USDA / Rural Development January/February 1999

65years

Special Issue 

Celebrating 

Sixty-Five Years

of Cooperative

Progress

Special Issue 

Celebrating 

Sixty-Five Years

of Cooperative

Progress

Rural
ii November/December 1998 / Rural Cooperatives

65years

We begin the year marking the end of the

millennium with this special issue of “Rural

Cooperatives” looking back over the past 65

years of cooperative progress as reported on

the pages of USDA’s cooperative magazine,

begun in April 1934. Article excerpts have

been culled from the nearly seven decades of

the magazine’s existence to capture milestone events and developments in the

nation’s cooperative movement.

Naturally, since our timespan covers

most of the 20th century, space permits the

inclusion of only a representative sample of

cooperative news and events as reported in

the magazine. Nevertheless, the highlights

provide a fascinating chronicle of cooperative

progress over 65 years. Our thanks to

Patrick Duffey, Pete Manzelli and Daniel

Campbell of the Rural Development Office of

Communications for producing this issue.

Reading the news briefs on the following

pages gives a sense of history in the development of agriculture and the evolution of

cooperatives as a vibrant sector of the farm

economy. It will also demonstrate the role of

USDA in assisting the development of

farmer-owned businesses, the various types

of business activity they have engaged in

and — in some cases — when these activities were eclipsed by changing technology

and times. Statistical articles throughout

this period document the growth in number

of cooperatives, then a gradual reduction in

numbers as changing transportation modes

and size of farms enlarged service areas that

led to the trend toward consolidations that

continues to this day. Volume of business

transacted has continued to increase, as

have market shares.

USDA’s work with cooperatives predated

the creation of the magazine, dating back to

the early 1900s. A number of reports about

cooperatives were issued by USDA following

passage of the Cooperative Marketing Act of

1926 — which formally created a multi-mission cooperative services unit within USDA.

The cooperative unit was part of the Farm

Credit Administration (FCA) from 1933-53.

The Cooperative Research and Service Division of FCA tracked the emergence and performance of the cooperative farm credit

system along with the marketing, farm supply and farm service sectors of the cooperative movement.

Following separation from FCA in 1953,

the Farmer Cooperative Service was established as an independent USDA agency and

primarily focused on marketing, farm supply

and related service cooperatives. The magazine continued as “News for Farmer Cooperatives,” published by the new agency. The

Rural Electric Administration concentrated

on electric and telephone cooperatives, and

FCA — now separated from USDA —

focused its energies on farm credit banks

and the banks for cooperatives.

Of particular interest in the recap is the

emerging use of petroleum and commercial

fertilizer as the horse and buggy days were

replaced by farm automation. Marketing

cooperatives similarly changed dramatically

in scope of business and service territory.

Development of brands for foods processed

by cooperatives took on a regional and often

national identity. More products were

exported abroad.

The different roles performed by cooperatives during World War II provides insight

into how co-ops were called upon to meet

defense needs in weapons manufacturing as

well as materials used in fighting the war.

Our retrospective captures the emphasis

USDA placed on the development of cooperatives in such areas as irrigation, insurance,

poultry marketing, frozen food lockers,

handcrafts and transportation.

Certain areas of emphasis are consistently found throughout the seven decades

chronicled. These recurring themes include:

the importance of cooperative education in

spreading knowledge of cooperative principles and practices; the importance of members making a commitment through member

agreements and equity investments to

finance cooperatives; cooperative combinations through mergers or consolidations; and

coordination through federations, marketing

agencies-in-common and joint cooperative

ventures.

The emergence of new technical services

provided by local and regional cooperatives

and, beginning in the 1970s, creation of

value-added/new-generation cooperatives in

both farm production and marketing are also

documented. Similarly, the tremendous wave

of consolidation and mergers among local

and regional farm supply, marketing and

credit cooperatives can be observed.

Each reader will draw different lessons

from this chronology of the role cooperatives

have played in service to agriculture. Overall, this chronology provides an overwhelming sense of the growing presence and

importance of cooperative self-help activity

— despite a number of setbacks — as cooperatives have steadily increased their share

of farm marketing and farm supply purchases and farm services.

What does the future hold? Cooperatives

will certainly continue to restructure to meet

the needs of a changing farm constituency.

Cooperatives will continue to fulfill their role

as a primary means for farm entrepreneurs

to maintain market access and services as

we enter the new millennium.

We hope this look back at the past 65

years will provide insight that helps all cooperatives continue to progress during the next

65 years and beyond. No matter what technological, economic and social changes lie

ahead of us, the advantages of rural people

working together to direct and control their

own fate will never diminish.

Magazine Time Capsules Reveal Progress of Co-op Movement

Randall E. Torgerson

Deputy Administrator

RBS Cooperative Services

ii November/December 1998 / Rural Cooperatives
2 Magazine Overview

For 65 years, USDA’s magazine has helped guide co-op movement

4 The 1930s

Cooperatives help farmers survive the Great Depression and position

themselves for new marketing opportunities 

10 The 1940s

Co-ops help supply U.S. war effort; modernize operations rapidly during

post-war era 

18 The 1950s

Co-op brands gain market share; livestock, tobacco, cotton co-ops

expand

26 The 1960s

Trend toward fewer, larger farms means major changes for co-ops

36 The 1970s 

Co-ops embrace new technologies and structures to maintain 

owner control

46 The 1980s

Mergers, consolidations change look of U.S. cooperatives

54 The 1990s

Hallmarks of the 1990s: Merger-mania and co-op fever

Rural Cooperatives (1088-8845) is published

bimonthly by Rural Business–Cooperative Service, U.S.

Department of Agriculture, Washington, DC. The Secretary

of Agriculture has determined that publication of this periodical is necessary in the transaction of public business

required by law of the Department. Periodicals postage paid

at Washington, DC. Copies may be obtained from the

Superintendent of Documents, Government Printing Office,

Washington, DC, 20402, at $3.00 domestic, $3.75 foreign;

or by annual subscription at $11.00 domestic, $13.75

foreign. Postmaster: send address change to: Rural Cooperatives, USDA/RBS, Stop 3255, Wash., DC 20250-3255.

Mention in Rural Cooperatives of company and brand

names does not signify endorsement over other companies'

products and services.

Unless otherwise stated, contents of this publication are not

copyrighted and may be reprinted freely. For noncopyrighted

articles, mention of source will be appreciated but is not

required.

The United States Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the

basis of race, color, national origin, gender, religion, age,

disability, political beliefs, sexual orientation, and marital or

family status. (Not all prohibited bases apply to all programs). Persons with disabilities who require alternative

means for communication of program information (braille,

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

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

To file a complaint of discrimination, write USDA, Director,

Office of Civil Rights, Room 326-W, Whitten Building, 14th

and Independence Avenue, SW, Washington, D.C. 20250-

9410, or call (202) 720-5964 (voice or TDD). USDA is an

equal opportunity provider and employer.

Dan Glickman, Secretary of Agriculture

Jill Long Thompson, Under Secretary, Rural Development

Dayton J. Watkins, Administrator,

Rural Business–Cooperative Service

Randall Torgerson, Deputy Administrator, 

RBS Cooperative Services

Patrick Duffy, Editor

Dan Campbell, Executive Editor

George Avalos & Pete Manzelli, Design

Have a cooperative-related question? 

Call: 202/ 720-6483 

FAX: 202/ 720-4641, Information Director

This publication was printed with vegetable oil-based ink.

Rural

JANUARY/FEBRUARY 1999 • VOLUME 66 NUMBER 1

United States Department of Agriculture
2 January/February 1999 / Rural Cooperatives Introduction

For 65 Years, USDA’s Magazine Has Helped Guide Co-op Movement 

By Patrick Duffey, Communications Specialist,

USDA Rural Development 

Editor’s Note: Duffey was editor of

“Farmer Cooperatives” magazine from

1981 until 1992, when he switched to editing USDA’s special cooperative reports.

The winner of the Klinefelter Award — the

industry’s highest honor for cooperative

communicators — he returned to the editor’s chair to produce this special issue of

the magazine. 

The spring of 1999 marks the 65th

anniversary of USDA’s journal for cooperatives. The monthly “News for Farmer

Cooperatives,” the forerunner of today’s

bimonthly “Rural Cooperatives” magazine, was first published by the cooperative research and service division of the

Farm Credit Administration, then an

agency of the U.S. Department of Agriculture. The nation and its agricultural

sector were emerging from the Great

Depression when USDA introduced this

magazine to help spread knowledge about

farmer-owned cooperatives and what was

required to make a success of them.

It appeared quietly, with little fanfare

in April 1934. Although initially limited

in circulation, word of its existence spread

and demand for copies grew. The original

issues were just 12 typewritten pages. 

Like any publication with an extended life, the content, style and even the

name of the magazine evolved over the

years to suit the conditions of its day. In

December 1953, FCA separated from

USDA and became an independent regulatory and farm credit system promotion

agency. USDA’s Farmer Cooperative Service was formed at the same time, and

assumed responsibility for the magazine,

the name of which was shortened to 

“Farmer Cooperatives.” 

In its 65-year span, the publication has

had 10 editors. The third one, the late W.

Gifford (“Giff”) Hoag, later went on to

become executive assistant to E.A.

Jaenke, then governor of the FCA. In a

book he wrote about FCA/FCS, Hoag, who

served the agency for 41 years, recalled,

“It’s amazing that the one-year-old FCA

could find time to launch a new educational publication. It was trying to help

the Federal Land Banks (FLBs) handle

thousands of loan applications. The banks

had closed $27 million in loans in one day

that year, more than the entire year 1932.

FCA was launching 600 local Production

Credit Associations (PCAs) and the 13

Banks for Cooperatives. Usually, in times

of stress in cooperatives, educational and

informational programs are the first to

feel the pinch.” 

Hoag continued, “A year later, President Franklin Roosevelt closed all commercial banks. The bank holiday lasted

Intro

Gene Ingalsbe, the fifth editor, brought modern

journalism practices to the magazine. 

Upon his retirement as governor of the Farm Credit Administration, E.A. Jaenke, left, is congratulated by “Giff”

Hoag, his executive assistant and long-time editor of this journal. 
Introduction Rural Cooperatives / January/February 1999 3

several days. In succeeding months, the

president asked any farm family whose

farm was being foreclosed to wire him.

Wires and letters inundated the FCA and

the Federal Land Banks.” The ensuing

flood of communications from farmers

took a three-shift stenographers’ pool to

handle, he said. “Creditors were being

asked to delay foreclosures until the FLBs

could try to refinance (loans). FCA recruited hundreds of people and expanded its

appraisal staff from 200 to more than

5,000 in less than a year.”

Many cooperatives failed and countless others were struggling financially.

“The Banks for Cooperatives were being

staffed to meet the challenge,” Hoag said.

The organization of PCAs across the country had been completed, thus giving farmers access to operating money for the year.

Hoag joined discussions with Cooperative Commissioner Frank Peck and

Information and Extension Director Ed

Reid when they agreed to develop a

monthly publication as an important part

in communicating with farm supply and

marketing cooperatives. At first, there

were no photos in the magazine, although

an occasional graph was used to illustrate

research. Within two years, “News for

Farmer Cooperatives” was being printed

in a slick magazine format, began using

black-and-white photographs and often

ran more than 20 pages per issue.

During the editorship of the late Ms.

Beryle Stanton, who worked with both

Val Sherman and Hoag in FCA during

World War II, more visuals, including cartoons, came into use to illustrate ideas.

She encouraged many people from the

cooperative community to write articles

for her. From the beginning, articles were

published about the agency’s useful

research projects, “but (we) avoided making the magazine only a house organ,”

Hoag said. The magazine became an

instrument for promoting practices that

improved cooperative operations. 

Ms. Stanton had the longest tenure of

any of the editors — 21 years, from 1950

to 1971— and had worked on it with

Hoag in FCA six years before that. In

1964, she began carrying the banner for

the first national observance of “October

is Cooperative Month. ‘ She saw the swift

changes cooperatives had to make “as

they faced hot and cold wars in the midcentury era, struggled to survive post-war

depressions, grew through relative prosperity, geared up for swiftly emerging new

technologies and management practices,

and adapted to the fast changing and

modernized agriculture.” 

People working with cooperatives also

changed during this time. At first, cooperative directors were typically small

farm operators with a limited education.

By the late 1960s, many, if not most, co-op

directors were well educated and managed large farm operations, which gave

them an expanded perspective in making

decisions on cooperative boards. 

“Cooperative employees also adapted

to new agricultural and industrial

demands. Women, young farm couples,

and youth emerged as stronger voices and

more interested participants in cooperatives.” Stanton felt cooperative people

were “a different breed, more giving, and

more sophisticated than they used to be,

but they still have that same spirit.”

In a final magazine article before

FCA’s exit from the USDA in December

1953, FCS Governor C. R. Arnold said the

magazine “is an effective means of helping

to coordinate the work of all cooperatives

in the country — credit as well as purchasing, marketing and service organizations. Farmer cooperatives throughout

the country profit from its published

results on current research related to

farmer cooperatives, information based

on experience of all kinds of farmer cooperatives, and general educational material on basic cooperative principles and

problems.” 

Gene Ingalsbe was the fifth editor and,

like his successors, he came from a newspaper background and later worked as

communication specialist for major cooperatives. He spent eight years as managing editor of “Farmland News” for Farmland Industries Inc., and two years

editing an agricultural trade magazine

before joining USDA. For a time, he was

both magazine editor and director of information. He bridged the gap between the

USDA magazine editor Beryle Stanton was credited for carrying the banner for the first National Cooperative

Month observance. 
5A-FPO

6A-FPO

4 January/February 1999 / Rural Cooperatives

early years of the Farmer Cooperative

Service and later Agricultural Cooperative Service. He brought modern journalism practices and a professional touch to

the magazine.

Patrick Duffey edited the magazine

from 1981 to 1993 after spending an earlier 12 years as publicity director and

magazine editor with GROWMARK, Inc.,

at Bloomington, Ill. Near the end of his

tenure, the magazine made the leap to

four-color reproduction. His successor,

Dan Campbell, came to USDA after working for newspapers and as an editor with

the Blue Diamond Growers almond cooperative in California. He continued to

emphasisze quality photography and indepth feature articles. About this time the

name of the magazine was changed to

“Rural Cooperatives” to reflect the inclusion of articles dealing with all types of

rural cooperatives, although the empahsis

has remained on agricultural co-ops.

Campbell was later named deputy director of public affairs for USDA’s Rural

Development mission area. 

While editors have come and gone and

the look and content of the magazine continues to evolve, the magazine’s goal

remains much the same as when founded: to promote the use of cooperatives by

rural Americans as an effective way to

improve their quality of life. ■

April Tyler instructs students in a one-room school

house on Smith Island, Md., where a crab meatpackaging co-op was formed by local women. The

school has since closed, but the co-op continues to

thrive. Background image: a notice calls members to

the next meeting of the Smith Island Crab Meat 

Co-op. USDA Photos by Bob Nichols
Rural Cooperatives / January/February 1999 5
Cooperative Purchasing Comes of Age

Census figures and other data reveal that

cooperative farm supply purchasing has

skyrocketed from $75.9 million in 1924 to

an estimated $250 million in 1934.Dr.

Joseph Knapp, principal agricultural

economist in the Farm Credit Administration, says the most striking development has been the spread of purchasing

to almost all parts of the United States.

“Cooperative purchasing of farm supplies

is now an important farm activity in as

many as 8,000 communities,” says Knapp.

The door was opened for rapid expansion

of cooperative business activity by the

Cooperative Marketing Act of 1926. It was

opened still wider by the Farm Credit

Acts of 1933 and 1935. This legislation

“recognized the increasing importance of

cooperative purchasing by providing equal

financial services to farmers’ marketing,

purchasing and service associations.”

Knapp also notes that there has been

rapid growth in large-scale purchasing

cooperatives. In 1925, for instance, farmers purchased $6 million in supplies from

Eastern States Farmers’ Exchange in New

York. The amount increased to $14 million a decade later. Likewise, farm supply

purchases increased from $6.6 million to

$25 million for Grange League Federation

in new York. Illinois Farm Supply Co.,

which didn’t even exist in 1926, did $10

million in farm supply sales in 1935. Other new farm supply co-ops developed during the previous 10 years include: Midland Cooperative Wholesale in Minnesota,

Farmers’ Union Central Exchange, Minnesota; Cotton Producers Association,

Georgia; North Carolina Farmers Cooperative Exchange; Consumers Cooperative Association, Kansas; and National

Cooperatives Inc., an Ohio-based interregional cooperative serving 25 regional coops. Land O’Lakes Creameries, Minnesota, also emerged during this time as a

significant regional dairy marketer.

The increasing use of motor-driven

equipment by farmers gave rise to petroleum cooperatives starting in 1921. Their

growth has been particularly dramatic in

the Midwest, fueled by the extensive use

of tractors, trucks and other motorized

implements. By 1935, about 2,000 associations supplied petroleum products valued at $40 million. This period also

marked the development of regional or

statewide wholesale federations of local

fuel cooperatives.

Large petroleum associations are

blending their own brands of oil in cooperatively owned plants. Standardized systems of local distribution have been developed by large-scale centralized

cooperatives such as Southern States

Cooperative in Virginia. Cooperative manufacturing of supplies — feed, fertilizer,

insecticides, package materials, and paint

— has also gained prominence. The State

Farm Bureau cooperatives in Illinois, Indiana, Michigan and Ohio share in the profits of a company manufacturing fertilizer

for them. West Coast marketing cooperatives are often using subsidiary companies or departments to purchase supplies.

Farmers, Co-ops Rebuild 

After Depression

W.I. Myers, governor of the Farm Credit

Administration, is encouraging farmers

— whose economic condition has

improved in the past two years — to turn

their attention to strengthening their

cooperative organizations. This is vital,

he says, because marketing farm commodities and purchasing “are as much a

part of farming as producing crops and

livestock products. In case of weakly

financed cooperatives, a plan should be

established which will gradually build on

members’ contribution to the co-op, thus

increasing the net worth that is essential

for the continued success of the cooperative and its members.

“We want to build cooperatives that

Unloading 1,500 bushels of wheat from a box car only took five to seven minutes and the service of two men

at a major co-op terminal in the early 1930s, thanks to up-to-date unloading equipment.

Cooperatves Help Farmers Survive the Great Depression, Position Themselves for

New Marketing Opportunties

1930s

6 January/February 1999 / Rural Cooperatives The 1930s
The 1930s Rural Cooperatives / January/February 1999 7

belong to members and construct cooperatives on a financial basis that gives a continually increasing proportion of memberownership,” Myers says. The only way to

build up net worth, he notes, is through

member contributions or earnings. “Many

members of cooperative have debts and

they have to be financed.”

Cooperatives would be better off, Myers

says, if members turn to Federal Land

Banks for mortgage credit and Production

Credit Association for production credit.

“With several hundred thousand farmers keeping their hands on the control of

the farm credit system, there will be a far

greater degree of success for cooperative

credit and a far greater degree of service

to farmer-borrowers throughout the country than at any time in the past.

“Farm land associations best withstood

the Depression and operated at a lower

cost basis in districts that had been developed into strong cooperative organizations

and were used to not only making loans,

but to service and collect loans.”

FCA Introduces Co-op 

Statistical Report

A supplemental statistical overview of

agricultural cooperatives — started by R.

H. Ellsworth, agricultural economist with

the Farm Credit Administration — made

its first appearance in 1935. This report

set the pattern for future annual reports

on the state of the nation’s farmer cooperatives for the rest of the century. The

number of active associations at the close

of 1935-36 was 10,500, with 69 percent of

them located in the 12 north-central

states and 8 percent operating in western states. Minnesota lead the nation

with 1,401 associations, followed by Wisconsin with 1,086, and Iowa with 954.

About 69 percent of the estimated membership of 3.66 million participated in

marketing cooperatives and the balance

in farm supply co-ops. Total business volume of the associations topped $1.8 billion, 86 percent of it conducted by marketing cooperatives. The top business volume states were California, Illinois, Minnesota and Iowa.

Retains Build Cooperative Business

“Most cooperative failures result from a

lack of a thorough understanding that a

cooperative marketing organization is a

business institution and should be regarded as such,” says Cooperative Bank Commissioner S.D. Sanders. “Many associations have gone under because members

were demanding too much cash — cash

that management needed to market their

products. Members have deserted [their

co-op] to get better prices outside,” he says.

As a solution, Sanders recommends

the board and management use retains

or stock ownership in the cooperative to

stress to members the stake they have in

their business association. “Let the members know how much is being taken off

[prices] and give them a stock certificate

to show their ownership in the association. In time, they will see that it is a savings account for members and they will

take a greater interest in the cooperative.”

Stressing that farmers are more

dependent than many think, Sanders

says, “They can produce until they are

blue in the face, but until they bring some

of the pluses (from marketing) to their

side of the ledger, they will not get as

large a part of the consumer’s dollar as is

possible from their crops.”

Some cooperatives operating with neither advance member capital nor retains

from the businesses, Sanders says, were

forced to forego profits during the Depression. These co-ops even endangered their

capital structure to hold a sufficient volume of business to warrant continued

operation. Contrasting with these businesses were associations that built up sufficient reserves through regular retains

and annually retired the oldest stock by

the new investments generated through

member retains. This type of cooperative,

with annual distributions, helped underwrite the financial success of member

farms, Sanders says.

Illinois Farm Supply System 

Reports Rapid Growth

More than $10 million in farm supplies

were sold in 1935 by 60 locally owned service companies associated with Illinois

Farm Supply Company, up by about 25

percent from 1934. The bulk of the sales

were petroleum products, which generated $1.4 million for Illinois from gasoline

and sales taxes.

About 68-million gallons of petroleum

products — including gasoline, kerosene,

distillate, lubricating oil and grease —

were sold by member co-ops in 1935.

Sales of soyoil paint jumped 65 percent,

to 175,000 gallons. Farmers’ investment

in the 60 companies reached $981,595.

They had a combined accumulated surplus of almost $1.2 million for use as

working capital.

Nearly half of the companies operated

service stations for petroleum products.

Three-fourths of the business in 1934 was

with 80 percent of the members. Each

company set aside part of its earnings for

working capital purposes. Cash dividends

to members totaled $805,000.

Co-op Activity Surges in Texas

Texas cooperative activity was on the

upswing in 1935, reports the Houston

This cartoon took a light-hearted look at the difficulty

some co-ops have getting enough board members to

attend meetings to constitute a quorum. The best

way to avoid this situation: keep meetings

educational and encourage director input. 

The 1930s Rural Cooperatives / January/February 1999 7
8 January/February 1999 / Rural Cooperatives The 1930s

Bank for Cooperatives. Cotton farmers

led the way by organizing new cooperative cotton gins. Bank President Sterling

Evans says the move toward cooperation

was so strong that 75 new co-ops were

formed in 1934-35 despite earlier cotton

crop failures. The crop rebounded in 1935.

The state’s 150 cooperatives have a total

membership of nearly 30,000 members.

Walnut Growers Market 

50 Million Pounds

California’s Walnut Growers Association

markets 50 million pounds of walnuts valued at $8 million for it 39 member associations. This accounts for about 87 percent of the state’s total walnut crop.

Shelled walnuts are being sold on the

export market while unshelled nuts are

primarily sold for domestic consumption.

Most of the business is being transacted

by mail and wire. Sales were made direct

to wholesale grocers, chain stores and the

wholesale produce trade through a group

of 128 food brokers. Most of these brokers

have been with the association since its

formation. While trade outlets had been

well established in Canada, new ones were

being developed for northern Europe.

National Markets Developing for 

Wool Associations

Of the 13 major state or regional fleece-wool

associations — including five formed in 1938

— all (with the exception of one based in

Ohio) belong to the National Wool Marketing Corporation, headquartered in Boston.

The bulk of fleece wool is processed within a

400-mile radius of Boston. The association is

owned and controlled by the local wool cooperative associations. All of these co-ops are

providing financing, marketing and educational services to members.

The average flock in the East and Midwest is currently about 50 head. Associations handling one- to two-million pounds

of wool are grading in car-lot quantities,

as preferred by manufacturers. Most associations are offering tours to growers, led

by county agents and extension workers,

to better acquaint them with how their

wool is graded and handled.

Local marketing pools are proving to be

advantageous to farmers and stockmen

with small herds who operate near irrigation projects in southern Idaho. Most of

the growth has occurred since 1930.

Changes in agricultural production methods in the past decade caused by low

prices, reduced yields and unsatisfactory

market outlets for cash crops have led to

increased livestock feeding and production.

Loans to Water Mutuals Grow

Serving the credit needs of California

farmers’ water mutual companies is fast

becoming an important part of business

for the Berkeley Bank for Cooperatives.

The bank’s first such loan in 1935 was

soon followed by 10 others, totaling $1.2

million. The figure was expected to reach

$3 million by year’s end after some companies reorganized as cooperatives.

Co-op Financing Climbs

Cooperative institutions loaned farmers

$119 million during the first half of 1936,

A mother taking part in the cooperative teaches her

children about its importance in the family's financial

and social future. This, in turn, helps them become

better future citizens.

Walnuts are sorted at the California Walnut Growers Association, which marketed 50 million pounds 

of walnuts for its 39 member associations in the mid-1930s. That was equal to about 87 percent of

California’s tonnage.
The 1930s Rural Cooperatives / January/February 1999 9

or more than a third of the $343 million

loaned by the Farm Credit Administration. The 550 associations had a 21-percent increase in business compared with

1935. This was the third consecutive

increase in spring crop and livestock

financing since the organizations formed

in 1933-34.

Trucking Livestock on the Rise

Drive-in business is speeding ahead for

the Central Cooperative Association livestock sales agency in South St. Paul,

Minn. Increased truck transportation

resulted in drive-in business jumping

from 17 percent of total business in 1929

to 59 percent in 1935. Given the growth

in livestock trucking, local shipping associations which rely on railroads are

almost extinct. In 1935, 83 percent of the

livestock receipts from Minnesota and

Wisconsin arrived at St. Paul by truck.

About 60 percent of the 200 livestock

associations shipping to Equity Cooperative Livestock Sales Association at Milwaukee, Wis., are moving their livestock

by truck, causing the gradual disappearance of shipping associations. Twenty

years earlier, nearly all livestock destined

for Milwaukee was moved by rail.

Developing Tomorrow’s Cooperators

“Get them involved in the movement

financially,” is Oklahoma banker M.H.

Howard’s suggestion for involving youth

in cooperatives. Howard, who manages

Farmers National Bank in Enid, Okl.,

says “If people can’t be interested in a project in which they have money invested,

then they can’t be interested at all.”

Howard says there is too much preaching

at young people “instead of giving them

a chance to participate actively in the program on a par with the grownups.”

Howard suggests wheat producers give

their children an allotment of acres from

which the crop would be marketed

through a cooperative elevator in which

their parents own stock. The elevators

would sell a share to these youngsters.

One or two of these youths in every community would be named directors at large

on the board.

“There is no more sobering and witsharpening experience...than to match

minds with thinking men on the board.”

And dads bringing their children to the

annual meeting would get and keep them

interested, he said.

Co-ops Need Emergency Reserves

Even though patronage refunds help

build volume and hold member interest,

“You can’t build successful cooperatives

by appealing to producers with an

unsound, inadvisable business action,”

cautions S.D. Sanders, cooperative bank

commissioner. “Failure to build up sufficient surplus and reserve is one of the frequent causes of financial stress among

cooperatives.” The reserve must be large

enough to enable the cooperative to meet

unforeseen circumstances.

“Every association is subject to emergencies when some reserve cash is badly

needed to tide the organization over a difficult period.” Despite pressure on management and directors to disburse surplus funds, in order to survive, an

association’s financial structure must be

placed on a sound basis. Members and

management must understand the financial needs of the association, he says.

Co-op Livestock Marketing 

Gains in West

Cooperative livestock marketing is gaining a foothold in the western states that

produce a large surplus of cattle and

sheep. Leading the way is the Farmers

Union Livestock Co. in Denver. Cooperative development has been slower in the

“range states” of the West than in the

Midwest or East, but the trend began to

increase in the West after 1930.

By 1936, 10 large livestock associations

were operating nationally. Between 1931

and 1935, the volume they handled more

than doubled, to 2.2 million head. These

cooperatives have reduced profits

skimmed off by speculators and reduced

unnecessary handling costs in moving

feeder cattle and lambs direct from range

to feedlots.

Fruit, Vegetable Co-ops Gaining

Sales, excluding supplies, for 1,063 fruit

and vegetable marketing associations

serving 166,000 growers reached nearly

$200 million during the 1935-36 season.

About 83 percent of that amount was handled by fruit cooperatives. Among the

major problems they face are: private fruit

marketing businesses are gaining control

of crop share offering production loans to

growers; greater use of trucks to transport

crops is making it more difficult to gauge

the quantity of a commodity moving to

market; some truckers are also becoming

itinerant salesmen; concentration of bargaining power by chain stores is presenting a challenge and opportunity best met

by concentrated selling.

FCX Formed in North Carolina

Farmers Cooperative Exchange (FCX),

formed in 1934 as North Carolina’s

statewide marketing and farm supply

cooperative, now has three separately

This cartoon illustrated a 1939 magazine article about

the increasing interest of women in the business side

of farming and in attending the annual meetings.
10 January/February 1999 / Rural Cooperatives The 1930s

incorporated departments: FCX Seed Service, FCX Fruit and Vegetable Service,

and FCX Poultry Service. Each has to be

self supporting. The 13-member FC board

represents growers, state agricultural

institutions and the State Grange and

Farm Bureau.

Producers Mutual Exchange, an earlier attempt to federate about 75 local

mutual exchanges, failed for lack of capital and trained management and merged

with FCX. Those exchanges and FCX

branches serving 22 of the state’s 100

counties continued operations. In an

agreement with Virginia’s Southern

States Cooperative (SSC), which had been

operating in part of North Carolina, FCX

will handle the marketing program and

provide wholesale and retail farm supplies. SSC provides manufactured goods,

such as fertilizer, feed, and seed. Three

SSC directors also serve on the FCX

board. Directors have agreed to pay half

of the annual savings in stock and the

rest in cash.

Cottonseed Co-ops Open in Cotton Belt

The five cooperative cottonseed oil mills

operating in the Cotton Belt crushed

about 100,000 tons of seed in 1937, double

their 1936 crush. Plains Cooperative Oil

Mill in Lubbock, Texas, and Delta Products Co. in Wilson, Ark., have just begun

operating. Assets of all these cooperatives

total nearly $1 million.

Most of these co-ops incorporated

under their state’s laws. Members and

non-members are treated alike in the

annual distribution of savings. Nearly all

the voting stock is held by members.

Stock dividends are limited to 8 percent.

Member equity in the five mills is almost

$700,000, or almost three-fourths of the

total investment. The cooperatives serve

nearly 2,000 members.

First Co-op Refinery Opens in Kansas

The first cooperative-owned oil refinery

opened in 1939 at Phillipsburg, Kan., by

National Cooperative Refinery Association, a subsidiary of Consumers Cooperative Association (CCA), based in Kansas

City. A 70-mile pipeline connects the refinery with oil fields. The $700,000 plant

uses 3,000 barrels of crude oil per day, or

the daily equivalent of 11 railroad-car

loads of refined fuels.

The refinery supplies 40 percent of the

refined fuel needs of 440 local cooperative

members of CCA located in nine states.

In 1938, the locals marketed more than

6,000 carloads of gasoline, kerosene, tractor fuel and distillate. And during a 1939

membership drive, CCA added 69 more

local cooperatives with 2,498 members.

‘Coffee’s On Us,’ Co-op Tells Patrons

There is no shortage of good will toward

patrons of Farmers Cooperative Company

at Oneida, Ill. For the donut dunkers,

Manager Leo Windish had the answer: free

coffee at a local restaurant. Oneida’s population — primarily people of Scandinavian descent — enjoy their coffee, he says.

Windish says it was the best promotion

the cooperative ever had. He feels little

things that humanize the cooperative are

just as important as following sound business practices, such as posting livestock

receipts and prices at the office — even

though the cooperative handles no livestock.

A dozen phone calls still come in every

morning about the postings. Periodically,

patrons receive a small token gift from the

cooperative, such as a key ring or pencil.

How To Appraise Your Co-op

Whether sizing up a dairy cow, farm tractor or automobile, the principles for

appraising are similar to those needed to

appraise your cooperative. These nine factors were suggested by J.E.Wells, Jr.,

These illustrations promoted an easy way to pay off a farm mortgage by using 4 percent Federal Land Bank

loans, repayable in small regular installments suited to the individual farmer's income. Producers were

encouraged to plan ahead on what crops or livestock to sell to meet payments, to set up an interest-paying

reserve to protect them from the drought or insects, and to get out of debt sooner by paying more on the

mortgage than required in good years.
The 1930s Rural Cooperatives / January/February 1999 11

deputy cooperative bank commissioner of

the Farm Credit Association: Is there an

economic need for the co-op?; Is the management good?; Are the association’s

membership relations satisfactory?; Are

the operating policies strong?; Are the

directors qualified for their jobs?; Is the

association’s financial condition satisfactory?; Do past history and present conditions point toward successful future operations?; Is the business volume

satisfactory?; Can the cooperative meet

or overcome competition?

Michigan Builds Local Co-ops

Since 1931, the number of member associations in Michigan has multiplied tenfold. By 1938, about 40,000 Michigan

farmers were using the services of 139

local cooperatives affiliated with Michigan Farm Bureau Services, the state

wholesale farm supply cooperative and

its 10 branch retail farm supply stores.

Sales for fiscal 1938 reached $2.8 million,

plus $800,000 from the retail stores.

Among the members and branches are

farm supply associations, cooperative elevators, and cooperative oil associations.

The locals mix much of the feed they sell

from ingredients obtained for state associations which purchase supplies from two

interregional cooperatives: United Cooperatives and National Cooperatives.

Challenge’s Silver Fleet Serves 

L.A. Dairy Market

California’s Challenge Cream and Butter

Association was formed in 1910 in Los

Angeles by a small group of dairymen

renting a basement storeroom. They put

a horse-drawn delivery vehicle on the

streets as a “challenge” to butter marketing interests. Today, in 1939, it operates a “silver fleet” of 225 streamlined

trucks working out of a dozen modern

warehouses. Deliveries of dairy products

are valued at $20 million annually.

The organization, owned by 23,000

farmers through 23 local creamery cooperatives, handles 70 percent of the Los

Angeles market and a substantial part of

the San Francisco market. Since 1922, it

has used a revolving capital retains plan

to finance facilities. By fiscal 1938, nearly $2.2 million had been retained. By Dec.

31, 1938, the cooperative had paid dividends of $1 million and held stock certificates totaling $1.2 million.

Challenge has had consistent growth.

Butter production, its main line, was 4.5

million pounds in 1920. By 1938 its butter

production has jumped to 41.5 million

pounds. By then, it was also producing

cheese, butterfat in cream and milk,

sweetened condensed milk, powdered

milk, whey powder, casein, cottage cheese,

evaporated milk, condensed skim milk,

and 2 million dozen eggs. Challenge also

processes and packages dairy products,

including bottled pasteurized milk for distribution on wholesale routes in Los Angeles and Oakland, and processed cheese.

An ice cream business was the latest addition to the product line.

Pecan Pies, from Georgia to D.C.

The 1,000 grower-members of the National Pecan Growers Exchange at Albany, Ga.,

produced 1 million pounds of paper-shell

pecans in 1939, enough to make a line of

pies stretching from Atlanta to Washington, D.C. Almost since its inception in

1915, the exchange has been trying to

devise better ways to prepare nuts for the

market. It used its plant as a laboratory

for testing ideas to catch the consumer’s

eye. In the early 1930s, the exchange

developed a method of bleaching and dyeing nuts. By 1938, it began stamping each

nut with the exchange’s trademark and,

by 1939, nearly all of the fall and winter

nuts were branded. Even the equipment

was trademarked. Most pecans were marketed in the East and Midwest.

The organization operates on a “pool”

basis. After nuts are graded according to

size and variety, each grower receives an

advance payment according to the grade

and size delivered. After nuts are marketed, final payment to members is based

on the quantity and quality of nuts in the

particular “pool” which contained the

grower’s pecans. Most of the co-op’s members farm in Georgia and Florida. ■
Co-ops Help Expand 

Wartime Food Supply

Some grain cooperatives, anticipating the

shortage of storage space brought on by

World War II, start expanding capacity.

But with harvest season approaching,

some plants stand idle for want of motors,

copper wire and other supplies needed for

the war effort. Wheat is spoiling in North

Dakota and Montana fields for lack of

storage space.

Ezra Taft Benson, executive secretary

of the National Council of Farmer Cooperatives, encourages representatives of

farm supply and marketing cooperatives

and major farm organizations to form a

National Committee for Farm Production

Supplies. It handles matters related to

agriculture and works with government

agencies to assure availability of supplies

needed for USDA’s Food for Freedom program. This effort involves a major

increase in food production from American farms to support the war effort.

Cooperative Business Tops $2 Billion

USDA data shows that 15,000 cooperatives were operating in the United States

in the mid-1930s, 295 of which were doing

$1 million in business annually while 34

did $10 million in business. Collectively,

cooperative business in the United States

exceeded $2 billion annually. Co-ops count

3 million members and derive patronage

from at least another 1.5 million others.

This means that 62 percent of cooperative patrons are members. And only 85

percent of the members are patrons. The

challenge, a University of Minnesota

extension economist says, is to “convince

farmers of cooperative benefits.”

The solution, he says, lies within the

cooperative and how well directors know

their local operations. Do they depend

entirely on the manager, or are directors

active in formulating co-op policy? How

well do they keep advised of changes in

their particular industry and how readily

do they adjust to changes? Do they know

directors from a neighboring cooperative

engaged in the same business? Do cooperatives of a county work together, or are

they suspicious of one another? Would

acquaintance and confidence result in

closer cooperation?

12 January/February 1999 / Rural Cooperatives The 1940s

Co-ops Help Supply U.S. War Effort; Modernize Operations Rapidly 

During Post-War Era

These illustrations and photos depict various wartime activities. Above right, Rutherford County (Tenn.)

Cooperative Creamery loads cheese for the War Department and promotes war bonds with the artwork on its

truck. Lower right: U.S. cooperatives escaped war damage, unlike this Irish co-op that was hit in a 1940

German bombing raid; Above: Uncle Sam pulls the railroad right-of-way levers for accelerated shipment of

hogs, beef cattle and sheep supplies needed for the war effort.

1940s
Dairy Co-op Becomes 

Part of Curriculum

A practical experiment begins in 1940 by

Virginia vocational agricultural instructors who are using a local cooperative to

supplement an ag marketing course.

Their study and tour of Valley of Virginia

Cooperative Milk Producers puts zest and

interest into classes. Discussions with coop Manager D.E. Shank brings new life

to textbook concepts of cooperatives.

Auctions Market More Livestock

The increase in livestock sold at local auctions attest to the growing trend toward

decentralized marketing of livestock. A

1937 Farm Credit Administration survey

shows 1,300 auctions operating in 37

states, with 67 percent operating in the

Corn Belt. More than 4.6 million head

were marketed. Livestock volume peaked

from 1934 to 1937 and business volume

averaged more than $555,000 per year.

Marketings in all classes of livestock

increased, except for hogs, which were in

sharply reduced supply.

Role of Nationwide 

Cooperatives Debated

The cooperative movement that has taken

hold in the United States during the past

20 years or more will continue to develop,

according to A.G.

Black, acting governor of the Farm

Credit Administration. He said the

field for nationwide cooperatives “is

still an open question; some leaders

doubt whether cooperative activities

can be successful on a nationwide

basis at this time. Others think there may

be a place for nationwide cooperatives, but

they must be organized and operated

somewhat differently than some of those

that have been tried in the past. No

national marketing program can be developed without giving proper consideration

to others in the field. I expect it to be a

long time before cooperatives can handle

all of a given product from the producer

to the consumer.”

The 1940s Rural Cooperatives / January/February 1999 13

Trucks hauled logs for the new Doddridge County

(W. Va.) Timber Marketing Association to a railyard

for loading into boxcars. Irene Bliss was the first woman to replace a man as a truck driver for the GLF Cooperative at Ft. Plain, N.Y. 

Magazine covers from the 1940s

depicted themes such as co-ops vs.

private handlers, tobacco and poultry

marketing cooperatives and the growing

use of women in farm production.
Florida Co-op Council Formed

Representatives of 50 Florida cooperatives have voted to form a Florida Cooperative Council to act as the official coordinating and policy-forming agency

representing the various agricultural

organizations, state agricultural institutions and grower cooperatives. The council deals with legislative matters related

to farm cooperatives, education, organization, research and other matters affecting cooperative development.

Message for Younger Cooperators

A sign in front of Litchfield (Minn.)

Creamery Co. not only identifies it as a

“cooperative owned by farmers and best

market for your milk and cream,” but also

addresses young farmers. “Your fathers

built and supported this creamery. Carry

on their good work through your patronage.” Manager Emil Oman says the sign

reminds the younger generation of “what

older folks were up against when the coop was formed in 1903. To that generation, the cooperative spirit which made

possible this brick and masonry was

almost a religion.”

Farm Electrification Expands

In 1940, about one-fourth of all farms are

receiving high-line electrical service via

programs of USDA’s Rural Electrification

Administration (REA). Nationwide, about

700 local power projects received REA

loans. Nearly 300 were in southern states.

These projects were providing electricity

for the first time to one-half million farms.

Another 1.1 million were slated for electrical service via REA projects under construction. About 90 percent of the systems

are cooperatives.

14 January/February 1999 / Rural Cooperatives The 1940s

Californian Fruit Growers Exchange used a

“sectionizer” to promote Sunkist lemons.

Penny-pack raisins were introduced to grocers and

wholesalers by periodic promotional post cards and

letters devised by Sun-Maid Growers of California.

The mini boxes were also used as change for

consumer food stamp program purchases. 

MFA at Columbia, Mo., packed its poultry mashes in

cotton color-fast bags in a variety of patterns so they

could be used in quilts, comforters, bedspreads,

dresses, pajamas, pillow cases, men’s shirts and aprons. 
Farm Mortgage Loans ‘Paid in Full’

Since its formation, the Farm Credit

Administration (FCA) has written “paid

in full” on 100,000 farm mortgage loans

— more than half of which were made

since 1933. Half of these farmers repaid

their debt by the late 1930s. FCA officials

say that despite repeated drought and low

prices in some Midwest states, farmers

are making faster progress in repaying

these loans than at any time in the history of the program.

Florida Celery Co-op Small But Stable

Although small in membership — it had

only 12 members when it organized in

1930 and 15 a decade later — the Standard Growers Association from Seminole

County in Florida is going strong as a celery marketing co-op. From January

through May, more than 500 carloads of

celery make the trip from the field,

through the washer and pre-cooler and

into refrigerated cars for the trip to northern markets. Sales by 1939 reached about

$125,000.

Hoosiers Buy Federated Co-op Way

Indiana farmers have made substantial

progress to improve their purchasing power by developing a federated system of

local farm supply cooperatives affiliated

with the State Farm Bureau. The Indiana Farm Bureau Cooperative Association was incorporated in 1925. By 1939,

the association’s 60,000 members represented about 30 percent of all Indiana

farmers. An equal number were in the

process of becoming members. Business

volume in 1937 amounted to $14.5 million, one-third of sales derived from petroleum products and one-fifth from feed

sales. By 1938, it began making deliveries

to the locals in its own trucks. Soon after,

it began to manufacture fertilizer in a

40,000-ton mixing plant at Indianapolis

and opened a 2,500-barrel-a-day petroleum refinery at Mt. Vernon.

The 1940s Rural Cooperatives / January/February 1999 15

A

B

C

D

E

F

G

(A) Cans of milk are delivered to Consumer-Farmer

Milk Cooperative’s processing plant at Belle Meade, N.J. 

(B) Flower-grower members of Greenhouse Flower

cooperative In New York City worked together to set

the pace of their industry.

C) The Litchfield (Minn.) Dairy reminded young

farmers of the sacrifices their dads made to build 

the cooperative.

D) Farm labor associations in New York built camps

such as this to house foreign workers. 

E) Livestock shipping associations, such as this one

in Kansas City, had a resurgence in popularity as

transportation shifted from rail to trucks. 

F) Developments in transportation, refrigeration and

mass buying prompted fruit and vegetable marketing

cooperatives to improve handling procedures to

assure product quality.

G) Cotton samples are checked at North Carolina

Cotton Growers Cooperative Marketing Association.

Growers could earn more for better quality if they

sold on the basis of grade and staple, instead of the

then-industry standard of “before or after rain.” 
Co-op Fertilizer Business Advances

In 1923, the Federal Trade Commission

recommended farmers lower farm production costs by using cooperatives to buy

fertilizer. Fifteen years later, the Ohio

Farm Bureau Cooperative Association

joined with Grange League Federation

cooperatives of New York to purchase an

80,000-ton fertilizer factory at Baltimore.

The $350,000 facility manufactured low-cost super-phosphate. Construction soon began on Farm Bureau

mixing plants at convenient transportation centers in Ohio to help reduce freight

rates, which made up nearly 40 percent

of the fertilizer cost paid by farmers. The

goal was to improve both the supply and

quality of the fertilizers at reduced prices

and cut the number of analyses. A 20,000-

ton mixing plant and warehouse costing

$125,000 was added near Cincinnati in a

joint venture of Indiana and Ohio Farm

Bureau cooperatives. The Ohio association supplies 15 percent of the fertilizer

used in the state. Ohio farmers in the early 1940s are spending $10 million annually on commercial fertilizers.

Burning Mortgages Co-op Custom

California and Idaho cooperative members have been burning paid-off mortgages as a symbolic gesture to celebrate

members gaining complete ownership of

their facilities. Calavo Growers, a California avocado growers’ cooperative,

secured a 10-year loan in 1934 with the

Berkeley Bank for Cooperatives. It repaid

the loan in only six years and has now

reached debt-free status. Dairymen’s

Cooperative Creamery Association of

Boise Valley, Idaho, has also paid off its

loan thanks to the $500,000 members

invested in their cooperatives during its

first 15 years. The business has a net

worth of almost $400,000. Achieving such

goals took years of advanced planning,

said Tom Stitts of the Farm Credit

Administration.

Phone Mutuals Serve 500,000

More than 30,000 mutual associations are

providing telephone service on a cooperative basis to almost a half million farm

homes. Some are large and operate complete telephone systems. Others are informal groups of farmers and rural people

who have pooled their efforts and constructed neighborhood lines. In many

instances, these cooperatively operated

lines provide the only telephone service

available in a community.

Co-op Traffic Departments 

Control Costs

With farmers spending millions of dollars

annually on freight charges, cooperatives

are finding traffic departments helpful in

pruning unnecessary distribution costs

and increasing savings for members. Five

16 January/February 1999 / Rural Cooperatives The 1940s

Cartoons such as this were used in the magazine to

promote good cooperative practices, such as

encouraging members to attend and participate in

annual meetings.
farm supply cooperatives in the north central states formed a joint transportation

committee to discuss creating a mutual

to deal collectively with transportation

agencies. They are considering various

ways to cut costs.

Illinois Co-op Supplies Certified Seed

An Illinois cooperative first formed in

1925 and later reorganized as Producers

Crop Improvement Association at Piper

City, Ill., has certified the quality of the

hybrid seed corn it produces or processes. With financing from the St. Louis

Bank for Cooperatives, a modern seed

plant has been built and sales of seed corn

nearly tripled from 1938 to 1941. Certification is based in part on field inspection

and checking for grade and disease. Germination tests are conducted for each bag

of seed corn.

Farmers’ Cooperative 

Markets Popular

Public market cooperatives that sell farm

produce are gaining in popularity in New

York, Pennsylvania, Massachusetts and

Rhode Island. In New Jersey, Patterson

Market Growers Cooperative Association

is leaving its small, crowded facilities for

a spacious building in a new farmers market. In New York’s Albany-Troy market,

Capital District Cooperative has built a

new market on a 25-acre tract adjacent

to a major highway and a railroad.

War Prompts Changes in 

Co-op Operations

In response to World War II, cooperatives

have tightened, expanded or consolidated

operations — changes that some say were

long overdue. The 860-member Ellsworth

(Wisconsin) Cooperative Creamery has

reversed a 25-year-old policy under which

it produced more than 1.6 million pounds

of butter for the New York and Chicago

markets. It has now switched to producing nearly 10,000 pounds of edible milk

powder in a new plant addition. North

Central Kansas Cooperative Creamery

added new vats to boost daily cheese production to 4,200 pounds.

Farm tractors and armored tank parts

are moving off the assembly line at

National Farm Machinery Cooperative at

Shelbyville, Ind. In Louisiana, cooperative cane sugar mills are offering their

facilities to crush sorghum to derive

molasses for alcohol. A tung oil cooperative in the South has arranged to crush

peanuts to produce more oil. A California

grain cooperative has remodeled truck

bodies to handle more bulk grain and

eliminate the need for bags. Eastern fertilizer cooperatives are turning to bulk

shipments. Wool co-ops are considering

use of cotton gin equipment to bale wool,

cut use of burlap, and reduce the shipping

space required by bags.

To conserve rubber and labor, dairy

cooperatives are consolidating milk routes

and cutting back to every-other-day deliveries. They are also improving co-op publications to keep members informed and

The 1940s Rural Cooperatives / January/February 1999 17

Challenge Cream and Butter Association at Los

Angeles,. Land O’Lakes at Minneapolis and Farm

Credit Administration were among cooperatives

using radio shows to promote their products
thereby reducing the number of meetings

and related travel. Some co-ops are promoting more store sales. More local coops have been formed for more efficient

assembly and distribution of livestock,

fruits and vegetables, poultry and eggs.

Eaton (Georgia) Cooperative creamery is

selling nearly half its 4,500-gallon daily

milk volume to nearby U.S. Army bases. A

cooperative formed in Brighton, Colo., is

handling scrap iron for the entire county

by collecting old machinery, which it dismantles, tags and stores.

Minnesota Cheese Exported to England

Nine Minnesota cooperative creameries

operating in a 20-mile radius of Fairbault

have temporarily diverted their whole

milk supplies to the central cooperative

to produce carloads of cheddar cheese

eventually destined for England. All were

too small to afford installation of needed

vats for expanded cheese production

which was providing better returns than

butter. Local organizations have been

kept intact for eventual operation on a

peacetime basis.

Two Letters ‘Create’ Co-op

On the surface, it appeared to happen

almost overnight. All it took was adding

two letters to the corporate name to convert 10-year-old Rochester (Minnesota)

Dairy Co. into Rochester Dairy Cooperative. The co-op is owned by more than

1,250 farmers. St. Paul Bank for Cooperatives developed the plan. The 140 producers supplying the original company

and other area distributors were part of

a dairy bargaining association. The conversion was brought on by the need to

raise additional capital so the cooperative

could expand operations, allowing it to

handle 400,000 pounds of milk per day

and produce up to 1,200 pounds of dried

milk per hour.

Co-op Adds Machinery Service

To help members meet production goals,

the Vermillion Farmers Cooperative Association in Louisiana — organized as a rice

warehouse in 1920 — has added a

machinery repair department, including a

replacement parts operation. Members

requiring repair service can bring farm

machinery into a central plant or request

a truck and repair crew to visit their

farm. The repair service is generating

about $45,000 annually in sales, with savings returned to members at year-end,

based on their use of the service.

Florida Orange Concentrate 

Bound for Yanks

Sixty boxcars of fresh citrus fruit a day

are being processed by Florida Citrus

Canners Cooperative at Lake Wales.

About 40 of those boxcars of fruit are converted into 8,000 gallons of orange concentrate destined exclusively for the United States armed forces and their allies.

Total volume of concentrate was expected to reach 800,000 gallons. When reconstituted on the basis of 7 gallons of water

to a gallon of concentrate, it will produce

6.4 million gallons of juice with vitamins

added. All will be shipped under the coop’s Donald Duck brand. Concentrate production has been boosted by the need to

reduce shipping space. Concentrate

requires only about one-eighth of what

fresh fruit requires.

Indiana Co-ops Supply 

Wood to Save Steel

An Arkansas forest, logging equipment,

trucks and two sawmills have been purchased by a subsidiary of Indiana Farm

Bureau Cooperative Association. Its member cooperatives have developed a side

business, supplying wood for farm buildings and equipment usually made of steel.

Hog and brooder houses and feeders are

available in either ready-built or to-beassembled form.

Co-op Becomes Major Grain Marketer

With the purchase of 135 country grain

elevators and 35 lumber yards, Farmers

Union Grain Terminal Association (GTA)

at St. Paul, Minn., is now the nations’s

largest grain cooperative. The acquisition

gives GTA 450 facilities it either owns or

is affiliated with. Asset value of the new

elevators exceeds $2.7 million. Most are

located on the Great Northern Railroad

right-of-way in Minnesota, Iowa, the

Dakotas, Nebraska or Montana. This

region accounts for most of the nation’s

durum wheat production.

Co-op Dividends in New Milk Houses

Members of Wisconsin’s Consolidated

Badger Cooperative have received

“improvement bonds” for their 1942 dividends. Rather than more dollars in their

billfolds, they are earning a new milk

house, cow clipper, an electric hot water

heater or a milk house stove. The bonds

can only be used to purchase either equipment or supplies that improve their farm

milk-producing facilities, or Badger preferred stock. Directors believe the bonds

will accomplish 10 years of milk quality

improvements within only three years.

Forest Product Co-ops Blaze Trails

Although limited in number, forest product cooperatives are blazing new trails

thanks to wartime needs and the economic value of farm woodlots. Otsego Forest Products Cooperative at Cooperstown,

N.Y., has contributed 15 percent to the

net income of dairy farms in the region.

Farmers Federation in North Carolina

effectively markets forest products as an

additional service to members. Rock Cooperative in Michigan — formed in 1913

when mines in the area began closing —

18 January/February 1999 / Rural Cooperatives The 1940s
saw business volume peak in 1930 at

2,000 carloads of lumber valued at

$265,000. But by 1943, its marketings

produced only $21,000. The cleared forest land is now devoted to income-producing crops and pasture. The cooperative increasingly provides farm supplies.

The new Doddridge County Cooperative

Timber Marketing Association in West

Union, W. Va., had net receipts from forest products of $30,000 during the first

half of 1945. It plans to operate a sawmill.

Co-ops Should Anticipate 

Post-War Adjustments

Cooperatives will be challenged to

improve their services in the face of the

price and other adjustments during the

post-war period, predicts O.B. Jensess,

chief agricultural economist with the University of Minnesota. “Cooperatives are

in the position to supply leadership in

working for improvements and in holding in check unwise developments...Better grades and standards often are needed. Cooperatives can help here and be of

service in locating new outlets and new

uses for the products they handle.”

Doing the ‘Turkey Trot’ at Ellsworth

Long after the “turkey trot” dance was

popular, Central Cooperative Turkey Producers has been formed at Ellsworth,

Iowa, and built a processing plant. It

serves 50 producers within a seven-mile

radius who market 4.5 million pounds of

dressed turkey through their cooperative.

Savings during the first two years of operations were enough to pay for the total

cost of the building and equipment. Members received $1.25 million for their birds

in 1946, much of which was spent in the

community. The cooperative chips in

another $40,000 annually in local operating expenses and nearly $60,000 in

employee wages.

Farm Organizations 

Back Locker Plants

With the backing of major farm organizations and regional cooperatives, locker

plant associations are flourishing in many

rural communities. Most were concentrated in Midwest, Pacific Northwest and

Northeast states, plus Texas and Virginia.

Seventy were associated with Land

O’Lakes, 9 were promoted by Southern

States, another 7 were organized,

financed and operated by Farmers Federation of Asheville, N.C., and a few were

under the umbrella of New York’s Grange

League Federation.

Fruit Growers Maintain Uniform Pack

Illinois Fruit Growers Exchange at Carbondale was formed by 15 packinghouses in 1921 that needed an overhead marketing agency to coordinate carlot selling

and shipping rather than relying on consignment outlets. Today, in 1948, its 139

farmer members and four association

members are doing an annual business

of more than $1 million. It handles a

major volume of fresh fruits and vegetables under a marketing plan that maintains a uniform pack of No. 1 grade under

the Illini brand.

Co-op Thrives in Deserted Mill

Sixteen cooperative gin associations in

Texas raised $22,500, 22 local citizens

purchased $6,000 in preferred stock and a

loan from the Houston Bank for Co-ops

covered the rest of the cost to help a new

cooperative buy and modernize a cottonseed mill at Wolfe City in 1939. It had

been idle for seven years. Eight years later, in 1948, the vision of Ne-Tex Cooperative Oil Mill members has paid off. The

cooperative is debt free; $329,000 in cash

patronage was distributed in 1948; and

membership has expanded to include 49

gin associations serving more than 10,000

cotton farmers in a 60-mile radius of

Wolfe City.

Rice Growers Expand Co-op Drying

Marketing cooperatives or their subsidiaries in principal rice-growing states

have joined an industry trend by

installing artificial dryers and expanding

storage capacity as a service to their

members. Uniform drying increases the

yield of whole rice grains in milling operations by reducing breakage. In 1946, 15

cooperatives with a combined rice drying

capacity of nearly 9.5 million bushels

were operating in the primary rice growing states. Another 11 driers under construction boosted capacity 62 percent to

more than 15.5 million bushels. The number of driers has increased 70 percent.

Grain Co-ops Expand Capacity

In response to a surging demand, many

of the nation’s local and regional grain

cooperatives are modernizing their operations with expanded storage capacity,

larger truck scales, faster car loading

equipment and automatic scales. They

offer grain drying and hedging service,

custom feed grinding and mixing, and distribution of seed, fertilizer and petroleum

products. In Kansas alone, local grain

cooperatives are completing work on 20

new elevators, each with a capacity of

100,000 bushels or more.

Use of barges on the Mississippi and

other major rivers has helped speed the

movement of post-harvest grain from the

elevators to distant markets. Illinois

Grain Terminals has exapnded its Illinois

River system to five terminals to merchandise more grain from Farm Bureau

affiliates. Illinois Grain Corporation, a

companion statewide cooperative, provides brokerage and commission services

to its locals. ■

The 1940s Rural Cooperatives / January/February 1999 19
20 January/February 1999 / Rural Cooperatives The 1950s

National Grape Buys Welch

The transaction was five years in the

making and of a magnitude that had never before occurred in U.S. agriculture. But

to the 4,600 Concord grape grower-members of National Grape Growers Cooperative at Westfield, N.Y., who invested $15

million, it meant buying the top name

brand in the business: the Welch Grape

Juice Co. Even though the association

was formed in 1945, it took until 1952 for

the idea of owning the processing company to jell.

To finance the transaction, growers

received cash for their grapes from Welch

at above market prices. They received an

additional 10 percent of net sales in the

form of allocation certificates due in 20

years, retroactive to the 1951 crop. When

the fund reached $15 million, the cooperative exercised its option to purchase. The

cooperative gave Welch a mortgage for

about $13.5 million to cover net current

assets, including supplies, grape juice and

other products ready for sale, improvements to plants, two new plants acquired

since 1952, plus goodwill and trademarks.

Growers applied 10 percent of the net

sales to begin paying off the mortgage.

Cooperative Fertilizer Market Grows

Fertilizer programs of cooperatives have

come a long way since the days of the first

car-door delivery of plant food materials

to farmer members. During 1950-51, supply co-ops grossed $256 million from fertilizer sales. Steady growth in this sector

means that today, in 1953, 65 cooperatives

own 111 fertilizer facilities. Of these plants,

21 manufacture normal super-phosphate.

They range in size from small dry mixing

plants of 5,000 tons up to plants with a

capacity of 80,000 tons or more. The

growth of regional cooperatives such as

Central Farmers Fertilizer Company of

Chicago (later CF Industries) gave farmers a foothold in the production of the primary sources of nitrogen and phosphate.

Cooperatives Integrate 

Petroleum Operations

After the initial growth of local petroleum retail cooperatives and the first cooperative refinery in 1939, 11 refineries are

being operated by 13 regional cooperatives in 1957. Total crude distillation

capacity is 155,700 barrels a day. Total

thermal cracking capacity of nine refineries was 25,925 barrels a day, or 1.2 percent of the total national capacity.

Apple of the Eye: Lucky Leaf

T’was more than luck that put the Lucky

Leaf brand of fruit products on the dinner

tables from Maine to California and more

returns into the pockets of growers. Planning, hard work, cooperation and merchandising knowledge have made Knouse

Foods Cooperative Inc., of Peach Glen, Pa.,

one of the four major apple processing

firms in the United States. While net earnings have been distributed annually since

the cooperative was formed in 1949, peak

returns of nearly $1 million were made in

1954. Fruit growers in the four-state area

of the southern Appalachian fruit-belt mar1950s

Checking on feed bags at the Progressive Farmers

Co-op at Sumter, N.C., which opened its new

building in 1954. The 100-member cooperative also

handled other farm tools and supplies, fruits,

vegetables, appliances and groceries. 

Compact, 50-pound bales of cotton helped Calcot Ltd.

of Bakersfield, Calif., cut air freight cost by a third. 

Michigan Elevator Exchange used 146 electric-eye sorting machines to sort beans at its Port Huron facility. 

Co-op Brands Gain Market Share; Livestock, Tobacco, Cotton Co-ops Expand
ket their foods in many forms, ranging

from apple sauce and red sour cherries to

peaches and fruit pie fillings.

Co-op Tobacco Warehouses Flourish

Cooperatives were new to the North Carolina tobacco country when some of them

formed in the late 1940s. The Growers

Cooperative Warehouse at Wilson, 40

miles east of Raleigh, is the world’s

largest brightleaf tobacco market and was

the first to be formed. To supplement

start-up capital invested by producers,

the cooperative negotiated a loan with the

Columbia Bank for Cooperatives to purchase an 11-acre tract and build its warehouse. In each of its four years of operation, the co-op led the Wilson market in

pounds of tobacco sold from a single warehouse floor. During the 1951 season, it

handled 7.8 million pounds of tobacco

worth $5.2 million.

Farmer Cooperative Service Is Born

Congress had been appropriating funds

to support the development of agricultural

cooperatives for 40 years. Now, in 1954,

it has formalized this assistance with the

creation of the Farmer Cooperative Service (FCS) as part of the U.S. Department

of Agriculture. This action comes on the

heels of the Farm Credit Act of 1953 and

the reorganization of USDA. The Farm

Credit Administration, which had contained the cooperative program, is now

an independent entity outside the government. FCS programs are carried on by

divisions for marketing, purchasing, management services. “News for Farmer

Cooperatives,” a magazine, and other bulletins and reports are edited and issued

by an information division of the Farmer

Cooperative Service. The agency’s new

administrator is Dr. Joseph Knapp.

MFA Sees 40 Years of Progress

William Hirth, editor of the “Missouri

Farmer and Breeder” magazine in the

early 1900s advocated the need to remedy

a “sickening agricultural situation” by

encouraging Missouri farmers to increase

their bargaining power through cooperatives. As a direct result, seven farmers

formed the foundation of Missouri Farmers Association (MFA), which is marking

its 40th anniversary in 1953. MFA’s business volume has reached $300 million and

the cooperative serves 150,000 members.

Dairy products are disbursed from

MFA creameries strategically located

throughout the state. Farmers purchase

nearly $2.5 million in farm production

supplies annually from MFA and it is the

largest producer and processor of certified seed and the largest distributor of

seed corn in the state. A substantial portion of commercial fertilizer used by Missouri farmers is manufactured and distributed by MFA. The cooperative

operates 47 bulk fuel plants and more

than 67 service stations that distribute

oil, gasoline and grease. It operates two

The 1950s Rural Cooperatives / January/February 1999 21

Studio lights brighten the set so that television cameras can broadcast a demonstration of how Co-op Glow

Candles are made by the Pacific Supply Cooperative at Walla, Walla, Washington. 

Copies of “Today’s Farmer” magazine, published by

the MFA cooperative, roll off press. 

This cartoon illustrated a magazine article titled

“Employees Produce More When They Share More.”
refineries that produce petroleum products. More that $23 million in grains is

sold through MFA Grain and Feed Co.

MFA also provides marketing services and

a hatchery for poultry and egg producers.

‘Hayburners’ Gone, But 

Florida Citrus Rolls On

Waverly Growers Cooperative of Florida

—founded four decades ago — originally

transported the citrus of its members by

old, reliable “hayburners” (horse-drawn

wagons) which often had to delve through

deep sands. In time, the hayburners were

replaced by powerful trucks and trailers

which haul fruit to modern packinghouses.

Crop volume has expanded from 9,725

boxes annually in the co-op’s early days to

2.5 million boxes. Grower equity has grown

from almost nothing to $2.4 million.

By its 40th birthday, Waverly joined

with five other citrus cooperatives to form

Florida Canners Cooperative at Lake

Wales. This cooperative provides cost-saving orchard caretaker service for about

90 percent of member groves and has perfected a seasonal pooling plan. The co-op

obtains crates from a cooperative with

sawmills and large timber holdings in

Florida and Georgia. Through Associated

Cooperatives at Sheffield, Ala., it secures

manufactured fertilizers. It helped organize Florida Citrus Mutual, with a membership of 7,000 growers representing 80

percent of the Florida citrus crop.

Wheat Co-op Responds to Bakers

The Farmers Cooperative Commission

Co. of Hutchison, Kan., a regional cooperative serving 121 local cooperative elevators, has tuned in to what the baking

industry is saying: “The variety of wheat

your members produce for high yields is

not suited to our needs for gluten-strength

flour, which affects our baking results.”

Today, in 1954, the cooperative is meeting the problem head on with an experimental mill to test wheat qualities for

baking qualities. It is giving growers a

better market by telling millers how well

members’ wheat will perform for the baker after milling.

22 January/February 1999 / Rural Cooperatives The 1950s

Pure Milk Association introduced a one-third quart of milk concentrate on the Chicago market, which attracted

a large amount of media attention. 

This cartoon from 1955 contrasted the differences

between cooperatives in the 1920s and the 1950s.

Land O’ Lakes used “milk automat” vending

machines to market half-gallon cartons of milk. 

United Farmers of New England, headquartered in

Boston, introduced “pitcher pour” half- gallon cartons

of milk in a media blitz that included streetcar

advertisements and store promotions in 1954.
Potato Growers Lure 

Buyers With Co-op

A cooperative formed by 16 potato growers in the north of lower Michigan is succeeding in attracting new buyers and

expanding markets. With help from their

county extension agent and staff of Michigan State College, the growers formed

Emmet County Growers Cooperative, Inc.,

at Petosky. Previously, their location put

them at the end of the buying chain, or

even shut them out of the market. The

cooperative is enabling them to produce

and market a uniform, high-quality

“Straits” brand potato, demand for which

is high. Net returns are increasing

because their product attracts higher than

average prices for that area. Member

ranks have quickly swelled to 38 growers.

Diamond Walnuts Called 

“Brand of Choice”

Like many food products developed by

farmer-owned cooperatives, the quality

walnuts sold under the Diamond brand

lead the industry for customer demand.

The California Walnut Growers Association of Los Angeles, now 40 years old, has

tied product quality to an aggressive marketing program. It took seven years to

develop the machine that stamps the Diamond brand on each first-grade walnut

shell. The association represents 25 local

cooperative associations, 11,000 growers

and 80 percent of the walnuts grown in

California.

One-Stop Service for Texas Farmers

Although the Brownsville (Texas) Cotton

Gin has never bought a bale of cotton, it

has sold more than 43,000 bales since it

was formed in 1947, or nearly 92 percent

of the bales ginned by the association in

its seven years of operation. The marketing service was started by the original

board of directors. Farmers agreed to pay

$150,000 for a modern gin that they knew

wouldn’t be paid off unless existing local

cooperative marketing practices were

improved.

Annual ginning volume averaged 7,000

bales. A second gin plant was added in

1951 to handle increasing member volume and increasing facility investments

to $1 million. The cooperative also has

$64,360 invested in Valley Co-op Oil Mill

at Harlingen, Texas, and it buys pure certified seed from the Texas Planting Seed

Association, of which it is part owner.

Home Freezers a Boon 

to Locker Plants

Frozen-food locker plants are expanding

marketing efforts by provisioning home

freezers. A survey of 10,553 frozen food

plants by the Farmer Cooperative Service

has revealed that about 1,700 qualify as

frozen food provisioning plants. These

plants extend credit for more than 60 days

for bulk food purchases of their patrons.

Half of the freezer provisioning plants

are in communities of more than 5,000,

while only a quarter of the locker plants

were in towns of that size. The majority

of both types of plants are individually

owned. Cooperatives are less likely to

include a home freezer provisioning feature in their operations.

Co-op Credit Increases 

About 10 Percent

Farmers and their cooperatives borrowed

more than $3.3 billion in 1957 from the

nationwide Farm Credit System, setting

a new record by increasing the amount

10 percent, or $368 million, from 1956. R.

B. Tootel, governor of the Farm Credit

Administration, says the growth of credit is due to “the continued rise in farming

costs and farmers’ efforts to improve the

efficiency of their operations by developing optimum, family-size mechanized

farming units.”

The 1950s Rural Cooperatives / January/February 1999 23

Southern States Cooperative, Richmond, Va., used a

“mobile dairy” in the 1950s to demonstrate its line

of milking equipment.

Broiled lamb chops were promoted as food that

should appeal to weight-conscious consumers in a

17-week ad campaign launched by Producers

Livestock Association of Salt Lake City, Utah. The coop claimed it helped spark a 68-percent upsurge in

demand in areas where it ran.
More than 2,400 marketing and purchasing cooperatives borrow from the

banks for cooperatives. At the end of 1957,

their loans outstanding from the banks

totaled $454 million compared with $457

million in 1956.

Poultry Co-ops Benefit from 

Trucking Rules

Lower rates and better service are the

principal benefits arising from the interstate trucking of fresh and frozen

processed poultry products under the

agricultural exemption clause, according

to a nationwide survey of poultry processors and motor carriers conducted by the

USDA. The exemption refers to the Motor

Carrier Act of 1935, as amended. In a pair

of court decisions, the latest in 1956, the

U.S. Supreme Court affirmed a decision

by a Texas district court that both fresh

and frozen dressed poultry came under

the agricultural exemption clause.

Cooperatives have an interest in the

exemption because they market 6 percent

of the entire U.S. volume of broilers and

other poultry except turkey. In 1956, this

amounted to 213 million pounds (freshcooked weight). Farmer cooperatives also

marketed 16 percent of the total U.S. production of turkeys in 1956.

Taft Benson: Co-ops Must Adjust 

to “Stupendous Changes”

Speaking at the 30th annual American

Institute of Cooperation at Pennsylvania

State University, Secretary of Agriculture

Ezra Taft Benson outlines the importance

of tasks facing cooperatives in an age of

“stupendous change and continuing

breathtaking challenges.” These include

the need to maintain producer control

over farming, preserving the family farm

and exerting effective bargaining power.

“Farmers must mold economic integration themselves to make sure it adequately serves farm interests. They must

create new opportunities for themselves

through joint efforts,” he says. Benson

warns against complacency despite

notable progress in integration and consolidation. He outlines a four-part program: 1) Build your cooperative bigger in

membership, resources, research and services you render; 2) Be satisfied with

nothing less than top-notch leadership in

directors and management; 3) Bring

about more cooperation between cooperatives; 4) Build a better press and public

relations program.

Benson says it is almost impossible to

over-estimate the value of farmer cooperatives. “Those of us who believe in farmer

cooperatives must be vigilant to see that

the public is fully informed... Farm people have come a long way in cooperation

with one another. Working together, they

can exert effective bargaining power and

maintain control of farming. They can

preserve the traditional family farm.”

Wisconsin Livestock Co-op Blazes Trail

For a state that had a dearth of livestock

cooperatives despite its long history as a

leading co-op dairy state, the new Equity Cooperative Livestock Sales Association at Milwaukee has set a torrid pace

in its first 18 months. It set up five livestock auctions around the state — a first

for Wisconsin — even though auctions

were prevalent elsewhere in the country.

C.M. Chalfin, Equity’s general manager,

and Milo Swanton, executive director of

the Wisconsin Council of Agriculture

Cooperatives, led the fight to get the brucellosis control law on Wisconsin’s books

amended so cattle going to slaughter

could be sold at an action without this

test. It allowed the state’s farmers to keep

pace with those in neighboring states.

Establishing the auctions involved

member relations, public relations and

the cooperation by the Agricultural Extension Service and many others in the state.

Equity representatives held township

meetings across a 10-county trade territory for the pilot auction at Richland Center. County meetings were conducted with

key farm groups. Cooperative staffers, district extension men and county agents

participated. They spoke at co-op annual

meetings and other farm meetings, service clubs and vocational agriculture

classes. They also used the cooperative’s

monthly newsletter to spread the word.

Existing cooperatives were used as allies.

Farmers selling at the cooperative livestock auctions are getting better prices,

have fewer shipping losses and get paid

for quality and merit.

Equity also has been selling purebred

24 January/February 1999 / Rural Cooperatives The 1950s

USDA’s Farmer Cooperative Service distributed 4,300 copies of cooperative publications from this booth at

the 1955 American Institute of Cooperation at Purdue University.
Wisconsin Holstein heifer calves for air

shipment to dairymen in distant states

such as Idaho, Tennessee and Kentucky

for dairy herd replacements. It is air-shipping mature dairy cattle to locations as

far away as South America.

Ohio Expanding Co-op Education Efforts

Teamwork among farmer cooperatives,

agricultural extension agents and vocational agriculture teachers in Ohio is

resulting in popular and effective ways of

showing young people why cooperatives

are so important to farmers and ranchers. More than 1,500 members of 4-H

clubs and Future Farmers of America

chapters participated in 16 field days held

on farms around the state. At each event,

students learned from producers and

cooperative representatives why co-ops

are vital to farmers.

The idea came from Max Drake, president of the Ohio Council of Farmer Cooperatives, following discussions with extension and agricultural education staff at

Ohio State University about the need to

develop more effective methods to teach

cooperative principles to young people.

All Ohio cooperatives were invited to

send representatives to district meetings

of extension agents and teachers to present field day plans. The area events were

first staged during the summer of 1952.

Farm radio directors throughout the state

serve as masters of ceremonies and interview host farm families and representatives of each cooperative, stressing how

co-ops bring modern business services to

the farm.

Another state council education program, also conducted in cooperation with

Ohio State University, involves creating

more contacts between cooperative managers and vocational agricultural instructors — 40 percent of whom have been on

the job three years or less. Very few of

these teachers learned anything about

cooperatives in college and many have

had only limited experience with co-ops. A

recent survey shows that 90 percent of

these teachers are giving some instruction on cooperatives, but only 12 percent

are visiting these associations or inviting

managers to talk to their classes.

Dairy Co-op Promotes Bulk Milk Tanks

The bulk system of handling milk to supply the Washington, D.C., market, is

being advanced by the Maryland and Virginia Milk Producers Association Inc.,

which has represented producers for 32

years. During the past two years, the

cooperative has been developing bulk

pickup of its members’ milk.

The cooperative helps producers adjust

to this big change and even helps finance

the initial investment by buying farm bulk

tanks in carload lots to lower the price.

Co-op fieldmen are providing individual assistance to producers to help them

make the switch to the new system. Pickup routes have been reorganized as more

bulk tanks come into service. More than

120 farms receive daily tanker pickups.

Average herd size for the co-op’s 1,800

members is 40 cows, although some milk

100 cows or more. Members produced an

average daily milk volume of 800 pounds

in 1951. Tanker trucks serve an average

of nine patrons on each route, which average 100 miles, round trip.

The bulk milk system first appeared

in the Los Angeles area in 1948, and gradually has become well established in at

least 16 other states. Twenty-one dairy

cooperatives currently use bulk pickup to

some degree.

The 1950s Rural Cooperatives / January/February 1999 25

At its 40th anniversary in 1955, Waverly ( Fla.)

Growers Cooperative featured women in Civil Warera clothing at its headquarters.

Avocadoes from Calavo Growers of California were

used in a fall fashion display show at a major

department store in Washington. D.C. Fashions were,

naturally, mostly in avocado green. 

With a little help from Miss Super-cargo of the Day,

Priscilla Keays, Sunkist Growers of California shipped

135,000 boxes of Valencia oranges to Europe.
Livestock Service Co-ops Gaining

About one million livestock farmers and

ranchers have banded into cooperatives

for marketing services. Both membership

and volume of livestock marketed by cooperative have been gaining during the past

decade. Cooperative interest is also stirring in the South, where beef production

has outstripped marketing facilities. Cotton Producers Association of Atlanta

opened a livestock department in 1952.

It plans to lease or purchase local stockyard facilities at strategic points in Georgia or build new facilities and bring them

into the central organization. The MidSouth Cotton Producers operates a livestock department at South Memphis

(Tenn.) Stockyards.

Meanwhile, western stockmen gained

another cooperative livestock market

when Producers Livestock Marketing

Association of Salt Lake City, Utah,

opened facilities in Billings, Mont. The

cooperative has six branches covering 11

western states.

The livestock cooperatives are still riding the tide of decentralized marketing

that began in the 1920s. New local markets were opened by several Corn Belt

cooperatives in 1952. Farmers now have

memberships in 38 large-scale, regional

and terminal marketing associations

operating on 29 livestock markets of the

country. Fifteen of the cooperatives operate 100 branches at other terminal and

country markets, making a total of 129

markets served.

Co-op Gin One Man’s Idea

Sometimes all it takes is the perseverance

of one person to spark development of a

cooperative. Grant Cotton Gin Cooperative at Marion, Ark., is largely the dream

of John Gammon, who resigned from the

Resettlement Administration (forerunner

of Farmers Home Administration) to operate his father’s cotton farm and led efforts

to build a $70,000 cooperative gin. The

cooperative started in the late 1940s with

54 holders of common stock, each of whom

who invested $10. Another 45 sharehold26 January/February 1999 / Rural Cooperatives The 1950s

The food research lab at Sunkist Growers Inc. plays an essential role in helping the co-op develop quality food

products. 

“Ma has parked her shoes, but keeps up with Pa and

the ‘young fry’ in a ‘grand right and left’ at a family

camp sponsored by the Consumers Cooperative

Association, Kansas City, Mo.”
ers paid $100 per share for preferred

stock. Five years later, the co-op was still

paying a dividend on preferred stock and

making an annual profit. The gin averages 2,000 bales per year and pays an

annual refund or rebate of $3.50 per bale

to participating producers.

A fire in 1951 ravaged the original

$130,000 gin of Mound Bayou (Miss.) Gin

Association, the brainchild of three producers, but due to wartime restrictions

on building materials, a new gin couldn’t

be built. So the board looked around and

purchased, moved and improved an old

gin located in Earl, Ark. It was partially

financed by a loan from the New Orleans

Bank for Cooperatives. Despite its small

membership, the cooperative has never

missed handling a single crop. And it has

steadily gained new business.

REA Loans Modernize Farm Phones

Many farms now have modern, dial-telephones thanks to legislation passed in

1948 which made loans available from the

Rural Electrification Administration

(REA) to modernize the phones used by

farmers. The share of American farms

with telephones passed 42 percent by

1952 and was growing. Well over 200 rural telephone associations had obtained

REA loans to install dial equipment. In

1953, a cooperative in New Mexico had

completed the first part of a system serving people who previously had to travel

70 miles to access a telephone. ■

The 1950s Rural Cooperatives / January/February 1999 27
28 January/February 1999 / Rural Cooperatives The 1960s

Dairy Co-ops Expanding 

Grade A Milk Operations

Originally established to manufacture

ungraded milk, many dairy cooperatives

are expanding to include Grade A fluid

milk production, matching an overall

industry trend. USDA’s Farmer Cooperative Service (FCS) surveyed 124 dairy

manufacturing cooperatives in Minnesota, Wisconsin and Iowa. FCS also analyzed three cooperatives experienced in

handling Grade A milk from 1955-58. The

study shows that cooperatives should

carefully appraise the adequacy of fluid

markets and the costs of adding facilities

for Grade A milk. By participating in the

federal milk order markets, such as the

order for the Chicago area, many cooperatives are successfully developing new

programs. For other smaller manufacturing plants, participating in the Grade

A market has not been — and may never be — possible, short of merging with

neighboring cooperatives.

Pacific Co-op Petroleum 

Patterns Changing

Petroleum, the original “pack horse” that

carried Pacific Supply Cooperative (PSC)

at Walla Walla, Wash., through its early

years, still accounts for about half the coop’s annual sales volume. But it has now

been joined by an array of production supplies such as fertilizer, hardware, feed and

automotive supplies. It also markets grain

and seed. Business volume for 1959

reached nearly $31 million. PSC supplies

120 local cooperatives which serve

100,000 farmer-members in Washington,

Oregon and Idaho. PSC recently opened

a $2 million petroleum marine terminal

on the Columbia River at Vancouver,

Wash., with a storage capacity of more

than 13 million gallons. Six river barges a

month, each toting 200,000 gallons of

petroleum, carry the bulk fuel further

upriver to PSC local cooperatives. The terminal project was financed with the coop’s operating capital, preferred stock sold

to members and a loan from the Spokane

Bank for Cooperatives.

Steps Suggested for Improving

Member Relations

Because cooperatives are owned by their

customers, a good member relations program is a must. The important first step

is to settle on as program and then actively follow these suggested ideas: develop

every director and employee into a friendly salesman for the co-op; make each

annual meeting a red-letter day; hold

additional membership meetings when

warranted; prepare a good annual report;

issue a periodic membership publication;

prepare special leaflets for members; distribute selected educational materials;

maintain an up-to-date mailing list; supply news regularly to local newspapers

and magazines; use the local radio and

television to carry news about your co-op;

foster the family approach to member

relations; provide cooperative educational opportunities for rural youth; maintain

an attractive headquarters and facilities;

cultivate friendly community relations;

and cooperate with other cooperatives.

Kansas Co-op Bolsters 

Its Public Relations

Reaching the people touched by cooperative activities is the primary aim of the

public relations program for the Farmer

Cooperative Commissions Co. at Hutchison, Kan., which serves its 131 local asso1960s

Trend Toward Fewer, Larger Farms Means Major Changes for Co-ops

President John Kennedy greets 500 cooperative leaders attending the 1963 National Conference on

Cooperatives and the Future during a ceremony at the White House Rose Garden.
The 1960s Rural Cooperatives / January/February 1999 29

ciations in central and southwest Kansas.

A series of six advertisements are running in local papers to promote the idea

that the regional and its member locals

are a valuable asset to the business and

economic life of the area.

Local cooperative associations have a

combined annual payroll of more than

$4.5 million and returned $6.5 million in

savings to members — an annual contribution of $11 million into local communities to stimulate business. The cooperatives also pay plenty of taxes. In one small

community alone, it pays 37 percent of all

personal and property taxes. In many cases, the local cooperative is the largest user

of local labor.

Using a common theme, “How Do You

Measure the Value of Your Local Community Institutions?,” the ads ask readers what the cooperatives means to the

community. These following headlines top

the ads: People working together; Homeowned; Community responsibility; More

local business; Shared by everyone; Paying taxes.

USDA Double-A Shield OKed

Lake to Lake Dairy Cooperative at Manitowoc, Wis., is the first cheese manufacturer in the United States to qualify for

using USDA’s Grade AA shield on its

cheese labels. Consistently producing only

the highest quality cheddar cheese has

taken Lake to Lake “from an art to a science in cheese making,” says General

Manager Truman Torgerson.

Liquid Fertilizer Use Gaining

To illustrate the growth in liquid fertilizer service by Midwest local cooperatives,

USDA/FCS has conducted a study of 17

cooperatives in Nebraska and Kansas.

Peruvian Indians work on the potato harvest outside

a parish in San Juan, which sponsored a credit union

to finance a local farm supply business and

cooperative housing. 

Mechanized harvest is underway near a rural church in the Dakotas, a spring wheat-producing area served by

Farmers Union Grain Terminal Association. 

These magazine covers from the 1960s

depict co-op activities, including

livestock feed and fertilizer operations,

Agriculture Secretary Orville Freeman

opening the National Co-op Month

observance at USDA; and Midland

Cooperative’s prize-winning photo in

the annual Cooperative Editorial

Association photo contest.
30 January/February 1999 / Rural Cooperatives The 1960s

Twelve of these co-ops distribute anhydrous ammonia while 14 handle 28- and

32-percent nitrogen solution. Very little

aqua ammonia, low-pressure nitrogen

solutions or liquid mixed fertilizers are

used by their members. Eight associations

that keep records show that anhydrous

ammonia represents 66 percent of the

total fertilizer sales.

Co-op Grain Drying on the Rise

The trend toward early harvest in the

mid-1950s meant local elevators received

more grain with a high moisture content

— more than they could conveniently

blend or sell at a discount. This trend has

given rise to grain drying services at the

elevators. A study by USDA’s Farmer

Cooperative Service and Kansas State

University of 10 local elevators looks at

drying costs for a period of one year. During the period, these elevators dried 3.25

million bushels, or an average of 250,000

bushels per dryer. Direct dryer costs averaged 1.47 cents per bushel of grain. Costs

were lower when drying volume was high.

Purchasing Co-ops Cut Farm

Production Costs

The trend toward larger farms is prompting a marked increase in services members expect from their cooperatives. This

includes bulk delivery of feed and petroleum products, spreading fertilizer and

grinding feed by portable mills on the

farm. In turn, cooperatives are providing

more credit, transportation, fire insurance,

electrical power and telephone services and

related on-the-farm production or business

service. As a result, regional cooperatives

are increasing economic research on problems of internal operations.

CCA Farm: A Testing and 

Proving Ground

A 150-acre working farm owned by Consumer Cooperative Association at Kansas

City, Mo., provides a testing center for

feeding and management practices, as

well as research labs. The beef, dairy,

turkey, chicken and part of the hog breeding enterprises are patterned after a normal Midwest farm operation. The three

objectives of the farm are: 1) to determine

specific rates of gain per pound of CCA

feed under farm conditions; 2) to breed

the hog of tomorrow;and 3) to find and

demonstrate improved feeding and management practices that can apply to individual livestock and poultry enterprises.

Nearly 4,300 visitors toured the farm during the first year. The initial open house

after CCA’s 1959 annual meeting attracted 750 people.

Cooperatives in the 1960s began offering consumer

recreation services -- such as rural golfing and

fishing -- with the help of financing from the Rural

Electrification Administration and technical

assistance from USDA’s Farmer Cooperative Service. 

The Consumers Co-op Association at Eau Claire, Wis., opened a car care center featuring a lounge where

customers could watch television while waiting for their car to be serviced. 

This mural provided inspiration for the Montgomery

Farm Women’s Co-op Market, Bethesda, Md., and its

manager, Marjorie Hicks.
The 1960s Rural Cooperatives / January/February 1999 31

Snowstorm Doesn’t Impede 

Annual Meeting

Not even a driving snow storm could prevent 16 of the 19 members of the Sawyer

County Mink Ranchers Cooperative at

Hayward, Wis., from attending the 1961

annual meeting. Plans were approved to

expand the food plant to make the operation more efficient. The initial plant was

financed by a loan from the St. Paul Bank

for Cooperatives. In its first month of

operation, the cooperative showed a loss of

$900, but by year-end it showed a net

gain of $19,000. Savings for 1960 reached

$33,000.

Secretary Freeman Sees New

Horizons for Co-ops

Cooperatives can make their greatest contribution only if they consciously seek

ever- widening horizons toward which to

set their own goals, Secretary of Agriculture Orville Freeman tells the 1961 American Institute of Cooperation.

Freeman says cooperatives should

“make their voices heard effectively and

constructively in formulation and adoption of a national farm policy directed

toward achieving broad goals for American agriculture.” He encourages “all

farmer cooperatives to cooperate with one

another in the interest of a broad legislative program for farmers, rather than

speaking only from their specific commodity interest with small and fragmented voices.” He urges cooperatives to

help improve public understanding of the

contributions and needs of the nation’s

farmers. He also urges cooperatives to

strengthen the bargaining power of farmers and explore benefits of vertical and

horizontal integration — especially in

areas where modern science and technology offer advantages, such as in processing commodities.

Seminole Indian Cattlemen Form Co-op

For several years the cattle were owned

by the Seminole Indian tribe in Florida,

but then cooperative principles were

adopted to improve marketing and production practices. The producers formed

Big Cypress Indian Cattlemen’s Association, which is now a member of the

Glades Livestock Marketing Association.

Tribal herds had been dispersed and individual ownership has been achieved by

members purchasing the cattle. It sold

115 fat, full-range cows at its first sale in

1961. The co-op has grown to 37 members

who own about 1,500 head of high-grade

Brahman-cross cattle. They run registered Angus bulls with their foundation

herds.

Scrambling for Eggs the Co-op Way

The Inter-County Cooperative Association at Woodridge, N.Y., could build a

mountain with all the eggs it has handled

in its 25 years. In 1936, its initial year,

the cooperative had 41,470 hundredweight in feed sales, which has grown to

1.3 million hundredweight in 1960. In its

quarter century, the cooperative has allocated more than $1.5 million in patronage refunds and paid out more than

$376,000 in cash refunds. The pulletfinancing program helps members with

replacement flocks. Financing bulk bins

boosts bulk feed receipts on members’

farms. It is the first organization in the

East to initiate an egg quality control program with federal-state grading service

at the farm level.

Service Co-ops Raise Living Standard

Farm service cooperatives and farmerowned mutual service companies have

played an important part in the development of rural America in the 1960s. They

provided farm business services in electricity, telephone, insurance, irrigation,

Co-ops in the 1960s became more adept at

marketing. National Grape Cooperative Association

used Fred Flintstone to promote Welch grape

products (top); Sunkist Growers opened its Citrus

House at Disneyland (bottom), and June is Dairy

Month (center) was heavily promoted. 
32 January/February 1999 / Rural Cooperatives The 1960s

credit and transportation to supporting

commercial farm operations. Mutual irrigation companies, for instance, served

more than 7,000 rural areas throughout

the western third of the United States to

bring water for crop irrigation on arid and

semi-arid soils and create prosperous

farms. In 1,600 or more rural areas in 40

states, farmers’ mutual insurance companies are providing more than half of

the fire insurance carried on farm property and save their 3.5 million members

at least $30 million in annual costs.

U.S. Co-op Marketing 

Movement Turns 50

Cooperative marketing in the United

States is marking its 50th anniversary in

1963. The occasion is being observed in

many ways by cooperatives, coast to coast.

In Oregon, for example, the Apple

Growers Association is observing a double celebration, since 1963 also marks its

50th anniversary. The co-op was formed

in 1913 when a bumper apple crop in Oregon’s Hood River valley prompted growers who had been supporting four competing organizations to join forces in a

new cooperative. In 1913, the Apple Growers Association had 400 grower/members

who controlled 65 percent of the area’s

fruit. It secured a start-up loan of $5,000

from a local bank.

By 1963, assets of the cooperative had

grown to more than $8 million and its

member equities stood at $4.2 million.

The association today sells $11 million in

products and purchases $1 million in supplies for its members annually. Its facilities include a 20,000-ton cannery, a 2-million-plus box cold storage warehouse and

five fruit packing houses.

It was 50 years ago, in 1913, that the

U.S. Department of Agriculture established an Office of Markets to assist proA Korean co-op signpost says that the association is

“by, of, and for farmer-members.”

Lyman McKee, president of Milk Producers Co-op at Madison, Wis., and Dairy Society International, serves

chocolate milk to visitors at the dairy mission at the World Trade Fair in Accra, Ghana.

President Lyndon Johnson was keynote speaker at

the 1967 Co-op Month observance. 
The 1960s Rural Cooperatives / January/February 1999 33

ducers in marketing farm crops and purchasing farm supplies cooperatively. Its

purpose was to help cooperatives such as

the Apple Growers Association organize

on a sound basis and develop efficient

operating methods, work later carried out

by USDA’s Farmer Cooperative Service.

A 1913 survey by USDA showed that

3,099 marketing cooperatives had a total

business volume of more than $310 million, compared with 5,727 cooperatives

with an annual business volume of $9.6

billion in farm products by 1960-61.

Despite the 50-year span, cooperatives

are still having trouble securing adequate

bargaining power. In 1913, the best

answer was to establish a good local or

regional commodity marketing cooperative. Fifty years later, the goal was to

merge or consolidate those cooperatives

and enlarge the scope of their activities.

Seed Co-op Foraging for Answers

Farmers Forage Research Cooperative

(FFR) organized in 1960 at Madison, Wis.,

is unique in the cooperative business

world because it combines two western

cooperatives that produce forage seed for

research with eight Midwestern and eastern cooperatives that will eventually distribute improved seed varieties. FFR conducts basic and applied research in

developing improved varieties of alfalfa

and clovers and plans to add other crops

later. In 1962, FFR operated a combination office, laboratory and large greenhouses and tested 18,000 seedlings on its

80 acres in Battle Ground, Ind.

NW Co-op Stabilizes 

Mink Feed Supply

Contrast the wild mink plunging into the

icy Yukon River for its daily fill of fresh

fish with their later day cousins in 1963,

living on a fur farm and being served a

daily ration of fish, grain, liver and vitamins for a well-balanced meal by the

Northwest Fur Breeders cooperative

(NFB) of Edmunds, Wash. Ranchers

formed the cooperative in 1947 to stabilize the supply of fish feed for the expanding mink ranch industry.

NFB has become the second largest

cooperative of its kind in the world and

A) A 1966 Christmas card from Farmers Union Central Exchange depicted children from Bombay, India,

primary schools offering thanks for CARE product donations in an effort that helped feed 19,000 children.

Employees and the co-op skipped holiday cards, parties and gifts for one another to finance the project.

B) This circular cover was used for a 1966 article about the growth of farm supply cooperatives. 

C) Farmland Industries draped uncut press sheets for one of its publications near the member relations booth

at its annual meeting. The intent was to stress the need for communicating with the membership. 

D & E) Cooperatives in the 1960s increasingly turned to computers to quicken handling of records and

calculations for members and management. North Central Wool Marketing Co-op at Minneapolis used

computers for storing fieldman records and dividend payments. A

B

D C

E
34 January/February 1999 / Rural Cooperatives The 1960s

supplies fish and other foods for a half million minks in Washington, Idaho, Montana

and northwestern Oregon. The cooperative’s 190 mink rancher members own

more than 70,000 female breeding minks.

By the end of 1961, NFB had issued certificates for retained margins and investments worth $1.3 million and had retired

more than $685,000 in stock, leaving only

5 years of retained certificates to be retired.

St. Louis Co-op Bank Marks 30th

In marking its 30th anniversary, the St.

Louis Bank for Cooperatives — the first

of the 12 district banks in the Farm Credit System — hosted 50 representatives

from cooperatives in Illinois, Missouri and

Arkansas. D.M. Hardy, the bank’s first

and current president, was honored during the celebration. The bank loaned

members more than $169 million, for a

grand total of $1.4 billion in 30 years. The

bank returned more than $1.4 million in

stock to members as patronage refunds.

Transportation Service 

Achieves Savings

The transportation bill for products marketed and supplies purchased by farmer

cooperatives is about $1 billion per year,

although only 2 percent of 5,000 cooperatives use a full-time traffic or transportation manager. An estimated 33,000

trucks are used as mobile warehouses

through which members’ products and

supplies move. The FS Services’ truck

fleet in Illinois, for instance, delivers

70,000 loads of merchandise to its member cooperatives. Midwest grain cooperatives own or lease 60 barges and hire hundreds of others to transport grain on the

Mississippi and Missouri rivers. Four

regional cooperatives ship 14.3 million

bushels of grain via barges for export.

Freeman, Voorhis Mark League’s 

50th Anniversary

Speaking at the 50th anniversary congress of the Cooperative League of the

USA, Agriculture Secretary Orville Freeman pledges the partnership of USDA

and the Farmer Cooperative Service in

helping cooperatives achieve even greater

usefulness. To solve the nation’s tough

internal problems and face growing

responsibilities and expanding opportunities, Freeman urges “better use of cooperatives in new ways and to meet new

needs as we struggle to meet our national objectives.” These objectives include

achieving income parity for the family

farm, helping poor Americans lift themselves out of poverty, and using the voluntary self-help form of organization to

open up economic opportunities in cities.

In his final report after serving for 20

years as the League’s executive, Jerry

Voorhis says cooperatives relate to five

great needs of the times: 1) they strengthen farmers’ position in the marketplace;

2) they preserve the best in rural life and

revive rural communities; 3) they give

people in cities a sense of belonging and of

taking part in worthwhile community

activities; 4) they help the poor; 5) they

help solve the hunger crisis and help people learn to live together in peace.

He challenges the League to help

members find the vision and courage to

adjust, expand, integrate and innovate

services. He says they must tell what

cooperatives are doing so they can grow

and develop rapidly and freely and should

work for cooperation among cooperatives

of all kinds. They must continue to raise

the professional competence of all people

in cooperatives: directors, managers,

employees and members. “Growth is the

prime necessity of the next 50 years in

cooperative development,” he says. Not

simply growth in size, but also growth in

vision and participation by members. He

says co-ops must emphasize differences

and unique values.

Sioux Honey: Buzzing Distribution

Sioux Honey Association at Sioux City,

Iowa, operates a “buzzing” distribution

network. In 1964, it moved more than 48

million pounds of honey through that network to reach every part of the United

States and many foreign markets. The

cooperative’s 1,100 members are scattered

over 32 states. Their crude honey is

hauled by truck from 500 origin points

into six processing plants stretching

sweetly across 2,500 miles, from Waycross, Ga., to Anaheim, Calif.

Large Breeding Co-ops Consolidate

Midwest Breeders Cooperative has been

formed through the combination of Consolidated Breeders Cooperative of Anoka,

Minn., and Badger Breeders Cooperative

of Shawano, Wis. Service and semen sales

of the new organization, formed in 1967,

will exceed $4 million. Now the nation’s

largest breeders’ cooperative, it has 50,000

members.

Calcot Recounts 40 Years of Progress

In observing his cotton marketing cooperative’s 40th anniversary, J. Russell

Kennedy, executive vice president of CalAgriculture Secretary Orville Freeman (third from left)

reviews a co-op month proclamation with Patrick

Healy, National Milk Producers Federation; J.K.Stern,

Cooperative League of the USA; and Torben Roane,

Danish ambassador to the U.S.
The 1960s Rural Cooperatives / January/February 1999 35

cot, Ltd., of Bakersfield, Calif., stresses:

“We have never lost sight of Calcot’s original objective of moving members’ cotton

to market at the lowest cost, and obtaining for [them] full market value consistent with sound business practices, and

maintaining our superior reputation with

the textile industry.” The cooperative now

serves 4,000 members who deliver hundreds of thousands of bales each year to

Calcot for sale around the globe.

At Age 50, WFA Just Getting Started

Western Farmers Association (WFA) at

Seattle, Wash., marked its 50th anniversary in 1967 but considers this only the

beginning of its efforts as an egg marketing cooperative. It was started with only

$245 in capital by 114 Washington poultry

producers; at that time it had no employees or facilities. The first year was marked

by $214,000 in egg sales and $203 patronage earnings for members. Embarking on

its second half century, WFA serves

almost 50,000 members and offers

turkeys, canned and dehydrated poultry

products, select frozen and canned vegetables, grains, seeds, beans, eggs and

fresh chickens. Its labeled products

appear across the nation and export markets, with Alaska a prime market.

Dairymen’s League: 

60 Years of Service

Dairymen’s League Cooperative Association of New York City is using a special

supplement to its official membership

newspaper to tell its six-decade history.

The supplement also is appearing in four

New York newspapers. The 15,000-member dairy co-op markets 3.9 billion pounds

of milk and has net annual sales of $279

million. It bargains successfully for higher milk prices for dairymen supplying

milk to New York City, the world’s largest

market. It has established a pooling plan,

created a system of classified pricing,

developed and promoted its trade name

in the Northeast and has obtained U.S.

Public Health Service approval for its

entire milk supply.

Statex on the Move

There’s no standing still at its 50th birthday for Farmers Union Central Exchange

of Omaha, better known by its Statex

brand name. It is using a new method of

cooperative financing — industrial development bonds, offered by the City of Fremont, Neb. — to raise $7 million to build

The board of directors of Bellamy (Ala.) Enterprises -- with organizational guidance from the Farmer

Cooperative Service -- took over American Can Company’s store and service station and added a credit union

for its community members.

This tombstone marks the demise of oil lanterns in

farm homes and barns. By 1962, 97 percent of the

farms were electrified, thanks in large measure to

REA programs. 
36 January/February 1999 / Rural Cooperatives The 1960s

an anhydrous ammonia plant and distribute its production. Joining the co-op

in a new corporate structure that will

operate the FEL-TEX ammonia plant is

Farmers Elevator Service Company (FELCO), of Ft. Dodge, Iowa.

Making Comeback the 

Cooperative Way

Harness a new cooperative to a new government loan source and you have the formula for small farmers in Mississippi to

make a comeback. Thirty farmers have

formed the Hinds Farm Service Association in Raymond and have obtained a loan

from the Office of Economic Development

within the Farmers Home Administration

(FmHA). The loan will enable them to

lease an equipment shed and to buy

machinery to plant, cultivate and harvest

soybeans, cotton, and other crops. Membership has tripled to 90, and the co-op is

now using 25 pieces of equipment. The

cooperative turned to Hinds County Co-op

of Raymond, a member of Mississippi Federated Cooperatives, to manage the venture. During fiscal 1965, FmHA made 295

loans to cooperatives totaling $1.3 million.

VP Humphrey Salutes 

New Agway Co-op

Agway Inc., based in Syracuse, N.Y., has

been formed through the merger of Cooperative GLF Exchange, Eastern States

Farmers Exchange and Pennsylvania

Farm Bureau Cooperative Association. In

his remark’s at Agway’s first annual meeting, Vice President Hubert Humphrey

calls this cooperative the embodiment of

rural self-help ideals. “Cooperation is one

of the finest expressions of the American

spirit,” Humphrey says. Here, groups

faced with common needs invest their

capital and organize their own cooperative to met their needs. This is self-help

at its best,” he said. The observance of

National Cooperative Month in October

“is an important reminder that cooperatives are a vital part of our free enterprise

system,” he says. Agway made $338 million in sales while serving 85,000 members during its first year of operation.

U.S. Grain to Japan: Co-op to Co-op

Believed to be the largest co-op to co-op

trade agreement, Zenkoren, Japan’s

largest agricultural cooperative, has

docked a ship on George Washington’s

birthday at the export terminal of Producers Grain Corporation in Corpus

Christi, Texas. It will load 35,000 tons of

milo, the first installment of a 200,000-

ton contract. This is the largest single

shipment of grain sorghum ever made by

American farmers.

Co-ops’ Answer to Urban, Rural Crisis

“Co-ops are predicated on the belief that

ordinary people can achieve extraordinary

feats of accomplishment if only we inform

them and ask them to take part,” Stanley Dreyer, new president of the Cooperative League of the USA, tells nearly 200

representatives at its 28th biennial congress at Kansas City in 1969. He asks

how cooperatives could be more relevant

currently and in the future. In response,

delegates examined how cooperatives can

be more responsive to the rural-urban

challenge by helping to bring progress to

lesser developed areas of the United

States and abroad.

Southern States Features 

Profit Seminars

A new feature at Southern States Cooperative’s 45th annual meeting at Richmond, Va., is profit seminars which examine how the cooperative can help farmers

make more money from their farming

operations. Delegates can attend two of

nine seminars. All relate to supplies and

services for livestock, crops, dairying and

other farming operations. One of the popular sessions is on tires — farmers being

the nation’s largest tire customers. Southern States has brought together the best

technical talent available from its 5-state

territory and beyond.

Farmers Open Grain Export Gateway

With the dedication of Farmers Export

Company near New Orleans in 1969, the

1 million farmers represented by the

member regional cooperatives have

gained an export gateway. The new facility encompasses a new, $20 million grain

elevator and marine terminal on the Mississippi River. To finance the facility, local

cooperatives furnished $9 million and the

bank for cooperatives extended $20 million. The first ship to dock there, the

Shahjehan Jayanti of Bombay, is loading

800,000 bushels of corn, 300,000 bushels

of soybeans and 3,500 tons of gluten pellets for delivery to Rotterdam.

Major Milestones for Central Farmers

A new potash ore strike at a potash mine

in central Canada and the opening of a

new anhydrous ammonia pipeline are

major market milestones in 1969 for Central Farmers Fertilizer Co., owned by 19

major regional cooperatives. Strengthened fertilizer services are now offered to

the 7,500 local cooperatives and their 3

million members in the Midwest Corn

Belt. A series of terminals have been built

along a 2,000-mile pipeline that carries

anhydrous ammonia from Central Farmers’ new 1,000-ton-a-day plant in

Louisiana.

California Canners Opens in Wisconsin

In its first venture outside its home state,

California Canners and Growers (CCG)

of San Francisco has opened its 10th and

most modern cannery, a $6.5 million plant

at Lomira, Wis. The payroll is expected
The 1960s Rural Cooperatives / January/February 1999 37

to provide $750,000 annually to Wisconsin

workers. Formed in the 1950s by 473

grower-members who put up about $1

million in capital, CCG annually markets

$115 million of canned foods in the United States and to 29 foreign countries.

CCG doubled it sales in the past decade

and now has 1,200 members in Wisconsin

and California. Sixty percent of its business is through private labels, institutional and remanufacture channels.

Record-Breaking Year for 

Almond Co-op

The 400 members attending the 57th

annual meeting of the California Almond

Growers Exchange are celebrating record

sales in 1968 of 63.3 million pounds of

almonds in the domestic market and a

near-record 22.4 million pounds in the

export market. The cooperative’s gross

proceeds for the year topped $47 million.

President Glenn Stalker reports that a

new bulk receiving station in Chico, Calif.,

has significantly reduced handling costs

for bulk boxes of almonds at its plant in

Sacramento.

STAPLCOTN Oldest Cotton 

Marketing Co-op

Staple Cotton Cooperative Association at

Greenwood, Miss., which turned 40 in

1966, is the oldest cotton marketing cooperative in continuous existence — even

preceding the Cooperative Marketing Act

of 1926 by five years. In its lifetime, the

cooperative has moved more than 15 million bales of cotton through its portals —

enough to stretch half way around the

world. It has doubled its volume in the

past five years and developed an orderly

marketing approach to world markets for

Delta cotton. It has also opened a compress warehouse capable of storing 92,500

bales and has established the STAPLCOTN trademark.

Changes in 60s to Impact 

Co-ops in 70s

Changes in agriculture in the 1960s will

continue to affect cooperatives in the

1970s. While the number of farms has

decreased, the size of surviving farms has

increased markedly. Both farm production expenses and cash receipts from

farming have climbed. USDA’s Farmer

Cooperative Service has identified six significant cooperative developments during

the 1960s: 1) the number of mergers

increased substantially; 2) processing

operations have increased; 3) greater

emphasis is being placed on export trade;

4) a larger range of services is being

offered; 5) research efforts have been

strengthened; 6) co-op educational programs are stronger.

Regional Dairy Co-ops Grow 

Via Consolidations

By the late 1960s, a series of large regional dairy cooperatives began to emerge

resulting from continuing consolidations.

USDA’s Farmer Cooperative Service

reported that during the 1968-69 period,

it recorded 84 mergers. These were

brought on by expanded technological

development, greater competitive pressure, improved transportation and communication, and increased need for better management. Milk pickup routes from

dairy farmers were consolidated. Milk

was increasingly accepted in federal milk

marketing orders.

Mid-America Dairymen Inc., Springfield, Mo., was formed in July, 1968

through the merger of Sanitary Milk producers and Square Deal, both based in St.

Louis, Mo., and Mid-America Milk Producers, Kansas City, Mo. Initial sales of

about $200 million increased to $500 million in 1969 and the co-op marketed 3.5

billion pounds of milk. 

In Louisville, Ky., Dairymen Inc. was

formed by producers in 10 states with an

anticipated volume of 3 billion pounds of

milk. Associated Milk Producers Inc., Dallas, Texas, had 25,000 members operating in three regions (ranging from Wisconsin to Texas) who were producing 10

billion pounds of milk. Meanwhile, Land

O’Lakes Inc., at Minneapolis, had 100,000

members and sales of $369 million at the

end of the decade. ■
38 January/February 1999 / Rural Cooperatives The 1970s

Co-ops embrace new technologies and structures to maintain owner control

Michigan Adopts Bargaining Law

The new Michigan Agricultural Marketing and Bargaining Act has drawn considerable attention because it is considered the first comprehensive farm

bargaining law enacted in the United

States. It expires in 1976. Noel Stuckman,

manager of the Michigan Agricultural

Marketing Association, reviews highlights

of the act at the association’s 12th annual meeting.

The law requires handlers to negotiate

with accredited associations which represent all producers (members and nonmembers) in negotiations with handlers. It

also requires producers to pay marketing

service fees and establishes an Agricultural Marketing and Bargaining Board.

The law also: sets association eligibility

standards for accreditation; provides for

mediation and arbitration; details unlawful practices by handlers and associations;

and limits eligible commodities to perishable fruits and vegetables.

Livestock Co-ops Vehicles for

Southeast Progress

By group action through their livestock

cooperatives, Southeast producers can

gain sufficient bargaining strength in the

marketplace to defend their prices and

other terms of sale, according to a new

report by the National Commission on

Food Marketing. “Livestock producers in

many areas have long used cooperatives

to extend their influence beyond the farmgate in marketing their animals, but

this has mostly occurred in the Midwest,

where livestock production is concentrated,” observes John Haas of the Farmer

Cooperative Service.

Noting the rapid growth in livestock

production in the Southeast since World

War II, Haas says Southeast farmers sold

20 million head of livestock worth $1.8

billion in 1967, which represented a fifth

of their total income. Haas concludes that

1970s

It was up with the new and down with the old as this service station in South St. Paul, Minn., installed its new

CENEX sign in 1972 following a name change for the co-op. The same scene occurred throughout its 10-state

trade territory. And how about those gas prices?
The 1970s Rural Cooperatives / January/February 1999 39

producers have “failed to take advantage

of the opportunities provided by a growing

industry to expand their influence in marketing livestock. The highly fragmented

cooperative market structure and lack of

coordination between associations limit

their effectiveness in helping farmers

improve their bargaining strength.” Many

smaller associations need to consider consolidating into larger units to broaden services and reduce cooperative overpopulation, he concludes.

Credit Report Accents Co-op Growth

An advisory report of the Commission on

Agricultural Credit, issued to the Federal Farm Credit Board, urges that a study

be undertaken which will gauge how the

Farm Credit System might provide further assistance in financing development

in rural America, including cooperative

utility systems, non-farm rural housing

and rural community needs. The report

urges the Banks for Cooperatives, the

prime credit source for agricultural cooperatives, to seek liberalization of eligibility requirements for borrowing associations, broaden their loan purposes, and

place greater emphasis on promoting the

growth and development of cooperatives.

Railroad Changes Impact 

Co-op Grain Marketing

The nation’s transportation system —

truck, rail and barge — is dictating when,

where and how grain will be marketed,

according to a new study by USDA’s

Farmer Cooperative Service. While trucks

and barges are hauling increasing amounts

of grain, railroads still remain the principal haulers. So rail rates are the standard

by which other charges are measured.

It was once common for a grain cooperative to ship a single 50-ton railcar of

grain to a single destination. But now, in

1970, shipment in 5-, 20- or even 100-ton

covered hopper railcars in unit trains is

routine. However, rate structures require

shipments larger than can be provided by

the average country elevator, which are

often located on branch rail lines. Many

of these rail branches are being abandoned. Railroad management is emphasizing large-volume, multiple-railcar shipments from a grain elevator or feed mill

located on a main line with the movement

fitting into an existing train schedule.

Cache Co-op Trucks Brim 

with Swiss Cheese

Just like alpine Switzerland, the Cache

Valley of northern Utah and southern Idaho brims with some of the world’s finest

Swiss cheese, produced by Cache Valley

Dairy Association at Amalga, Utah. When

any of the co-op’s eight big vans ease away

from the loading dock and head for distant western markets, they tote a cargo

valued at nearly a quarter- million dollars. As the largest Swiss cheese plant in

the world, the co-op’s 200 employees proAssuring farmers a supply of seed corn that was resistant to Southern Corn Leaf Blight required the services

of nearly 1,000 teenagers to detassel seed-corn plants during 1971. They rode in buckets hanging from the

extended arms mounted on a tractor moving through the field. The teenagers were hired by FS Services Inc. 

Henry Von Bank, Minnesota Valley Breeders

Association, places ampules of beef bull semen

derived from the cooperative’s herd into cryogenic

bottles prior to shipping them to one of the

cooperative’s artificial insemination (AI) technicians.

Cooperatives pioneered the AI industry. 
duce 50,000 pounds of cheese from a daily volume of a half million pounds of milk.

Several hundred members are constantly

being urged to increase milk production

from their herds to match the growing

demand for the co-op’s cheese. The valley

is home to 40,000 people and Utah State

University. The cooperative is the most

important industry in the valley, with a

monthly payroll of $90,000.

Severe Challenges Facing 

Co-ops in 1970s

Agriculture is facing severe challenges in

the 1970s and cooperatives must help

guide these changes, not just react to

them, says Bill Black, agricultural economist from Texas A&M University. “Cooperatives have always generated agricultural leaders, and the future of

agriculture will depend upon leadership

from within,” he says.

Farmers will continue to be guided by

the economic laws of the marketplace, and

thus must not be blinded by their emotional desire to produce without regard to

market demands,” he says. Cooperatives

can meet the challenges in seven ways: 1)

providing marketing leadership; 2) enacting tougher production and quality policies; 3) developing joint ventures; 4) developing cash and contract markets; 5)

pursuing new and expanded markets; 6)

better research and development efforts;

and 7) through strong internal leadership.

Detailed Records Help Boost 

Dairy Production

Cooperatives looking at ways to help their

members become better managers are

increrasingly turningd to computerized

business and production records. Dairy

farmers with Dairy Herd Improvement

Associations (DHIA) for herd management are producing an average of 3,000

to 4,000 more pounds of milk per cow

annually than those not using records.

However, only 25 percent of the dairy

cows in the United States are on DHIA

testing. Agricultural Records Cooperative

at Madison, Wis., was developed primarily for processing dairy production and

business records.

Agri-Tech Analytics Inc., a subsidiary

of Dairymen’s Cooperative Creamery

Association at Tulare, Calif., uses sophisticated techniques to improve herds and

farm management practices. Long Meadow Dairy Farms, a cooperative at

Durham,. N. C., has joined with local

county DHIAs to provide specialized

record service to Long Meadow members.

The cooperative pays a 10-cent bonus per

100 pounds of Class I milk sold to the

dairy plant from herds participating in

the DHIA or owner-sampler record plans.

Farmland Promotes Food as Bargain

Farmland Industries Inc., of Kansas City,

Mo., has become a leading voice for agriculture and those who face a myriad of

problems in trying to make a respectable

living on the farm. The cooperative is

sponsoring a series of full-color newspaper advertisements and a billboard near

its headquarters with the theme that

“food is a bargain” compared with the

prices of other products.

Ernest Lindsey, Farmland’s president,

wants urban Americans to realize farmers aren’t getting rich and often are barely surviving. He also discusses this dilemma in several articles appearing in

40 January/February 1999 / Rural Cooperatives The 1970s

National Grape Cooperative Association’s subsidiary,

Welch’s, introduced a new vitamin-enriched drink for

the Caribbean market during the early 1970s.

Children in downtown Hong Kong sip a beverage

produced by Sunkist Growers of California. The

cooperative anticipated sending 15 million cartons of

its citrus soft drink into the export market in 1972.
The 1970s Rural Cooperatives / January/February 1999 41

agricultural journals. The series of ads

and articles triggers a flood of favorable

reaction both from farmers and from other cooperative organizations.

CRF Joint Venture Provides Feed

Conversion Data

Twenty regional cooperatives, including

four from Canada, have formed a joint

venture — Cooperative Research Farms

(CRF) — which involves a network of

eight livestock research farms that test

feed formulas to determine cost and conversion efficiency. Participating cooperatives share in the costs and research

results. The research program rests only

on a gentlemen’s agreement outlined in

a letter, which says the cooperatives will

pay an annual assessment and abide by

a majority decision in choice of projects.

Total cost for the prject is about $500,000

annually. Committees of feed specialists

from all participating cooperatives choose

the research projects.

Minnesota Co-op Multi-Serviced at 85

There was little or no shock threshing in

Watson, Minn., when Watson Farmers Elevator Co. was formed 85 years ago. Most

farmers stacked their grain in round stacks

in the field. It is believed to be the oldest

continually operated grain cooperative in

the country. Farmers raised hogs and dairy

cattle, but the straw was considered useless and burned in the field. There were no

trucks, tractors, school busses, refrigerators, electric lights, gas or diesel motors —

and no rural electric cooperatives.

Now 85 old, the cooperative offers a

multitude of services plus grain marketing. It has a feed plant for custom grinding and blending and a fertilizer warehouse and custom blending and spreading

services. It cleans seeds, markets a variety of grains, operates two grain dryers

and has a storage capacity of 250,000

bushels. Manager Roy Oleson, who is also

mayor of Watson, population 300, reports

the co-op is handling 1.3 million bushels

of grain and has a total business of $1.6

million. In the past year it had $31,640

in net margins.

LOL, Sweet Cream Butter, Mark 50th

Land O’Lakes (LOL), of Minneapolis,

Minn., will mark a half century in busiBrynhilde Ringheim holds a pair of lobsters for a customer’s inspection in a retail store operated by Chatham

(Mass.) Seafood Co-op Inc., on Cape Cod. It was the first seafood cooperative to receive a loan from the new

Springfield (Mass.) Bank for Cooperatives.

Connecticut farmer Louis Longo didn’t need the

background cheerleader for his enthusiastic remarks

at a dairy profit seminar sponsored by Southern

States Cooperative at its 50th annual meeting in

Richmond, Va.
42 January/February 1999 / Rural Cooperatives The 1970s

ness during 1971. The dairy cooperative

was formed by 350 Minnesota dairy farmers as Minnesota Cooperative Creameries

Association, Unit No. 1. It was a statewide

marketing association that has gained

fame for its “sweet not sour cream butter.”

It started with one borrowed desk, one borrowed typewriter and a loan of $1,000. The

LOL brand name and Indian maiden logo

first appeared in 1924.

LOL’s current strategies, based on

goals set by its pioneers, include: to standardize and improve quality through

cream grading and proper methods of

manufacture; to transport butter and

dairy products by car-lot shipping; to provide service in the sale of products

through closer cooperation with distribution agencies and whole-market receivers;

to cooperatively purchase supplies such

as salt, butter tubs, coal and the like in

car-load lots, and to cooperatively advertise dairy products.

Leadership Co-op’s 

Greatest Contribution

“I have often said that cooperatives have

made a great contribution to American

agriculture,” Earl Butz, President Nixon’s

new secretary of agriculture, tells delegates

to the National Council of Farmer Cooperatives annual meeting. They supply a great

deal of leadership to rural America, he says,

because of the experience they’ve gained

in running cooperatives.

“This encourages participation in local

government and support for good government and fiscal responsibility,” he continues. This leadership has helped make

our country great and it is needed now

more than ever as we move even further

from a rural oriented society toward a

more unsettled urban-oriented society.”

CENEX Trademark Is Born

Marking its 41st annual meeting, Farmers Union Central Exchange formally

A Vermont co-op farmers market extended its fall

season a month and generated an extra $68,000 in

gross receipts by selling handcrafts. 

Long-grain, fresh-market cucumbers are washed, graded and packed by Tri County Farmers Association, a

vegetable marketing cooperative in eastern North Carolina.
The 1970s Rural Cooperatives / January/February 1999 43

adopts CENEX as the trademark, tradename and general corporate communication identification for this St. Paul, Minn.-

based cooperative. The organization,

however, retains its official corporate

name. CENEX becomes the house-brand

for all products packaged and branded by

Central Exchange. It will also be used as

the corporate identifier in the marketplace. The cooperative’s sales have just

set a sales record of $200 million.

TCX Dedicates $1.7 Million Juice Plant

Keeping pace with the state’s rapidly growing citrus industry, Texas Citrus Exchange

(TCX) at Edinburg has erected a $1.7-million frozen concentrate plant at Mission,

Texas. Plant capacity is the largest in the

state, at 13,000 tons of concentrate per season. TCX, formed in 1968, is a sales agency

for five other cooperatives.

AMCOT Meets Cotton 

Marketing Challenge

Better grower returns is the agricultural

challenge of the 1970s, so four regional

cotton cooperatives — Calcot Ltd., of Bakersfield, Calif.; Plains Cotton Cooperative

Association, Lubbock, Texas; Staple Cotton Cooperative Association, Greenwood,

Miss.; and Southwest Irrigated Growers

Association, El Paso, Texas — have

formed AMCOT Inc. to link and strengthen worldwide marketing efforts. AMCOT

started with 25 percent of the U.S. cotton

production, or about 2.75 million bales of

cotton. With the additional muscle provided by the merger, grower returns will

improve through broader market coordination and through the economics of combined sales offices.

Hallberg Reemphasizes 

Co-op Education

“There is a big challenge facing us in

acquainting the many publics with the

role of cooperatives in our American competitive enterprise system,” Owen Hallberg, the new president of the American

Institute of Cooperation (AIC), says during the 45th National Institute in Cooperative Education. “Constant examination is vital,” he stresses.

Special emphasis on membership education should focus on young farmers and

youth, many of whom know very little

about cooperatives. “We also need wellinformed and concerned employees who

understand what cooperatives are all

about, who are enthusiastic about their

employer and can transmit this enthusiasm to everyone they contact,” he says.

While more education may be possible

through better coordination among cooperative organizations, government agencies, state councils and education groups,

there are limitations, he says. The main

limiting factors are: the”willingness of

directors and management to recognize

needs; lack of courage by directors and

management to envision and plan longrange education programs; and the willingness to work together. We must be big

enough to recognize differences in philosophy and practice and be willing to overlook them in achieving our common goals.”

‘Food for Crude’ Policy Suggested 

by FS Services

In the midst of an international oil embargo, exchanging food for crude oil makes

good sense, E.V. Stevenson, executive vice

president for FS Services Inc., tells delegates attending the 1973 annual meeting

of the Midwest-based farm supply cooperative. “We can produce more than enough

food for the America people” and still

export 50 percent of the soybean crop and

20 percent of the corn, Stevenson says.

Total farm exports are predicted to grow

to $20 billion by 1980, the same projected

value of oil imports by then, he notes.

“To produce for expanded exports, however, we need adequate supplies of fuels

and fertilizer. We cannot feed our nation

and part of the rest of the world if agriculture is limited to a stick and a hoe and

a fish in each hill of corn,” Stevenson says.

“Making sure there is enough energy for

farming has a good payoff ratio. Farming

uses less than 5 percent of the nation’s oil

and 3 percent of the nation’s gas. But with

that vital percentage, we can produce the

products to pay for 50 percent of the oil

the nation needs to import. So food for

crude makes sense.” And if that opportunity knocks, Stevenson says Midwest

farmers and their FS cooperative would

be willing and able to answer the call.

On a billboard near its Kansas City office, Farmland

Industries advertised that “food is a bargain.” 

St. Paul Federal Intermediate Credit Bank advertised

that “farming is everybody’s bread and butter” on

bumper stickers. 
44 January/February 1999 / Rural Cooperatives The 1970s

Southern State’s 50th: No 

Jack and Beanstalk Tale

Like Jack and the Beanstalk, Southern

States Cooperative at Richmond, Va., also

has its roots in seeds, although in alfalfa

and clover, rather than bean, seeds. And

instead of a golden egg, co-op members

have reaped $91 million in cash refunds

over the past half century.

Appropriately, the cooperative’s golden anniversary year has been its most

successful.

Highlights include: volume is up 18

percent, to $180 million; net savings after

taxes total $5.1 million; fertilizer volume

is up 11.5 percent, to $30 million; petroleum volume jumped 17 percent, to $22.7

million; seed sales are up 31 percent, to

$12.6 million; egg marketing climbed 10

percent, to $4.9 million. As further icing

on the cake, the co-op’s net worth has

reached $55.5 million.

Texas Sweet Tooth Begets $30 Million

The nucleus for a Texas sugar cane

revival has been created by 115 sugar

growers who formed Rio Grande Valley

Sugar Growers Inc. They built a $30 million processing plant near Santa Rosa.

Chartered in 1970, the co-op planted 25

acres of cane as seed crop, added another 250 acres in 1971, then expanded to

2,500 acres for seed by 1972. By late 1973,

they had 25,400 production acres of cane

to grind into raw sugar. The cooperative

has signed a contract to supply the only

refinery in Texas.

Agri-Trans: Birth of Co-op Navy

CF Industries President R.R. Baxter says

fertilizer barge shipments are expected to

increase five-fold during the next five

years, so a barge-shipping cooperative is

essential to long-range plans for improving

service to member-owners and to reduce

Dairymen Inc., of Louisville, Ky., used its annual report to double as a calendar. shipping costs. Agri-Trans Corporation is
The 1970s Rural Cooperatives / January/February 1999 45

an interregional transportation cooperative formed by six cooperatives to do just

that. It ships nitrogen and phosphate fertilizer from CF Industries plants in Florida and Louisiana to the Upper Midwest.

The ships return with members’ grain,

destined for Gulf Coast export facilities.

Grain cooperatives face similar transportation pressures, so it was natural for

them to join CF Industries in forming

Agri-Trans. Other initial owners include

Farmer Grain Dealers Association of

Iowa, Farmers Union Grain Terminal

Association, Illinois Grain Corporation,

Missouri Farmers Association and

St.Louis Grain Corporation. CF will manage the firm, which gained its impetus

from a study by the USDA Farmer Cooperative Service. The study explored the

advantages of coordinating north-south

flows of grain and bulk fertilizer.

REA an Electrifying Experience

When USDA’s Rural Electrification

Administration (REA) was formed in 1935

to provide loans to finance farm electrical service, only 1 in every 10 farms had

electrical service. How successful was this

effort? Just 40 years later, 99 percent of

farms have electrical service. There are

more than 1,000 REA-financed rural electric systems serving rural America,

including 977 cooperatives. Lines have

been strung from above the Arctic Circle

in Alaska to the Florida Keys and from

Maine to the California desert.

CCC Program Opened to Co-ops

Cooperative associations marketing grain

— including barley, corn, oats, rye,

sorghum and wheat — gained access to

programs of the Commodity Credit Corporation (CCC) in 1977 on behalf of their

members. They had earlier been approved

to receive CCC loans on cotton, honey, rice

and soybeans. Expansion of the program

to feed grain and wheat growers gave

them the option of not taking a loan, taking a loan as an individual producer, or

delivering grain to their CCC-approved

cooperative for marketing. Marketing

cooperatives handling these commodities

were eligible to participate regardless of

their size.

Minnesota Co-ops Buy Volstead Home

Members of the Minnesota Association of

Cooperatives (MAC) are joining community leaders to purchase the home of the

late Congressman Andrew Volstead at

Granite Falls, Minn. They plan to turn it

into a museum as a tribute to his impact

on the cooperative movement. The will be

donated to the city. As chairman of the

House Judiciary Committee, Volstead

authored what is now known as the Capper-Volstead Act of 1922, which enabled

farmers to jointly market their products

without being prosecuted for antitrust violations. Museum preparations were

expected to take two years.

Cooperatives Ponder 

Bargaining Legislation

Concerns over shortcomings in the 1967

Agricultural Unfair Practices Act prompt

discussions among managers of fruit and

vegetable bargaining associations and

legal experts about elements needed in

new legislation. The act prohibited discrimination by a processor against a producer because of his membership in a bargaining cooperative or against the

cooperative itself. The scope of the act was

considered limited and enforcement

machinery inadequate.

Elements of the Michigan Agricultural

Marketing and Bargaining Act of 1973

are being studied. It, like the Sisk Bill later introduced in Congress, provided that

accredited associations represent all producers (members and non-members) in

the bargaining unit; all producers in the

unit must pay marketing service fees to

an accredited association; mediation is

optional, but arbitration is compulsory

unless, within a given time, the processor elects not to purchase or the association decides not the sell the commodity to

the processor. Both the bargaining cooperatives and processors were required to

bargain in good faith.

Torgerson Heads USDA’s FCS

Dr. Randall Torgerson, a staff economist

for the administrator of the Agricultural

Marketing Service, has been named by

Agriculture Secretary Earl Butz as administrator of Farmer Cooperative Service. He

succeeds Dr. Ronald Knutson, who joined

the faculty of Texas A & M University.

Torgerson, a native of Wisconsin, directs

the FCS research and technical assistance

efforts of 60 agricultural economists and

cooperative specialists. While teaching at

the University of Missouri-Columbia, he

was executive secretary of the Missouri

Institute of Cooperatives and executive

secretary of the university’s Graduate

Institute of Cooperative Leadership.

Marketing Act Celebration 

Salutes Programs of FCS

The 1975 observance was dubbed a birthday party because it marked the 50th

Indiana Farm Bureau Cooperative Association

marked its 50th anniversary and record sales of

$700 million by feeding an estimated 13,300 people

in a 4.5-acre dining room. 
46 January/February 1999 / Rural Cooperatives The 1970s

anniversary for the Cooperative Marketing Act of 1926. That legislation led to creation of USDA’s Farmer Cooperative Service (FCS). Secretary of Agriculture Earl

Butz says one of the greatest challenges of

the cooperative movement is to focus on

members’interests. “I think there is no better training ground for democracy in this

country than in the self-management and

operation of these cooperatives. That to me

has been the great contribution that cooperatives have made in the past 50 years

and I think it will be the greatest contribution they will make in the next 50 years.”

Patrick Healy, secretary of the National Milk Producers Federation, calls FCS

“A much needed voice within government,

deeply appreciated by farmers. Its knowledge of cooperative activity is invaluable

in setting the record straight and in countering relentless attacks on cooperatives...” Ken Naden, president of the

National Council of Farmer Cooperatives,

cites FCS for its business analysis work

with cooperatives. He says no other government agency collects statistics and

analyzed the books and the method capitalization and distribution of earnings of

cooperatives. Dr. Randall Torgerson, FCS

administrator, adds that while the agency

is Washington-based, it stays close to the

operating problems at the grass roots.

Three predecessor FCS administrators

join the celebration: Dr. Joseph Knapp,

1953-66; Dr. David Angeline, 1966-70, and

Dr. Ronald Knutson, 1973-75.

Grain Co-ops Expand 

Storage, Processing

Regional and interregional grain marketing cooperatives are significantly

expanding their storage and processing

capacity. By 1976, nearly 60 percent of

their grain marketings — or 1.6 million

bushels — are headed for the export market. Storage capacity of 18 major grain

cooperatives totals 400 million bushels,

more than half at inland locations, 50 million bushels on navigable rivers or the

Great Lakes, and nearly 60 million

bushels at sea ports.

Other improvements include new dust

and pollution control equipment and new

equipment to increase capacity to receive,

condition and load grain — particularly

at port terminals at Ama, La., Houston,

Texas and Baltimore, Md. Hopper car

usage for grain shipments to ports has

also greatly expanded, as has the use of

tank cars for shipping vegetable oil. Much

of the grain shipped by regional is going

by barge to port elevators near New

Orleans and Portland.

Five Midwest regional grain cooperatives have now joined CF Industries, the

interregional cooperative that manufactures and distributes fertilizer, to form

Agri-Trans Corp., based near St. Louis.

The firm uses seven towboats and nearly 200 barges to ship grain down the Mississippi River to New Orleans and return

with fertilizer materials destined for Midwest regional cooperatives.

Riceland CEO Retires in Co-op’s 

Record Year

As a swan song to the 1977 retirement of

L.C. Carter, the co-op’s president and chief

executive officer, Riceland Foods at

Stuttgart, Ark., handles a record volume

of rice just as it was completing a major

buildup of its rice division — increasing

milling capacity by a third, doubling parboiling capacity, and adding about 15 million bushels of storage. Marking its 57th

year of operations, Riceland’s gross sales

reached $488 million. Returns to members

for grain handled topped the preliminary

national average price by $33.9 million.

Farm Credit System Loans $38 Billion

Farmers and their cooperatives received

loans totaling $38 billion in 1977 from the

Farm Credit System, an increase of 11

percent from 1976. Gov. Don Wilkinson of

the Farm Credit Administration reported a record $42 billion of loans outstanding. Banks for Cooperatives loans were

up 9.2 percent to $11.8 billion.

Agway Boosts Energy Savings

In an effort to encourage its member cooperatives to conserve energy, Agway Inc.

of Syracuse, N.Y., has published a 40-page

handbook outlining energy management

steps and planning tips. The potentialsfor savings included many projects that

require little or no investment. Topic

areas included tractors, insulation, household appliances and tillage management.

School Class Functions as Co-op

Nearly 20 cooperatives have come and

gone during the past five years at Richland Center, Wis. But financial trouble

has not been the cause of their demise.

All lasted only nine weeks because they

were part of a seventh grade study on

American industry at Richland Middle

School. The project took place in an industrial arts class taught by Jerry Sims. It

combined traditional shop skills with

lessons on history, practices and problems

of industry.

Students studied the four kinds of

industrial ownership, including cooperatives. They formed a cooperative, bought a

share of stock, planned, manufactured and

marketed their shop projects: foot stools,

plastic bowls, billfolds, coin holders, picture frames and stationery. Finally, they

dissolved the cooperative and redeemed

stock. Community support for the school

cooperatives has been excellent.

“That’s really why I went with a cooperative approach,” Sims says. “The area’s

[cooperative orientation] dictates it.” He

had little knowledge or experience with

cooperatives so he got information from

the Wisconsin Federation of Cooperatives.

“A lot came from local cooperative managers. They were fantastic.” Sims says he
The 1970s Rural Cooperatives / January/February 1999 47

is “pretty satisfied” with the program. It

opens the students’ eyes. ...One of the

biggest problems cooperatives have is

education of youth, and this really shows

students what cooperatives are.”

Holsum Foods: Farmer to 

Consumer Link

Member-produced products are moving

through the marketing chain from farm

to supermarket shelf for the first time,

B.J. Malusky, president of Grain Terminal Association at St. Paul, tells participants at the grain marketing cooperative’s

39th annual meeting. He is speaking of

the earlier purchase of Holsum Foods at

Waukesha, Wis. It was folded into GTA’s

Honeymead Division, a packer and processor of foods for the dinner table. The firm

sells in 22 states through 40 brokers. During the past fiscal year, GTA handled 256

million bushels of grain and showed aftertax margins of $7 million. Now, beginning

with its 40th year, GTA will increase its

cash patronage refunds from the required

20 percent to 30 percent.

Citrus Growers, 

Auto Maker Cooperate

Seald-Sweet Growers of Florida and the

Japanese Toyota automaker have completed a historic trading action. When the

automaker delivered its cargo to Jacksonville, Fla., aboard a new $28 million

vessel — the world’s first combination car

and refrigerated cargo carrier — it

returned to Tokyo with 283,000 cartons of

fresh Florida grapefruit and oranges. The

shipment of 14 million individual fruits

was the largest in the state’s history.

LOL Moves Into Beef Processing

A major dairy marketing cooperative has

moved closer to becoming a total food

company. Land O’Lakes (LOL) of Minneapolis has entered the red meat business by buying Spencer (Iowa) Foods in

1978. LOL soon adds the processing plant

at Oakland, Iowa, owned by American

Beef Packers, to boost the cooperative’s

annual processing capacity to nearly 1.5

million head. President Ralph Hofstead

says the purchases were made only after

efforts failed to organize a “CF Industries”

approach with other regionals.

Co-op Use of Subsidiaries Gains

Farmer cooperatives are increasingly

using subsidiaries instead of divisions or

departments to conduct some services. Of

80 large regionals reviewed, 58 had one

or more subsidiaries in 1975-76. Eight

cooperatives alone listed use of 195 subsidiaries.

Co-ops Facing Key Capital, 

Structure Issues

Capital formation, the structure of cooperative growth, expanding product markets and communications are key issues

for cooperative leaders in the 1980s, says

Randall Torgerson, deputy administrator

of USDA’s Economic, Statistical and Cooperative Service. “National issues such as

adapting to an energy-short environment,

wrestling with rural transportation problems, pricing commodities in thin markets and dealing with complex government regulations will continue, he says.

“The decade can well become cooperative’s

greatest growth period because of farmer

and rancher awareness of the important

structural role cooperatives play in maintaining access to markets for a dispersed

agriculture. Primary ares of growth will

be in exporting grain and oilseeds and

establishing cooperatives in red meat processing and distribution. ■
48 November/December 1998 / Rural Cooperatives The 1980s

Mergers, Consolidations Change Look of U.S. Cooperatives

Mergers Hit Major Regionals

Financial conditions during the 1980s are

fueling a string of mergers among the

major regional cooperatives. The new

GROWMARK Inc. Cooperative, formed

through the merger of FS Services and

Illinois Grain cooperative, is now led by

Glenn Webb, who had been vice president of

the board. The cooperative’s net margins in

1980 were $43.8 million on sales of nearly

$1.5 billion. GROWMARK owns six grain

terminals on the Illinois River, an inland

terminal at Paxton, Ill., and an interest in

Farmers Export Co., an interregional cooperative based near New Orleans.

In the Minneapolis- St. Paul area, Midland Cooperatives has merged with Land

O’Lakes Inc. (LOL) to form the second

largest cooperative in the nation. Midland’s 1980 sales were $523.5 million,

while LOL had $3.3 billion in sales. LOL

President Ralph Hofstad says the new

organizations could save nearly $7 million in administrative and operating costs.

The bankrupt status of Energy Cooperative Inc., one of three interregionals in

which the two Minnesota cooperatives

had common membership, was a factor in

the merger.

In another major co-op unification,

Farmers Union Central Exchange

(CENEX) has purchased the assets of

Western Farmers Association (WFA) of

Seattle, Wash., and consolidated the operations of Idah-Best, based in Caldwell,

Idaho. CENEX is now an Idaho feed supplier. WFA had been under federal bankruptcy act reorganization for two years.

Its member cooperatives were eventually purchased by CENEX members.

California’s Tri Valley Growers has

assumed responsibility for the bankrupt

California Canners and Growers’ (CCG)

marketing inventories, leasing four facilities and adding 300 CCA growers.

William Allewelt, Jr., Tri Valley president,

says he is looking forward to an improved

marketing picture, thanks in part to

adverse weather that helped eliminate the

canned fruit surplus that plagued markets in the past three years. Tri Valley

sought to avoid liquidation of CCG’s inventory and to provide market outlets for

growers left without a home for their crop.

1980s

Members of Southern States Cooperative gather at one of 10 outlying locations to view a satellite-transmitted

annual meeting program from its headquarters at Richmond, Va. Producers were able to quiz a management

panel about aspects of the cooperative's activities.

This artwork illustated the trend toward more farm

mergers.
The 1980s Rural Cooperatives / November/December 1998 49

Members of both Ohio Farmers Grain

and Supply and Landmark Inc., have

approved unification of their regional coops to form Countrymark Inc., with sales

of nearly $1 billion and assets exceeding

$240 million. The action had no effect on

the corporate status of the new cooperative’s 136 locally owned and controlled

member cooperatives in Ohio, Michigan

and Indiana. Don Benschneider, former

Landmark chairman, headed the new

Countrymark board.

Vertical Integration Key to Moroni

Moroni Feed Co. of Canpete County,

Utah, is one of the few fully integrated

turkey producing and marketing cooperatives in the United States. It has a

turkey breeding farm, hatchery and feed

mill plus a processing, packaging and

freezing plant, fertilizer department and

a disease diagnostic laboratory. Growers

have maintained a profitable cooperative

even though they are located between the

mountains in the desert, which causes

higher production costs, higher freight

costs and lower turkey prices than competitors in most parts of the country.

Turkeys are marketed through Norbest

Inc., another Utah cooperative.

Poultry Producers Seek 

Collective Bargaining

In response to many years of being caught

in the “vice” between an increasingly concentrated processing industry and rising

production costs, broiler producers on the

Mid-Atlantic’s Delmarva peninsula have

formed the Peninsula Poultry Growers

Association (PPGA). Producers expected

PPGA to enable them to collectively bargain with the processors. The number of

processors in the region declined from

more than 100 in the 1930s to the current

10. Nationwide, 20 of the 60 processors

produce 60 percent of all dressed poultry.

‘Those Who Show Up’ Control Co-op

A Wisconsin dairy farmer and president of

Consolidated Badger Cooperative tells delegates at the co-op’s annual meeting that

the world and all organizations are run by

those who are interested and committed

— or “by those who show up. Our business

of producing and marketing milk is very

competitive,” says John Malcheski. Despite

our efficiency, that will not guarantee us

a fair share of the income we need to keep

us free and in control of our destiny. This

can only be done when we, as farmers,

involve ourselves beyond our farms. As we

look to the future, needed changes will be

made by those who show up.”

California Fruit, Nut Co-ops 

Form Sun-Diamond

Three California cooperatives have formed

a common marketing cooperative: SunDiamond Growers. Members are Diamond

Walnut Growers, Sun-Maid Growers

(raisins) and Sunsweet Growers (prunes).

The marketing agreement is expected to

improve grower members’ crop returns

through savings and efficiency in selling

a diversified line of dried fruits and nuts.

“Challenges from giant conglomerates

entering the food processing field places

stresses on the limited resources of our

farmer enterprises,” says William Dabney,

Sun-Diamond’s president.

Co-op Development 

Training Center Opens

Nineteen students are participating in the

first, one-week classes opening the National Cooperative Development Training Center at the University of Georgia in Athens

in 1981. The center is an adjunct to the

cooperative development division in

USDA’s Agricultural Cooperative Service(ACS). The ACS program assists new

cooperative directors and managers to

develop successful businesses.

Farmers Export Revamps 

After Losses

Suffering from financial losses estimated

at $40.9 million in 1981, Farmers Export

Co., the export marketing arm of Midwest

regional grain cooperatives, has reorganized. It has sold the Galveston elevator

to Far-Mar-Co, sold lease holdings in

Philadelphia, lost six of its 12 member

cooperatives, scaled down its headquarters staff and closed offices in Portland,

Ore. and Tokyo.

Reluctance to Unite a Major Flaw

“We aren’t as big as the major corporations

with whom we must compete, but if we

don’t grow, we can’t provide the benefits

our members expect,” says Sigved Sampson, recently retired president of Midland

Cooperatives, headquartered in Minneapolis-St. Paul. Based on his 41 years

with Midland, he contends that a major

flaw of cooperatives is their reluctance to

unite to find solutions to their problems.

He urges haste in unifying the nation’s toofragmented network of cooperatives.

Sampson also is concerned about transCover art from “The Next Greatest Thing,” a photo

history book produced to mark the 50th anniversary

of U.S. rural electric cooperatives. Here, the joyous

day arrives when a High Plains farm family is

"hooked up" with electric power. 
50 November/December 1998 / Rural Cooperatives The 1980s

ferring ownership of a cooperative from one

generation to another. “No farm supply

cooperative in the country has fully resolved

it. And as co-ops become larger and more

capital intensive, and farmers become fewer in number but larger in size, this ownership transfer problem will become more

acute, burdensome and complicated. We’ve

got to figure out how to transfer ownership

from the generation that is retiring to the

one now using the co-op.”

Knutson: “Commit to Co-ops 

or Loose Control”

Young farmers have only two choices

today. Join the corporate structure and

“relinquish all control,” or commit to the

cooperative system, cautions Ronald

Knutson, professor of marketing and policy at Texas A & M University. Take an

activist role in cooperatives or neither of

you will survive the 1980s, he told 228

young farmers from across the nation who

are attending the 1982 National Institute

on Cooperative Education.

Also addressing the institute, Ken

Baer, chief executive officer of GROWMARK Inc., at Bloomington, Ill., says the

time has come to deal with the reality

that farmers account for only 3 percent

of the population and many of their cooperatives have fallen on hard times. “After

many years of financial growth through

the use of debt, farmers may face the need

to write some checks and infuse added

equity to preserve their cooperatives.”

Consumer Co-op Bank Gains

Independence

The National Consumer Cooperative

Bank of Washington, D.C., has been privatized by new legislation passed by Congress and approved by the president. Government equity has been converted to a

loan to the bank and ownership turned

over to members. Directors, elected by

member cooperatives, have replaced government-appointed board members. The

president will continue to appoint a small

business representative and two other

directors to the 15-member board.

Gold Kist’s Gaston Boosts 

Co-op Exports

“There may be no tomorrow for co-ops in

exports unless we pull together,” warns

William Gaston, president of Gold Kist

Inc., Atlanta, Ga. Speaking during the

international development program at the

1983 National Institute on Cooperative

Education, Gaston says, “Make no mistake, cooperatives have lost ground in

recent years, if not in volume, certainly

in prestige.”

Speaking also as chairman of Toepfer

International, a North American and

European cooperative-owned trading company, Gaston urges other commodity cooperatives to join Toepfer and expand their

marketing programs via exports. “If we

make up our minds today that we are all

going to do something to improve our

international trade efforts, we can make

it happen. Our cooperatives will be

stronger for it, and so will our patrons.”

Involve Young Farmers in 

Co-op Activities

Educating young farmers and young farm

couples on cooperative principles and

practices is vital to bolster their support of

cooperatives, a University of Georgia

study shows. An educational program

should emphasize two-way communication between cooperative officers and

young farmer-members and needs to be

developed at the grassroots level.

A tank lid seems to float over one of three, 700,000-

gallon grape juice storage tanks being constructed for

Welch Foods in Pennsylvania prior to the 1983 season.

This dove was used to symbolize the Food for Peace

program using PL 480 funds to foster humanitarian

aid and developing long-term export markets.
The 1980s Rural Cooperatives / November/December 1998 51

Block Vows to Protect Co-ops

Agriculture Secretary John Block says

cooperatives are so important to American agriculture that the USDA will work

to protect them by “assuming a strong policy making role concerning any government legislation or regulations” affecting

them. Speaking at the 1981 annual meeting of the Cooperative League of the USA,

Block says there are those who would

attempt to “weaken” cooperatives. “But I

pledge to you ... that we will not allow

them to be weakened. I will work to support them.”

To fortify agriculture, “it is imperative

we work to maintain and strengthen the

financial base of our nation’s agricultural

cooperatives,” Block says. He encourages

farm and consumer cooperatives to work

together to strengthen the free market.

While farming in Illinois, Block was an

active patron and director of his local

Spoon River FS cooperative.

Minnesota Co-op Stretches Corn Value

Minnesota Corn Processors (MCP) has

opened a $40 million corn wet milling

plant at Marshall that derived syrup,

starch and feed byproducts from corn. St.

Paul Farm Credit Banks were the major

lenders for the project. In later years,

many will point to this co-op as showing

the way for a surge of new cooperatives

formed to add value to members’ farm

commodities.

President Richard Jurgenson notes

that “for too long, we’ve depended upon

government programs or some other outside help to keep us solvent. Having the

opportunity to generate a better net

return from each bushel of corn without

government help just makes sense to

me.” In the initial equity drive, he

recalls, the first $1.5 million was committed by producers in only three days.

But the rest of the needed investments

didn’t come so easy. “We hit stonewalls

often — but refused to quit.” Nearly

2,100 producers for 18 counties initially agreed to a 5,000-bushel membership

contract (at $21.41 per bushel). The

plant handles about 11 million bushels

annually, translating to 350 million

pounds of products.

Bergland: “Commitment Means

Staying Power”

“Commitment means staying power,” says

Bob Bergland, president of the National

Rural Electric Cooperative Association and

keynote speaker at the 1984 National InstiFarmland Industries used its Co-op Video Network studio to prepare videotapes for use at farmer meetings.
52 November/December 1998 / Rural Cooperatives The 1980s

tute on Cooperative Education. “We have

it. We have strong, bright and dedicated

young people. It’s just a matter of putting it

all together. What you do with the power

is up to you. The choice is yours.”

He urges more cooperative involvement in the international scene. “You

can’t walk away from it. There is a

tremendous opportunity for cooperatives

to help developing countries get on their

feet so they can pay their own way.” In

recalling his father’s involvement in organizing Minnesota cooperatives, Bergland

points to the need for change among existing organizations. Many small co-ops need

to expand, merge or consolidate, he says.

Cooperation Restores 

Rail Line Service

When Illinois Central Gulf Railroad

imposed a 70-ton-per-car limit on a 63-

mile branch line in 1977, it effectively

blocked use of efficient 100-ton hopper.

That sparked six shippers on the line,

including four member cooperatives, to

form the Bloomer Line Connecting Railway Co., which bought and operates the

rail line. Robert Graves, director of traffic

for FS Services (now GROWMARK) — to

which the four co-ops belonged —

advanced the case before the Interstate

Commerce Commission.

A 32-mile rail line was opened for operation and interconnection with the Norfolk

Southern Railroad in 1985, after extensive

refurbishing. Federal and state funding

sources were used in this effort. Further

work that year opened an interconnection

with the Santa Fe Railroad, followed by

further refurbishing on the northern link

and an interconnection with Illinois Central Gulf. About 90 percent of the annual

loadings — including grain, fertilizer and

miscellaneous products, such lumber —

are expected to come from the cooperatives.

“We couldn’t possibly have accomplished this and at the price we did if starting today,” says Leo Smith, line chairman

and manager of Anchor Grain. He credits

the success of the effort to lucky timing in

protesting the service disruption and “the

cooperative spirit among our members,

which has made it possible to achieve our

common goal: restoring rail service.”

Andreas: Use Trade, Food Aid to 

Douse Prairie Fire

A tougher trade policy and a substantial

increase in the Food for Peace (PL 480)

Program can help “end the depression

sweeping like a prairie fire across the

nation’s heartland,” says Dwayne

Andreas, chairman of Archer Daniels Midland, Decatur, Ill. Addressing the 1986

annual meeting of the National Council

of Farmer Cooperatives, Andreas says the

U.S. government must convince “mercantile governments” that their policies of

dumping surplus agricultural products in

world markets at below-cost prices “are

not always in anyone’s best interests.”

Despite budget pressures, the government should double the $2.5 billion

A towboat steers a fertilizer-laden barge toward dock at a Midwest storage warehouse owned by CF Industries,

an inter-regional manufacturing and distributing cooperative.
The 1980s Rural Cooperatives / November/December 1998 53

planned for the PL 480 program for the

next five years, he says, because it would

save $4.5 billion in price support expenditures and expand farm export markets.

It will also “add jobs for workers in processing, trucking, shipping and related

industries.” That, in turn, would generate

$300 million in new tax revenue, he says.

Pressure Seen to Merge, 

Consolidate Co-ops

Given the restructuring in agriculture

and agribusiness, cooperatives must seriously consider merger or consolidation,

Don Sands, president of Gold Kist Inc.

says in keynote remarks at the 1986 Eastern Member Relations Conference. He

says restructuring “will bring about more

changes in the next three to five years

than we have seen in the past 20. Change

not only can be challenging, exciting and

rewarding, but also frightening, extremely stressful and even depressing.”

Sands tells the conferees: “Consolidation or merger should be pursued in most

parts of the United States. There is no

justification for the intricate web of more

than 5,000 farmer cooperatives existing

today...History tells us co-ops merge only

when participants are on their death bed.

Rather than merge small, sick companies

to create one large, sick cooperative, why

not explore consolidation where all partners are relatively strong?

Mergers and consolidations in the

Farm Credit System were discussed for

five years, he says, “but nothing happened

until the entire system nearly collapsed

under the greatest losses in banking

industry history. I don’t think members’

interests were being served,” he says. “It

will be many years before the system

regains its strength.” As an indication of

impending changes, he cites a Congressional Office of Technology study that says

by the year 2000, animal and plant production will be revolutionized by biotech

and infotech.

FCS Losses Down, Still Heavy

Although combined results for the Farm

Credit System (FCS) in fiscal 1986 showed

a net loss of $1.913 billion, the crisis

showed some easing compared with 1985

losses of $2.689 billion. New loans are also

down from $66.6 billion to $54.6 billion.

Other property, primarily from foreclosures, has increased to $1.101 billion, up

from $928 million. The system’s total capital dropped $2.7 billion, to $5.6 billion.

A bountiful fall corn crop is harvested near Aurora, Neb., against the backdrop of a CF Industries anhydrous

ammonia storage terminal.

The USDA Agricultural Cooperative Service booth attracts attention at the 1987 National Institute on

Cooperative Education.
54 November/December 1998 / Rural Cooperatives The 1980s

Acceptance of Co-op 

Business Growing

The future for cooperative activity in

both domestic and international arenas

is strong and growing, says Robert

Scherer, new president of the National

Cooperative Business Association

(NCBA), in his first report to the membership. Given the new emphasis on cooperative business, Scherer says NCBA

must be prepared to network with the

entire business community. “We are proud

to be called cooperatives. They are being

formed by businesses long thought of as

being anti-cooperative....We should be

proud of that trend.”

Torgerson Sees Return to 

Early Co-op Zeal

“Despite being in the most economically

disruptive period in a half century, family

farmers and their cooperatives remain a

major force in agriculture (and) ... are positioned well to exploit their future in the

years ahead,” observes Randall Torgerson,

administrator for USDA’s Agricultural

Cooperative Service, in remarks to the 1987

Eastern Member Relations Conference.

He urges the conferees to “take a hard

look at cooperative education and training programs in view of the aloof and

doubtful attitude of many young farm

couples toward cooperatives. “We need to

reemphasize public and private roles of

teaching about cooperatives as unique

institutions and the responsibilities of all

participants, including chief executive officers, staff, directors and members.”

Torgerson called for a “return to the

early zeal that led to the formation of cooperatives. “Let’s build the fervor and excitement that accompanies the discovery of

mutual interest; use the cooperative business form to enhance members’ competitiveness in domestic and international

markets and emphasize the positive in our

outlook and discussions.”

Manage Industry or Face Price Cuts

Either work together in solving industry

problems or risk having someone else do

it who is less interested in your wellbeing, Jim Barr, chief executive officer of

the National Milk Producers Federation,

tells delegates at its 71st annual convention. “We must choose whether we want

to manage our production as an industry

or whether we want it managed for us

through price cuts. If we fail to choose,

the decision will be made for us.”

Co-ops Increase Clout in 

Processing Soybeans

Soybean processing plants in the upper

Midwest owned by Farmland Industries

Inc., Land O’Lakes Inc., and Boone Valley Cooperative Processing Association

have combined into a new cooperative, Ag

Processing Inc., based at Omaha, Neb.

The combined organization represents

about 9 percent of the nation’s soybean

processing capacity. It has assets of about

$160 million and a sales base exceeding

$1 billion.

Strong Family Farms, Co-ops on

Horizon: NCFC’s Naden

Stronger family farms, maybe organized as

corporations, will emerge from the present

trend toward specialization on the farm,

higher cash cost and fewer cooperative

members in the next 20 years. This will

trigger a need for stronger cooperatives,

predicts Kenneth Naden on the eve of his

retirement after 19 years at the helm of the

National Council of Farmer Cooperatives.

“Cooperatives can achieve growth in

share of market and market power by

improving all phases of their operations,

finances and member relations. They can

gain a greater share if more existing

members use their cooperatives and still

others join a cooperative...(to) gain a

greater share of the market,” he says.

Encouraging more farmers to buy their

supplies and market their products

through cooperatives and providing much

needed capital is tied to “finding a program that works to implement basic cooperative principles. Among recent legislative gains, Naden cites a cooperative

amendment to the Federal Trade Commission (FTC) authorization bill banning

FTC investigations of agricultural marketing orders and conference language

reaffirming authority of the Capper-Volstead Act. Another legislative victory he

cites is passage of the Farm Credit Act

amendments that provide financing of

cooperative exports, more liberal lending

policies for young farmers, and re-establishing the Agricultural Cooperatives Service as a separate USDA agency.

Antitrust Commission Eyes

Modifications to Volstead Act

Two modifications regarding the CapperVolstead Act have been recommended to

the National Commission for Review of

Antitrust Laws and Procedures. The first

proposal is that agreements among cooperatives — such as mergers and marketing agencies in common — should not be

allowed if competition is substantially

decreased. The other proposal would redefine the “undue price enhancement” term

in the Act and make enforcement separate from USDA’s cooperative promotional responsibilities.
The 1980s Rural Cooperatives / November/December 1998 55

Farmland Foods Among 

Top 10 Hog Processors

Farmland Foods, a subsidiary of Farmland Industries Inc., at Kansas City, Mo.,

is now among the nation’s top 10 hog

processors. Chairman Gordon Leith

reports that sales topped $647 million.

Savings of nearly $14 million resulted in

refunds, averaging $4.69 a head for hogs

and $4.92 a head for cattle for the 11,000

hog and cattle producer-members.

Ag Co-op Earnings Up Dramatically

Reflecting the general trend of agriculture

in the mid-to-late 1980s, the nation’s major

agricultural cooperatives are striving to

use their resources more efficiently, are

eliminating operational duplication and

redeploying assets. The Agricultural Cooperative Service’s annual survey of the

nation’s 100 largest cooperatives also

shows that they are consolidating to

improve plant operating efficiency, provide

less-costly farm supplies or enhance marketing services for members. Management

staffs are being reduced, personnel pruned

and unprofitable departments closed.

Overhead and operating expenses are

being slashed and tighter control is being

maintained over inventories.

Total revenue for the top 100 co-ops rose

1.6 percent, to $43 billion; net margins

before losses increased 60.4 percent, to

$756 million; net losses dropped dramatically from $272.4 million to $38.7 million;

total assets climbed 2.4 percent, to $15.9

million; and member equity increased 6.6

percent, to $6 billion. Five of the nine cooperative commodity groups had higher revenues in 1987, the largest gains being in

the fruit/vegetable and dairy groups. The

poultry and livestock groups showed the

largest drop in revenues.

National Bank for Co-ops Formed

A new National Bank for Cooperatives has

been formed, resulting from the combination of 8 of 12 district banks and the Central Bank for Cooperatives (CBC). The

bank, formed in 1989, has authority to

serve agricultural cooperatives, rural utility systems and eligible associations

throughout the United States. W. Malcom

Harding, former CBC president, has been

chosen new chief executive officer and

Douglas Sims, president of the St. Louis

Farm Credit Board, as chief operating officer. The merger plan was developed by a

special committee after Congress approved

the Agriculture Credit Act of 1987.

Watch Activity in Five Areas, 

Leaders Caution

Speakers at the 1989 annual meeting of

the National Council of Farmer Cooperatives are cautioning cooperative leaders to

carefully follow activity in five areas with

the potential to have detrimental or beneficial impacts on their organizations. These

include: 1) new attempts to reduce the federal deficit; 2) implications of leveraged

buyouts occurring with increasing frequency in the business world; 3) resolution of issues and problems in international trade; 4) changing consumer

attitudes and preferences; and 5) rural economic development initiatives. New leadership in the nation’s Capitol is expected

to develop new solution alternatives,

speakers advised. And the impact of those

alternatives on agriculture and cooperatives needs to be carefully assessed.

CoBank Formation Proves Fruitful

In its first year of operation, CoBank

formed through the merger of 11 of the

13 district banks for cooperatives, proved

fruitful. It has improved operations, to

the benefit of member cooperatives and

their farmer-owners, says W. M. Harding,

bank president. “We reduced costs,

assured rural America of the existence of

a strong cooperative bank and strengthened member control.” Net income for

1989 of $92.95 million was up 35 percent

from 1988. ■
56 January/February 1999 / Rural Cooperatives The 1990s

Hallmarks of the ‘90s: Merger-Mania and Co-op Fever

Lack of Dairy Consolidations 

Hurts Farmers

After 31 years as a director, including 15

years as chairman at Wisconsin Dairies

Cooperative, Herb Selbrede laments the

lack of consolidations among dairy cooperatives in his state. “It [industry consolidation] should have happened,” he says,

but divisions in the country and among

directors and managers prevented it. Some

farmers think competition keeps prices up,

he says, “but competition also costs you a

lot of money.” So both in the country and

political arena, producers are still failing

to reach a consensus so they can speak

with a unified voice, he adds. “The one

thing that has helped us over the years

with mergers has been that we share information. We lay all issues on the table so

everyone knows what we’re doing.”

Co-op Restructuring 

Lead Issue for 1990s

Cooperative directors and managers

believe cooperative restructuring is the

single largest issue facing them, according to a survey conducted at the Arthur

Capper Cooperative Center. David Barton, the center’s director, says it is clearly the most important business and economic issue co-ops will face in the 1990s.

Research at Kansas State University indicates that the most efficient and profitable

size for cooperatives in Kansas is much

larger than existing sizes. Substantial

economies of scale appear to exist up to

(at least) sales of up to $30 million. The

typical current operation has sales of $7

million.

Politics is the root cause for the predominance of small cooperatives, Barton said.

“Cooperatives will not achieve their

full potential to provide economic benefit

to patrons until patrons are convinced

and agree that this benefit is achievable

and more important than alternative benefits,” Barton said.

Social Issues Challenge Co-ops

Growing activism in the United States

over social issues such as the environment,

animal rights, food safety and employee

health are challenging cooperatives, Jimmy Loftis, member relations director for

Gold Kist, tells participants at the 1990

Eastern Member Relations Conference. He

cites these potential danger areas for cooperatives: pesticides on fruits and vegetables; antibiotics and hormones in livestock

production; hazardous waste disposal;

employee health concerns — including

injury claims from repetitive motions in

processing; and protests at broiler houses,

testing laboratories and feedlots by animal rights advocates. “What is your plan?

How will you respond?”

Emerging Technology to 

Impact Dairying

Members should take a broader view of

emerging technology that will be a “mover

and shaker” of our economy long after

we’re gone, Dairylea President Clyde

Rutherford cautions.

These new technologies will be a predominant force in the 1990s, he says,

stressing that “pieces of this technology

may be the only answer to remaining

competitive in an era of upsizing farms,”

he said.

Growth on NCBA’s 75th Horizon

At age 75, the National Cooperative Business Association (NCBA) has gained

stature in four areas: 1) government

affairs; 2) membership; 3) international

cooperative development; and 4) domes1990s

Dave Studebaker, Haven Cooperative, Haven Kan.

Dairy farmers Clark and Joy Vilter, members of Golden Guernsey, Milwaukee, Wis. USDA Photo by Ken Hammond. USDA Photo by Dan Campbell. 
tic cooperative development. Chairman

Rod Nilsestuen characterizes NCBA’s role

as being the “common ground for joint

action for all cooperatives. We provide services that a single cooperative or association can’t...build relationships with professionals in other organizations and

thereby broaden our membership base

and corresponding income.”

President Robert Scherer details

NCBA’s diverse interests, which include

supporting cooperative financial institutions and promoting cooperative development in agriculture, housing, financial

services, health care and education.

NCBA is helping shape national standards for organically grown produce certification and exploring services for urban

cooperatives in child care and health care

and initiating a trade and business development center for Eastern Europe.

Indiana Co-op, Countrymark 

Launch Joint Venture

After a year of common management, Indiana Farm Bureau Cooperative Association

and Countrymark Inc. have formed a joint

venture for their regional cooperative farm

supply and grain marketing interests. This

action has been taken in response to tight

economic conditions in agriculture. The coops had combined sales in 1990 of $2.4 billion and net income of $9.55 million. Total

assets are $428.4 million and long-term

debt is $67 million. In its Ohio-Michigan

territory, Countrymark had 117 member

cooperatives and 22 farm centers. IFBCA

had 57 member cooperatives in Indiana.

Eight member cooperatives belonged to

both regionals. Real economies of scale

resulting from the merger will occur in fiscal 1992.

Squeezing More Profit from 

Sugar Beets

An $18 million, one-of-a-kind operation

for extracting sugar and other products

from sugar beets has been built at

Renville, Minn., by Southern Minnesota

Beet Sugar Cooperative. It processes

175,000 tons of pure beet sugar, 82,000

tons of beet pulp pellets and 80,000 tons

of beet molasses annually. The pellets are

fed to dairy and beef cattle and sheep

while beet molasses is used for the pharmaceutical and liquid feed businesses. In

looking ahead, President Irvin Zitterkopf

observes: “The future of the cooperative

and the industry in this area rests on the

continued willingness of growers and

employees to use these changes.”

Merger Equals Survival in Indiana

Dean Kaesebier, La Porte County (Indiana) Farm Bureau Cooperative’s manager of 12 years, has guided his local cooperative’s combination with two

neighboring co-ops during a 20-month

period. As a result, sales have tripled to

$56.5 million, with $36.1 million of that

amount derived from grain marketing.

The 1990s Rural Cooperatives / January/February 1999 57

Oliva Hernanez, second from left, and her daughters, who were organizing a dairy goat cooperative in Redford,

Texas. USDA Photo by Larry Rana 
58 January/February 1999 / Rural Cooperatives The 1990s

“The merger affected patrons, employees

and the cooperatives differently,” he says.

“In today’s market, merger becomes a matter of survival.” He offers these merger

tips: blend employees by moving some

from one cooperative to another; avoid getting entangled in small details and be sure

to force the right thing. Two cooperatives

can’t merge unless one agrees to give up

control, he notes. Branch offices must be

staffed with capable people who have power to solve problems. That keeps solutions

closer to the members being served.

Colorado Co-op Grows Rapidly

Consolidations and a merger have put

American Pride Co-op at Brighton, Colo.,

on the crest of a wave that’s building a

$20-million operation with 6,000 members. The co-op’s sales volume has nearly tripled in just four years. Al Shively,

who has managed the Colorado cooperative since 1987, is also a director and officer of Farmland Industries. A competent

staff is one of the keys to absorbing businesses, Shively says. “I’m not afraid to

hire good people. It makes for a good cooperative. That’s why we have five former

local managers from elsewhere in the

Farmland system. Each manages one of

our divisions. They bring in a lot of ideas

and expertise.”

Farmland Acquires Union Equity

Union Equity Cooperative Exchange

(EU), the Oklahoma-based grain marketing cooperative, has become the grain

division of Farmland Industries and

boosted unified sales to $4.7 billion. FarMar-Co, Farmland’s grain marketing subsidiary until 1985, had previously been

sold to EU. All of EU’s 434 member cooperatives were also members of Farmland.

Due to rapid changes in the grain industry, such as the federal government’s exit

from the grain storage business, EU had

cut its workforce 40 percent and closed

seven terminals.

Qualla Markets Cherokee Crafts

Qualla Arts and Crafts Mutual, operating on the Cherokee Indian Qualla

Boundary reservation in North Carolina,

markets the crafts produced by the Eastern Band of Cherokees. Sales in 1991

exceeded $750,000, an important source

of income for the co-op’s 300 members.

New Co-op Center in North Dakota

A center for cooperatives at North Dakota State University at Fargo has been

named after the late U.S. Sen. Quentin

Burdick, a strong supporter of cooperatives and rural issues. David Cobia, professor of agricultural economics at the

university, is acting director. It will serve

as a resource center for cooperatives and

members and work to increase understanding of cooperative businesses and

their economic role.

CRI Co-op Unites Dairy Interests

A member-owned holding company, Cooperative Resources International, has been

formed by two major Wisconsin cooperatives associated with the dairy industry.

The restructuring by 21st Century Genetics and Wisconsin Dairy Herd Improvement Association will benefit more than

half of the state’s 30,000 dairy producers

by controlling costs and improving services. It’s the first link between a herd

improvement association and a provider

of artificial insemination services.

Packing Shed a Boon to 

Vegetable Growers

Opening a new $100,000 packing shed in

Petal, Miss., was a big step for Indian

Spring Farmers Association in 1993.

Annual sales for the 40-member vegetable

growers cooperative, formed in the 1960s,

are expected to hit $1 million in a few

short years. The cooperative had been

field packing or renting space in a stateowned packing facility. Its first contract

for a value-added product packed with

new equipment was with a Minnesotabased food service company for weekly

Rancher Ken Dillingham, Hawaii Cattle Producers Cooperative Associaition, Hilo, Hawaii. USDA Photo by Dan

Campbell
The 1990s Rural Cooperatives / January/February 1999 59

shipments of 5,000 bags of two-pound cut

and washed collard greens. It is hoped

that cooperative such as this can help preserve black farmers in the South.

Hawaiian Co-op Took 25 Years to Brew

After 25 years in the brewing stage, competing coffee growers on the island of

Hawaii have merged, forming the new

Kona Pacific Farmers Cooperative in

order to gain more market clout and possibly stabilize or reverse a trend of diminishing market share. Growers in both

cooperatives produce gourmet Kona coffee and macadamia nuts. The merger was

prompted in part by steep drops in coffee

and macadamia nut prices. The board

now requires new members to sign a marketing agreement to deliver all their crop

to the cooperative.

Rural Women Gain from Craft Co-op

The Watermark Association of Artisans

operating out of Camden, N.C., is an

example of what the rural poor can

accomplish through a cooperative

approach to business and life.

The craft cooperative has carved an

ever-widening market niche in a highly

competitive crafts trade and provided

training to members to improve or learn

craft-making skills. Hundreds of rural

women in North Carolina gained not only

a source of income but also a new sense

of accomplishment. Formed in 1978 by 35

women who pooled efforts to sell crafts,

the cooperative had grown to 750 by 1993

and their products are being sold around

the world.

Bergland: Spread Rural Job Base

Instead of states fighting each other for

“the newest manufacturing plant and its

10,000 jobs, America should be looking to

create a new job at 10,000 different

places,” says Bob Bergland, president of

the National Rural Electric Cooperative

Association and former U.S. secretary of

agriculture. Speaking at the Eastern

Member Relations Conference, Bergland

says if 10,000 firms which currently

employ two people each have the economic incentive to expand to three

employees each, the rural economy of the

entire nation benefits, not just one lucky

town or county that wins a new manufacturing plant. It will take a private and

public partnership to create conditions

that pave the way for a stronger rural

economy, he says.

Co-op Fever Erupts on Northern Plains

There’s a fever erupting on the Northern

Plains that’s being driven by a major resurgence of producers seeking to add value to

their crops and livestock via cooperatives.

They represent attempts to answer

problems identified during the agricultural downturn of the 1980s. One of the

early successes was Dakota Growers Pasta Co., formed by Northern Plains durum

wheat growers. Members invested an

average $14,000 in risk capital, demonstrating their commitment to the cooperative. The new processing plant — featuring the cooperative’s own brand name

of pasta products — was met with widespread success in the retail marketplace.

The pasta co-op has sparked the creation

of other cooperative efforts, such as the

North American Bison Cooperative,

Northern Corn Processors Cooperative

and Northern Plains Organic Cooperative.

Minnesota Co-ops Spark 

Rural Resurgence

Bumper crops from the 1994 season hold

ever-greater promise for rural communities in Minnesota because of the resurgence

of new cooperatives which can absorb the

production. Instead of simply selling the

raw materials their crops represent, producers are forming value-added cooperatives to generate an increasing share of the

consumer food dollar. Agricultural economists say the plants are part of a new wave

that will reshape the food system.

Farmers and rural residents have

Doc Throlson, North American Bison Cooperaitve, New Rockford, N.D. USDA Photo by Dan Campbell
60 January/February 1999 / Rural Cooperatives The 1990s

invested at least $1 billion of new capital

in new plants at various stages of development in Minnesota, Wisconsin and the

Dakotas. They range in size from a $245

million corn sweetener plant planned for

the Red River Valley to small marketing

co-ops for organically grown vegetables in

Wisconsin and to process and market farmraised venison in Minnesota. Rural communities are benefitting from the economic stimulus new cooperatives generate.

Consolidations Drive New Foremost

The number of Wisconsin dairy farms has

plunged from 143,000 in 1950 to 30,150 in

1992. This trend set the stage for the consolidation of Wisconsin Dairies at Baraboo

and Golden Guernsey at Milwaukee to

form the new Foremost Farms USA. The

new cooperative has 5,500 members and

sales of $778 million. Cheese production

accounts for nearly 72 percent of Wisconsin

Dairies’ sales. Subsequently, the Mid

States region of Associated Milk Producers Inc., merged with Foremost.

Co-ops Urged to Pursue Food

Processing Projects

A Minnesota agribusiness manager

dreams of building a cooperative that

ranks among the nation’s major food marketers. Lamenting the lack of significant

cooperative presence among major U.S.

food companies is Joe Famalette, president and chief executive officer of American Crystal Sugar Co. “Why don’t growers own more of the U.S. food chain?

Agriculture in America has to change and

the sooner the better. ...We are not just

growers and producers. We are food

processors,” he asserts.

ValAdCo: Bringing Home the Bacon

A swine breeding cooperative, ValAdCo,

which adds value to corn crops, was

opened in Renville, Minn., with 38 grower members. Its first farm, a 1,250-sow

operation, began selling barrows and gilts

Ben Burkett, Indian Springs Farmers Association,

Petal, Miss. USDA Photo by Ken Hammond

Sharon Begay, president of Dine Be Iina (Lifeway of

the People), a Navajo craft cooperative in

Arizona.USDA Photo by Ken Hammond

Velma Cardwell, Cabin Creek Quilters Cooperative,

Charleston, W.V. USDA Photo by Ken Hammond
The 1990s Rural Cooperatives / January/February 1999 61

in 1993. A 2,500-sow multiplier unit was

added 1995. The two farms were expected

to produce 76,000 animals annually. ValAdCo and Cooperative Country Farmers

Elevator later constructed a 10,000-tona-year feed mill, with potential to expand.

It provides feed for a new 2-million-hen

egg-laying facility owned jointly by the

elevator and a private firm.

California Gold Brand Pays Off

After years of supplying the market with

bulk dairy products, the board of California Cooperative Creamery at Petaluma

entered into the branded cheese market

with its “California Gold” label and found

a needed spark to rejuvenate the cooperative. After a decade of limited growth,

membership climbed from 320 to nearly

500 and sales jumped from $220 million

to $450 million. Its cheeses are now found

in stores around the state and even in

Japan and Mexico.

Blue Diamond Still Going Global

Walt Payne advises cooperators to continue to “think global.” As the new chief

executive officer of Blue Diamond Growers, he knows what that entails, since his

cooperative exports almonds to 100 countries. “Each market has a unique development story. You really can’t develop a

cookie cutter approach to export market

development,” Payne says. “You must do

your homework to identify your market

opportunities and then channel what will

work for you in that country.”

California Co-ops Celebrate a Century

Two California marketing cooperatives

marked their 100th birthdays during the

1990s. Danish Creamery Association

(DCA) at Fresno is the oldest continually operated cooperative, and its still going

strong, with 1995 sales of $210 million.

Butter and dried milk are marketed by

DCA. It has a majority interest in Challenge Dairy Products Inc. Also turning

100 is the Sunkist Growers citrus cooperative. From humble roots in 1893, with

60 struggling citrus members, Sunkist

has blossomed into a $1-billion-a-year

cooperative with 6,500 members in California and Arizona.

United Sugars Eyes Market Clout

Three Upper Midwest sugar beet grower

cooperatives have formed United Sugars

Corp., a marketing agency in common. It

will market 100 percent of the sugar the

co-ops produce in seven factories. Partners are American Crystal Sugar, MinnDak Farmers Cooperative and Minnesota

Beet Sugar Cooperative. Other than for

sugar marketing, each cooperative

remains autonomous. United has become

the nation’s fourth largest sugar supplier, with annual marketings of about $800

million.

Elsie Martinez, Ramah Navajo Weavers Association, Ramah, N.M. USDA Photo by Ken Hammond
62 January/February 1999 / Rural Cooperatives The 1990s

NCBA Forms Development Institute

National Cooperative Business Association has created the CLUSA Institute for

Cooperative Development to act as a catalyst for building and sustaining partnerships among its members and other

organizations to promote economic development through cooperatives in the United States and overseas. The mission seeks

to replicate successful cooperatives.

Tree Top Sprouts Record Earnings

Tree Top, the apple and pear marketing

cooperative based at Selah, Wash., is

marking fiscal 1996 with record earnings

of $49.4 million, topping its previous 1995

record of $34.6 million. Total proceeds

include $3.5 million in profit, which reflects

the earnings members receive above the

average cash market. Annual sales have

dipped from $229.9 million in 1995 to

$218.4 million in 1996 as did tonnage,

although supply was greater than anticipated. For the first time in many years,

the cooperative received more than 50 percent of the Washington state apple crop.

Co-ops Cautious Toward 

Ethanol Fuel Projects

Despite the general enthusiasm for

renewable energy from the heartland and

cooperative involvement in the subsidized

ethanol industry, the pace has been slow

and cautious. The St. Paul Bank for Cooperatives, which has been assessing the

viability of ethanol projects for 15 years,

finances only a few. Some 42 plants produced 1.54 billion gallons of ethanol in

1996, up substantially from the 1979 production of 20 million gallons.

Ocean Spray Cranberry Opens

Research Center

An agricultural research center with all

the components of an agricultural experiment station has been opened by Ocean

Spray Cranberries at its new headquarters site at Lakeville-Middleboro, Mass.

The new center enables Ocean Spray to

conduct flexible, problem-solving research

in seeking solutions to problems facing

today’s cranberry industry. Since its

founding, Ocean Spray had been based at

historic Plymouth, Mass.

Hedge-to-Arrive Contracts Snare

Some Grain Co-ops

Hedge-to-Arrive (HTA) contracts have

become a nightmare for a number of producers and grain cooperative managers

in 1996 and beyond. The price risk associated with HTA contracts is not a problem in a normal post-harvest grain marketing pattern. But sharp, unexpected

grain price increases in the spring and

summer of 1996, however, caught many

producers and cooperatives in speculative

market positions. Failure of both parties

to honor HTA contract conditions is often

leading to litigation in the courts. Some

cases are still pending.

Marketing Agreements 

Must Be Enforced

A cooperative must enforce its member

marketing agreements to protect its reputation in the marketplace and the interest of loyal members, according to Frank

Kronynenburg, former chairman of the

California Canning Peach Association.

Members must look at factors other than

price, such as the stability of the market

created by the cooperative and improved

terms of trade.

Sun-Diamond Growers 

Settles Litigation

A $13.4 million settlement was reached

between Sun-Diamond Growers of California and its federated cooperative members,

Sun-Maid Raisin Growers and Diamond

Walnut Growers, regarding overpayments

Kerry Kennedy, production manager of the

Culpepper (Va.) Farmers Cooperative. USDA Photo

by Ken Hammond
The 1990s Rural Cooperatives / January/February 1999 63

disclosed in 1985. Funds necessary to

accomplish the settlement will be paid by

various insurance companies.

Harvest States Introduces 

‘Harvest Mark’ Pooling

A new grain pooling plan has been

unveiled by Harvest States Cooperatives

of St. Paul, Minn., during a series of meetings with 60 select local elevator managers and President Allen Hansen. Pools

are used as a vehicle for handling the

risks in grain marketing because they

enable local managers to cooperate on a

cost-plus basis in the same way they now

handle government grain.

Co-ops Cotton to Blue Jeans

In a vivid example of how U.S. cooperatives add value to raw farm products,

each year, 28 million pairs of Levi Strauss

jeans are stitched together from rolls of

denim produced by Plains Cotton Cooperative Association in Littlefield, Texas.

The denim stems from 120,000 bales of

billowy white cotton that flows into the

cooperative’s textile mill, which is contained under one huge, 10-acre roof.

‘Dough’ Expectations Rise in Colorado

Both business expectations and bread

dough were rising in Longmont, Colo., as

227 wheat growers have formed the

Mountain View Harvest cooperative to

purchase Gerard’s Bakery and transform

their crop into a value-added product.

Nearly half of the more than 500 farmers

who attended a series of 60 grower meetings opted to invest in the cooperative.

Florida Co-op Juice Brand Growing

Citrus World’s total juice products represent $450 million a year in sales and its

Florida’s Natural juice brand provides it

with 18-percent share of the not-from-concentrate juice market, which ranks it second in the nation. The 65-year-old cooperative’s orange and grapefruit juices are

now exported to 50 countries.

California’s Hmong Refugees 

Form Co-op

Once refugee tribesmen from Southeast

Asia, Hmong farmers have joined forces

in California and found a possible route

to economic self-sufficiency via a fresh

vegetable marketing cooperative. A fivestory historic building in Fresno provides

office space for the Hmong-American

Cooperative and Hmong Multicultural

Center. USDA funds totaling more than

$121,000 will help the Hmong farmers

with cooperative education.

Beef Co-op for Cowboys

Faced with falling livestock prices and

corporate inroads in the packing industry, hundreds of cattle producers from 23

states have formed a new cooperative:

U.S. Premium Beef. The co-op purchased

a major interest in a beef-processing company owned by Farmland Industries, and

is pursuing larger profits with a valueadded strategy. “This has never happened

before,” says Tim Ryan, a Kansas director. “Cattle producers have never before

bought into a packing company or became

part of a vertically integrated system

where they own a piece of everything from

conception to consumption.”

1990s Legacy: Tidal Wave of 

Changes for Co-ops

The impact of rapid changes in agriculture — reduced farmer numbers but consolidated acreage among survivors and

higher crop yields resulting from new

technologies — created profound changes

in the 1990s. This was seen nowhere more

clearly than in the number of major cooperative mergers and consolidations.

Steve & Margo Sayre family, Dodge City (Kan.)

Cooperative Exchange. USDA Photo by Dan Campbell
64 January/February 1999 / Rural Cooperatives The 1990s

Two major dairy cooperatives with

coast-to-coast connections were created.

Land O’Lakes (LOL), Minneapolis, Minn.,

stretched east to merge with Atlantic

Dairy near Philadelphia and then extended itself westward to absorb Dairymen’s

Cooperative Creamery Association at

Tulare, Calif. Both of those co-ops had

manufactured LOL butter for years. An

even larger co-op was created when Dairy

Farmers of America, based at Kansas

City, was formed by the merger of MidAmerica Dairymen, the Southern Region

of Associated Milk Producers Inc., Milk

Marketing Inc. and Western Dairymen.

It later added California Gold.

Southern States Cooperative of Richmond, Va., stretched to the Midwest to

acquire Michigan Livestock Exchange. It

then bought the seven-state farm supply,

grain, peanut and cotton business and 100

retail stores from Gold Kist in Atlanta,

Ga. Goldkist will now concentrate on the

poultry business. CENEX and Harvest

States merged to create the nation’s

largest cooperative. This was preceded by

a feed joint venture between CENEX and

LOL . An 11-year-old agronomy joint venture between LOL and CENEX continues.

Farmland Industries and CENEX Harvest States subsequently formed a petroleum marketing and distribution venture

called Country Energy LLC.

LOL acquired Countrymark Inc.’s feed

and fertilizer assets in Indiana, Ohio and

Michigan. Countrymark then formed a

grain joint venture with Archer Daniels

Midland, similar to an earlier

ADM/GROWMARK alliance. In view of

Countrymark’s earlier joint feed venture

with the FS supply division of GROWMARK, LOL will now supply feed to the

FS member companies in Illinois, Iowa

and Wisconsin and the Canadian province

of Ontario. The FS Services feed employees

will join LOL which leased the mills.

Under the new alliance, GROWMARK will

provide petroleum supplies not available

from Countrymark to LOL member cooperatives in Indiana, Michigan and Ohio,

but LOL retains its fertilizer business,

which earlier had been distributed through

a joint-venture with Countrymark.

GROWMARK and LOL have also

developed an alliance in seed. Farmland

Industries acquired the assets of FS Services after an earlier feed joint venture with

its Arkansas-based neighbor. Farmland

developed a similar feed manufacturing

and marketing alliance with MFA Inc. in

Missouri, and created a grain joint venture

with Con Agra. Statewide regional farm

supply cooperatives serving Tennessee and

Alabama were also exploring an alignment.

Meanwhile, Pro-Fac Cooperative of

Rochester, N.Y., acquired Curtice Burns,

its joint venture partner in the fruit and

vegetable processing industry, then

changed the name of the now whollyowned subsidiary to Agrilink Foods. It

also acquired Dean Foods’ vegetable processing division. It is in the process of

acquiring the frozen foods assets of Agripac Inc., a Salem, Ore., food processing

cooperative. And on the banking horizon,

St. Paul Bank has entered into merger

discussions with CoBank, Denver, Colo.

The first decade of the next millennium will be hard pressed to match all this

change! ■
The 1990s Rural Cooperatives / January/February 1999 65
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