995 at the Norman

Rockwell Museum in Stockbridge,

Mass. During the celebration, two

original oil paintings

commissioned by Sun-Maid

— titled Market Day Special

and Fruit of the Vine — were

loaned to the museum, where

they remain today.

In a 1967 letter he sent to

Sun-Maid, Rockwell

explained that the elderly

woman in “Fruit of the

Vine,” painted in 1926, was

actually the mother of his

first wife. Rockwell often

used family members and

people from his community

as subjects in his work.

The More Raisins the Better

the Pudding was painted by

Rockwell in the 1920s and

used in a Saturday Evening

Post advertisement and poster

that helped to promote raisin

pudding in 40,000 grocery

stores nationwide. The most

widely circulated publication

of its time, the Saturday

Evening Post appealed to America with

its high-quality art, short stories, essays,

serialized novels, jokes, cartoons and

poetry. 

Another favorite publication used to

showcase raisins was the Ladies’ Home

Journal, launched in 1883 to chronicle

American life from a woman’s

perspective. It covered family, marriage,

work, home and beauty issues. SunMaid targeted this audience by

promoting healthy, sweet raisins for

home cooking.

Raisins in popular culture

Sun-Maid and California raisins have

been embraced in numerous ways in

modern “pop culture.” Sun-Maid raisins

in the red and yellow boxes are seen

everywhere, from children’s books and

television programs to magazines and

video games. They have appeared on

early-morning and late-night talk shows

and were even featured in one of

MasterCard’s “Priceless” series of TV

commercials, in which raisins are

mentioned as one of the necessary items

for building “the best snowman on the

block.”

Some other examples of raisins in

pop culture include:

• The California Dancing Raisins were

introduced in TV commercials in 1986

by the California Raisin

Advisory Board. Brought to life

through the art of

“claymation,” these talented

raisins sang and danced to the

hit song “I Heard It Through

the Grapevine,” becoming a

huge media smash. Their

images appeared on

lunchboxes, notebooks,

clothing, posters, toys and

video games, earning the raisin

association considerable

licensing royalties. The

dancing raisins even appeared

on the cover of humor

magazine Mad, one raisin

bearing the face of the

magazine’s “mascot,” Alfred E.

Neuman.

• In 1987, children’s TV show

Sesame Street aired an animated

segment evoking the Sun-Maid

brand by featuring a woman in

a red bonnet. Titled “Snacks

on Parade,” the cartoon

explained Sun-Maid’s process of sundrying raisins, packaging them in red

and yellow boxes and sending them out

for the rest of the world to enjoy.

• In the 1990s, the “Sweet by Nature”

marketing campaign, featuring adorable

children as raisin spokespersons,

became one of the co-op’s best-loved ad

campaigns.

• Sun-Maid celebrated Yosemite

Few food companies have done a better job

of brand development and marketing than this farmer-owned co-op.

The California Dancing Raisins, part of an

industry-wide promotional effort, became

something of a pop-culture sensation, even

winding up (somewhat adapted!) on the

cover of Mad magazine.
Rural Cooperatives / July/August 2013 19

n the early days of the raisin industry,

Martin Theodore Kearney proposed

pooling resources to improve raisin

marketing and distribution. His ideas and

leadership led to his election as president

of the California Raisin Growers’ Association, which was

formed in 1895 and incorporated in 1899. After initial

success, difficult years followed, leading to the

association’s demise in late 1905.

Several early attempts to organize growers failed, in part

because of the rapid growth of the raisin industry. Today’s

Sun-Maid (initially known as the California Associated

Raisin Co.) was originally formed in 1912 in an effort by

growers to combat low prices and fluctuating demand.

They also hoped the co-op could provide better economies

of scale in processing and marketing and help create a

more stable raisin market. 

For raisin growers, the advantages of organizing as a

cooperative included: having the co-op serve as a reliable

and fair crop buyer; giving growers control of their product,

from field to end user; ensuring that growers had a financial

interest in keeping customers satisfied; helping to “put a

face to family farming” and adding value to their product by

developing a branded marketing strategy. 

By 1918, the co-op’s booming raisin business needed a

new home, so Sun-Maid opened a state-of-the-art factory

near downtown Fresno. Upon its opening, “Sun-Maid City”

was dubbed the “finest factory building west of Detroit.”

By the early 1920s, the California Associated Raisin Co.’s

membership comprised 85 percent of the state’s raisin

growers. The organization changed its name to Sun-Maid

Raisin Growers of California in 1922 to identify more closely

with its nationally recognized brand.

The co-op’s current processing plant in Kingsburg, 20

miles south of Fresno, was opened in 1964 and was

recognized as one of America’s top new plants by Factory

Magazine. The 640,000-square-foot, state-of-the-art facility

sits on more than 100 acres. The facility is continuously

improved to meet the demand of customers around the

world.

Innovations in packaging have also helped spread the

popularity of raisins. The freshness of Sun-Maid raisins

became the focus of new packaging in 1980 when the

“carton can” was introduced. Its airtight lid keeps raisins

plump and moist, and the larger opening makes it more

consumer friendly. The package was an instant hit with

consumers and, with some modifications, remains in use

today. n

I

Co-op crucial to industry’s success

The Sun-Maid plant in Kingsburg, Calif.
20 July/August 2013 / Rural Cooperatives

t would be hard for a raisin grower to find

a more perfect place than California’s San

Joaquin Valley, home of one of the state’s

many unique micro-climates. The central

San Joaquin Valley enjoys optimum

weather patterns for grape/raisin production. Its welldrained, sandy-loam soil dries quickly, and the hot, dry

Septembers allow drying grapes to transform into sweet

raisins.

The mountains surrounding the Valley create a basin of

fog during the winter months, allowing fruit crops to rest in

dormancy and save their energy for vigorous spring growth.

The summer’s dry, sunny climate and fertile soil is tailormade for dried fruit production. 

The California raisin industry got started in 1873, when

Francis T. Eisen planted an experimental vineyard of

Muscat grapes on 25 acres along Fancher Creek, just east

of Fresno. In 1877, raisins dried on the vine were shipped to

San Francisco, where they were sold to “fancy grocers”

and proved to be an immediate hit with shoppers. As word

spread about the high-quality raisins produced around

Fresno, more producers planted grapes and went into the

raisin business. 

Packaged raisins were shipped out of the state by 1878,

and by 1890 California had produced more than 66 million

pounds of dried fruits, including more than 45 million

pounds of raisins. By 1903, California was producing 120

million pounds of raisins a year. The large, round berries of

the Muscat grape eventually gave way to the Thompson

Seedless grape as the preferred variety for raisin

producers.

In 1890, raisin grape acreage was scattered throughout

California. Once Central California’s great potential for

producing raisins and dried fruits was realized, the area

quickly transformed from scattered small farming towns

into a top-producing agricultural region. Today, most raisin

grapes are grown within 50 miles of Sun-Maid’s Kingsburg

headquarters. 

As production increased, so did innovation, and growers,

packers and marketers of raisins and dried fruits all helped

establish their industry as a vital part of California’s

agriculture economy. California today dominates U.S.

production, producing more than 90 percent of the nation’s

raisins and dried fruits.

When it’s time for drying the grapes into raisins, both the

sun and the heated soil work together like an oven to

transform the grapes into raisins. Solar energy dries about

2.5 billion pounds of fresh grapes, which saves the

equivalent of 600 trillion British thermal units (BTU) of

natural gas each year. California’s 548,000 miles of grape

vines could circle the Earth 22 times.

At the Sun-Maid plant, water used in the raisin-cleaning

process is reused to irrigate forage for cattle. Even capstems and stems removed during raisin processing are sold

for cattle feed. Raisin packages are shipped in corrugated

cartons made from trees grown in sustainable forests,

marked with the Sustainable Forestry

Initiative label. Recycled material is used

in outer packaging, and all inks are waterbased. n

San Joaquin Valley: Nirvana for raisins

The re-sealable raisin “carton-can” was a big packaging advance that helped

consumers keep raisins fresh and moist every time they wanted to sprinkle some on

cereal, salads, oatmeal, etc. 

I
Rural Cooperatives / July/August 2013 21

National Park’s centennial anniversary

in 1990 with advertising that showcased

Ansel Adams’ 1960 photograph “Moon

and Half Dome.” Sun-Maid was the first

food company to receive permission

from the Ansel Adams Publishing

Rights Trust to use an Adams’ image

for advertising and promotion. 

• In 2007, the 400th episode of The

Simpsons animated TV show featured

Marge Simpson baking her famous

raisin sponge cake for the Springfield

Elementary School bake sale. Finding

her carton of “Sun-Made” raisins

empty, Marge went to the grocery

store, where she fought with Helen

Lovejoy over the last box of raisins on

the shelf.

• In its annual “America’s Best” issue in

2007, Reader’s Digest named the SunMaid raisin girl “America’s Best Lasting

Logo.”

• Also in 2007, a children’s book —

Healthy Snacks with Blue! — featured

Blue, the dog from Nickelodeon’s

“Blues Clues” TV show, and her friend,

Joe, preparing a fruit salad with raisins

to share with Blue’s class as part of

“Healthy Snacks Day.”

Changing with 

the times 

In 1923, the original

image of the Sun-Maid girl

was modified for the first

time, giving her a bigger

smile, with brighter colors

and a stylized sun. This

more contemporary look

kept her in style with the

rapidly changing 1920s. 

In the mid-1950s, the

trademark was updated for

the second time. The sun

was moved off-center, intensifying the

effect of the sunshine, with the bonnet

casting a shadow across the Sun-Maid

girl’s face. 

In 1970, brighter colors and a

geometric sun modernized the logo’s

third update, with the brand name —

now printed in yellow — imparting a

warmer, sunnier feel. This Sun-Maid

girl continued into the 21st century.

In 2006, in celebration of her 90th

birthday, the Sun-Maid girl was

animated for the first time. Her 21stcentury image appeared in print, on

television and on the company’s website

to launch the new slogan: “Just Grapes

& Sunshine®.” This was accomplished

through the work of Synthespian

Studios, a Massachusetts-based

animation company. 

Launched with a full-page ad in USA

Today and on Sun-Maid’s website, the

animated Sun-Maid girl received

national attention, including articles in

the New York Times,

Chicago Tribune,

Philadelphia Inquirer, San

Francisco Chronicle and

Fresno Bee. While the

animated Sun-Maid girl helped bring

raisins into the modern age, she was not

designed to replace the traditional SunMaid logo — which has remained the

same since 1970. The logo appears on

packaging for Sun-Maid products while

the animated Sun-Maid girl appears in

television commercials, print

advertising and on the Sun-Maid

website.

Will the Sun-Maid girl be further

adapted in future years? Perhaps, but

regardless of changes in style, she will

continue to be based on the original

pose of Lorraine Collett and will

continue to symbolize the delicious,

wholesome taste of Sun-Maid raisins.

As marketing experts will admit,

without a superior product to sell, even

the best ad campaign will carry a

product only so far. Sun-Maid’s farmermembers and the warm California sun

continue to take care of that part of the

bargain. n

California’s 548,000 miles of grape vines

could circle the Earth 22 times.

The “sun maids” (seen here in 1921) made many appearances

promoting California raisins and the co-op’s popular new brand.

Marge Simpson (right) is not about to let

Helen Lovejoy buy the store’s last box of

“Sun-Made” (sic) raisins, which she

needs for her raisin sponge cake.
22 July/August 2013 / Rural Cooperatives

hat does the world most need to know

about American agriculture?

When a natural disaster devastates a

local cooperative and its community,

how does being part of an extended coop system help it recover? 

These were among the questions addressed in widely

divergent ways by winning entries in the 2013 co-op

communications contest, sponsored by the Cooperative

Communicators Association (CCA), a professional

organization of about 300 co-op communicators

dedicated to helping their co-ops through improved

communications. The dramatically different ways in

which these topics were addressed underscore the range

of communications strategies and technologies being

effectively employed by cooperatives today to keep

members, employees, customers and the general public

informed about their activities. 

Tornado coverage show excellence 

in traditional media 

To examine the recovery process following a natural

disaster, Karen Jones of GROW MARK used a

communications method that would have been familiar

to any member of CCA when it was organized 60 years

ago. She wrote about the impact of a tornado and the

recovery effort in a feature article for “Spirit” magazine,

GROW MARK’s member publication.

The early-morning tornado hit Harrisburg, Ill., last

February, destroying a Southern FS facility and causing

extensive damage to the community.

“The story was written to inform our readership

about the damage and offer a way that they could help,

but also to show the value of being part of a cooperative

system,” Jones says of the article. “Business was able to

continue immediately after the storm and during the

year-long clean-up and rebuilding process because

customers were able to draw product and services from

other Southern FS locations.”

W ithout the support of those cooperatives in the

Southern FS system, a stand-alone business would quite

likely have had to shut down following a disaster of such

magnitude, Jones noted. In awarding her account a first

place trophy for feature articles, the judges said: “W hat

a powerful story. Excellent quotes and details about

what people were doing or seeing make an impact on

the reader. Well done!”

Social media also in spotlight

W hile publications for members and employees —

most of which are still produced in hard copy, as well as

posted online — are still at the heart of most co-op

communications efforts, websites and social media are

also playing an increasingly important role for co-ops

today. 

Margaret Fogarty and Farm Credit brought home a

CCA salutes best in co-op communications

W

with Words...

A Way 

and pictures, and websites, etc.

One photo from Dairylea

Cooperative’s “A Purpose

Driven Life,” w hich w on

the first place photo

essay aw ard. A ll photos

and artw ork courtesy

Cooperative

Communicators

A ssociation and the

w inning co-ops.

s
Rural Cooperatives / July/August 2013 23

Best of Show/Photography 

Accelerated Genetics won the first place

cover and Best of Show awards in the

photography contest for its Beef Sire

Directory.

Publication 

of the Year

Publication of 

the Year went to

Tennessee Farmers

Cooperative for “All

that Matters.”

First Place Social Media

The first place social media trophy was claimed by Farm Credit

National Communications. Colorado Ag Commissioner John

Salazar even pitched in with this Facebook posting as part of

the campaign.
24 July/August 2013 / Rural Cooperatives

first place award in the social media category

for the co-op’s “Farm Credit Goes Social”

communications campaign. The effort

included a Facebook page on which short

messages were posted addressing the theme:

“What does the world need to know about

agriculture?” 

Helping attract attention to the messages

was the unusual way they were displayed.

Message posters, ranging from Colorado Agriculture

Commissioner John Salazar to an expectant mother, all

used a marking pen to write a short phrase about farming

on some portion of their body, mostly arms, hands, feet

and shoulders. 

The tech-savvy judges were duly impressed: “Great

work! I appreciate the April 3 Facebook post. It shows

you’re keeping current on pop culture and that there’s an

appreciation for fun and business at Farm Credit.” 

The judges continued: “On Twitter, the March 22 tweet is

an example of the same thing. Your YouTube channel (the

bit on consumers) shows you’re aware of the challenges

facing your customers. The blog shows nice coordination

and execution among all the social media outlets. Great

use of images of people, awareness of the season and

what’s appropriate given the time of the year. Good

integration of other sites/users information.

“It’s difficult to get to your target audience (the

agricultural community), so continue to find ways to make

your social media work relevant and accessible to them.

This isn’t an easy task, [considering that] the average

farmer is over 58 years old!”

Four competitions in one 

The CCA communications contest is comprised of four

competition areas — writing, photography, publications

and programs/projects — each of which includes about a

dozen sub-categories.

This year, the overall

contest attracted 695

entries, an increase of

138 over the previous

year. Awards were

presented during a

banquet at CCA’s

annual meeting, held

in Nashville in June. 

For example, in

the publications area,

there are separate

categories for member

and employee

publications, annual

reports, brochures, etc.

In addition to social

media, the

programs/projects

competition includes

categories such as print

and broadcast

advertising, co-op

education efforts and

trade show exhibits,

among others. The writing contest attracts entries not

only in news and feature categories, but also in editorials,

press releases, blogs, speeches, etc. Photography presents

awards for best portraits, scenic photos, photo essays and

best overall use of photography in a publication, among

many other categories.

A complete list of the winners is posted on the CCA

website: www.communicators.coop/2013Contest.htm.

CCA members can also see the actual winning entries and

judge’s comments in a “members only” portion of the

website. 

Following are just a few examples of some of the other

winning entries:

• Best of Show/Photography — Accelerated Genetics

won Best Cover and Best of Show in the photography

contest for its Beef Sire Directory. This annual directory

is produced by the Wisconsin-based breeding co-op for

cattle producers worldwide. “It made the most of the

Photographer of the Year 

This was one of a portfolio of photos that earned the Photographer of the Year award for Kyle Spradley of the

Association of Missouri Electric Cooperatives.
Rural Cooperatives / July/August 2013 25

CA’s top award for a career devoted to

cooperative communications is the H.E.

Klienfelter Award. It also honors up-andcoming talent by presenting the Michael

Graznak Award to one of the nation’s best

young (35 or under) co-op communicators. Both awards this

year went to Associated Milk Producers Inc. (AMPI), New

Ulm, Minn. 

Winning the Klinefleter award was Sheryl Doering

Meshke, an executive senior vice president at AMPI who

“exemplifies all the best qualities for which this

organization stands

and for whom the

award was created to

honor,” said

nominator Mark

Bagby,

communications

director at Calcot LTD.

His endorsement was

echoed by many of

Meshke’s peers who

called her “a professional colleague, a

mentor and an individual who has done

it all in CCA.” 

Meshke grew up

on a farm in

Minnesota and

graduated with a

bachelor’s degree in

agricultural journalism, with a minor

in animal science,

from South Dakota State University. She edited weekly

newspapers and created a monthly agricultural newspaper

before going to work for 

AMPI, where for 20 years she served as communications

director. She completed a master’s degree in business

communication from the University of St. Thomas while

working full time at the cooperative. 

“Sheryl is the best communicator I have ever met,”

wrote Ed Welch, president and CEO of AMPI. “She can take

the most difficult situation and break it down into terms and

objectives that the entire management team can

understand and support with one voice.” Adds former AMPI

President and CEO Mark Furth: “Sheryl’s unique

combination of natural ability and tireless effort has made

her a major contributor to the success of AMPI.”

A past winner of the Graznak Award, Meshke has held

numerous leadership positions with CCA, including

president. 

Graznak goes to Nickie Sabo

As a communications assistant for AMPI, Sabo brings

the visual aspects of a story to life through creative layouts

in the milk marketing co-op’s Dairymen’s Digest and

Moosletter publications. She directed photography and

graphic design for CCA’s 2012 Publication of the Year, the

co-op’s annual report, entitled “You.” 

“Every page of Nickie’s portfolio was very creative, eyecatching and attention getting,” said Graznak selection

committee member Teri Ditsch. “Her work flows nicely and

makes you want to dig in and read.” 

“Sabo trims, defines and draws the eye effectively

across her co-op’s communication vehicles,” added Megan

McKoy-Noe,

associate editor

with the National

Rural Electric

Cooperative

Association and the

2012 winner of the

award. “She

designs cooperative

success.”

One of Sabo’s

largest projects has

been AMPI’s

rebranding effort. A

cooperative-wide

team recently

updated the co-op’s

logo for the first time since 1969. Over a two-year period,

Sabo helped redesign 146 dairy product labels and

established graphic standards to protect the renovated

brand. 

“She was tireless in pursuit of an effective rebranding

effort and serves as the ‘logo cop’ in our company,” adds

CEO Welch. Sabo was called “the critical link between the

agency that developed the new brand graphics and

messages and the employees and members who

implemented them. She fostered cooperation among

individuals, departments, vendors and customers.” n

AMPI wins top “career” awards

C

AMPI’s Sheryl Meshke (above)

receives the Klinefelter Award from

Jim Rodenburg, the 2012 winner. Nickie

Sabo (far right), also of AMPI, receives

the Graznak Award from Megan

McKoy-Noe, the 2012 winner.
26 July/August 2013 / Rural Cooperatives

medium that was used, appealed to multiple senses and

exceeded the objectives, [using] a small budget,” one

judge wrote. “The use of a simple photo made a

dramatic impression for a cover,” said another. 

• First place member magazine — Dairy Farmers of

America (DFA) won for its quarterly magazine: “The

Leader,” which reaches more than 20,000 dairy

producers, industry professionals and legislators. Each

issue delivers critically important cooperative and

industry news and showcases member-owners through

feature stories about their farms and interests. The cover

story of the fall 2012 issue addressed one of the most

critical issues facing DFA producers at the time:

widespread drought. It also showcased DFA members’

use of innovative technology, such as anaerobic digestion

and intensive grazing practices, as well as the

commitment to food safety at DFA plants. 

• Publication of the Year — Tennessee Farmers

Cooperative (TFC) won this grand award for its “All

That Matters” booklet, which also won first place for

“brochures, pamphlets and one-time publications” (with

a budget of more than $5,000).” TFC creates a new

“corporate identification” publication each year that

doubles as its annual report. It is first distributed during

the cooperative’s annual meeting and includes removable

financial report inserts. 

“All That Matters” was praised by the judges it for its

“awesome modern design. The tall, thin panels of pictures

are great, the colors are spectacular and the cover is eyecatching,” they said. “The fold-out page is also great.

Fabulous work. Your designer and printer are to be

commended! It was done economically, too.”

• First place brochure (under $5,000 budget) — Sarah

Schmidt and AMPI won this award for a publication

titled “Owner’s Manual,” an “extremely effective telling

of the AMPI story from the perspective of a

farmer/owner,” the judges wrote. “The way the narrative

is woven to include additional family members is very

clever. Use of large, professional photos is eye-catching,

as are the highlighted statistics throughout. Well

conceived, well written and well designed. This piece is

a success!”

• First Place Feature (serious/investigative) — This

award went to the Farm Credit Bank of Texas and

Christine Forrest for an article titled: “Liquid Assets,”

which appeared in the Summer 2012 issue of the co-op’s

“Landscapes” magazine. In researching the article,

Forrest said she learned that a western Alabama farming

operation had been recognized for many conservation

practices that improve soil and water quality. “I also

discovered that the Dee family had relocated to this

rainfall-rich area because of water issues at their

previous location. Water turned out to be one of the

main characters in this family story, and a six-year dry

spell that prompted the Dees to irrigate was just the

latest chapter.” 

The judges said: “Love your headline, and the lead ties

in nicely. This is an excellent story that flows together

very well and gives the reader all the information needed

on this topic. This is one of the best examples I’ve read in

First Place

Feature/Investigative

Christine Forrest of Farm Credit

Bank of Texas won a first place

feature article award for “Liquid

Assets.”

First Place Member Magazine

The top award for member

magazines went to “DFA Leader.”

First Place Feature

“FS Is Still There,” about the

aftermath of a tornado in Illinois,

earned a first place writing award

for Karen Jones of GROWMARK.
Rural Cooperatives / July/August 2013 27

terms of putting together the whole

package. I loved the historical

perspective that led up to their decision

to irrigate.” 

• Writer of the Year — Chris Villines

of Tennessee Farmers Cooperative

won this award for a portfolio of his

articles. “Everything about this

writer’s entries are superb!” said the

judge. “The leads are compelling and

dressed up with conflict. He manages

to make mundane topics (such as cast

iron pots) interesting by being

engaged in the story — no doubt the

result of quality interviewing. The

continuity in his stories is superb and

leaves you with a satisfied feeling that

always accompanies good writing.” 

• First place News Writing —

Margaret Fogarty and Farm Credit

also took home this award for an

article titled: “Keeping Farm in

Family Requires Strategy.” The

judges said: “Great lead, and a great

team effort. This piece is well

organized and includes wonderful

information. The headline could be

stronger, but the writing is excellent

and the headline does clearly state

the content of the article. Nicely

done!”

• Rural Cooperatives magazine won two

awards in the contest. Assistant Editor

Stephen Thompson was runner-up in

the news writing contest for “New

Life for a Lifeline,” about a successful

effort to save a shortline railroad that

was in danger of being abandoned.

Editor Dan Campbell placed second

in editorial writing for “How Can a

Bunch of Farmers Do It?” which

commented on an effort by Virginia

poultry growers to form a co-op to

save their processing plant from

closing. n

n the 11 years that he has served as

president and CEO of his co-op, Ernest

“Chip” Jakins III has not only been a

champion of communications at Carroll

Electric Membership Cooperative in

Carrollton, Ga., but also of the cooperative way of doing

business.

“Some people are planners, some are doers; Jakins is

both. He puts a high value on an organized communications

effort, both internally at the co-op and in the broader

community. He also follows through personally with a

visible presence and community leadership that delivers a

positive co-op message,” the award committee said. 

Jakins and the co-op’s board created a separate

communications department in 2010, which included adding

two additional staff members (a communications manager

and a communications specialist). This meant funding a

new budget for the communications department, which

was created to ensure that all corporate communications

streams from a centralized location. This helps ensure a

more unified message from the cooperative. 

In 2011 and 2012, the new communications department

began a rebranding effort and a website redesign that

represented a large financial commitment. Jakins

demonstrates his dedication to advancing his awardwinning communications department by investing in his

employees. He was praised for integrating communication

into nearly every aspect of Carroll EMC’s planning and

management processes

during his time as

president and CEO of the

cooperative. 

“He understands the

integral role communication plays in every

department and also in

helping departments to

effectively work

together,” said one

nominator. 

Jakins is a dynamic

speaker who

communicates a positive

co-op message. His

speeches discuss how cooperatives were started and “the

cooperative difference,” as well as Carroll EMC’s role in the

communities it serves and the status of the current and

future power supply. 

He is a four-time group leader at the National Rural

Electric Cooperative Association’s Washington Legislative

Conference, which involves meeting with members of

Congress to discuss issues of importance to cooperatives.

Carroll EMC was chosen as one of the Best Places to Work

in Georgia by “Georgia Trend” magazine. His father, E.A.

“Bucky” Jakins Jr., is also a co-op CEO, at Baldwin EMC in

south Alabama. n

Jakins picked as top co-op CEO communicator

I

Ernest “Chip” Jakins III
28 July/August 2013 / Rural Cooperatives

he Battle of Gettysburg remains

one of the most significant events

in American history and was the

turning point of the Civil War.

Some would say that this fierce, three-day

battle was won by the Army of the

Potomac primarily because of effective

leadership — including the “anticipatory

leadership” of cavalry officer John Buford,

combined with his willingness to do things

differently. 

Buford positioned the Army of the Potomac

to fall back, ridge by ridge, then through the

town of Gettysburg and on to Cemetery Hill as

Union reinforcements arrived. Thus, the Union

had the strategic advantage of holding the

higher ground at twilight on July 1, 1863, 

from which it would successfully repel the

Confederate attacks.

Gettysburg Leadership Experience demonstrates

that lessons from 150 years ago are still relevant for co-op leaders

Battlefield Lessons

Editor’s note: this article is provided courtesy of FCC Services.

T

The stone figure of a Union infantryman keeps vigilant watch

near the Rose Farm portion of the battlefield. Photo by Bill

Dowling, courtesy Gettysburg National Park. 
Rural Cooperatives / July/August 2013 29

Cheers rang out among the soldiers of the Army of

Northern Virginia as they hoisted the Confederate flag in the

town square of the little borough of Gettysburg. No one

would fault them the celebration, as they had been tremendously successful to date, winning eight of nine battles against

the Army of the Potomac during the previous two years. 

But the celebration proved to be premature, as the Union

army under Major General George Meade defeated the

Confederate army under its brilliant general, Robert E. Lee.

The victory halted Lee’s invasion of the North, by which the

South had hoped it would break the will of the North to

carry on with the war.

Coping with problems

The officers on both sides at Gettysburg faced problems

similar to those experienced by today’s executives: incomplete

information, shortage of manpower and resources,

communication conflicts and the urgency to move ahead in

the face of unforeseen risks. In the face of adversity, how was

the Union able to obtain victory?

General Meade deployed his forces effectively, relied on

strong subordinates to make decisions where and when

needed, and stood firm while nimbly shifting resources.

Historians have said of Meade’s army that the men knew

what they could do under an extremely competent general;

one of lesser ability and courage could well have lost the

battle, and the war. 

Would your co-op’s senior leaders know how to lead their

“army” to victory? What is said about their style, courage and

abilities?

Leadership development 

and governance

Hundreds of studies have been conducted with the same

conclusion: Organizations that invest in leadership

development perform better than those that do not make the

Facing page: Historical re-enactors stage the battle of Gettysburg, the turning point in the Civil War. Photo

by Paul Witt, courtesy Gettysburg Convention and Visitors Bureau. Above: Participants in FCC Services’

Gettysburg Leadership Experience learn valuable lessons about leadership while touring the battlefield.

Photo courtesy FCC Services 
30 July/August 2013 / Rural Cooperatives

investment. This is not only true of executive leadership, but

also of director leadership. 

Governance is a fundamental part of leadership.

Ineffective governance compromises the ability of

management to succeed. In contrast, effective governance

greatly assists the organization in its success. 

Directors face a unique set of challenges and opportunities

on behalf of the organizations they govern — from industry

consolidation and sector growth to economic, commodity,

political and global volatility. To assist in meeting those

challenges, FCC Services offers a governance series designed

to raise the level of board performance and enable individual

directors to fulfill their roles with substance and significance. 

FCC Services was formed by the Farm Credit System 35

years ago to provide certain support resources, including

leadership development, to all of the System’s entities. In

2007, it expanded its services to the entire agricultural

cooperative marketplace. 

Gettysburg as a classroom

The Gettysburg battlefield is often referred to as “the

finest classroom in America.” Using history as a backdrop,

FCC Services’ Gettysburg Leadership Experience is a unique

experiential leadership program that is especially crafted for

master practitioners and professionals, senior executives and

boards of directors. 

This distinguished program examines the leadership styles,

decisions and principles displayed by military leaders before,

during and after the battle. It applies timeless leadership

lessons to current organizational situations and challenges. 

“There are very few educational offerings for master-level

professionals, senior executives and boards that are as

powerful, yet as affordable and time-conscious, as The

Gettysburg Leadership Experience,” says Cindy Knutson,

vice president, board development with FCC Services. “It is

one of those rare experiences that stays with you for the rest

of your life and influences your personal and professional

success.” 

The actual battlefield becomes a classroom, and case

studies that incorporate history as a metaphor for modernday leadership issues are used to create a unique approach to

learning. 

The program was launched 12 years ago. One of the

founders was an Air Force colonel and college professor. The

other founder served as an ambassador and director of the

Foreign Service Institute. Because of the founders’

experiences, the primary participants and beneficiaries of the

program were from the military and government agencies.

A few years ago, FCC Services sought to add an

experiential leadership module to the governance series of

classes it offered to agricultural cooperatives. The founders of

The Gettysburg Leadership Experience were near retirement

and wanted an experienced and reputable firm in the field of

executive and director leadership development to carry on

the legacy of the program. FCC Services purchased The

Gettysburg Leadership Experience and expanded the reach of

the program and its governance series of classes to

cooperatives and others. 

Timeless leadership lessons 

Various case studies have been created based on the

character, behaviors and attitudes of selected generals and

officers on both sides of the famous battle. The decisions,

communications, actions and outcomes of these leaders have

been designed as lessons that are as relevant today as they

were 15 decades ago. 

The learning format is not training; rather, it is an

experiential program that incorporates classroom lessons, the

experience and knowledge of participants and interactive

discussion. It also incorporates video clips from the movie

“Gettysburg,” which was based on the Pulitzer Prize-winning

historical novel “Killer Angels” by Michael Shaara. 

Each case study visits the site on the battlefield where the

leadership lesson took place. A licensed battlefield guide leads

the discussion and ties lessons discussed in the classroom to

the onsite activity. Once the battlefield visit is complete, the

group returns to the classroom for “reflective discussion” and

application of the experience to today’s leadership situations. 

Goals can be customized

The Gettysburg Leadership Experience can be customized

to match the goals, issues and situations of a cooperative,

using additional case studies, activities and the vast

connections to outstanding speakers that FCC Services

enjoys through its governance series and leadership

development programs. 

Comments made by co-op leaders who have taken the

course include:

• “The format of the meeting was excellent. Identifying leadership

qualities, defining historical characters (generals)...and

visualizing leadership [were made relevant] to your individual

perspective.” 

• “I truly appreciate that our learning goals were identified before

the instruction began. [The concept was] that we were not looking

for a transfer of historical information, but rather for a new way

to think though issues.”

• “The ability to take the story of the Battle of Gettysburg and

discuss how those decisions were made, and how they relate to

decisions and leadership applications in our own business

environments, was done very well.”

Just as the battle of Gettysburg was a “turning point” in

the Civil War, so the application of what is studied in The

Gettysburg Leadership Experience can provide “turning

points” for an organization. n
Rural Cooperatives / July/August 2013 31

By James Wadsworth, Ag Economist

Cooperative Programs

USDA Rural Development 

james.wadsworth@wdc.usda.gov

n effective board of

directors is a key

ingredient in a healthy

and successful

cooperative. Well-run,

efficient meetings and sound boardnominating and election procedures are

necessary for all successful co-ops. But

most important of all is that a co-op be

governed by qualified, experienced

directors with the skills needed to carry

out their responsibilities to the co-op. 

James Baarda in The Circle of

Responsibilities of Co-op Boards (CIR 61,

published by USDA Cooperative

Programs), describes seven major

responsibilities for directors:

1. Represent members;

2. Establish cooperative policies;

3. Hire and supervise management;

4. Oversee acquisition and preservation

of cooperative assets;

5. Preserve the cooperative character of

the organization;

6. Assess the cooperative’s performance;

7. Inform members.

Director responsibilities may be

further broken down as follows:

• Hire a competent manager/CEO,

determine the salary, outline the

duties and authority of the position

and formally review his/her

performance at least annually.

• Adopt broad, general policies to guide

the manager and cooperative.

• Develop and adopt long-range

business strategies.

• Require written monthly financial

reports and operating statements for

board meetings to keep directors

informed of both adverse and

favorable operations.

• Direct the manager to prepare, before

the end of each year, an operating

budget for the next fiscal year for

board approval.

• Employ a qualified auditor to make an

independent audit at least once each

year.

• With the aid of the manager, plan and

conduct the annual meeting to keep

members informed about the status of

their business, including operations,

finances and policies.

• Determine the patronage refund

allocation and per-unit retain level.

• Ensure competent legal counsel is

available.

• Keep a complete record (e.g.,

minutes) of the board’s actions.

• Communicate with members as

necessary.

• Work to promote the cooperative.

More specific duties

There are also many more specific

duties directors should fulfill. These

duties include, but are not limited to,

the following:

• Determine the boundaries of

districts/divisions and locations of

operations offices/facilities.

• Approve or disapprove of major

capital expenditures.

• Establish the co-op’s financial

structure and authorize changes to it.

• Establish appropriate election and

voting procedures to maintain

accurate representation of members.

This includes timely filling of

vacancies on the board, committees or

any other organizational body that

results from a resignation, death,

disqualification or similar occurrence. 

• Decide what the appropriate

relationship should be with other

Co-ops should assess director skills and ability to fulfill duties

Director Diligence

A

The USDA report, Assessing the

Performance and Needs of

Cooperative Boards of Directors

(CIR 58), contains information and

exercises for assessing a board of

directors in three ways:

(1) Director’s self-assessment

(assesses areas related to a

director’s responsibilities and

duties);

(2) Assessing the board as a single

entity (assesses how well

directors work together); and 

(3) Assessing board meetings

(measures the productivity and

effectiveness of board meetings).

Cooperative boards use

assessments to identify problem

areas and weaknesses and

subsequently devise programs,

plans and training methods to

remedy them. To read the report

online, visit the co-op publications

library at:

www.rurdev.usda.gov/BCP_Coop_Li

braryOfPubs.htm. To request a hard

copy, send an e-mail to:

coopinfo@wdc.usda.gov. n

USDA’s director 

assessment tool online 

continued on page 45
This article is provided courtesy Hoosier

Energy Rural Electric Cooperative. The

Co-ops & Community page spotlights co-op

efforts that fulfill the mission of

“commitment to community.” If you know

of a co-op, a co-op member or co-op

employee whose efforts deserve to be

recognized on this page, please contact:

dan.campbell@wdc.usda.gov. 

en families in

Henryville, Ind., who

lost their homes in a

devastating tornado in

March 2012, are

enjoying the benefits of energy-efficient

Touchstone Energy Homes, thanks to

the combined efforts of Clark County

REMC and a local chapter of Habitat

for Humanity.

Days after tornados devastated the

southern Indiana town on March 2,

2012, Hoosier Energy’s Holly Yensel, a

residential energy consultant, attended

a luncheon to find a way that Clark

County REMC and its power supplier

could help with recovery efforts.

Together with Houser Canter, director

of the Floyd County Habitat for

Humanity, a plan was formed to take

advantage of the electric cooperatives’

experience with energy-efficiency

buildings.

The resulting 10 homes were

completed for occupancy in time for

Christmas, a lasting testament to a

powerful partnership with a

commitment to community service. All

the homes are served by Clark County

REMC. The Sellersburg-based

cooperative provided heat-pump water

heaters, compact fluorescent lights and

$300 bill credits for each home, in

addition to Touchstone Energy Home

certification.

Clark County REMC Chief

Executive Officer David Vince said the

cooperative has been pleased to

demonstrate its community

commitment through several efforts to

assist the community as it recovered

from the disaster.

“The Touchstone Energy Home

project further demonstrates that Clark

County REMC is committed to the

communities we serve. These families

will enjoy the comfort and energy

savings of their new homes for many

years,” says Vince.

Strict building specifications

Touchstone Energy Homes focus on

strict building specifications for energy

efficiency, including the types of

insulation, windows, doors, air sealing,

and heating and cooling systems

required. The goal is to lower operating

costs while increasing performance and

comfort. The Henryville homes surpass

the 2009 International Energy

Conservation code.

“Henryville is a tight-knit

community that we have been proud to

work with throughout the restoration

efforts. We are pleased that Clark

County REMC has been able to

provide assistance,” says Julie Hinton,

the co-op’s marketing coordinator.

The cooperative continues to stay in

touch with the Habitat for Humanity

homes by monitoring efficiency.

“This is a tremendous project that

personifies how electric cooperatives are

32 July/August 2013 / Rural Cooperatives

Co-ops & Community

Electric co-op assists in rebuilding after tornado

T

Ten Habitat for Humanity homes built to Touchstone Energy Home standards were part of the

tornado recovery in Henryville, Ind. From left are: Hoosier Energy’s Holly Yensel, Clark County

REMC CEO David Vince and Floyd County Habitat for Humanity Director Houser Canter. Photos

courtesy Hoosier Energy 
Rural Cooperatives / July/August 2013 33

part of their communities and

committed to their members. These

homes not only help families with an

immediate need, they will also be

energy-efficient, comfortable homes

they can afford to live in for the

foreseeable future,” Yensel says.

The families purchased the homes

interest-free from Habitat for

Humanity and also put in 200 “sweat

equity” hours to help build their homes.

About 250 volunteers framed the 10

houses in Henryville’s Twin Oaks

subdivision. “We have 10 amazing

families with stories of their survival

through that storm. They are now

rebuilding their lives through building

their own house,” says Gina Leckrom,

state director of Habitat for Humanity.

Hoosier Energy is a generation and

transmission cooperative (G&T) with

headquarters in Bloomington, Ind. It

provides electric power and other

services to 18 electric distribution

cooperatives, including Clark County

REMC, which collectively meet the

electricity needs of more than 750,000

residents, businesses, industries and

farms. Hoosier Energy operates five

power plants, two renewable energy

plants and a transmission network that

includes 1,700 miles of high-voltage

lines. For more information, visit

www.hepn.com. n

• A solar hot water installation and high-efficiency heat pumps were

installed at Henryville High School;

• Reconnecting fees were waived for all affected members;

• Lines were reconnected within two days to the Henryville substation and

within seven days in the town of Henryville;

• About 40-50 employees worked in recovery efforts;

• The Clark County emergency management command center was based

at the co-op’s Sellersburg headquarters. n

Clark County REMC tornado recovery efforts include:

Hoosier Energy’s Holly Yensel, left, and Harrison REMC’s Bob Geswein inspect a Touchstone Energy Home,

built to meet exacting energy efficiency standards.
By Margaret Lund

e-mail: lundsteller@iphouse.com

Editor’s note: Lund spent 15 years as the

executive director of the Northcountry

Cooperative Development Fund (NCDF)

and is currently a business consultant who

specializes in working with cooperatives and

other small businesses. This article is

excerpted from a new University of

Wisconsin Center for Cooperatives

(UWCC) publication: “Cooperative Equity

and Ownership: An Introduction.” It is

available on the UWCC website at:

www.uwcc.wisc.edu/.

lot has changed in Mt.

Horeb, Wis., since

1893 when Premier

Cooperative was

started. In those days,

Grover Cleveland was the U.S.

president and Premier was known by its

former name, Patrons’ Mercantile

Cooperative. 

Patrons’ was started in the

neighboring town of Black Earth to

provide local farmers with an affordable

source for a variety of supplies, while

receiving a fair price for the goods they

produced. Today, Premier has facilities

in 15 communities and operates a

diverse array of agronomy services,

produces conventional and organic

feeds and operates farm supply and

grain marketing divisions. It also

operates: four convenience stores,

propane and bulk petroleum supply

operations, two hardware stores, a

heating and air conditioning service, a

lumber yard and three auto/truck and

tire repair centers. 

Yet even as the world has changed,

some things seem never to. Many

would say that one of those “unchanging things” is cooperative equity

management. That was certainly true of

Premier’s equity plan at one time. 

When Andy Fiene, Premier’s CEO,

first arrived at the co-op 26 years ago,

the member equity redemption policy

was much like those of any of its

neighboring farmer cooperatives. That

is, members shared in the profits of the

co-op each year through their

patronage dividends. Yet most of the

funds (a maximum of 80 percent per

year) were paid to members in the form

of stock, rather than cash. The stock

would then be retained by the co-op for

an indefinite period. 

Since the whole patronage allocation

— whether in stock or in cash — was

taxable to the farmer-members in the

year it was declared, in many cases

members ended up paying more in

taxes every year than they received in

cash from their patronage allocation.

Further, the co-op held on to the stock

portion of patronage for decades. 

System was slowing down

When Fiene started as general

manager in 1992, the average age at

which members of Premier might

expect to get even a portion of their

retained stock redeemed in cash was 78.

This might occur 40 years or more after

the earliest of this equity was “earned”

by the member. 

In many cases, the funds had to be

paid to an estate because the member

had died while still waiting for his or

her share of co-op profits to be

returned in cash. Due to four straight

years of losses prior to Fiene starting as

general manager, the cooperative had

ceased making equity retirements based

on age and had fallen behind on estate

redemptions. 

34 July/August 2013 / Rural Cooperatives

A

Premier Co-op adapts equity policy

to reflect changing membership

Premier Cooperative’s main complex in Mt. Horeb, Wis. Co-op Manager Andy Fiene led an effort that overhauled

the co-op’s member equity redemption program. Photos courtesy Premier Cooperative
Understandably, members did not

like this system, although it was very

common among farmer co-ops at the

time and still is today. 

Fiene didn’t like the equity system

either, but for additional reasons. When

he started projecting what would need

to happen to enable the co-op to

redeem member stock on a shorter,

more meaningful timeline, he and the

board members were surprised at what

they discovered. Given reasonable

financial assumptions for the business

and its growth, not only would Premier

be unable to shorten the payment

period for members, the timeline was

likely to just continue to get longer. 

There was no way that Premier

could “grow its way” out of the

situation without sacrificing future

investment in vital business functions.

On paper, the system was simply not

sustainable.

New system reflects 

changes in business

After taking a good look at its

evolving business interests and

changing membership, the co-op

instead crafted a new member equity

system that works better for all

parties. This system retired the

member equity that the co-op was

already obligated to pay while

limiting future liability. 

First, recognizing that many of

the purchases at the co-op’s retail

convenience stores, hardware stores and

lumber yard were quite small, the co-op

limited patronage payments to members

making a minimum of $1,500 per year

in purchases. This cut down on

paperwork and recordkeeping while

ensuring that patronage payments were

only going to those members who did a

substantial amount of business with the

co-op. 

Second, instead of declaring the

majority of member patronage

payments to be “qualified” allocations,

and therefore the tax responsibility of

the individual members, the co-op still

kept track of individual members’

portions but declared the allocations

“nonqualified,” meaning the

cooperative pays the tax on the equity

portion allocated. By removing the tax

burden from the members, the

cooperative feels less obligated to retire

the “nonqualified” equity than it does

the “qualified” equity its members

previously were issued and paid taxes

on. If the cooperative does decide to

retire any amount of the “nonqualified”

equity in the future, the farmer

members will only have to pay tax (and

the co-op will get a refund of the tax

previously paid) at the time the member

actually receives the cash. 

Third, the co-op studiously tracked

down which member transactions were

attributable to consumer members (and

therefore not taxable as patronage,

because consumer members do not

report their purchases as business

expense deductions on their taxes). It

then allocated those members’

“qualified” equity, rather than

“nonqualified” equity. This saved the

co-op money but did not pass a

commensurate burden on to the

member. 

The net result is that the cash

portion of the annual patronage

allocation has increased from 20

percent in the past to a range of from

30 to 57 percent since inception of the

new system. Personal tax liability of coop members has also decreased

appreciably, making the cash portion of

their annual payment more meaningful. 

Redemption 

timeline shortened

The timeline for redeeming stock

allocated to members under the old

plan has also decreased appreciably. In

2013, Premier members age 65 and

older received their eligible retirement

equity, instead of at age 78 (the average

age when the new program started).

The expectation is that the age will

continue to decrease until all of the old

qualified patronage has been returned

to members. At that time, the co-op

will evaluate annually how to treat the

“new” equity. 

The new system “requires a lot of

hard work” in the form of

recordkeeping “if you want to do it the

right way,” says Fiene, but it also has

pushed the co-op to operate in a much

more business-like manner in terms

of its cash planning. The co-op

retains a great deal of flexibility in

whether or not to revolve the nonqualified equity down the line.

Further, because members have not

been required to pay tax on it, they

are more willing to accept their

allocated equity as an investment in

the future services of their

cooperative. 

While some cooperatives might

take the easier route and just seek to

delay any redemption to members

indefinitely, Premier’s board and

management understand that the value

of the co-op was built upon business

with members and the balance that

must be struck between the interests of

the co-op and its members. 

“While this type of program may not

fit other cooperatives, for our

cooperative it was an important change

that has helped us grow our value to

our members,” Fiene says. “Most [coops] are afraid to rock the boat and talk

to their members about the problems

the old system creates. People

inherently fear change.” But as he has

shown, a willingness to confront such a

problem with creativity and insight

could mean a better solution for both

the co-op and its members. n

Rural Cooperatives / July/August 2013 35

Sam Baker demonstrates how to make

picture frames for Father’s Day presents,

part of “June is Dairy Month” events at

Premier Co-op.
ctober is Cooperative

Month, and

cooperatives of all types

are urged to plan

educational events to

celebrate the many products and

services that co-ops provide to their

member-owners while also helping to

strengthen their communities. 

“There are more than 29,000

cooperatives in the United States, and

they not only help to improve life for

their members, but also have a

profoundly positive impact on the

overall economy,” says Doug O’Brien,

acting under secretary for USDA Rural

Development. “That’s why it’s

important to tell your cooperative’s

story. October is a perfect time to join

with thousands of other cooperatives

across the nation in doing so.” 

Traditional media — including press

releases; public service announcements;

advertisements in newspapers,

magazines and radio; billboards and

posters — can be effective for letting

people know about cooperatives. Social

media also provides abundant

opportunities to help spread the word

about cooperatives. 

A co-op display or exhibit set up in a

shopping mall or outside a large retail

complex can reach thousands of people

in a single day. Many co-ops schedule

classroom visits and make presentations

before community civic organizations

during October. In-store

demonstrations are another effective

way to spread the word about co-op

products.

“Surveys show that most people —

once informed about what cooperatives

are and how they work — are

supportive of the cooperative, memberowned approach to business,” says Chad

Parker, deputy administrator for

USDA’s Cooperative Programs. “By

sponsoring co-op educational activities,

co-ops can play a big role in helping

more people understand what co-ops

are all about.” 

Open houses, field days, tours 

Open houses or field days are an

effective way to engage members and

36 July/August 2013 / Rural Cooperatives

Co-ops urged to plan now

for Co-op Month activities

O

Here are some key messages to relate in interviews and press releases

that have been found to resonate with the media and the public. They help

achieve the goals of Co-op Month, which are to raise public awareness of

cooperatives and celebrate their accomplishments. 

• There are more than 29,000 cooperative businesses in the United States

with 350 million members (many people belong to more than one co-op).

These cooperatives generate $514 billion in revenue and more than $25

billion in wages, according to a study conducted by the University of

Wisconsin Center for Cooperatives, with support from USDA Rural

Development (http://reic.uwcc.wisc.edu/default.htm). 

• Cooperatives represent a strong business model and greatly contribute to

both the national and local economies. 

• Studies show that consumers want to do business with companies that

share their values, making today’s environment ideal for cooperatives and

their commitment to the communities in which their members live and

work. 

• Co-ops don’t have to answer to outside shareholders; they care about

meeting their members’ needs. 

• Co-ops represent democracy in action, with control exercised by a board

of directors elected from the ranks of members; the board hires and

directs management and is ultimately responsible to the members; 

• Cooperatives generate jobs in their communities, keep profits local and

pay local taxes to help support community services. Cooperatives often

take part in community improvement programs, ensuring that everyone

has an opportunity to benefit from the cooperative experience.

To better “bring home” these messages, gather additional data about the

role and power of co-ops in your state, region or community. n

Key messages for Co-op Month
the public. These events can include

vendor booths to provide information

on products the cooperative sells.

Demonstrations and tours of co-op

facilities and/or at a member’s farm can

also help educate the public about

agriculture in general. 

For example, a grain co-op can begin

with a facility tour that shows how

grain is stored and loaded onto rail cars

or trucks, or how its feed mill operates.

Farmer co-ops with an agronomy

division can have an application rig on

hand to demonstrate how global

positioning systems (GPS) enable

fertilizer to be directed only where

needed and in the proper amounts. For

an even more ambitious program, hand

out maps with

driving directions

to the farms of

several members,

each of whom

have agreed to

demonstrate some

aspect of farming. 

Some co-ops

hold related

activities — such

as games, raffles,

cookouts, etc. —

to boost interest in

their open house.

These types of

activities can be an

easy way to

showcase the

services and

products of the

cooperative and

provide greater

information to

members and the

public. 

Other types of

cooperatives —

such as electric coops and credit

unions — can also

hold open houses

to encourage

members and the

general public to

learn more about the cooperative and

its functions. Some use Co-op Month

envelope stuffers in their mailings to

promote co-op education. 

More co-op education ideas

Here are some other activities your

co-op may consider: 

• Set up a Co-op Month banner at your

cooperative or a public facility;

• Hold a workshop for members and/or

the general public on an important

topic for your co-op. For example,

electric co-ops can hold a workshop

on energy conservation in homes and

businesses or to address what the coop is doing to promote renewable

energy. 

• Write a letter to the editor about the

importance of co-ops in the economy

and the part your co-op plays locally. 

• Contact your governor’s office and

request a state Co-op Month

Proclamation be issued (this is often

done by state co-op councils, so check

with them first. This often takes many

weeks of lead time);

• Add some Co-op Month content to

your website. 

• Perform a community service project

or hold a fund raiser in honor of Coop Month. These activities can range

from cleaning up a stretch of highway

or a public park to staging an event

such as the annual race in

Washington, D.C., held to raise

money for co-op development. 

• Hold a Co-op Month breakfast,

luncheon or dinner for members

and/or community members, and

include a short co-op presentation.

• Co-op stores can distribute special

coupons for members to use during

October.

• Provide co-op educational brochures

and booklets at your event, such as

the “Do Yourself a Favor, Join a Coop” brochure from USDA Rural

Development. Visit http://www.

rurdev.usda.gov/BCP_Coop_Library

OfPubs.htm to see the co-op

publications available from USDA. To

order, send an e-mail to coopinfo

@wdc.usda.gov, or call (202) 720-

6483.

• Encourage year-around co-op

education by directing your members

to sign up for a free electronic

subscription to USDA’s “Rural

Cooperatives” magazine at: http://

www.rdlist.sc.egov.usda.gov/listserv/m

ainservlet.

Like co-ops themselves, this annual

observation is a do-it-yourself effort.

Let your members know that your coop celebrates its unique business

structure and service to them, and that

it in turn fully appreciates their

participation. Get prepared — October

is the perfect time to do this! n

Rural Cooperatives / July/August 2013 37
New River Organic 

opens distribution facility 

New River Organic Growers

(NROG) in May opened its first

distribution facility in Ashe County,

N.C. NROG is a nonprofit farmers coop formed in 2000 in the Blue Ridge

Mountains of North Carolina. The

distribution facility will help the co-op

increase sales in summer and, by

allowing the co-op to store winter crops

(such as winter squash and potatoes), it

will also boost its winter sales.

NROG currently includes more than

55 farms that provide produce, eggs,

cheese and meat to the cooperative. It

sells these items to more than 70

buyers, including restaurants, buyers

clubs, retailers and wholesalers. The coop had sales of $240,000 in 2012 and

says it is on track to increase sales by 70

to 100 percent in 2013. 

This year NROG has expanded its

membership to include conventional

farmers, and it reports that there has

been “a great deal of interest from local

farmers” in joining the co-op. The coop is actively seeking member-farmers

in the High Country area, as demand is

out-pacing its supply. Growers and

buyers can find out more about NROG

by contacting Caleb Crowell at (828)

773-1588.

Study shows federal 

milk marketing order 

could benefit California 

The findings of a five-month-long

study commissioned by California

Dairies Inc. (CDI), Dairy Farmers of

America Inc. (DFA) and Land O’Lakes

Inc. (LOL) indicate that a properly

written federal milk marketing order for

California would provide a regulatory

structure that could result in higher

farmgate prices, benefitting California

dairy farm families. The three

cooperatives, representing about 80

percent of the milk produced in

California, collectively funded the

comprehensive modeling study to

38 July/August 2013 / Rural Cooperatives

Newsline

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

Co-op developments, coast to coast

Jill Nicklaw of Sunshine Cove Farms in Boone, N.C., harvests a batch of organic micro mizuna,

which are cut to order and sold throughout western North Carolina through New River Organic

Growers.
Rural Cooperatives / July/August 2013 39

examine issues and benefits of replacing

the current state milk marketing order

with a federal order. 

The study was conducted by Mark

Stephenson, University of W isconsinMadison, and Chuck Nicholson of

Penn State University. After a thorough

review of the study results, including

possible consequences and opportunities, the three cooperatives agreed to

continue working toward a change in

the regulatory structure. 

CDI, DFA and LOL will be holding

a series of explanatory sessions for

members to share the results and

receive input on how best to move

forward.

Aurora Cooperative 

announces expansion 

Aurora Cooperative, a leading grain

marketer and agricultural supplier based

in Nebraska and serving farmers in

multiple states, has announced

finalization of expansion of Aurora

Agronomy in Texas, South Dakota and

Nebraska. 

The expansion in Texas involves a

seven-location acquisition of Plains

Aerial Co., previously owned by Lance

Ollinger and headquartered at Olton,

Texas. Other Texas sites being acquired

include Cotton Center, Slaton, Tahoka,

Lamesa, Groom and Levelland. These

sites will continue to operate under the

Plains Aerial brand, with Ollinger

leading operations and assisting in the

consolidation of these sites with Aurora

Ag Aviation, a division of Aurora

Agronomy. 

The South Dakota expansion

involves a three-location acquisition,

Doug O’Brien w as appointed acting

under secretary for USDA Rural

Development on M ay 6, succeeding

Dallas Tonsager, w ho had served in the

position since the beginning of the

Obama administration. O’Brien, w ho w as

raised on a diversified farm in Iow a, has

dedicated his career to agriculture and

rural policy.

Before this appointment, O’Brien

served as deputy under secretary for

Rural Development. Prior to that, he w as

senior advisor to Agriculture Secretary

Tom Vilsack, w hich follow ed service as

chief of staff to USDA Deputy Secretary

Kathleen M errigan. 

The USDA mission area O’Brien now

leads encompasses three main program areas: the Rural

Business and Cooperative Service, the Rural Utilities

Service, and the Rural Housing Service. It includes USDA’s

Cooperative Programs, w hich helps agricultural and other

types of cooperatives via co-op education efforts (including

production of “Rural Cooperatives” magazine) and through

research, statistics, technical assistance and financial

programs that assist cooperatives. Through the Rural

Utilities Service, O’Brien w ill oversee USDA programs that

provide financing and technical assistance for the nation’s

rural electric and telecommunications cooperatives. 

“I am a strong believer in the cooperative business

model and believe co-ops have untold potential to help not

only agriculture, but all rural people facing a common

need,” O’Brien says. “As democratically governed, memberow ned and member-benefitted businesses,

co-ops help keep control of a business in

the hands of the people w ho use it and

rely on it for goods and services that are

crucial to their w ell-being.” 

Before joining USDA, O’Brien served as

the assistant director at the Ohio

Department of Agriculture. In this capacity,

he assisted the director in administering

the day-to-day operations of that

department in such areas as plant

industries, animal health and its

laboratories. In addition, he w as

responsible for developing the

department’s biofuels, bioproducts and

renew able energy policy.

O’Brien has also served as senior

advisor to Iow a Governor Chet Culver, interim co-director

for the National Agricultural Law Center in Fayetteville, Ark.,

and senior staff attorney at the Drake Agricultural Law

Center in Des M oines, Iow a. He is former counsel for the

U.S. Senate Agriculture Committee, w here he w orked on

the 2002 Farm Bill.

He also served as legislative assistant for U.S.

Representative Leonard Bosw ell of Iow a, focusing primarily

on Rep. Bosw ell’s w ork on the House Agriculture

Committee, and w as a clerk for Justice Jerry Larson of the

Iow a Supreme Court. O’Brien graduated from Loras College

and earned a Juris Doctorate w ith honors from the

University of Iow a. He also holds a M aster’s Degree in

agricultural law from the University of Arkansas. 

Doug O’Brien

O’Brien new leader at USDA Rural Development
40 July/August 2013 / Rural Cooperatives

including facilities in Mitchell (Big

Green Agronomy), Letcher (MJ

Aviation) and Elk Point (MJ

Aviation). John and Marci O’Connell,

previous owners, will continue

managing the sites, which will continue

to operate under the Big Green and MJ

Aviation brands. The Aurora Ag

Aviation and Aurora Agronomy teams

will provide service and oversight.

The co-op has completed the

construction of its newest Aurora

Agronomy retail site in David City,

Neb. The facility is now fully

functional, serving area farmer-owners

from the 31-acre facility. 

“In each of these expansions,

Aurora’s ground and aerial agronomy

capabilities are further enhanced,” says

George Hohwieler, president and CEO

of Aurora Cooperative, adding that all

the businesses acquired “share Aurora’s

culture and vision.” 

Azevedo new chairman 

at California Dairies

John Azevedo has been elected board

chairman of California Dairies Inc.

(CDI), the nation’s second largest dairy

processing cooperative. Azevedo, who

had been first vice chairman, succeeds

Brian Pacheco, who will continue to

serve on the board and will remain on

the executive committee as a memberat-large. 

“It is an exciting time at California

Dairies Inc. as the cooperative grows its

markets, its products and the return on

investment to its member-owners. I

look forward to the challenge of

improving the cooperative and the

California dairy industry,” says

Azevedo.

A member of the board since 2007,

Azevedo also serves on the California

Dairies’ Political Action Committee,

the Milk Fat Marketing Challenge

Dairy Products Inc. Committee, and

the Finance and Capital Base Planning

Committee. As chairman, Azevedo will

also serve in an ex-officio capacity on all

committees. 

California Dairies Inc. produces 47

percent of California’s milk. It is coowned by more than 430 dairy

producers who ship 18 billion pounds

of milk annually. It is the home of two

leading brands of butter: Challenge and

Danish Creamery. 

CHS, ConAgra, Cargill 

plan flour joint venture 

CHS Inc., ConAgra Foods and

Cargill in March announced an

agreement to combine their North

American flour milling businesses to

form Ardent Mills. The venture would

bring together two of the nation’s

leading flour milling companies:

Horizon Milling, a Cargill-CHS joint

venture formed in 2002, and ConAgra

Mills.

Because the new venture would

control about one-third of the U.S.

flour market, it is being reviewed by the

U.S. Justice Department’s antitrust

division. About a dozen wheat-growing

states, led by Oklahoma’s attorney

general, are joining with the Justice

Dept. in its review of the deal,

according to a Reuters’ news report,

which quotes Justice Department

spokeswoman Gina Talamona as

confirming that the deal is under

review. 

The three firms say the new

company would bring innovative flour

and grain products, services and

solutions to the marketplace. Ardent

Mills’ products “will be backed by an

extensive network of wheat sourcing

capabilities and flour milling and bakery

mix facilities across North America,”

they said in a joint press release. “The

company will offer a unique set of

services, including product development

resources, technical and application

support, supply-chain management and

commodity price risk management.” 

The owners expect the formation of

Ardent Mills to be completed late this

year, following regulatory clearances,

financing and “the satisfaction of

customary closing conditions.” Dan

Dye, currently president of Horizon

Milling, would then become CEO of

Ardent Mills. 

Annual sales for Horizon Milling are

about $2.5 billion while ConAgra Mills

sales were about $1.8 billion last year.

The owners say they intend for Ardent

Mills to be self-financed through cash

flow from operations and its own bank

debt and credit facility. The structure

and amount of Ardent Mills’ debt

financing will be determined during the

pre-close period. The owners say they

intend to receive cash distributions

from Ardent Mills at closing. Initial

estimates of the total proceeds to be

distributed range from $800 million to

$1 billion.

Mulhern next CEO at NMPF

The National Milk Producers

Federation (NMPF) has announced that

Chief Operating Officer Jim Mulhern

John Azevedo

Jim Mulhern
will take over as president and CEO on

Jan. 1. Mulhern will succeed Jerry

Kozak, who has led the organization

since 1997. Kozak will continue his

involvement with NMPF’s Cooperatives

Working Together (CWT) program,

which provides export assistance to

member cooperatives. 

“We are very excited to have such a

knowledgeable and capable leader at the

head of our team in the coming years,”

says NMPF Chairman Randy Mooney,

a dairy producer from Rogersville, Mo.

“Jim’s impressive and extensive track

record of working on dairy issues made

him the ideal choice.” 

Mulhern, who joined NMPF in

January 2013, has been managing the

communications, government relations

and membership functions of the

organization. His appointment as COO

marked a return to NMPF; he had

directed the organization’s government

relations program earlier in his career.

A Wisconsin native, Mulhern worked

for NMPF in the mid-1980s, then

served as chief of staff for Wisconsin

Sen. Herb Kohl. Mulhern also worked

in senior management positions for

Fleishman-Hillard, the Fratelli Group

and Watson/Mulhern LLC. During this

period, he maintained a close

relationship with the dairy industry and

NMPF by working as a consultant on

numerous projects. “I look forward to

building further upon the relationships

and successes of the past, but with a

clear focus on addressing the challenges

to dairy farming’s future,” says

Mulhern.

Blue Diamond 

opens Turlock plant 

Doors to Blue Diamond’s almond

processing plant in Turlock, Calif.,

opened in June as California dignitaries

and guests toured a facility that

represents the largest single investment

made in the almond industry since

1910, when the cooperative was first

organized. “The Turlock plant supports

significant growth in our global almond

ingredients business,” said Mark Jansen,

Blue Diamond president and CEO,

adding that the facility “sets new

standards for food safety.”

The 200,000-square-foot plant

represents almost half of a threephased, capacity-enhancement project

scheduled to be completed during the

next 10 years. The first phase will

create 300 jobs, including 100 direct

jobs, an estimated 123 additional

indirect local supplier-based jobs, and

79 jobs created by increased consumer

spending in the community, according

to Randall Svedbeck, research manager

for the Stanislaus Economic

Development and Workforce Alliance.

The phase 1 expansion will help

meet growing global demand for valueadded almond ingredients from major

food companies worldwide. Cereals,

Rural Cooperatives / July/August 2013 41

Co-op leaders and guests cut a ribbon to officially open Blue Diamond's new processing plant

in Turlock, Calif. Photo courtesy Blue Diamond
snack bars, yogurt toppings, baked

goods and candies are among the many

destinations for products from this

plant. Value-added revenue for Blue

Diamond’s Global Ingredients business

soared 69 percent between 2009 and

2011. 

The co-op also recently opened a

6,500-square-foot Almond Innovation

Center at its headquarters in

Sacramento. The new facility will be a

showcase for new almond product

concepts, with the goal of increasing

sales of new products fivefold in the

next five years. The Sacramento Area

Commerce & Trade Organization

presented the co-op with its Powering

Innovation Capstone Award in March,

recognizing the business potential of

the new Innovation Center. 

In other Blue Diamond news, the coop is closing its hazelnut packing

division in Oregon after operating it for

more than 30 years. It will be sold with

all equipment. The co-ops says there

has been interest from other packers 

in buying it. 

Wisconsin co-ops 

complete merger 

Allied Cooperative has been created

through the merger of two Wisconsin

cooperatives: Wisconsin River Co-op in

Adams and Farmers’ Co-op Supply &

Shipping Association in West Salem,

Wis. They completed the merger April 1.

Wisconsin River Co-op has locations

in Adams, Mauston, Necedah,

Plainfield, Plover and Wisconsin Dells.

42 July/August 2013 / Rural Cooperatives

About 50 percent of the Organic Valley

headquarters office building in La Farge, Wis., was

destroyed May 14 by a fire that 11 area fire

departments were called out to fight. The building

was fully occupied when the fire broke out, but there

were no reported injuries. 

About 250 of the co-op’s office workers were

deployed to temporary offices, but CEO George

Siemon said he was proud that the co-op never

missed an order due to the fire. “We’re pleased with

the staff’s response and the work that’s been done,

and we’ve been touched by the community’s

support,” Siemon said. He also praised the “heroic

efforts of firefighters” to extinguish what he

described as a very difficult fire to extinguish. 

Couleecap in Westby, Wis., a nonprofit that

provides services to needy families, provided space

for 65 Organic Valley employees following the fire,

with most of the other displaced workers initially

working from temporary trailers.

“Fortunately, our distribution center and other

facilities are fully operational. Our contingency plans

are in progress, and we continue to ship and take

orders on schedule. We anticipate an expedient

recovery in La Farge,” the co-op said in a statement

posted on its website soon after the fire. “Our

dedication to cooperation and quality, organic food is

stronger than ever. And as we face this challenge

together, we are taking cooperation to a whole new

level.” n

Organic Valley keeps rolling after fire at HQ

Clockwise from top: Putting out embers

following the blaze; repair work

underway in the damaged interior; out

of his office but not out of work, a

resourceful staff member plunks down

in the office parking lot, needing only his

cell phone and a tablet to keep the coop’s orders moving. Photos courtesy

Organic Valley 
Rural Cooperatives / July/August 2013 43

Farmers Co-op Supply and Shipping

Assoc. operates stores in West Salem,

Galesville, Melrose, Mindoro and

Tomah. The merger won overwhelming

support from members of both

governing boards, according to a joint

press release. Agricultural products and

services offered by the new cooperative

will not change at retail stores.

“We will improve the utilization of

our facilities and equipment,” says

Allied CEO Timothy Diemert. “We

will add efficiency to our sales and

delivery routes. We will also be better

positioned for growth and have

increased access to capital.” 

New projects being planned by

Allied include building a new fertilizer

plant in Tomah this spring. The new

plant includes 8,000 tons of dry crop

nutrient storage and 1,800 tons of

liquid-blending capacity, the co-op says.

Construction has also begun on a grain

plant at the same location with a 1.16-

million bushel capacity, which should

be open this fall.

Cartoon character to 

promote REAL® Seal

In its ongoing effort to revitalize and

build awareness of the dairy industry’s

iconic REAL® Seal — in use for nearly

40 years — the National Milk

Producers Federation (NMPF) is

introducing a cartoon character

modeled after the logo. A contest is

being held to name the cartoon

character. Names may be submitted

through the REAL® Seal website:

www.realseal.com. All entries must be

received by Aug. 31, 2013. The top

three names entered will be posted in

September on the REAL® Seal

Facebook page (www.facebook.com/

realsealdairy) and subject to a vote. The

name with the most votes will be

declared the winner.

The Facebook page includes

interactive updates, multimedia

presentations, contests, polls and

quizzes. 

CWT members support 

program changes 

Members of Cooperatives Working

Together (CWT) have endorsed a

larger investment in the farmer-funded,

self-help program by voting to raise the

membership requirement from 2¢ to 4¢

per hundredweight, effective July 1,

2013, running through Dec. 31, 2015.

The additional investment will cover

the large increase in CWT member

requests for export assistance in 2013,

driven by increased demand in world

dairy markets for U.S. American-type

cheeses, butter, whole milk powder and

anhydrous milkfat.

Since the start of 2011, the CWT

Export Assistance program has helped

member cooperatives sell 257.7 million

pounds of American-type cheeses and

111.5 million pounds of butter to 39

countries on six continents.

Equity Livestock 

marks 90th anniversary 

Equity Cooperative Livestock Sales

Association celebrated its 90th

anniversary at 10 annual district

meetings held in late March. The

cooperative reported net proceeds of

$1.67 million.

“Equity, as a producer’s marketing

cooperative, is built on strength,

dedication and partnerships,” says

Chuck Adami, president/CEO.

“Partnering with you since 1922, we’ve

always encouraged our members to stay

connected as we strive to improve on

the programs and services that will be

advantageous to a successful future.”

When it was launched in 1922,

Equity operated collection points from

which it moved livestock by rail to the

terminal market in Milwaukee or direct

to a packing plant. Equity transitioned

from private treaty sales to auction

markets in 1957. The commodity

division began in 1985 and the Equity

Livestock Credit Corporation (ELCC)

was formed in 1992. 

Equity, a federated cooperative with

its corporate office in Baraboo, Wis.,

operates 12 auction markets and

services producers in Illinois, Iowa,

Michigan, Minnesota, South Dakota

and Wisconsin. It assists producers with

marketing, managing and financing

their agricultural businesses.

O’Brien: Regional food 

systems could boost rural NY 

Doug O’Brien, acting under

secretary for USDA Rural

Development, recently met with

farmers and business leaders to discuss

how local and regional food systems can

revitalize rural New York. “USDA

supports the critical connection

between farmers and consumers,”

O’Brien said. “Similar to other parts of

the country, here in New York we have

seen a surge in consumer demand for

locally produced food, therefore

creating jobs and opportunities for rural

residents.” 

The roundtable talk at Cornell

Cooperative Extension of Erie County

was held by USDA in collaboration

with U.S. Senator Kirsten Gillibrand. It

focused on the opportunities and

challenges around the development of

food hubs in Western New York.

O’Brien also highlighted USDA’s Know

Your Farmer, Know Your Food

initiative, part of the Obama

Administration’s commitment to

strengthening local and regional food

systems.

Following the roundtable discussion,

O’Brien visited Mercy Flight of

Western New York, an emergency airmedical transport service that received

funding through USDA’s Community

Facilities program to purchase a new

helicopter. 

CHS offers Center for

Cooperative Growth

CHS Inc. has introduced the CHS

Center for Cooperative Growth, an

online platform that gathers and shares

diverse viewpoints from agribusinesses,

independent agricultural producers,
44 July/August 2013 / Rural Cooperatives

and specialty soybeans to overseas

markets. Deshler Farmers Elevator Co.

currently markets soybeans harvested

from within a 25- to 30-mile radius. It

sells to truck markets within a 50-mile

radius and rail markets encompassing

the Eastern United States. 

The co-op estimates that, in addition

to increasing value to its members, the

proposed container-loading facility has

the potential to add up to six new jobs.

“Rather than selling their soybeans

strictly on the local commodity market,

Deshler Elevator Cooperative members

may now have the ability to access more

lucrative overseas specialty soybean

markets,” says USDA Rural

Development Ohio State Director Tony

Logan. “Many overseas buyers prefer

identity-preserved, non-GMO beans

and they are more than willing to pay a

premium price for premium quality.”

Excluding food and feed, the VAPG

awards include 12 bio-based projects

totaling nearly $2 million. These

projects involve processing corn and

rice waste into anhydrous

ammonia/fertilizer, wood-waste and

goat manure into bio-char and

enhanced compost, raw timber into

wood flooring, miscanthus fiber into

bedding and pellets, hay into fire logs,

and sheep wool into apparel products.

Another bioenergy

project will use sorghum

for electricity and

fertilizer.

In the 2008 Farm Bill,

Congress made several

enhancements to the

VAPG program. It

expanded the definition of

“value-added” to include

locally produced

agricultural food

products, and it gave

priority to projects that

focus on increasing

opportunities for small

and mid-size family

farmers and ranchers,

beginning farmers and

ranchers, and socially

disadvantaged farmers

and ranchers. ValueAdded Producer Grants

are an element of USDA’s

Know Your Farmer,

Know Your Food

initiative, which

coordinates USDA’s work

to support local and

regional food systems. n

Co-ops ‘adding value’

continued from page 10

academia and other leaders to foster

greater success among America’s

cooperatives and their leaders. The

online platform, launched last October,

features a primary cooperative topic

addressed through four perspectives. It

allows audiences to participate through

online polls and a blog.

To learn more about this new online

platform and view discussions about the

dynamic global marketplace, log on to:

chscenterforcooperativegrowth.com.

“We hope this online resource will

break complex cooperative topics into

informative content to help cooperative

leaders learn and grow," says Lynn

Foth, vice president of market

development and strategic alignment

for CHS. Using the resources on this

website, visitors will be better informed

about the choices their cooperatives

have to grow and remain profitable and

sustainable into the future. This

quarter, four cooperative leaders talk

about the value of the cooperative

business model. n

Rhody Fresh milk sales have proven popular with consumers, and the co-op hopes its cheese will do likewise.
cooperatives and associated

organizations.

• Determine corporate membership in

other organizations, associations and

federations.

• Establish the responsibilities and

duties assigned to each committee

that the board creates.

• Establish basic policies about

legislative or administrative decisions

on local, state, national and

international levels that affect the

welfare of members.

Directors carry out their duties and

responsibilities during board meetings,

membership meetings and on their

own. Directors need to learn to conduct

these necessary tasks and functions.

They must have an in-depth

understanding of cooperatives and their

unique principles. They must also keep

abreast of the many associated issues

that will arise. 

Assessing directors

Directors should periodically

undergo an assessment to ensure that

they are fulfilling their responsibilities

and duties. A “best practice” is to

conduct such a skills assessment when

any new director joins the board. 

In the USDA report Assessing the

Performance and Needs of Cooperative

Boards of Directors (CIR 58), there is an

assessment exercise that can help show

where directors are strong and weak.

From this assessment, a cooperative

board can then find or develop targeted

reading or training to improve any

deficiencies directors may have. (Editor’s

note: All USDA co-op publications are

available on the Internet at:

www.rurdev.usda.gov, and many

publications in the CIR series are also

available in hard copy, free of charge for

educational use).

This assessment exercise rates

directors in seven different areas:

personal competence, board operations,

managerial aspects, finance, policies and

planning, member relations and

leadership. Example questions from the

assessment (directors are to answer

either “yes,” “unsure,” or “no”) include:

Finance: I am able to interpret the

cooperative’s financial statements and

assess the viability of the cooperative. I

am able to analyze equity redemption

requests and establish redemption

policy.

Managerial aspects: I am able to

participate in a performance review and

appraisal of the general manager. I am

able to establish the job description for

the general manager, including the

specific duties and responsibilities. 

Policies and planning: I am able to

establish objectives and policies for

operations and services of the

cooperative. I am able to provide

ideas/strategies relevant to the

cooperative’s objectives.

Member relations: I am able to

receive ideas and expressions of concern

from members and initiate appropriate

action on their behalf. I am able to

assist in planning the annual meeting

program to maximize member

involvement and input. 

Personal competence: I am able to

listen and speak effectively with

individuals and groups. I am

knowledgeable about the potential

liabilities of being a director.

Leadership: I am able to inform

others of the history, values, principles,

organization and functioning of the

cooperative. I keep attuned to

agricultural, business and

environmental issues and seek to be

knowledgeable in all issues and

concerns affecting the cooperative. 

Board operations: I am able to

work well with other directors and the

management team. I am able to

participate as a member or chairman of

a committee. 

These are just some of the questions

of the assessment exercise tool; there

are many others. Cooperative boards

may also want to devise some of their

own questions for directors to respond

to as well. Once completed, the board

should consider discussing some of the

major weaknesses identified, based on

the assessments, and explore ideas for

addressing needs. It may be that a

single education program can alleviate a

problem area for a number of directors.

Some co-op organizations, such as the

National Council of Farmer

Cooperatives, National Rural Electric

Cooperative Association and some

state/regional cooperative associations,

among others, conduct director training

programs especially tailored for co-ops.

The key is to conduct an assessment

from time to time and then come up

with ways to educate directors in those

areas that are identified as problem

areas or weaknesses. Having a board of

competent, knowledgeable directors

coincides with having a well-governed

and efficiently functioning cooperative.

n

References

• Baarda, James, The Circle of

Responsibilities for Co-op Boards,

Cooperative Information Report 61,

U.S. Department of Agriculture,

Rural Development, December 2006.

On the Internet at:

www.rurdev.usda.gov/supportdocume

nts/CIR61.pdf

• Frederick, Donald A., Co-ops 101,

Cooperative Information Report 55,

U.S. Department of Agriculture,

Rural Development, April 1997

(revised November 2012). On the

Internet at:

www.rurdev.usda.gov/supportdocume

nts/cir55.pdf

• Wadsworth, James J., Assessing

Performance and Needs of Cooperative

Boards of Directors, Cooperative

Information Report 58, U.S.

Department of Agriculture, Rural

Development, October 2000. On the

Internet at:

www.rurdev.usda.gov/supportdocume

nts/CIR58.pdf.

• USDA cooperative publications

library:

www.rurdev.usda.gov/BCP_Coop_Lib

raryOfPubs.htm.

Rural Cooperatives / July/August 2013 45

Director Diligence

continued from page 31
46 July/August 2013 / Rural Cooperatives

follows each group of animals to

substantiate the premiums to be paid. 

Untraceable or substituted animals

are not eligible for a premium. KBMN

uses a production database to monitor

the growth of each group and to predict

harvesting schedules. KBMN negotiates

and tracks all sales using a marketing

database, beginning with the cow/calf

producer and ending with the retailer.

Under agreements reached with

producer-members, all producer sectors

in the supply chain share in the

premiums paid along the way to the

retailer. 

USDA assistance 

USDA Rural Development has

provided key assistance to KBMN,

including the following financial

assistance:

• A $35,000 Value-Added Producer

Grant (VAPG) was awarded to the

network in March 2012 for an

economic feasibility analysis and

business planning for the aggregation

project. The primary consultant was

Cathy Smith, executive director of the

Keystone Development Center Inc. (a

co-op and small business development

center that also receives funding from

USDA under the Rural Cooperative

Development Grant program). 

• A $79,500 Rural Business Enterprise

Grant (RBEG) was awarded in April

2012 for website design, advertising,

computer software, and portable

scales for marketing. 

• A $300,000 VAPG was awarded in

May 2013 for working capital to

develop and implement the KBMN

supply chain infrastructure and to

coordinate marketing activities.

Progress during KBMN’s 

first 30 months 

Through February 2013 — KBMN’s

first 30 months of operation — the

network’s key accomplishments include: 

• Aggregated 7,000 head of cattle for

sale, gaining producers an average of

$125 per head, or $875,000, due to

aggregation alone. Additional income

resulting from price discovery and

negotiation may be as great as the

income from the sale of aggregated

cattle. 

• Improving the market infrastructure

by establishing four collection/buying

facility sites since July 1, 2012. This

reduces transportation and other costs

for producers in Clarion, Fayette,

Mercer and Tioga counties. All of

these locations are equipped with

pens, certified scales and loading

facilities. All have the ability to handle

calves, yearlings and adult animals.

• To accommodate the projected

volume of calves needed, KBMN is

working to strengthen the state’s

stocker/backgrounder sector. Two

new cattle backgrounders have been

established, adding essential partners

in the supply chain. Western

Pennsylvania has thousands of acres

of under-utilized grassland — often

highly erodible land not suitable for

row cropping — that can be well used

for backgrounding. 

• Conducting 23 meetings offering

services to more than 2,500

Pennsylvania beef producers. 

To ensure a sufficient supply of

calves is consistently available, KBMN

is striving to further expand its

membership. Its goal is to market

20,000 head annually — about 10

percent of the Pennsylvania cow/calf

population — by December 2016 (the

third full year of operations). This level

is sufficient to supply some major local

markets in Pennsylvania. When its

marketing plan is implemented, KBMN

projects that $3.5 million in additional

revenue will be collected annually by

Pennsylvania beef producers.

“One of life’s greatest satisfactions is

helping your fellow man,” Henry says.

“KBMN will continue working to

increase income to Pennsylvania

cattlemen.” 

For more information about KBMN,

visit: www.kbmn.org, or e-mail:

info@keystonebeef.com. To learn more

about UPI, visit: www.uproducers.com.

For more information about USDA

Rural Development programs, visit:

www.rurdev.usda.gov. n

Pennsylvania Bred and Fed

continued from page 7

Bob Bryce checks on his Angus cattle, outside Carlisle, Pa. By aggregating and marketing their cattle jointly, small-scale producers are earning

more per head.
Rural Cooperatives / May/June 2013 47
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